Here’s why Warren Buffett’s stock surged as the market suffered

Warren Buffett‘s Berkshire Hathaway (NYSE:BRK.B) stock has surged 16.2% in 2025, outperforming the S&P 500’s 4.6% decline. This performance has caught the attention of investors and market analysts alike, potentially creating additional momentum.

But it’s not only the share price performance that has caught investors eyes. Buffett had been slowly selling some of Berkshire Hathaway’s positions as US stocks surged. This appears to be a very wise move, with the conglomerate’s cash reserve reaching $334bn just as the broad market started to fall.

He’s been here before

Investor confidence in Buffett’s ability to navigate turbulent markets has contributed significantly to Berkshire’s stock performance. The Oracle of Omaha’s long-standing track record of thriving during economic uncertainties continues to attract shareholders.

Buffett’s strategic decision to sell approximately $134bn worth of shares in 2024, including reducing stakes in Apple and Bank of America, has proven prescient, demonstrating his foresight in anticipating market volatility.

Moreover, several stocks in Berkshire’s portfolio have performed exceptionally well in 2025. For instance, BYD, the Chinese electric vehicle maker, has seen its stock surge by 41%. T-Mobile US shares have risen about 21%, while VeriSign’s stock has increased by 23%. Coca-Cola Company, one of Buffett’s long-term holdings, has appreciated by 13%.

A port in stormy waters

Berkshire Hathaway’s diverse portfolio, spanning various sectors (albeit, US focused), has provided stability during market turbulence. This diversification strategy has further cemented the company’s status as a safe haven for investors.

What’s more, the company reported record operating profits of $47.4bn in 2024, a 27% increase from the previous year. This undoubtedly further booster investor confidence in Berkshire’s ability to weather economic storms.

Berkshire Hathaway has been significantly increasing its holdings in U.S. Treasury bills, which has contributed to the company’s resilience and current appeal. In the first half of 2024, Berkshire increased its T-bill holdings by 81%.

It held $234.6bn in short-term US Treasury bills at the end of the second quarter. In fact, Berkshire’s T-bill holdings have grown so large that the company now surpasses the Federal Reserve in short-term Treasury holdings. With yields exceeding 5% in some cases, Buffett’s T-bill holdings could generate around $12bn annually.

The bottom line

With its substantial cash reserves and Buffett’s proven track record, Berkshire Hathaway remains well-positioned to capitalise on future opportunities that may arise from market volatility.

However, two notable risks could temper this outlook. First, Berkshire’s focus on the US economy leaves it vulnerable to domestic economic downturns or prolonged high-interest-rate environments. This could dampen growth in key subsidiaries such as BNSF Railway and GEICO.

Second, the eventual departure of Warren Buffett introduces uncertainty despite a well-laid succession plan. While Greg Abel is widely regarded as a capable successor, any shift in strategy or missteps during the leadership transition could affect investor confidence and Berkshire’s long-term trajectory.

Nonetheless, it’s a stock I’ve been buying for myself and my daughter. The cash and T-bill holdings offer something of a safe haven in an increasingly challenging market.

The post Here’s why Warren Buffett’s stock surged as the market suffered appeared first on The Motley Fool UK.

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James Fox has positions in Berkshire Hathaway. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.