50% of Warren Buffett's Berkshire Hathaway Is Really in Just 3 Dividend Stocks

Berkshire Hathaway is currently underperforming the S&P 500 this year, with a 6.6% gain against the index's 13.3%, despite its $1.08 trillion market capitalization and a significant $344 billion cash reserve reflecting a cautious market outlook. The firm's portfolio remains highly concentrated, with American Express, Apple, and Bank of America collectively accounting for over 50% of its total holdings. American Express recently reported strong Q1 2025 earnings, surpassing expectations with 19% year-over-year EPS growth and 11% revenue growth, while Bank of America also posted robust Q3 results, showing 23% profit growth and 11% revenue growth, highlighting the performance of these core investments.

Analysis

Berkshire Hathaway is currently trailing the S&P 500 year-to-date, with a 6.6% gain against the index's 13.3%, despite its substantial $1.08 trillion market capitalization. The firm holds a significant $344 billion in cash and short-term T-bills, reflecting a cautious outlook on prevailing market conditions. This positioning contrasts with its 2024 performance where it surpassed the S&P 500.

The portfolio demonstrates high concentration, with American Express (AXP), Apple (AAPL), and Bank of America (BAC) collectively accounting for over 50% of its total holdings. Berkshire Hathaway maintains a 21.6% stake in American Express's float, representing 17.3% of its portfolio, while Apple comprises 23.2% of the portfolio even after recent share divestitures. Bank of America, despite a trimmed position, still constitutes 10.2% of the portfolio.

American Express reported robust Q1 2025 earnings, with EPS of $4.14 exceeding analyst expectations of $3.99 and marking a 19% year-over-year increase. Revenue also grew 11% to $18.43 billion, surpassing forecasts, contributing to a strong per-ticker sentiment of 0.8. Bank of America similarly posted strong Q3 results, with EPS of $1.06 beating estimates and profit rising 23% year-over-year on 11% revenue growth, reflected in its 0.7 per-ticker sentiment.

Key Decisions for Investors

• Consider Berkshire Hathaway's current underperformance relative to the S&P 500 and its substantial cash reserves, which may indicate management's cautious market view or potential for future strategic acquisitions.
• Evaluate the implications of Berkshire Hathaway's highly concentrated portfolio, particularly the strong recent earnings performance of American Express and Bank of America, which could signal continued strength in these core financial holdings.
• Monitor Apple's performance and its significant weighting within the Berkshire Hathaway portfolio, especially given the firm's recent share sales and Apple's lower per-ticker sentiment compared to the financial holdings.