Berkshire Hathaway Inc. (NYSE:BRK-B) shares closed 1.5% higher at $529.42 on August 10 after gaining as much as over 3% during the session. The Class A shares rose as much as 3.3%, reaching their highest level since the day before Warren Buffett announced he would step down as chief executive.

The market was not simply responding to another profitable quarter. Berkshire-defined operating earnings, a non-GAAP measure of performance across its businesses, rose 16% to $12.98 billion. The bigger surprise was how quickly Greg Abel had started putting Berkshire Hathaway Inc. (NYSE:BRK-B)’s enormous liquidity to work.

Berkshire purchased $23.5 billion of publicly traded stocks during the second quarter and repurchased $4.5 billion of its own shares. In July, it deployed at least another $10.1 billion through additional buybacks and the acquisition of Taylor Morrison Home Corporation.

The question is whether this marks the beginning of a more active capital-allocation era or merely a busy stretch that still leaves Abel with hundreds of billions of dollars to deploy.

BERKSHIRE FINALLY BECAME A NET STOCK BUYER

The most important number in Berkshire Hathaway Inc. (NYSE:BRK-B)’s report was not earnings. It was the nearly $20 billion difference between the stocks it purchased and sold.

Berkshire bought $23.5 billion of equities while selling approximately $3.7 billion during the second quarter. That ended 14 consecutive quarters in which the company had been a net seller of stocks.

The selling streak helped Berkshire’s liquidity climb to record levels. At the end of March, cash, cash equivalents and U.S. Treasury bills totaled approximately $397.4 billion on the balance sheet. After deducting $17.2 billion of unsettled Treasury purchases, Berkshire Hathaway Inc. (NYSE:BRK-B) reported a net figure of $380.2 billion.

Investors could understand why Buffett refused to chase expensive assets. The harder question was whether Berkshire had become too large to find enough opportunities capable of materially affecting per-share value.

That question became the most visible capital-allocation test facing Abel after he succeeded Buffett as CEO at the beginning of 2026. The second quarter provided his first substantive response.

Berkshire Hathaway Inc. (NYSE:BRK-B) deployed capital through publicly traded stocks, share repurchases and a wholly owned acquisition. Those are three distinct parts of the Buffett playbook, and Abel used all three within a relatively short period.

The shift should not be confused with a complete break from Berkshire’s previous activity. The company acquired OxyChem for approximately $9.5 billion in January and continued investing heavily across its operating businesses. What changed during the second quarter was Berkshire’s posture toward publicly traded stocks and its own shares.

After years of net equity selling and limited recent buybacks, Berkshire Hathaway Inc. (NYSE:BRK-B) began using several capital-allocation channels at once.

BULL CASE: ABEL IS USING THE ENTIRE CAPITAL-ALLOCATION TOOLKIT

The constructive case is not that Berkshire has already spent enough to eliminate its cash pile. It is that Abel appears to be establishing a repeatable process for deploying capital without abandoning Buffett’s standards.

Berkshire’s $10 billion Alphabet Inc. (NASDAQ:GOOGL) investment showed that the company remains willing to make a large public-market commitment when it sees an attractive combination of business quality, earnings power and price. Alphabet has since become one of Berkshire’s largest stock holdings.

The investment also fits Berkshire Hathaway Inc. (NYSE:BRK-B) better than Alphabet’s technology label might suggest. Alphabet owns mature businesses that generate substantial cash with relatively little financial leverage. Although the company did not repurchase Class A or Class C shares during the first half of 2026, it has historically returned significant capital through buybacks and retains the capacity to resume them.

Berkshire Hathaway Inc. (NYSE:BRK-B) therefore gained exposure to artificial intelligence and digital advertising through an established cash generator rather than an early-stage technology bet.

The Berkshire Hathaway Inc. (NYSE:BRK-B) buybacks served a different purpose. The company repurchased $4.5 billion of its own stock during the second quarter, compared with only $235 million in the first quarter. The decline in Berkshire’s share count indicates that it spent more than $3.3 billion on additional repurchases in July.

That brought estimated buybacks since April to nearly $8 billion. The continuation into July matters because it shows that the second-quarter activity was not confined to a single purchase made during a temporary decline. Berkshire kept buying as the shares recovered.

Berkshire Hathaway Inc. (NYSE:BRK-B)’s repurchase policy allows Abel to authorize buybacks when he believes the shares trade below a conservatively determined estimate of intrinsic value, after consulting Buffett, who remains chairman. That arrangement preserves Buffett’s influence over valuation discipline while making Abel responsible for the final capital-allocation decision.

Taylor Morrison added a third deployment channel. Berkshire completed the acquisition on July 24 at an equity value of approximately $6.8 billion. The transaction had an enterprise value of approximately $8.5 billion after including Taylor Morrison’s debt.

The national homebuilder now sits alongside Clayton Homes and Berkshire Hathaway Inc. (NYSE:BRK-B)’s collection of building-products businesses. Unlike a minority stock investment, Taylor Morrison gives Berkshire control over the asset and another operating platform in which it can reinvest capital.

Taylor Morrison’s mortgage, title, escrow and insurance operations may also complement Berkshire’s existing housing and financial-services businesses. The strategic logic is recognizably Berkshire Hathaway Inc. (NYSE:BRK-B). Abel expanded an industry cluster the conglomerate already understands instead of pursuing an unfamiliar business simply to announce a large acquisition.

Alphabet, Berkshire’s own shares and Taylor Morrison address the cash problem in different ways. One adds a liquid minority investment, another increases each remaining shareholder’s claim on Berkshire, and the third adds an entire operating company.

That range may be more important than the amount spent in any one transaction.

THE DEPLOYMENT IS ACTIVE, BUT NOT AGGRESSIVE

The recent activity looks substantial in isolation. Berkshire Hathaway Inc. (NYSE:BRK-B)’s second-quarter stock purchases and buybacks, combined with its July repurchases and Taylor Morrison acquisition, represent more than $38 billion of gross capital deployment.

That is a clear change from the extended net stock-selling streak and recent buyback lull. It is not indiscriminate spending.

As of June 30, Berkshire held approximately $365.5 billion of cash, cash equivalents and Treasury bills on its balance sheet. After subtracting $771 million of unsettled Treasury purchases, the company reported a net figure of $364.7 billion.

Measured consistently, that was down from the $380.2 billion net figure reported at the end of March. Berkshire therefore deployed a considerable amount of capital while preserving extraordinary financial flexibility.

This is the balance Abel needs to maintain. Spending too slowly allows liquidity to accumulate faster than Berkshire Hathaway Inc. (NYSE:BRK-B) can use it. Spending too quickly would raise concerns that the new CEO feels pressured to prove himself by accepting lower expected returns.

So far, the pattern falls between those extremes. Alphabet was a large but liquid investment. Buybacks increased the ownership stake of remaining shareholders. Taylor Morrison expanded an industry platform Berkshire Hathaway Inc. (NYSE:BRK-B) already knows.

Abel appears willing to use Berkshire’s capital more actively without visibly changing the threshold used to judge an opportunity. That is the strongest early evidence that succession may produce a more active company without producing a less disciplined one.

OPERATING RESULTS GAVE ABEL ROOM TO ACT

Berkshire’s operating businesses generated enough momentum to support the capital-allocation shift.

Company-defined operating earnings increased to $12.98 billion from $11.16 billion a year earlier. Revenue rose 10% to $101.81 billion. BNSF’s after-tax earnings increased 6%, while Berkshire Hathaway Energy’s profit climbed 27%. Earnings from manufacturing, service, and retailing businesses rose 24%.

The breadth of the improvement matters because Berkshire does not need to preserve its entire liquidity position to support existing operations. Its subsidiaries continue generating additional capital that Abel must redeploy.

GAAP net income more than doubled to $25.67 billion, although that figure included unrealized gains on Berkshire’s stock portfolio. Berkshire Hathaway Inc. (NYSE:BRK-B) has long warned that quarterly changes in investment values can make net income a poor measure of the performance of its operating businesses.

The company-defined operating earnings measure offers a clearer view of those businesses. It showed that Abel’s first major burst of capital deployment arrived while most of the conglomerate was producing higher profit.

That is both a strength and a complication. Berkshire Hathaway Inc. (NYSE:BRK-B) has the financial capacity to keep investing, but its operating businesses and investment portfolio continually replenish the liquidity Abel is trying to deploy.

A few large transactions can slow the accumulation. Preventing it from rebuilding requires a sustained pipeline.

BEAR CASE: $364.7 BILLION REMAINS A FORMIDABLE CAPITAL-ALLOCATION TEST

The skeptical case begins with scale.

Taylor Morrison’s $6.8 billion equity value represented less than 2% of Berkshire Hathaway Inc. (NYSE:BRK-B)’s reported net liquidity at the end of June. The $10 billion Alphabet investment absorbed less than 3%. Even nearly $8 billion of estimated buybacks since April has had only a modest effect on a company valued at more than $1 trillion.

The recent spending demonstrates willingness. It does not yet prove that Berkshire can consistently deploy enough capital to prevent its liquidity balance from returning to record levels.

Berkshire’s operating businesses and investment portfolio continue generating billions of dollars. Abel therefore needs a sustained flow of suitable opportunities, not one strong quarter. If equity valuations remain elevated and owners of large private businesses remain reluctant to sell, Berkshire Hathaway Inc. (NYSE:BRK-B) could quickly return to accumulating Treasury bills.

Buybacks may also become less attractive as the stock rises. Berkshire shares reached a new 52-week high on August 10. A sustained rally could reduce the opportunity to repurchase stock at prices that clearly improve per-share value.

Taylor Morrison brings a different timing risk. Berkshire Hathaway Inc. (NYSE:BRK-B) is increasing its housing exposure while high borrowing costs and affordability constraints continue to weigh on the industry. Clayton Homes’ second-quarter pre-tax earnings declined 3.5%, as weaker homebuilding profitability offset growth in financial services.

Taylor Morrison may create long-term value, but the acquisition also increases Berkshire’s exposure to mortgage rates, construction demand, housing affordability and consumer confidence.

Alphabet presents its own question. The investment gives Berkshire Hathaway Inc. (NYSE:BRK-B) another high-quality cash generator, but a $10 billion position remains relatively small against Berkshire’s total assets. Even a strong return may not materially change the conglomerate’s growth rate unless the position becomes larger.

Abel has demonstrated that he can find several credible uses for Berkshire’s capital. The next challenge is repeating that performance at a scale large enough to matter.

GEICO REMAINS THE QUARTER’S BIGGEST WARNING

Berkshire Hathaway Inc. (NYSE:BRK-B)’s headline operating growth also concealed a significant decline at GEICO.

The auto insurer’s pre-tax underwriting profit fell 45% as accident claims and advertising expenses increased. GEICO has been spending heavily to regain customers after previously reducing policy counts to improve underwriting quality.

The concern is that GEICO may now be paying more to attract policyholders just as claims pressure returns. Overall profit from Berkshire’s insurance and reinsurance businesses declined 11% during the quarter.

That weakness does not undermine the capital-allocation case by itself, but it complicates the succession story. Abel is not responsible only for choosing stocks and approving acquisitions. His reputation as a hands-on operator creates expectations that Berkshire Hathaway Inc. (NYSE:BRK-B)’s subsidiaries will also become more efficient and accountable.

The quarter showed stronger performance across the railroad, energy and industrial businesses. GEICO showed why operating execution remains as important as deploying cash.

Berkshire Hathaway Inc. (NYSE:BRK-B) also warned that tariffs, wars and broader economic conditions continue to create considerable uncertainty. Sluggish demand was already visible at businesses including its automotive dealerships, Fruit of the Loom and Forest River.

A weaker economy could give Abel more attractive investment opportunities. It could also pressure the earnings generated by Berkshire’s operating companies and increase the risks attached to economically sensitive acquisitions.

INSIDER MONKEY’S HEDGE FUND DATA ANALYSIS

Hedge funds did not broadly return to Berkshire Hathaway Inc. (NYSE:BRK-B) during Abel’s first quarter as CEO.

According to Insider Monkey’s database, 126 hedge fund portfolios held Berkshire Hathaway Inc. (NYSE:BRK-B) at the end of the first quarter of 2026, down from 133 at the end of the preceding quarter.

The first-quarter filings captured the resumption of Berkshire Hathaway Inc. (NYSE:BRK-B)’s buybacks in March. They did not include the $10 billion Alphabet investment, the second-quarter repurchase surge or the completion of the Taylor Morrison acquisition.

CONCLUSION

Greg Abel has not ended Berkshire Hathaway Inc. (NYSE:BRK-B)’s cash-hoard problem. He has weakened the argument that Berkshire is unable or unwilling to address it.

The distinction matters. Berkshire still reported $364.7 billion of net liquidity at the end of June, and the recent investments remain modest relative to the company’s scale. Preventing that balance from returning to record levels will require years of productive deployment.

What changed in the second quarter was the range and pace of activity. Berkshire Hathaway Inc. (NYSE:BRK-B) became a net stock buyer, made a substantial investment in Alphabet, accelerated share repurchases, and followed its January OxyChem acquisition with another wholly owned business in Taylor Morrison.

Abel’s first major capital-allocation test therefore looks encouraging but incomplete. He has shown that Berkshire can become more active without visibly abandoning Buffett’s discipline.

The next test is whether suitable opportunities continue to appear, and whether Abel can deploy enough capital to move Berkshire’s per-share results without lowering the standards that created the cash pile in the first place.

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