Latest / Finance TL;DR Daily / Buffett's Berkshire Ends Its Cash Hoarding Streak as TSMC Rides the AI Wave
Transcript
- Buffett's Berkshire Ends Its Cash Hoarding Streak as TSMC Rides the AI Wave 2026-08-10 Alex: Welcome to Finance TL;DR Daily, the podcast where we break down the biggest stories in finance. It's Monday, August tenth. And today, Warren Buffett's company just did something it hasn't done in three and a half years — it started buying stocks again. Riley: Here's what's moving today. Alex: So Berkshire Hathaway just ended a fourteen-quarter streak of net selling. That's three and a half years of Buffett and now Greg Abel being net sellers of equities, and in the second quarter they flipped hard — twenty-three and a half billion dollars in purchases against just three point seven billion in sales. Riley: Fourteen quarters is a long time to just sit on cash. How big was that pile getting? Alex: Nearly four hundred billion dollars at its peak. That's the headline everyone's been watching — is Buffett's company basically saying it can't find anything worth buying. Well, now it's saying the opposite. They also ramped up buybacks, four and a half billion in the quarter versus just two hundred thirty-five million in the first quarter, plus another three point three billion in July alone. Riley: And the cash pile's come down to what, roughly? Alex: About three hundred sixty-five billion. Still enormous, but the direction of travel matters more than the number. And look at where the money went — ten billion into Alphabet, nine point seven billion buying OxyChem outright, six point eight billion for the homebuilder Taylor Morrison. Riley: That's a proper spread — big tech, chemicals, housing. Not exactly a single theme. Alex: No, and I think that's the point. It reads less like a bet on one sector and more like Abel saying, broadly, prices look reasonable again. Operating profit was up sixteen percent to just under thirteen billion, and net income more than doubled to twenty-five point six seven billion. Riley: What did you make of that CFRA line, the one about Abel asserting himself? Alex: Cathy Seifert said it's a healthy beat and that slowly, gradually, subtly, we're seeing Greg assert himself as the new leader. I think that's the real story underneath the numbers — this isn't Buffett's playbook anymore, it's Abel's first real signature move as CEO. Riley: Worth noting a healthy chunk of that net income jump is unrealized gains on the equity portfolio, so it flatters the number a bit. But the buying pattern itself is the harder signal, and that's genuine. Alex: Fair caveat. Either way, after three and a half years of hoarding, the world's most closely watched value investor just said now's the time. Riley: Well, sticking with big numbers moving markets — Taiwan Semiconductor just posted a forty-five percent jump in sales, and this is becoming a familiar story. Alex: Familiar how? Riley: Because it keeps happening. Last quarter, the one ending in June, revenue came in at one point two seven trillion Taiwan dollars — about thirty-nine and a half billion US — up thirty-six percent year on year. And that followed a first quarter where revenue was up thirty-five percent. This is now several consecutive quarters of extraordinary growth, all riding on AI chip demand. Alex: TSMC makes the chips for Nvidia and Apple, among others, so when they say demand is strong, that's not a guess — that's an order book. Riley: Exactly, and the chairman, C.C. Wei, put it plainly — AI related demand continues to be extremely robust. What's telling is the mix. Advanced chips, seven nanometre and below, that's the really cutting-edge stuff, made up seventy-seven percent of total wafer revenue last quarter. Alex: So the growth isn't just volume, it's the highest-margin, most advanced part of the business doing the heavy lifting. Riley: Which is rather the whole thesis behind the AI trade holding up — that the demand isn't just hype, it's translating into actual, very large orders for the most expensive chips to make. TSMC sits right at the centre of that supply chain, so their numbers are as close to a direct AI-spending gauge as markets get. Alex: Is there a risk this is running ahead of itself, though? Forty-five percent is a big number to sustain. Riley: That's the question everyone's asking, but for now the read from the company itself is that demand keeps outpacing what they expected even a quarter ago. Whether that holds through the back half of the year is genuinely the thing to watch. Alex: Which brings us to a company trying to catch up to that AI wave rather than ride it — Intel just announced a fifteen billion dollar stock offering. Riley: That's a big dilution hit for existing shareholders. What's driving it? Alex: They want to fund an aggressive expansion into AI — scaling up the foundry business, building out this Terafab chip complex, and total costs on these projects could run as high as one hundred nineteen billion dollars. Intel's stock has also been riding high, valuations at levels not seen since the dot-com era, and the research shop SemiAnalysis had basically been telling them, quote, issue equity now, while investors are enthusiastic. Riley: So this is Intel cashing in on a strong share price to fund the buildout, rather than raising debt. Alex: That's the read. And CEO Lip-Bu Tan has been making the case that the CPU is reinserting itself as, quote, the indispensable foundation of the AI era. Their data center and AI segment revenue was up twenty-two percent year over year in the first quarter, to five point one billion. Riley: Is that enough to justify a raise this size, though? Five billion in one segment against a fifteen billion raise and a hundred-nineteen-billion price tag on the whole build-out. Alex: It's a gap, and that's exactly why this is being framed as a long-term bet over near-term dilution. Intel's essentially saying the CPU still matters in an AI world dominated by GPUs, and they need the capital now to prove it. Riley: It does underline just how expensive it is to stay in this race at all. Even a company with Intel's history needs to go raise fresh equity just to keep pace. Alex: Which is a pretty stark contrast to Berkshire sitting on nearly four hundred billion doing nothing for three years. Riley: Different problem entirely. Now — away from chips and cash piles, there's a geopolitical story that's quietly been pushing oil prices higher, and it's the standoff over the Strait of Hormuz. Alex: This has been simmering for a while. What's changed? Riley: President Trump has shifted tone. He told Axios the U.S. is, quote, low-keying it, and is essentially waiting for economic pain to build inside Iran rather than launching new strikes — watching, as he put it, Iran with its huge inflation and the fact they have no money. Alex: So less military escalation, more economic squeeze. What does that look like in practice? Riley: A naval blockade that keeps tightening. The U.S. redirected twenty more commercial vessels last week, bringing the total to fifty-five, up from thirty-five just over a week before that. And actual traffic through the Strait has thinned right out — only eight confirmed crossings on Friday, a third down from the day before. Alex: And the Strait carries something like a quarter of the world's seaborne oil trade, so that drop-off isn't trivial. Riley: No, it isn't, which is why Brent crude rose one point one percent to eighty-four forty-five a barrel on Monday, and WTI gained about a percent to just under seventy-nine. Iran, for its part, wants the blockade lifted, US troops out, and frozen assets released before it'll even discuss reopening the waterway. There's also a draft parliamentary plan in Tehran to bar US and Israeli ships outright and fine violators twenty percent. Alex: Doesn't sound like either side is in a hurry to blink. Riley: Warren Patterson at ING put it well — there doesn't seem to be much of a compromise, which makes a sustainable deal harder to reach. ING's still forecasting Brent to average around eighty dollars this quarter, so for now the market isn't pricing in a full-blown supply shock, more a slow-burn standoff. Alex: Worth watching whether that patience holds if crossings keep falling the way they did on Friday. Riley: Quite — the direction of that shipping number may end up mattering more than any single headline out of Washington or Tehran. Alex: So to wrap it up — Berkshire's finally spending after three and a half years of sitting on cash. Riley: And chipmakers are living two very different realities — TSMC riding a wave, Intel paying up to catch one, while oil markets watch the Strait of Hormuz for the next move. Alex: This has been Finance TL;DR Daily. We'll see you tomorrow.