Warren Buffett may still be calling the shots in Omaha, but the stock market appears to be pricing in a world without him – and fast.
During the second quarter of 2025, Berkshire Hathaway's (NYSE:BRK) (NYSE:BRK) Class B shares underperformed the S&P 500 Index by a historic margin, lagging the benchmark by nearly 18 percentage points since the May 3rd shareholder meeting, when Buffett reiterated his retirement succession plan.
Source: TradingView
What makes this stretch remarkable isn't just the scale of the drop — it's that this is the biggest quarterly underperformance in the history of the stock, outside of the Covid crash (exception being the second quarter of 2020).
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This Isn't Just Another Rough Patch
Berkshire has had off quarters before, but rarely one this severe. In the second quarter of 2020, the market was in chaos, reacting violently to pandemic shutdowns, Fed shockwaves, and unprecedented global uncertainty.
In contrast, the second quarter of 2025 has been relatively stable and broadly bullish, with the S&P 500 powering higher on AI euphoria, tech strength, and a resilient consumer.
So what's dragging Berkshire down? Likely, a mix of rotation out of value-heavy sectors, fading interest in financials and industrials, and a psychological shift as investors begin to think more tangibly about the post-Buffett era.
From Aura To Arithmetic
For decades, Berkshire traded with a halo – the ‘Buffett Premium’ – a valuation lift rooted in investor faith in the Oracle's judgment and capital discipline. That premium now seems to be eroding.
Without Buffett's active presence or new bold moves to counteract the market's pivot to growth and innovation, Berkshire is beginning to look like just another value stock.
And markets are treating it accordingly.
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