Berkshire Hathaway Stock Has Crossed $750,000 For The First Time This Week

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• Berkshire Hathaway's Class A shares surpassed $750,000 after a strong earnings report this week.
• The company's market value reached $1.1 trillion, making it the seventh largest company in the S&P 500.
• Warren Buffett avoids stock splits, focusing instead on attracting long-term investors.

Berkshire Hathaway's Class A shares crossed a milestone on Monday, trading above $750,000 for the first time. The stock hit an intraday high of $755,968 before ultimately closing lower.

The stock extended its gain above the key threshold on Tuesday, hitting a record-high price of $759,923.94.

The conglomerate owned by billionaire investor Warren Buffett surged 4%, or $28,735, on Monday after reporting positive fourth-quarter earnings over the weekend.

The company is now worth about $1.1 trillion, making it the seventh largest company in the S&P 500 and the only trillion-dollar company without a technology focus.

Berkshire Hathaway's earnings report revealed a surge in profits, with fourth-quarter operating earnings of $14.53 billion rising 71% year-over-year.

Much of that growth came from a surge in investment income, in part driven by the interest earned on its massive $334 billion cash position.

Regarding the company's huge cash pile, Buffett said in his annual shareholder letter that it doesn't necessarily mean he's bearish on the stock market.

"Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won't change," the 94-year-old billionaire wrote.

Berkshire Hathaway held $272 billion in public stocks at the end of the 2024. Subtracting the public stocks and $334 billion cash from Berkshire Hathaway's total market value leaves about $465 billion in remaining market value being ascribed to the company's privately-owned investments.

"I have depended on the success of American businesses and I will continue to do so," Buffett said in the letter.

Stock split? Don't count on it

Buffett took over Berkshire Hathaway in 1965 when its stock was trading at about $19 per share. Since then, the stock has soared 3,999,494% to $759,923 on Tuesday, and through all those years, Buffett has resisted a stock split.

Instead, Berkshire Hathaway introduced lower-priced Class B shares in 1996. At the time, Class A shares traded just above $30,000, while Class B shares started trading at 1/30th the price, around $1,000. Today, Berkshire's Class B shares trade at around $500. The Class B shares trade lower than their initial $1,000 debut because of a stock split in 2010 after Berkshire purchased railroad operator BNSF.

Buffett's reasoning behind not splitting the Class A shares is his quest to attract high-quality buy-and-hold investors that are more focused on the long-term growth and sustainability of the business rather than the price level of the stock.

In a 1995 shareholders meeting, Buffett said splitting the stock would likely attract short-term investors who had little knowledge about the underlying business.

"I know that if we had something that it was a lot easier for anybody with $500 to buy, that we would get an awful lot of people buying it who didn't have the faintest idea what they were doing," Buffett said.

Berkshire Hathaway's Class A shares last reached a major price milestone in March 2022, when the stock crossed above the $500,000 threshold.