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Berkshire Hathaway, the company synonymous with patient, value-driven investing, is getting lapped by the S&P 500. And not by a little.
By April 2026, Berkshire shares had underperformed the S&P 500 by 11.3 percentage points year-to-date. The stock fell roughly 13% from its May 2025 highs, while the broader index climbed approximately 26% over the same stretch.
The numbers tell a sobering story
The divergence started becoming visible in late 2025. By the end of October that year, Berkshire had posted an 8.6% return compared to the S&P 500’s 15.5%, a gap of roughly 6.9 percentage points.
Over the trailing 12 months through May 2026, Berkshire’s Class B shares delivered a return of approximately negative 4% to negative 5%. The S&P 500, meanwhile, was up somewhere between 26% and 27%.
For the full calendar year of 2025, Berkshire returned around 11% versus the S&P’s roughly 17%. From 1965 to 2024, Berkshire underperformed the S&P 500 in full calendar years just 20 times, and 2025 now adds to that count.
The Buffett factor, or the lack of it
Warren Buffett announced his retirement in May 2025, and Greg Abel officially stepped into the CEO role by the end of that year. Buffett was 94 at the time of his retirement announcement.
Berkshire’s massive cash and short-term Treasury holdings have been a significant drag during a period when equities, particularly growth stocks, have been ripping higher.
What this means for investors
Historically, when Berkshire lags the market significantly, it often coincides with periods of excessive exuberance in growth sectors. The conglomerate’s conservative posture, heavy on insurance, utilities, railroads, and cash, tends to look boring precisely when speculation is running hottest.
If Berkshire’s defensive strategy eventually proves prescient, as it did during the dot-com bust and the 2008 financial crisis, then the assets currently benefiting from that risk-on environment could face a sharp reversal. Berkshire’s cash hoard becomes a weapon when prices collapse and bargains emerge.
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