Buffett's Berkshire Hathaway becomes first non-tech U.S. firm to hit $1 tn market cap

Billionaire Warren Buffett's Berkshire Hathaway has created history as it became the first non-tech U.S. company to achieve a $1 trillion market capitalisation on August 28. This significant leap underscores investor confidence in the conglomerate, which Warren Buffett has meticulously built over nearly six decades into a symbol of the American economy.

Berkshire Hathaway joined an exclusive group of six other U.S. companies, all connected to the technology sector, that has surpassed the $1 trillion valuation mark. The list includes Apple, Nvidia, Microsoft, Google’s parent Alphabet, Amazon, and Facebook’s parent Meta Platforms.

The milestone reflects a broader market rebalancing as U.S. investors shift focus from tech giants to traditional businesses like Berkshire Hathaway, which operates in insurance, transportation, energy generation and industry tech. 

Berkshire's Class A shares closed up 0.84% at $702,320, while the more widely held Class B shares rose 0.81% to $468.37 on August 29. The $1 trillion valuation as of Wednesday was based on Berkshire's 553,234 Class A and 1,325,192,508 Class B shares outstanding as of July 23. Since Warren Buffett took charge in 1965, Berkshire shares have surged over 4,384,748%, averaging about 20% annually, according to the company's 2023 shareholder letter. This return is nearly double the compounded annualised gain of the S&P 500, including dividends.

Warren Buffett has built Berkshire Hathaway into a diversified conglomerate through a systematic, low-risk approach. Since taking over in 1965, he has transformed it from a struggling textile company into a powerhouse with investments in Geico, BNSF Railroad, Berkshire Hathaway Energy, Brooks Running, Dairy Queen, and Ginsu Knives. The company also holds notable stakes in Japanese firms like Mitsubishi, Itochu, and Mitsui. Buffett is renowned for investing in businesses with an economic moat and advocating for long-term investments in companies that one wouldn’t want to sell.

Earlier this month, Berkshire Hathaway cut its stake in Apple by nearly 50%, increasing its cash holdings to about $280 billion. Although Apple and Bank of America are among the largest holdings in Berkshire's stock portfolio, as of June 30, the company's cash reserves, primarily in U.S. Treasury bills, stood at $276.9 billion. 

At the May meeting, Buffett was asked about his plans for exploring opportunities in India, and he also acknowledged the "unexplored" potential. Still, he questioned whether Berkshire has the necessary insights or contacts to pursue these opportunities effectively, suggesting that this might be a task for a more dynamic management team.