Berkshire Hathaway Breaks the Trillion-Dollar Mark: Buffett's Success Story Makes History

Warren Buffett's billion-dollar investment conglomerate has surpassed a market capitalization of over $1 trillion for the first time, underscoring the investor's remarkable success over nearly six decades. Berkshire Hathaway's Class B shares have surged an impressive 30% this year, significantly outperforming the S&P 500 Index's 18% rise. In early trading on Wednesday alone, the shares climbed 1%, pushing the market capitalization to a record level. This development appears all the more remarkable considering that when Buffett took over Berkshire in 1965, it consisted of just two textile mills with approximately 2,300 employees and generated an after-tax profit of less than $5 million in 1968. Today, the company owns numerous business segments – including Geico, BNSF Railway, and Jazwares, the maker of Squishmallows – and holds multibillion-dollar stakes in publicly traded companies like Apple and Coca-Cola. Last year, Berkshire recorded operating profits exceeding $37 billion and employed nearly 400,000 people as of the end of December. Berkshire's consistent growth has made it the seventh most valuable publicly traded company in the United States. Berkshire is now valued higher than Eli Lilly ($858 billion), Broadcom ($744 billion), and Tesla ($666 billion), but lower than Meta Platforms ($1.3 trillion). Buffett's personal fortune has grown by about $26 billion this year, placing him at the eighth spot on the Bloomberg Billionaires Index with a net worth of $145 billion. The achievement of the $1 trillion mark for Berkshire seemed foreseeable, given that as of the end of June, assets worth $1.1 trillion were on record – including $277 billion in cash, Treasury bills, and other short-term investments. Buffett, who will turn 94 on Friday, may well be pleased about reaching the trillion-dollar milestone, but may also have concerns. He has often described Berkshire's increasing size as a challenge, as it becomes increasingly difficult to find high-quality investments that make a substantial impact. When asked by a shareholder during the 2014 Annual Meeting what a $1.2 trillion Berkshire might look like, the "Oracle of Omaha" expressed worries about finding attractive acquisitions of that magnitude. "There is no question we will someday have more cash than we can wisely deploy," Buffett said, suggesting that Berkshire shares might continue to be attractive for buybacks. This challenge may be weighing on his mind in light of the company's latest milestone valuation.