Berkshire Hathaway’s stock (BRK.A/BRK.B) is trading at an all-time high as investors continue to rotate capital into blue-chip value stocks.
Both Berkshire’s Class A and Class B shares closed at record highs on July 12. It was the first time since March of this year that the stocks had reached fresh all-time highs.
The gains at Berkshire Hathaway, the holding company of legendary investor Warren Buffett, come as investors move money out of high-flying technology stocks and into value securities.
The S&P 500 Value Index (IVE) and the Russell 1000 Value Index (RLV) have each risen about 3% in the past week after moving sideways for most of this year.
At the same time, growth stocks in the U.S. finished trading on July 12 down 0.1%.
Berkshire Hathaway’s stock is the largest holding in exchange-traded funds (ETFs) that track both the Russell 1000 value and S&P 500 value indices.
The rotation of money out of tech stocks and into value comes after June inflation data in the U.S. came in soft, boosting expectations that the Federal Reserve will begin lowering interest rates in September of this year.
Until now, a handful of mega-cap technology stocks led by chipmaker Nvidia (NVDA) had led the U.S. stock market to record highs this year.
Berkshire Hathaway’s stock is also getting a boost from a rally in Apple’s stock, which is the largest holding in its equity portfolio.
After lagging the market for most of this year, Apple’s stock has risen nearly 20% since the company unveiled its artificial intelligence (AI) strategy on June 10.
Apple accounts for 44.5% of Berkshire’s equity portfolio, making it the company’s largest holding.
Berkshire Hathaway is a diversified holding company. In addition to its $409 billion U.S. equity portfolio, the company owns several businesses outright, including the Dairy Queen restaurant chain and Geico insurance company, to name only a few.
Berkshire Hathaway’s more affordable Class B stock has gained 23% over the last 12 months and currently trades at a record high of $424.44 U.S. per share.
