Berkshire Hathaway's cash reserves surge to a record $397 billion, while U.S. stock valuations reach historic highs during the same period.

Mars Finance News, in the first quarter with Greg Abel serving as CEO, Berkshire Hathaway’s cash reserves soared to a record high of $397 billion.
At the end of last year, the company’s cash reserves slightly declined, but in the first quarter, they increased significantly due to a net sale of $8.1 billion worth of stock during the period.
Additionally, Berkshire Hathaway A (BRK.A.N) announced Q1 2026 revenue of $93.68B, compared to $89.73B in the same period last year, with a market expectation of $89.27B; net profit of $10.11B, compared to $4.6B last year, with a market expectation of $11.76B.
As of the end of Q1 2026, Berkshire Hathaway’s fair value of fixed income securities held reached $17.67B, compared to $17.82B in the same period last year.
Warren Buffett has always viewed cash as a “necessary but not ideal asset,” often comparing it to oxygen—crucial for businesses but not a good investment in itself.
Buffett repeatedly emphasizes that Berkshire will never prefer holding cash equivalents over high-quality businesses; cash is merely a war chest waiting for “super good opportunities.”
When market valuations are too high and investment targets lack attractiveness, he prefers to hoard cash rather than force a deal; but once a great opportunity arises, he will deploy this ammunition without hesitation.
In Buffett’s view, cash can provide safe returns in a high-interest-rate environment, but in the long run, investing in excellent companies is far more valuable.
While Berkshire’s cash holdings hit a new high, despite the S&P 500 and Nasdaq indices continuously reaching new all-time highs recently, there are still multiple risks behind the market, and valuations are in historically high ranges.
Data as of April shows the S&P 500’s trailing P/E ratio is about 24 times (versus a historical average of around 16 times), the Shiller P/E (cyclically adjusted) has risen above 37 times, reaching extremely high levels in history, second only to the internet bubble period.
This “valuation + high expectations” combination means the market’s tolerance for errors is extremely limited.
Moreover, the current rise in U.S. stocks is based on optimistic assumptions such as “AI-driven profits, falling inflation, declining interest rates, and manageable risks,” and any deviation in any variable could trigger amplified shocks in the market.