(BFM Stock Exchange) – Between May 2 and August 2, the action of Berkshire Hathaway, the conglomerate of the famous investor fell 14% when the S&P 500, over the same period, sold 11%, dividends included. According to the Financial Times of the strongest underperformance over three months since the start of the pandemic in early 2020. This can be explained by the next departure of Warren Buffet, but also by the defensive nature of the group on the stock market.

The company of Warren Buffett, the famous investor nicknamed “The Oracle of Omaha”, his hometown, crosses a stock market hole. Over the 2025, Berkshire Hathaway, the billionaire conglomerate wins 2.4%, when the S&P 500 advances 7.1%.

The underside of the company has mainly observed in recent months. In a recent article, the Financial Times had fun comparing the performance of the Berkshire Hathaway action over three months since May 2.

The British daily has obviously did not choose this date at random. It was the last session before the company announced that its emblematic leader would leave its functions as general manager at the end of 2025, replaced by Greg Abel. The title had lost 5.12% in stride.

Over the three months going from May 2 to August 2, the Berkshire Hathaway action dropped by 14% when, at the same time, the S&P 500, a dividend included, took 11%, according to data from the Financial Times, an underperformance of 25 percentage points.

According to the British daily newspaper, this is the strongest underperformance of the group’s action over three months since the beginning of the 2020 and the break-up of the pandemic, when the market was won in turn, including insurers and financial services, activities managed by Berkshire Hathaway (in addition to its numerous participations, the group is present in insurance, energy and ferroviary).

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After-buffett, a stranger for the market

How to explain such a sub-performance? Obviously, the announcement of the departure of Warren Buffett can weigh. This because the famous 94 -year -old investor is surrounded by a certain aura and the financial community fears that this “magic” is lost with his departure.

Antoine Pélet, analyst and portfolio manager at Monocle Asset Management, invested in Berkshire Hathaway, explained very well in 2024 on News Bulletin 247 the challenges that arose for the post-buffett.

Greg Abel “is a person who is quite discreet, whom we know very little, it is a point which is rather negative”. The manager recalls that Warren Buffett had written, in his letter to the shareholders, that the success of Berkshire Hathaway was linked to “twelve investment decisions, twelve in sixty years”.

“The question that arises is to what extent this is replicable by a new management team, management,” he added.

This is all the more so since “Berkshire is growing each year, you have $ 10 billion in cash that arrive every quarter and that must be reallocated”. “This means that Greg Abel in the ten years after Buffett will have to allocate much more capital than Warren Buffett throughout his life,” he warned.

“Perhaps investors have not yet been convinced that the company can remain an investment champion without Buffett at its head,” Russ Moud Bell wrote in a note published on Monday.

A market reversal

But the scheduled departure of Warren Buffett is certainly not the only explanation. In reality, the comparison period chosen by the Financial Times is particularly disadvantageous for Berkshire Hathaway.

From January 1 to May 2, the company had largely outperformed the S&P 500, with an increase of almost 19% (for class A action) when the S&P 500 (excluding dividend) had lost 3.3%.

At that time, Berkshire Hathaway benefited from its character of defensive action, the group being a conglomerate with professions (insurance or energy) less affected by American customs duties than many other activities. In addition, Berkshire Hathaway has a mountain of cash, about $ 344 billion at the end of June last. This ensures an appreciable reserve and strengthens its defensive value status.

“While concerns about customs duties were starting to intensify, some people turned to security offered by Berkshire,” said Financial Times Bill Stone, investment director at Glenview Trust, an investor of Berkshire.

Problem: over the last months Wall Street has experienced a rebound, especially in June (+5%) and to a lesser extent in July (+2%). Investors who had sheltered by positioning themselves on Berkshire resumed a taste for risk and we have reinvesting in more cyclical values. This reversal of trend logically penalized Berkshire Hathaway who underwent his good performance of the first four months of 2025.

An absence in tech

Especially since the rally was partly worn by tech, especially during the last season of the results. If Amazon has disappointed, Microsoft, Meta and Alphabet all delivered results appreciated by the market, which has shown that the theme of artificial intelligence still had a bright future ahead of Wall Street.

“Based on the solid alphabet results the previous week, the better than expected reports of Meta and Microsoft further strengthened the discourse on AI, the first having recorded an acceleration of the growth of its sales and presented aggressive expenditure plans in terms of AI, while the second published solid results in its Cloud activity thanks to the AI demand”, explains Union Bancaire Privé. “The essential point to remember is that the dynamics of artificial intelligence (AI) is intact,” abounds UBS.

Warren Buffett, who does not like to invest in companies he does not understand, is little present on Tech. Admittedly, Apple is one of the five largest investments in Berkshire Hathaway.

But the apple group is very clearly the GAFAM which has invested the least in artificial intelligence. The Apple action is currently evolving in a ‘penalty box’ (the corner of bad students, note), since Apple is largely considered to be a delay in terms of AI (in -depth integration of delayed SIRI and absence of cutting -edge models) “, explained Bank of America in a recent note.

If the departure of Warren Buffett therefore constitutes a legitimate reason for fears for the market, the underperformance of the Berkshire Hathaway action is also explained by a market rotation which was unfavorable to the conglomerate as well as by its absence on the technological compartment.

“There have been periods in the past when Berkshire has been delayed from the S&P 500 index, but his patient approach allowed him to garner profits and generate considerable outperformance over time,” said Russ Moud.

“The period 1996-1999 is a recent and blatant example, Berkshire who did not participate in the rush to the actions of the technology, media and telecommunications sectors, which allowed him to escape the crisis of 2000-2003”, he illustrates.

“The performances were also lower than those of the S&P 500 in 2004-2006, when financial engineering, the lever effect and a multitude of derivative products satisfied Wall Street until ‘Main Street’ (a jargonneous term which evokes the real economy, editor’s note) and the economy as a whole end up paying the price. After this stock market cataclysm, then largely outperformed over the following decade “still talks about the market expert.