Berkshire Hathaway’s 60‑Year Outperformance And The Stock That Could Fuel Future Gains Under Greg Abel

Key Points

• Even after trimming its holdings in recent years, Apple remains Berkshire Hathaway’s largest public equities position.
• Valuation concerns linger for the “Magnificent Seven” stock, yet its size means it will drive portfolio returns.
• Berkshire’s massive cash balance continues to weigh on share‑price performance.

Berkshire Hathaway (NYSE: BRKA/BRKB) shares have risen 236% over the past decade (as of Sept. 2). Critics note this trails the S&P 500’s total return, prompting questions about capital‑allocation decisions. Nonetheless, over the past six decades Berkshire’s stock has compounded at an annualized rate of 19.7%, far outpacing the S&P 500’s 10.5% average. The conglomerate’s long‑term record is so robust that even a hypothetical 99% drop tomorrow would still leave it ahead of the benchmark over a 60‑year horizon.

Warren Buffett’s stewardship earned him widespread acclaim. His successor, Greg Abel, now directs capital for the $1.1 trillion enterprise. Investors are watching closely to see whether Berkshire can continue to outperform the S&P 500 in the decades ahead.

Image source: The Motley Fool.

Apple remains Berkshire Hathaway’s largest public equity holding

Berkshire Hathaway first bought Apple shares in Q1 2016. Since then, the consumer‑technology giant’s stock has surged more than 1,140%. At one point the position represented roughly half of Berkshire’s entire portfolio, making it arguably Warren Buffett’s most successful investment by dollar value.

Starting in late 2023, Berkshire trimmed its Apple stake, yet the holding still accounts for over 20% of the $73.8 billion portfolio. Because of its size, Apple is the single asset that can have the most material impact on Greg Abel’s ability to beat the market.

Valuation is a headwind: Apple trades at a price‑to‑earnings ratio of 37.2 and is up 19% in 2026, leaving little margin of safety. Nevertheless, the company’s elite brand, pricing power, and tightly integrated ecosystem support its competitive stance and can sustain market sentiment.

Financially, Apple’s growth has accelerated, driven by strong demand for the iPhone 17 family. Revenue rose 16.2% year‑over‑year in the first nine months of fiscal 2026 (ended June 27). Profits are robust and free cash flow remains strong, underscoring the business’s durability.

The odds aren’t stacked in Greg Abel’s favor

Apple also welcomed a new CEO, John Ternus, replacing Tim Cook, whose 15‑year tenure oversaw the “Magnificent Seven” surge of more than 2,200%.

Ternus faces a lofty challenge, as does Abel, who confronts an uphill battle to achieve market outperformance. Scale is the primary obstacle: Berkshire Hathaway is now one of the world’s most valuable companies, and delivering 20% annual intrinsic‑value growth is far harder than it was when the firm was smaller.

Size can inhibit growth, a reality reflected elsewhere on the balance sheet. As of June 30, Berkshire held $365.5 billion in cash and short‑term Treasuries, equal to 34% of its market capitalization. The limited pool of sizable investment opportunities means the cash buffer, while providing protection against market downturns, will continue to drag on performance.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.

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