Warren Buffett’s 2016 acquisition of Precision Castparts, initially facing an $11 billion write-down and criticism for its high price, is finally proving to be a highly successful long-term investment. Driven by surging demand for its specialized metal components in both the aerospace sector and for AI data center infrastructure, the company is now estimated by Barron’s to be worth approximately $100 billion. This remarkable turnaround, nearly tripling its original purchase value, underscores Buffett’s enduring confidence despite the unit’s quiet contribution to Berkshire Hathaway’s overall valuation.
This analysis is part of the Warren Buffett Watch newsletter, providing news and insights on Warren Buffett and Berkshire Hathaway.
Buffett's confidence in a decade-old acquisition finally pays off
Six years ago, Berkshire Hathaway faced an $11 billion write-down on its substantial $37.2 billion acquisition of Precision Castparts (PCC) in 2016. At the time, Warren Buffett conceded in his annual letter to shareholders that he had "paid too much" for the company, known for its "complex metal components and products."
Despite recognizing PCC as a "fine company – the best in its business," Buffett admitted he had been "simply too optimistic" about its profit potential. This "miscalculation" was exacerbated by the severe downturn in the aerospace industry, PCC's primary customer base, during the Covid pandemic.
During a CNBC interview when the deal was first announced, Buffett acknowledged the "very high multiple" paid. However, he consistently expressed great confidence in Mark Donegan, the company's CEO, and its long-term profit outlook. This unwavering belief is now yielding significant returns.
Ryan Henriksen | Reuters
Though it took longer than anticipated, Buffett's investment is now performing exceptionally well. As Reuters reports, there's a current shortage of the intricate products Precision Castparts manufactures, which are vital for engine turbine blades. Furthermore, these components are in high demand for natural gas turbines, essential for powering artificial intelligence data centers.
Leslie Josephs/CNBC
This week, GE Aerospace announced its intention to pay $11.75 billion for Consolidated Precision Products (CPP), a key competitor to Precision Castparts. Barron's described this deal as "pricey," valuing CPP at 26 times its projected 2027 earnings before interest, taxes, depreciation, and amortization (EBITDA).
Applying the same multiple, Barron's now estimates Precision Castparts' value at approximately $100 billion. This figure significantly surpasses the $60 billion to $75 billion valuation cited in a previous article last month and is nearly triple its 2016 purchase price.
Andrew Bary, writing for Barron's, noted that Berkshire and its share price are not "getting much credit" for PCC's surging value. He attributes this partly to CEO Greg Abel's (like Buffett) preference for not conducting analyst conference calls or investor events, which could highlight the unit's performance. Bary suggested, "Without Warren Buffett at the helm, Berkshire may have to start telling its story if it wants to attract a new generation of investors. This year's trading action suggests that something may need to change."
Berkshire Bounces as Wall Street Retreats
Berkshire Hathaway shares saw a modest increase this week, departing from the broader Wall Street sell-off. Both Class A and Class B shares rose nearly 0.9%, while the S&P 500 declined by 0.8%. This modest outperformance contrasts with the general "trading action" of 2026 mentioned earlier.
Prior to Friday's rebound, major benchmark indices, including the S&P 500, Dow Industrials, and Nasdaq Composite, had fallen for four consecutive days amidst rising oil prices and bond yields.
Despite this week's minor gains, Berkshire's B shares still trail the S&P 500 by over 10 percentage points year-to-date.
Nebraska Candidate Withdraws Ad Featuring Buffett's Image
A Republican candidate in Nebraska's 2nd Congressional District quickly launched a new campaign advertisement after Susie Buffett objected to a previous commercial that briefly displayed an image of her father, Warren Buffett.
The contested ad showed a picture of Buffett with his name for roughly two seconds as candidate Brinker Harding stated, "Here in Omaha, we know a thing or two about the stock market, some more than others. But we do it without insider information." Harding then advocated for a ban on Congressional stock trading, criticizing lawmakers who "trade on secrets you'll never know" and "get rich" while constituents "barely get by."
Omaha's ABC affiliate KETV reported that Susie Buffett requested the ad's removal on September 2, stating, "Warren did not give Brinker his permission to use his face or name in his ad. It implies that my dad endorses him. He did not have permission to use it."
Harding's campaign spokesman clarified that they believed the ad did not imply an endorsement. However, out of respect for the Buffett family, they accelerated the rollout of their next planned commercial by several days, despite delays due to the Labor Day weekend. The newly running commercial no longer features or mentions Buffett.
Buffett & Berkshire Around the Internet
- Best's News and Research Service: 2026 Best's Rankings: Berkshire Hathaway Takes DPW Top Spot Among Accident & Health Lines
- Travel Weekly: How Berkshire Hathaway Travel Protection is catering to advisors
- Inc. on MSN: Warren Buffett says successful people get these 3 life decisions right
- Financial Times: The day Warren Buffett saved Salomon Brothers
Highlights From CNBC's Buffett Archive
The Effects of 9/11 on Berkshire and the Insurance Industry (2002)
AUDIENCE MEMBER: I know you lost a lot of money as a result of 9/11. But I would like to know how 9/11 changed your life and your investment strategy?
WARREN BUFFETT: It made everybody, I think, in the country aware, I mean, we've gone through world wars and all of that, and essentially felt quite protected within these borders. And I have been quite worried about — Charlie can attest to — you know, the possibility, particularly of some kind of nuclear device in this country, by — probably more likely by terrorists than by some, at least, declared act of war by another state. And 9/11 made everybody realize that as humans have not progressed, particularly, in terms of how they behave with each other over the years, they have progressed enormously in their ability to inflict damage on those they hate for one reason or another...
In terms of the business aspects of it, in your question, obviously the area at Berkshire that it effects most significantly, by miles, is insurance.
And prior to 9/11, even though we recognized that there could be huge monetary damages that flowed from the activities of what I would call deranged people, we hadn't really written the contracts in such a way as to either get paid for taking that risk or to exclude the risk. In other words, we were throwing it in for nothing.
We had excluded risk for war. I mean, we knew that we'd seen what had happened in England in the 40s, and so we had taken account of something that some of us had seen with our own eyes, but we didn't take account of something that we knew was possible, but we just hadn't seen. And that's, you know, that's the human condition, to some degree.
Since September 11th, everybody in the insurance business recognizes that they had exposures that they weren't charging for, and they either had to exclude those exposures or they had to charge for them.
We have written — first thing we had to do, of course, is we had lots of policies on the books that left us exposed to this, and most of those policies ran for a year, starting at different points. Those have run off to a great degree, but they're not entirely run off.
The other thing we did was on new policies. We have sold a fair amount, quite a large amount, of terrorism insurance that excludes what we call NCB, nuclear, chemical, and biological, as well as fire following nuclear.
And, we can take a fair amount of exposure to that sort of terrorism, because it doesn't — it won't aggregate. It aggregated at the Twin Towers in a way that — World Trade Center — in a way that just about was as extreme as you could get for non-NCB-type activities.
I mean, that was a huge amount of damage done without nuclear, chemical, or biological.
But we can have tens of billions of dollars with NCB excluded throughout a greater New York area, or something, but we can't have hundreds of billions of exposure that would be exposed, say, to, nuclear activities, because there an act or two, or three, coordinated, could cause damage that would destroy the insurance industry. And if we had coverage on that, it would destroy us as well.
Berkshire Stock Watch
Four weeks
Twelve months
BRK.A stock price: $766,000.00
BRK.B stock price: $510.37
BRK.B P/E (TTM): 12.83
Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)
Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)
Berkshire repurchased $4.5 billion of its shares in Q2 2026.
Berkshire's Top Equity Holdings - Sep. 11, 2026
Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.
Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:
- Mitsubishi, which is as of April 30, 2026
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
Questions or Comments
Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we don't forward questions or comments to Buffett himself.)
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Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.
-- Alex Crippen, Editor, Warren Buffett Watch
