Berkshire Hathaway cash deployment under Greg Abel

The company said profits rose 16% last quarter, reinforcing that Berkshire’s operating businesses remain resilient even as the leadership transition continues. For long-term investors, that combination is important: strong underlying earnings give Abel room to move without leaning on financial engineering, and Berkshire’s balance sheet still gives it flexibility few companies can match.

The shift also raises the stakes around succession. Buffett’s capital-allocation judgment helped turn Berkshire into a compounding machine over decades, and Abel now has to prove he can preserve that same edge. Spending cash is easy; spending it well is what will determine whether Berkshire can keep outperforming over the next decade.

From an investor’s perspective, that makes Berkshire more interesting, not less. A larger pace of deployment could support earnings growth, but it may also shrink the margin of safety that has historically made the stock so durable in volatile markets. The key question is not whether Berkshire will spend, but whether it can continue buying strength at sensible prices.

The stock’s technical picture suggests investors are already rewarding the story. Berkshire Class B shares recently traded above both the 50-day and 200-day moving averages, though the relative strength index has moved into overbought territory, hinting that the market may have gotten ahead of itself in the short term. For patient investors, that is usually a reminder to focus on the next 3 to 10 years, not the next 3 to 10 days.

Berkshire’s transition under Abel is still in its early innings, but the outline is becoming clearer: robust profits, massive financial firepower and a new chief executive who appears ready to use it. For investors building durable portfolios, that is the kind of story worth watching closely — and keeping on the long-term buy list.