Warren Buffett's Successor, Greg Abel, Put Nearly $35 Billion of Cash to Work Last Quarter. Here's What He Bought.

Berkshire Hathaway’s CEO Greg Abel deployed about $35B of cash in Q2 (including $23.5B in new equity positions and renewed buybacks), signaling increased capital commitment after Buffett’s cash-build period. Share repurchases totaled $4.5B in the quarter (up from only $234M in Q1), alongside Berkshire’s $6.8B agreement to acquire Taylor Morrison. Berkshire still ended the quarter with over $359B in cash and equivalents, leaving substantial liquidity for further investments.

Analysis

The signal here is less about the dollars and more about regime change: Berkshire is shifting from balance-sheet hoarding to explicit capital recycling, which should compress the conglomerate discount if it persists for multiple quarters. Near term, the main mechanical support is the buyback bid; that creates a quasi-floor in BRK.B, but the market should not extrapolate one quarter into a permanent step-up because the cash position is still far larger than the deployment cadence.

The second-order beneficiaries are the targets of Berkshire’s capital: Alphabet gets external validation for a capex-heavy cloud model, which can help the multiple if investors worry too much about AI spending versus free cash flow. TMHC and the broader homebuilder complex get a strategic floor from Berkshire’s willingness to own scale in housing, but that is only a valuation signal unless mortgage rates and cancellation trends improve; the real catalyst path is 1-3 months for sentiment, 6-18 months for fundamentals.

The most important contrarian point is that this may be misread as an aggressive risk-on pivot when it is really balance-sheet optimization. If capital deployment continues but remains concentrated in low-volatility, already-high-quality assets, the market may conclude Abel is preserving optionality rather than unlocking a new growth runway. Falsifiers are straightforward: repurchases dropping back below a low single-digit quarterly pace, cash continuing to rise, or Alphabet cloud growth/cash conversion rolling over enough to question the quality of the deployment.

Key Decisions for Investors

• Add BRK.B on 2-3% pullbacks over the next 1-2 weeks; target 5-8% relative outperformance versus the S&P 500 over 3-6 months if quarterly repurchases stay above ~$3B. Cut the thesis if the next 10-Q shows buybacks reverting below $1B or cash balances resume rising materially.
• Tactically long GOOGL/GOOG on weakness versus XLK for the next 1-3 months. Berkshire’s involvement reduces financing-overhang psychology around cloud capex, but this only works if cloud growth remains strong and free cash flow does not deteriorate; exit if cloud growth slows sharply or capex intensity rises without revenue follow-through.
• Keep TMHC and the broader homebuilder basket on watch rather than chasing outright long exposure. Berkshire’s acquisition is a floor for high-quality builders, but the sector needs lower mortgage rates and improving cancellations to translate sentiment into earnings; do not press longs unless rate data turn.
• For longer-dated capital-recycling exposure, consider a small basket long in MARUY/MTSUY/SSUMY against a JPY-strength hedge, sized modestly due ADR liquidity. The thesis is a multi-quarter carry/dividend arbitrage, but it is invalidated if BOJ normalization or yen appreciation materially reduces the funding advantage.