• Berkshire Hathaway reported second-quarter 2025 earnings, revealing sales of US$5,118 million and net income of US$12,370 million, both up slightly in revenue but down significantly in profit compared to a year earlier.
• As the company prepares for Warren Buffett’s announced retirement and Greg Abel’s succession, investors are closely watching how leadership transition impacts the company’s direction and steady performance.
• We’ll examine how Berkshire Hathaway’s unexpectedly lower profit and upcoming leadership change may influence its long-held investment narrative.

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What Is Berkshire Hathaway's Investment Narrative?

Being a Berkshire Hathaway shareholder has always been about trusting in the long game and believing in the company’s ability to compound capital through diversified, quality assets under a disciplined management team. The recent quarterly update, flat revenue and a sharp drop in net income, doesn’t fundamentally change the big picture, though it puts a spotlight back on earnings volatility and the importance of the upcoming leadership transition. With Warren Buffett set to retire and Greg Abel confirmed as his successor, most immediate catalysts now revolve around whether the new leadership can maintain operational stability, prudent capital allocation, and investor confidence. Given the company’s long-term focus, the dip in quarterly profit feels more like a headline than a signal of any major, lasting business risk for now. The share price’s moderate pullback since the announcement underscores that sentiment: the perceived catalyst is Abel’s leadership, while the biggest near-term risk is market confidence during the management transition.

But with leadership in flux, will confidence hold through this handover? Berkshire Hathaway's shares have been on the rise but are still potentially undervalued by 33%. Find out what it's worth.

Exploring Other Perspectives

The Simply Wall St Community brings together 27 investor fair value estimates for Berkshire Hathaway, with figures ranging from just over US$577,000 to more than US$1.05 million, showcasing strong differences in opinion. While some see potential for significant upside, today’s environment demands careful attention to risks around management transition and earnings consistency. Consider how others assess value and look closer at what could shape the company’s direction next.

Explore 27 other fair value estimates on Berkshire Hathaway - why the stock might be worth 18% less than the current price!

Build Your Own Berkshire Hathaway Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Berkshire Hathaway research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free Berkshire Hathaway research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Berkshire Hathaway's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.