For decades, investors considered Berkshire Hathaway a reliable vehicle for outperforming the broader stock market. However, that long-standing assumption is now facing scrutiny.
Technical analysts are increasingly pointing to indicators that Berkshire's shares are losing their relative momentum compared to the S&P 500. A detailed chart analysis by 22V Research concerning Berkshire's performance against the benchmark index shows the stock has regressed to relative levels last observed around 2007, suggesting almost no relative advancement over nearly two decades.
"Berkshire Hathaway was once a strong bellwether for the S&P, but that relationship appears to be evolving," 22V Research noted in a client communication.
It's crucial to understand that this comparison does not imply Berkshire shares have performed poorly in absolute terms. The expansive conglomerate has climbed significantly over the period, sitting just 6% below its all-time high achieved in November.
Instead, the data underscores a shift in its relative performance: Berkshire is no longer consistently outpacing the broader market, a marked change from decades of delivering superior returns under Warren Buffett's leadership.
This divergence has become particularly noticeable in recent years as the frenzy surrounding artificial intelligence has propelled technology behemoths, which largely dominate the S&P 500, to unprecedented heights. Berkshire, while still maintaining a substantial investment in Apple, has largely refrained from investing in many of the market's highest-flying AI beneficiaries.
Some market observers also highlight Berkshire's record cash reserves, which stood at nearly $400 billion in the first quarter. While proponents argue this cash provides ample ammunition for market downturns, critics view the enormous reserve as a potential drag on returns when equity markets continue to climb.
Under the new stewardship of CEO Greg Abel, Berkshire has only cautiously resumed share buybacks following a nearly two-year hiatus. This has disappointed some investors who had anticipated more aggressive repurchases given Berkshire's extensive liquidity.
Year-to-date, Berkshire shares have declined by approximately 4%, contrasting with the S&P 500's impressive 9% gain.
Warren Buffett, who stepped back from serving as CEO at the start of 2026, had already cautioned shareholders in his 2023 annual letter that Berkshire's sheer size and diverse composition would make dramatic outperformance increasingly challenging.
"With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more importantly, should also operate with materially less risk of permanent loss of capital," Buffett penned. "Anything beyond 'slightly better,' though, is wishful thinking."
This comment reflected Buffett's philosophy that Berkshire's portfolio of mature, diversified enterprises—ranging from BNSF Railway to See's Candies—should continue generating steady, lower-risk gains, rather than the outsized returns that characterized much of its formative years.
Berkshire's long-term record remains exceptional; since Buffett assumed control in the 1960s, the conglomerate has consistently generated annual returns that have roughly doubled those of the S&P 500.
