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

Berkshire Hathaway’s Greg Abel stepped up capital deployment, investing about $35B in Q2 across equity purchases, acquisitions, and share repurchases. Major actions included $23.5B in new equity positions (including a likely $10B Alphabet private placement in June) and restarting buybacks at $4.5B in Q2 (vs. $234M in Q1), the largest quarterly total since Q1 2023. Berkshire also agreed to acquire Taylor Morrison for $6.8B (about $8.5B enterprise value including debt), while ending the quarter with over $359B in cash and equivalents, suggesting buyback/return capacity remains ample despite the deployment.

Analysis

Abel’s move matters more as a signaling event than as an immediate earnings driver. Berkshire’s market value is still dominated by its cash drag, so visible buybacks and selective deployment can narrow the conglomerate discount and stabilize per-share compounding; but this is a slope, not a regime change, because the incremental capital is still small relative to the balance sheet.

Alphabet is the cleanest beneficiary: the Berkshire validation makes the market slightly more willing to underwrite heavy cloud/AI capex as a high-ROIC reinvestment cycle rather than a free-cash-flow problem. That helps multiple support in the next 1-3 months, but the thesis is fragile if cloud growth decelerates or capex intensity stays elevated into the next two prints.

The Japan trading-house buys are really a low-cost yen carry trade with equity upside attached. If the yen stays weak and BOJ normalization remains gradual, that basket can quietly compound; if the yen strengthens meaningfully, the hedge becomes less attractive and the relative-return case compresses. The homebuilder acquisition is a secondary read-through: it is less about near-term housing demand than about consolidation discipline, which could help scale leaders before rates actually improve.

Contrarian view: the market may be overreacting to a quarter of capital deployment and reading it as a new philosophy. Berkshire still has a massive war chest, so unless buybacks stay elevated and equity activity becomes recurring, the stock may not earn a durable re-rating beyond a modest reduction in cash-hoard skepticism.

Key Decisions for Investors

• Long BRK.B vs SPY/XLF on pullbacks over the next 1-3 months; thesis is that sustained buybacks plus active deployment reduce the cash-drag discount. Falsify if repurchase cadence drops back toward immaterial levels or the stock re-rates well above its recent book-multiple range without follow-through.
• Long GOOG/GOOGL on weakness over 3-6 months; Berkshire’s participation should modestly improve investor tolerance for Alphabet’s capex-heavy cloud buildout. Exit if the next earnings cycle shows cloud growth slowing materially or capex rising faster than revenue.
• Add MARUY/MTSUY/SSUMY/TKOMY only as a disciplined basket trade and only if JPY remains weak; this is primarily a low-rate funding/FX carry expression, not a pure operating story. Cut quickly if BOJ tightening or yen strength undermines the hedge economics.
• No fresh trade in TMHC on this headline alone; use it as a sector signal for eventual consolidation beneficiaries like DHI and PHM rather than chasing the acquired name. Revisit only if mortgage rates roll over enough to improve affordability and order trends.