Finance

Buffett’s Berkshire Hathaway hits $1 trillion market value, first U.S. company outside of tech to do so

Published

9 months ago

August 28, 2024

Business Finance News

Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska.

David A. Grogan | CNBC

Warren Buffett’s Berkshire Hathaway reached a $1 trillion market capitalization on Wednesday, the first non-technology company in the U.S. to score the coveted milestone.

Shares of the Omaha-based conglomerate have rallied more than 28% in 2024, far above the S&P 500’s 18% gain. The $1 trillion threshold was crossed just two days before the ‘Oracle of Omaha’ turns 94 years old.

The shares were up 1.2% to hit a high of $699,440.93 on Wednesday, allowing it to top the $1 trillion mark, per FactSet.

Unlike the six other companies in the trillion dollar club (Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta), Berkshire is known for its old-economy focus as the owner of BNSF Railway, Geico Insurance and Dairy Queen. (Although its sizable Apple position has helped drive recent gains.)

Buffett took control of Berkshire, a struggling textile business, in the 1960s and transformed the company into a sprawling empire that encompasses insurance, railroad, retail and energy with an unmatched balance sheet and cash fortress.

Buffett has been in a defensive mode as of late, dumping a massive amount of stock, including half of his Apple stake, while raising Berkshire’s cash pile to a record $277 billion at the end of June.

While Buffett famously never times the market and advises others to not try to either, these recent moves served as a wake-up call to some of his followers on Wall Street, who believe he saw some things he did not like about the economy and market valuation.

Berkshire invests the majority of its cash in short-term Treasury bills, and its holding in such securities — valued at $234.6 billion at the end of the second quarter — has exceeded the amount the U.S. Federal Reserve owns.

So it’s hard to judge why investors are rewarding Berkshire with the $1 trillion crown today, whether it’s a bet on the American economy and Buffett’s sprawling set of businesses set to benefit if it keeps chugging along or whether they see Berkshire as a cash fortress that will generate steady income in the face of an uncertain macro environment.

The conglomerate also started a selling spree of Bank of America shares in mid-July, dumping more than $5 billion worth of the bank stock. Buffett bought BofA’s preferred stock and warrants in 2011 in the aftermath of the financial crisis, shoring up confidence in the embattled lender struggling with losses tied to subprime mortgages.

High price tag

Berkshire’s original Class A shares carry one of the highest price tags on Wall Street. Today, each one sells for 68% more than the median price of a home in the U.S.

Berkshire Hathaway A shares, long term

That’s because Buffett has never split the stock, arguing that the high share price attracts and retains more long-term, quality-oriented investors. The Ben Graham protégé has said that many Berkshire shareholders use their stock as a savings account.

Still, Berkshire issued Class B shares in 1996 at a price equal to one thirtieth of a Class A share to cater to smaller investors wanting a small piece of the Buffett’s performance.

Finance

UK’s FCA teams up with Nvidia to let banks experiment with AI

Published

2 hours ago

June 9, 2025

Business Finance News

Jakub Porzycki | Nurphoto | Getty Images

LONDON — Britain’s financial services watchdog on Monday announced a new tie-up with U.S. chipmaker Nvidia to let banks safely experiment with artificial intelligence.

The Financial Conduct Authority said it will launch a so-called Supercharged Sandbox that will “give firms access to better data, technical expertise and regulatory support to speed up innovation.”

Starting from October, financial services institutions in the U.K. will be allowed to experiment with AI using Nvidia’s accelerated computing and AI Enterprise Software products, the watchdog said in a press release.

The initiative is designed for firms in the “discovery and experiment phase” with AI, the FCA noted, adding that a separate live testing service exists for firms further along in AI development.

“This collaboration will help those that want to test AI ideas but who lack the capabilities to do so,” Jessica Rusu, the FCA’s chief data, intelligence and information officer, said in a statement. “We’ll help firms harness AI to benefit our markets and consumers, while supporting economic growth.”

The FCA’s new sandbox addresses a key issue for banks, which have faced challenges shipping advanced new AI tools to their customers amid concerns over risks around privacy and fraud.

Large language models from the likes of OpenAI and Google send data back to overseas facilities — and privacy regulators have raised the alarm over how this information is stored and processed. There have meanwhile been several instances of malicious actors using generative AI to scam people.

Nvidia is behind the graphics processing units, or GPUs, used to train and run powerful AI models. The company’s CEO, Jensen Huang, is expected to give a keynote talk at a tech conference in London on Monday morning.

Last year, HSBC’s generative AI lead, Edward Achtner, told a London tech conference he sees “a lot of success theater” in finance when it comes to artificial intelligence — hinting that some financial services firms are touting advances in AI without tangible product innovations to show for it.

He added that, while banks like HSBC have used AI for many years, new generative AI tools like OpenAI’s ChatGPT come with their own unique compliance risks.