Warren Buffett’s stock is getting cheaper! Is this an opportunity for investors?

Since Warren Buffett announced his intention to retire at the end of 2025, Berkshire Hathawayâs (NYSE:BRK.B) shares have become noticeably cheaper, with both Class A and B shares falling by around 8% from their all-time highs, underperforming the broader S&P 500, which has risen over the same period.

This pullback may reflect investor anxiety about the post-Buffett era, despite his successor Greg Abelâs strong operational credentials. But there are likely factors at play.

A little intro on Berkshire

Berkshire Hathaway is a vast American conglomerate, famous for its unique structure and Buffettâs legendary value investing approach. The companyâs operations span insurance (GEICO, Gen Re), railways (BNSF), utilities and energy (Berkshire Hathaway Energy), manufacturing (Precision Castparts, Duracell), and retail (Dairy Queen, Seeâs Candies).

In addition to wholly-owned businesses, Berkshire manages an enormous portfolio of publicly traded equities, with its largest holdings including Apple, American Express, Coca-Cola, Bank of America, and Chevron. These five stocks alone account for over 62% of its equity portfolio. For a period, Apple accounted for over half of this portfolio. Clearly, concentration risk wasnât a huge concern for Buffett.

Cash-rich, but risk remains

Financially, Berkshire sits atop a colossal cash pile, with $333bn in cash and short-term investments, including over $300bn in US Treasury bills as of Q1 2025. This immense liquidity provides a buffer against market shocks and positions the company to seize opportunities during downturns.

However, the companyâs first-quarter earnings fell short of expectations, and the recent leadership transition has led to investor caution and profit-taking after a strong multi-year rally.

Despite its diversification, Berkshire remains heavily US-focused, with the majority of its revenues and assets tied to the American economy. This domestic concentration means it’s particularly sensitive to US economic trends, such as inflation and growth.

According to the Federal Reserveâs model, a $10 increase in oil prices could push US inflation up by 0.4% and slow growth by a similar margin, underscoring the macroeconomic risks Berkshire faces as a predominantly American enterprise.

The bottom line

Berkshire Hathaway stands out for its remarkable long-term performance. The shares saw an average annual gain of 19.9% since 1965, far outpacing the S&P 500âs 10.4% over the same period . It has continued to outperform major indices since the start of the pandemic despite holding a limited number of technology giants â these are the stocks that have really taken the US indices higher.

Personally, Iâm investing in Berkshire for the long run and, as such, Iâm quite happy to take advantage of dips like this. I appreciate concern about Buffettâs retirement may dampen sentiment for some time, but I doubt the core investment proposition will change â this is about a diversified investment in the US economy. I believe investors should consider Berkshire Hathaway, especially as the stock pulls back.

The post Warren Buffettâs stock is getting cheaper! Is this an opportunity for investors? appeared first on The Motley Fool UK.

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Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. 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.