By Jonathan Stempel
(Reuters) -Berkshire Hathaway's market value closed above $1 trillion for the first time on Wednesday, reflecting investor confidence in the conglomerate that Warren Buffett built over nearly six decades into what many consider a proxy for the American economy.
Buffett's company joined six other U.S. companies, all in or tied to the technology sector, valued at more than $1 trillion: Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Google parent Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) and Facebook parent Meta Platforms (NASDAQ:META).
Berkshire's Class A shares closed up 0.7% at $696,502.02. The more widely held Class B shares rose 0.9% to $464.59.
Buffett, who turns 94 on Friday, has run Omaha, Nebraska-based Berkshire since 1965.
He transformed it from a failing textile company into a colossus with dozens of old-economy businesses such as Geico car insurance, the BNSF railroad, Berkshire Hathaway (NYSE:BRKa) Energy, Brooks running shoes, Dairy Queen ice cream, Ginsu knives and the World Book encyclopedia.
The operating businesses generated $22.8 billion of profit in the year's first half, up 26% from 2023.
Berkshire also has a huge stock portfolio even after selling tens of billions of dollars of Apple and Bank of America, its largest and until recently its second-largest stock holdings, in 2024.
The sales are a major reason Berkshire's cash hoard, mainly in U.S. Treasury bills, soared to $276.9 billion as of June 30. Berkshire has also slowed repurchases of its own stock.
"Buffett built Berkshire in a systematic, relatively low risk manner," said Steve Check, president of Check Capital Management in Costa Mesa, California, which invests one-third of its $2 billion of assets in Berkshire stock and options. "As a huge conglomerate it will always have parts doing well."
The $1 trillion valuation is based on Berkshire's 553,234 Class A and 1,325,192,508 Class B shares outstanding as of July 23.
Since the year Buffett took charge, Berkshire shares have gained more than 5,600,000%.
That's about 20% annually, nearly double the annualized gain in the Standard & Poor's 500 including dividends.
No single catalyst appeared to fuel Wednesday's gain. Berkshire's Class A shares are up 28% this year, while the S&P 500 excluding dividends is up 17%.
Buffett still owns more than 14% of Berkshire despite having donated more than half his shares to charity since 2006.
His $146 billion fortune makes him the world's sixth-richest person, Forbes magazine said on Wednesday.
Check said he became a grandfather on Aug. 16, and bought 100 Berkshire Class B shares for his grandson Zealand that day.
"Investors should certainly not jump in because the market cap hit $1 trillion, and the stock is perhaps as fully priced as it has been since before the 2008 financial crisis," he said. "It is a good investment for someone with a 10-year horizon."