For three weeks, Wall Street sold the market’s hottest trades and bought one of the oldest. Chip stocks lost 15% while Warren Buffett’s Berkshire Hathaway gained 7%.
That swing brought Berkshire Class B shares (BRK-B) to a record close Tuesday, the first since May 2, 2025 — the day before Buffett announced he would hand Greg Abel the CEO job. The stock hit an intraday high on Wednesday, as did Class A stock (BRK-A).
The wait lasted 17 months, during which time the S&P 500 (^GSPC) gained more than 35%.
From October 6 through Tuesday, the iShares Semiconductor ETF (SOXX) fell in 10 of 11 sessions. Berkshire rose on nine of those days, and on the chips’ two worst days, October 14 and 16, it posted two of its best gains of the race.
For now, this price action has made Berkshire a hedge against the AI chip trade. Since October 1, it has increased mainly on days when the tokens fell.
Berkshire is on track to advance in 14 of its last 15 sessions. Along the way, he went on a 10-day winning streak, his first since 2018, according to Yahoo Finance calculations.
A gap last seen during the Internet company crisis
From October 2 to Tuesday, Berkshire beat SOXX by 22 percentage points. This is the largest gap in a 12-session period since early 2010, according to Yahoo Finance calculations comparing Berkshire to the PHLX Semiconductor Index (^SOX) since 1994. The 12-session window is the one that captures the largest gap this month.
The rarest signal is the combination.
The tokens fell at least 14% while Berkshire gained at least 7% over 12 sessions. Before this month, this last happened on October 3, 2001. All previous cases occurred in 1995-96 or 2000-01, the last case being when the dotcom bubble burst.
The story sends a mixed message from here.
In the short term, the tokens have rebounded. They were higher a week later in five of the previous six cases, and they also rebounded on Wednesday. A year later, the tokens were down in five out of six cases, and the S&P 500 fell in four cases.
However, four of these six cases occurred during the same bear market. Consider this a rare signal and not a forecast.
Abel’s Berkshire is spending again
Abel also changed the way Berkshire uses its cash. Berkshire repurchased about $4.5 billion of its own shares in the second quarter and closed 14 straight quarters of net stock sales while its cash flow fell from a record $397 billion.
Buffett said on September 18 that he would also step down as chairman. The stock hit its lowest level two weeks later.
The next test is the third quarter results, which are expected to be released on Saturday, November 7.
Gn bussni
