Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) has hit a milestone, topping a $1 trillion market cap for the first time.
The achievement comes as the conglomerate steadily pares down its stake in Bank of America (BAC).
Berkshire stands as the first non-tech U.S. company to breach the trillion-dollar threshold, joining an elite club of just six other giants.
This latest chapter in Berkshire’s story unfolds after the firm disclosed it had sold another 24.6 million shares of the nation’s second-largest bank, netting nearly $1 billion.
In just over a month, Berkshire has offloaded 129 million BofA shares, pulling in $5.4 billion.
As Buffett trims his stake, Bank of America’s stock has taken a hit, dropping more than 9% amid the sales.
Still, the bank’s shares are up about 18% year-to-date, though they lag behind bigger gains from rivals like Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C).
On Wednesday morning, BofA’s stock saw a modest rise of over 1%.
Berkshire has not explained the sales.
Yet, despite the trimming, Berkshire remains Bank of America’s largest shareholder, holding over 900 million shares valued at more than $35 billion.
This maneuver carries weight given Buffett’s deep ties to the bank.
Back in 2011, he bet big on Bank of America, injecting $5 billion at a time when the lender was reeling from the aftermath of the subprime mortgage crisis.
This wasn’t just a wager on the bank’s recovery; it was a nod to the leadership of CEO Brian Moynihan, who had taken the reins in 2009.
That endorsement, a beacon in a stormy market, helped steady the ship, and BofA’s stock has since soared nearly 400%.
Buffett’s loyalty to Bank of America is striking, particularly as he has walked away from other banking giants.
Between 2018 and 2022, he exited major stakes in JPMorgan, Wells Fargo (WFC), and Goldman Sachs—some just before the banking sector’s recent turmoil.
Wells Fargo, in particular, saw Buffett’s departure after a series of scandals that revealed employees, driven by aggressive sales targets, had opened millions of unwanted accounts and charged unnecessary fees.
“We’re very cautious … about ownership of banks, and we do remain with one bank… I like Bank of America, and I like the management,” Buffett shared at Berkshire’s annual meeting in May 2023.
As of June, Bank of America made up 15% of Berkshire’s portfolio, even as the firm trimmed its massive stake in Apple (AAPL).
Today, BofA ranks as Berkshire’s third-largest position, trailing only Apple and American Express (AXP).
This move highlights the delicate balance Berkshire strikes in its investment strategy, particularly in the banking business, where even small shifts can make waves in the market.
You May Also Like:
