Greg Abel Just Gave Investors $4.5 Billion Reasons to Take a Closer Look at Berkshire Hathaway

Greg Abel Just Gave Investors $4.5 Billion Reasons to Take a Closer Look at Berkshire Hathaway

Matt Frankel, CFP®, The Motley Fool

Mon, August 31, 2026 at 5:36 PM GMT+3 4 min read

• BRK-B -0.24%
• NVDA +0.83%

Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) bought back $4.5 billion in stock in the second quarter, its first major buyback activity since early 2024. While other companies buy back billions of dollars in stock, Berkshire's buyback program is a unique one.

Specifically, Berkshire buys back stock only when its leaders believe it trades at a considerable discount to intrinsic value. This lets investors use Berkshire's buyback as a signal that the stock might be cheap.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Berkshire's $4.5 billion buyback

Of course, there's more to the story. For one thing, Berkshire started the second quarter with a record high $397.4 billion in cash and Treasuries, and new CEO Abel has been eager to find ways to put it to work.

Also, the second quarter's buyback could be an especially strong signal that Abel believes the stock is cheap right now. Not only is $4.5 billion the most Berkshire Hathaway has spent on buybacks in a single quarter since 2021, but Berkshire's buybacks in recent years have generally occurred while Berkshire was a net seller of stocks.

In contrast, the second quarter saw Berkshire aggressively buy back shares while also investing heavily in other stocks. It wasn't just Berkshire's default use of cash when it couldn't find anything else attractive to buy. Greg Abel clearly sees investment opportunities and believes Berkshire's stock is cheap.

It's also important to put the buyback into perspective. Buying back $4.5 billion worth of shares means that Berkshire repurchased less than one-half of one percent of its outstanding shares. Annualized, this represents a rate of about 1.8% of shares. It's on the aggressive end of the spectrum for Berkshire, but it isn't exactly a table-pounding declaration that the stock is cheap.

The bottom line

Berkshire's buyback clearly indicates that Greg Abel and Warren Buffett (who still plays an active role as Chairman) believe the stock is undervalued. Of course, management can be wrong, and Buffett will be the first to admit that he's been wrong many times throughout his career.

Having said that, it's important to do your own homework. It's never a great idea to buy any stock just because a company is ramping up buybacks. But if you can make the case that Berkshire is worth more than its current market cap of about $1.09 trillion, which means that you agree with Abel and Buffett that the stock is undervalued, now could be a good time to take a closer look.

Should you buy stock in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,335,252!*

That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.

See the 10 stocks »

*Stock Advisor returns as of August 31, 2026.

Matt Frankel, CFP® has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Greg Abel Just Gave Investors $4.5 Billion Reasons to Take a Closer Look at Berkshire Hathaway was originally published by The Motley Fool