As investors reassessed AI-related stocks, money rotated toward Berkshire Hathaway, lifting its shares well ahead of the S&P 500. In the month through early November, Berkshire outperformed the index by 19.2 percentage points—the widest gap since 2010. But a 43% decline in insurance profits complicates the picture and leaves the durability of its relative strength uncertain.
Berkshire’s Class B shares rose 13.2% over the period to a record high, while the S&P 500 fell 3.7%. The divergence reflects both a repricing of AI-linked assets and a shift in some investor funds toward companies with more traditional, diversified operations.
Doubts over AI spending fuel rotation into Berkshire
Nvidia, one of the central companies in the AI boom, has retreated from the record it set on October 6, losing nearly $1.4 trillion in market value. Its shares fell 9.26% on November 5. Investors have begun questioning whether technology companies’ heavy data-center spending will deliver commensurate returns, putting valuations across the AI supply chain under pressure.
Concerns also grew after the November 3 U.S. midterm elections that new data-center projects could face tighter scrutiny. As AI stocks fell, some investors turned to Berkshire. Unlike companies more exposed to chip demand and the data-center investment cycle, Berkshire operates across railroads, energy, manufacturing and insurance, giving it a broader mix of revenue sources.
The performance gap ranks fourth-largest in the past 30 years. The widest occurred during the 2008 financial crisis, when Berkshire outperformed the S&P 500 by 29.6 percentage points. The current spread remains below that level but is well beyond the range typically seen in recent years.
Record share price contrasts with weaker insurance profits
Berkshire’s rising share price does not reflect improvement across all its businesses. Profit from its insurance operations fell 43%, an earnings setback that contrasts with the stock’s record high. Investors weighing the rally must account for both the relative advantage Berkshire gained as money moved out of AI stocks and the fact that its own results were not uniformly strong.
Market observers have noted Berkshire’s resilience since Warren Buffett stopped serving as chief executive. Its lead over the S&P 500 reflects the company’s business mix as well as the pullback in technology shares and the resulting rotation in investor funds. The relative performance could change if selling pressure on AI stocks eases or pressure on Berkshire’s earnings becomes more pronounced. The available figures do not establish how long its lead will last.