Shares of Berkshire Hathaway have been on a tear recently, rising about 17% in the first two months of 2024.
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Berkshire Hathaway hit a record high on Monday and is approaching a $1 trillion valuation after it reported fourth-quarter earnings over the weekend.
The conglomerate, led by CEO Warren Buffett, saw its Class B shares jump as much as 3% in Monday trades, giving it a valuation of about $931 billion. The stock has since given up those gains and is trading lower by about 1%.
Shares of Berkshire Hathaway have been on a tear recently, rising about 17% in the first two months of 2024.
Fourth-quarter and full-year 2023 results for Berkshire Hathaway showed a surge in growth for the company's revenue and profit results, though it did have somewhat easy comparables compared to 2022.
Revenue for the company surged in the fourth quarter to $169.9 billion, representing a year-over-year increase of 83%. Adjusted revenue, which excludes gains and losses from Berkshire's investment portfolios, jumped 70% year-over-year to $133.1 billion.
The surge in revenue was driven by the company's 2022 acquisition of Alleghany, an insurance company, and the inclusion of operating results from Pilot Travel Centers.
Meanwhile, Berkshire Hathaway's operating earnings jumped 28% year-over-year to $8.5 billion during the fourth quarter and were up 21% to $37.4 billion for all of 2023.
Finally, Berkshire Hathaway said it held $167.6 billion in cash as it continues to search for its next big investment.
Whether future investments will be able to move the needle for Berkshire Hathaway remains to be seen, and Buffett played down investor expectations considerably in his annual letter to shareholders.
"There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others. Some we can value; some we can't. And, if we can, they have to be attractively priced. Outside the U.S., there are essentially no candidates that are meaningful options for capital deployment at Berkshire. All in all, we have no possibility of eye-popping performance," Buffett said.
While Berkshire Hathaway may face challenges in deploying its cash and growing its earnings considerably in 2024, the company should continue to fare just fine thanks to its diverse exposure to various industries, according to an analyst note from Bloomberg Intelligence.
"A slowing economy, rising labor costs and wildfire lawsuits may be headwinds to non-insurance units. Still, we think Berkshire's earnings will remain robust due to its diverse segments," Bloomberg Intelligence said in a Monday note.
