Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How Greg Abel Is Reshaping Berkshire Hathaway for June 2026
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- Lucas: Greg Abel has now spent about a year and a half effectively running Berkshire Hathaway's daily operations, and the shape of his tenure is getting much clearer — especially with the nearly 17 billion dollars in deals he's put together so far in 2026. Luna: Seventeen billion is a serious number even by Berkshire standards. How much of that is actually new — deals that Buffett probably wouldn't have done? Lucas: That's the key question. And I think the surprising answer is: a meaningful chunk. Abel has made three big moves that stand out. First, there's the acquisition of a minority stake in a private AI chip designer — the company makes application-specific chips for data centres. That's a sector Buffett famously avoided, calling tech too unpredictable. Second, there's the roughly 4 billion dollar purchase of a logistics software firm that uses machine learning to optimise supply chains. And third, he doubled down on energy infrastructure, but with a twist — the new assets are tied to renewable-powered data centres. Luna: So the common thread is AI infrastructure — not just buying a utility or an insurance company. That feels like a real pivot from the traditional Berkshire moat philosophy. Lucas: Exactly right. And the market seems to be rewarding it. The S&P 500 is up about 1.2 percent over the past five days, as of June 3rd, but Berkshire's class B shares have outperformed by a couple of percentage points. Investors are essentially pricing in a premium for Abel's willingness to deploy capital into secular growth areas. Luna: I remember when Buffett bought into Taiwan Semiconductor a few years ago; that was seen as a big tech bet. But this feels more deliberate — like Abel is systematically building a tech-adjacent portfolio within Berkshire. Lucas: Right. The Taiwan Semiconductor stake was more of a value play — buying a well-run cyclical company at a discount. What Abel is doing is different. He's buying into the growth narrative directly. The AI chip designer, for example, isn't profitable yet. It's at that stage where revenues are growing at triple digits and the company is reinvesting everything. Berkshire traditionally hates that kind of profile. But Abel seems comfortable with it as long as the addressable market is large enough. Luna: And he's using Berkshire's cash pile, which was around 325 billion at last count. So he's not levering up. But he is rotating from cash into higher-risk, higher-return assets. That's a strategic choice. Lucas: It is. And it's also a bet on the durability of the AI investment cycle. Some analysts are nervous that the AI capex boom could peak in the next year or two. But Abel is acting like the infrastructure buildout has years left. For context, the deals so far in 2026 represent about 5 percent of the cash pile. If he keeps up this pace, Berkshire could deploy 30 to 40 billion by year-end. Luna: And that's still far less than the 60-plus billion Buffett deployed at times when he saw huge bargains. So Abel isn't going wild. He's just being more growth-oriented. Lucas: Precisely. And there's another angle: the leadership transition itself. Buffett is still chairman, but Abel is the ceo designate in everything but title. The market is essentially watching a handoff in real time. And so far, the reaction has been overwhelmingly positive. The stock's multiple has expanded from about 1.4 times book value a year ago to about 1.6 times now. Luna: That's a meaningful rerating for a company of Berkshire's size. It suggests investors believe the growth profile is improving. But is there any risk that Abel is moving too fast? The tech deals he's doing aren't exactly in Berkshire's circle of competence historically. Lucas: That's the counterargument. And to be fair, some of the early returns are mixed. The logistics software deal closed in February; we haven't seen how that integration is going. AI chip design is a notoriously tough business — even established players like Intel have struggled. There's execution risk. But I think Abel's strategy is to mitigate that by taking minority stakes rather than full control. He's not running the chip company; he's just a large shareholder. That gives him optionality without full operational exposure. Luna: That's a classic Buffett approach — you can be a passive investor and still benefit from the tailwind. So maybe Abel is blending his own instincts with Berkshire's DNA. Lucas: That's the best way to frame it. Now, the big question going forward is whether Abel will eventually make a transformational acquisition — something like a full takeover of an AI or tech company. That would be a true departure from Buffett's playbook. But for now, the market seems to appreciate the measured approach. Luna: And you've got to think about the broader macro backdrop. The S&P 500 at 7,610, the NASDAQ at over 27,000 — these are high valuations. The Fed holding rates at 3.63 percent isn't exactly loose. So Abel is making these bets in an environment where the cost of capital is still relatively high. That adds another layer of risk. Lucas: Absolutely. If we hit a recession, those high-growth tech stakes could get hit hard. But Berkshire's insurance and utility earnings provide a cushion. That's the conglomerate advantage — the non-tech businesses generate steady cash flows regardless of the cycle. So Abel can afford to be patient with the tech bets. Luna: It's interesting that you bring up patience, because in a way, that's what this whole conversation is about. We spend so much time talking about market moves and quarterly data, but the real story is how a company like Berkshire evolves over decades. Lucas: That's a great point. And it's actually why we keep the conversation on Bull Market Conversations ad-free — we want to focus on the long-term thinking, not the noise. If these discussions have helped you think differently about investing or corporate strategy, you can support the show by buying us a coffee at buy me a coffee dot com slash fexingo. That link helps us stay independent and ad-free. Luna: Yeah, it's a simple way to keep the show exactly as it is — no sponsors, no interruptions. We appreciate everyone who's chipped in. Lucas: Alright, back to Abel. One more data point: Goldman Sachs CEO David Solomon said this week that markets are in 'greed' mode, as AI companies seek billions in funding. That environment is actually perfect for Abel's strategy — there's a lot of capital chasing AI deals, but Berkshire's name and long-term horizon give it an edge over VC firms that need exits within a decade. Luna: So he can essentially pick his spots. And the market seems to trust him to do that wisely. Lucas: Exactly. And I think the legacy here is that Abel is proving that Berkshire can evolve without losing its identity. It's still a conservatively financed, long-term-oriented holding company. It's just that the definition of 'long-term' now includes AI infrastructure. And that's a shift worth watching for the rest of 2026.