'AI frenzy' swept the market…Buffett piled up more cash

Berkshire, no share buybacks through September

'Increasing cash holdings to prepare for uncertainty'

Analyses cite 'judgment of market overvaluation', etc.

Berkshire Hathaway, the investment firm led by Warren Buffett, has accumulated the largest amount of cash in its history. It has also stopped buying back shares this year. As the global stock market has surged amid the artificial intelligence (AI) frenzy, analysts say Buffett's characteristically cautious investment stance has been shown once again.

'As the 'AI frenzy' swept the market…Buffett piled up more cash' According to the third-quarter results released on the 1st, Berkshire's cash holdings rose to US$381.7 billion (about KRW 545 trillion), a record high. This is a large increase from the end of June (US$344 billion). Market observers interpret Buffett's continued cash accumulation despite the AI boom as a sign that he judged the current stock market to be overvalued.

Also, Berkshire has not repurchased any shares through September this year. Buffett has said in the past, "Share repurchases are carried out only when the stock price falls below the company's intrinsic value and sufficient cash can be retained after the repurchase." The decision to halt repurchases even after recent stock price declines is analyzed as meaning either that Berkshire's stock was not judged to be below intrinsic value or that the company intended to secure more cash to prepare for future market uncertainty.

Berkshire's Class B shares listed on the New York Stock Exchange have fallen 11.53% since Buffett's surprise retirement announcement in May, lagging far behind the S&P 500 index's gain (20.28%). With Buffett's retirement two months away, some analysts argue the 'Buffett premium' is disappearing. Buffett will finish writing his annual shareholder letter with the Thanksgiving letter on the 10th of next month.

Berkshire's results were solid. Berkshire's third-quarter net income was US$30.796 billion (about KRW 44 trillion), a large increase from US$26.251 billion in the third quarter of last year. Operating profit also surged to US$13.585 billion (about KRW 19.4 trillion).

Reporter Im Dayeon allopen@hankyung.com