Berkshire Hathaway Inc. (NYSE: BRK.B) saw its Class B shares edge higher in premarket trading on Monday, August 10, 2026, rising 0.4% to $524.05. The uptick comes as investors digest the conglomerate's second-quarter earnings report, which revealed a significant surge in net income and a notable acceleration in share repurchases.
The company's buyback activity during May and June provides a window into management's view of intrinsic value. Berkshire repurchased 8.6 million Class B shares at a weighted average price of approximately $485.95. By Friday's close, the stock had climbed to $521.80, representing a 7.4% premium over that average repurchase price. This gap suggests that management, led by CEO Greg Abel with input from Chairman Warren Buffett, has been willing to acquire shares at levels below the current market price.
Earnings Breakdown
Net income for the second quarter surged to $25.67 billion, more than double the prior-year figure. This included $12.68 billion in investment gains, most of which were unrealized. Berkshire reiterated that quarterly investment results can distort the true earnings picture.
Operating profit, which excludes investment gains, climbed 16.3% to $12.98 billion. However, a closer look reveals that nearly 66% of that gain came from a $1.203 billion positive swing in the value of non-dollar debt. Excluding this currency component, operating earnings would have grown by an estimated 5.2%, according to analytical calculations.
Capital Deployment Accelerates
Berkshire's capital deployment was notably aggressive during the quarter. The company repurchased $4.5 billion of its own shares in Q2, and an additional $3.3 billion in July. This brings the year-to-date total to at least $7.8 billion, a pace that could rival the record $27 billion repurchased in 2021.
Moreover, Berkshire became a net purchaser of equities for the first time in 15 quarters, acquiring nearly $20 billion more in stocks than it sold. Among its notable investments was an additional $10 billion stake in Alphabet Inc. (NASDAQ: GOOGL).
Segment Performance
Segment results were mixed. Manufacturing, services, and retailing posted the largest dollar increase in operating earnings, up 24.1% to $4.47 billion. Berkshire Hathaway Energy saw the highest percentage growth, rising 26.9% to $891 million. However, both insurance segments reported declines.
GEICO's pre-tax underwriting profit dropped 45%, pressured by higher accident claims and increased advertising expenses. CFRA analyst Cathy Seifert described the performance as "absolutely abysmal," noting that competitors Allstate Corp. (NYSE: ALL) and Progressive Corp. (NYSE: PGR) are showing stronger results.
Valuation Insight from Buybacks
The buyback activity offers a clearer signal of management's confidence in the stock's value compared to volatile investment returns. The average repurchase price of $485.95 in May and June is a data point that could prove more significant than the headline net income figure.
Analyst coverage remains limited and mixed. FactSet data shows seven analysts with a hold rating, while Barchart's smaller sample is more positive. Seifert maintained CFRA's neutral rating, characterizing the quarter as "a pretty healthy beat."
Market Context and Outlook
Berkshire shares rose 2.0% between July 31 and August 7, while the S&P 500 advanced 3.6% during the same period. The broader market's strength was its best since April.
Looking ahead, key economic data releases this week could impact Berkshire's businesses. July consumer price data is due Wednesday, producer prices on Thursday, and retail sales on Friday. Lower short-term rates have already pressured insurance investment income, which fell 9.1% in Q2.
The company's cash and Treasury holdings totaled $364.7 billion at the end of June, down from the record $380.2 billion in March. This figure does not reflect the $6.8 billion homebuilder acquisition finalized in July.
While buyback prices reflect past transactions and do not guarantee future purchases, they provide a valuable benchmark. The $485.95 average repurchase price, set against Friday's close of $521.80, suggests that Berkshire's management believes the stock was undervalued at those levels. As markets open Monday, this metric may carry more weight than the headline earnings numbers.
