Warren Buffett's Successor, Greg Abel, Dumped Amazon and Bought 3 Million Shares of This Undervalued Stock

Berkshire Hathaway sold its Amazon stake, a small position worth about 2.3 million shares, while buying roughly 3 million shares of Macy's. Macy's is showing improvement, with Q1 fiscal 2026 net sales up 1.8% to $4.7 billion, comparable sales up 3%, and adjusted EPS rising 18% to $0.13; the company also raised full-year guidance. The move looks more like a value-oriented, real-estate-backed contrarian bet than a top-conviction purchase.

Analysis

The signal here is less about the specific names and more about capital allocation under a new regime. Berkshire’s cleanup of legacy positions and willingness to own a beaten-down retailer suggests the market should read this as a governance/portfolio-construction reset, not a thesis on e-commerce versus malls. The second-order implication is that value can still be found in “asset-rich, cash-generative enough” businesses where the equity embeds little optionality for real estate monetization or margin normalization.

Macy’s is the cleaner catalyst stock because the setup is asymmetric: the market is paying a low multiple for a business that is already showing that cost cuts, footprint rationalization, and inventory discipline can produce visible EPS inflection over the next 2-4 quarters. That said, the move is fragile; if same-store sales momentum fades even modestly, the multiple can compress further because the bear case is structurally simple and easy to reprice. The key is that this is not a long-duration growth story — it is a near-term earnings and balance-sheet execution trade.

Amazon’s sale is mildly negative only in sentiment terms, not fundamentals. The more important read-through is that capital is being re-ordered toward higher-conviction positions rather than that AMZN has lost its strategic relevance; if anything, that should reduce any overhang from “Buffett proxy” ownership in the near term. For consumer and retail names, the relative winner is any operator with a credible omnichannel turnaround and monetizable real estate, while the losers are structurally challenged department stores that lack either traffic or asset backing.

Key Decisions for Investors

• Long M on a 3-6 month horizon, targeting a re-rating toward 12-13x forward earnings if execution holds; use a tight stop if same-store sales roll over for one quarter.
• Buy M Jan-2026 call spreads to express upside from continued margin/real-estate optionality while capping downside; best entry is on any post-earnings pullback rather than chasing strength.
• Short a basket of structurally weaker department/store-adjacent retailers against M as a relative-value pair; thesis is that the market will reward the name with the clearest self-help path first.
• Stay neutral-to-slightly long BRK.B as a quality anchor, but do not extrapolate this quarter’s portfolio reshuffle into a broad catalyst; the likely impact is modest and mostly sentiment-driven over days to weeks.
• Treat AMZN as unaffected tactically; any weakness on headline-flow should be buyable for long-only accounts, but not as a hedge against retail exposure because the decision is portfolio-specific rather than company-specific.