Berkshire Hathaway (BRK.A) shares experienced a decline after Warren Buffett's conglomerate reported a slight drop in operating earnings, alongside an ongoing selloff of stocks and a cessation of buybacks. The Omaha-based giant saw operating earnings decrease by 3.8% in the second quarter of fiscal 2025.

Railroad, energy, manufacturing, service, and retail sectors all posted increased profits year-over-year (YOY), but a decline in insurance underwriting weighed down overall results. Both Class A and B shares of Berkshire fell nearly 3% on Aug. 4 following the earnings release.

Adding to the noise was the substantial write-down of Berkshire's underperforming Kraft Heinz (KHC) stake, marking the conglomerate's first-ever $3.8 billion loss from its 27% stake. The move coincided with reports of Kraft Heinz considering a spinoff of its grocery business.

Furthermore, Buffett's cash reserves remained near a record high of $344.1 billion. Berkshire continued its trend as a net seller of stocks for the 11th consecutive quarter, divesting $4.5 billion in equities in the first half of 2025. Interestingly, despite a substantial market correction, Berkshire refrained from any stock repurchases through July 21.

While some view this period with apprehension, it does present a potential buying opportunity for others.

About Berkshire Hathaway Stock

Headquartered in Omaha, Nebraska, Berkshire Hathaway (BRK.B) commands a market capitalization of $1 trillion. The conglomerate and its subsidiaries operate across diverse sectors, including insurance, reinsurance, utilities, energy, freight rail transportation, manufacturing, services, and retailing.

Despite its resilience, BRK-B stock has seen pressure in recent months. Over the past 52 weeks, the stock has risen 8%, but the last three months tell a different story, with shares falling 11%. What's more, the stock's 3% dip in just the past month reflects growing caution among investors following the latest earnings data.

From a valuation standpoint, the stock is not cheap. BRK-B currently trades at 22.6 times forward adjusted earnings and 2.7 times sales, keeping it well above the industry average.

A Closer Look at Berkshire Hathaway’s Q2 Earnings

On Aug. 2, Berkshire Hathaway posted its Q2 earnings, revealing a 3.8% YOY decline in operating profit to $11.2 billion. The figure reflects results from its wholly owned businesses, including insurance, railroads, energy, manufacturing, and retail. 

Insurance underwriting income fell 12% from the previous year’s quarter to $2 billion, while the Other segment reported a 96% YOY decline to $32 million. However, the broader picture showed pockets of strength. Insurance investment income jumped 1.4% to $3.4 billion. 

Burlington Northern Santa Fe (BNSF), the company’s railroad unit, reported earnings of $1.5 billion as well, reflecting 19.5% growth from the prior year. Manufacturing, service, and retailing revenues together saw a 6.5% uptick to $3.6 billion, while Berkshire Hathaway Energy delivered $702 million in profit, rising 7.2% compared to the same period last year. 

These gains illustrate how the company’s diversified base can provide balance even when one segment stumbles. 

Looking ahead, analysts expect Berkshire Hathaway’s Q3 2025 EPS to decline 18.4% YOY to $3.82. Full-year EPS is forecast to decline 6.7% from the year-ago value to $20.53. However, for fiscal 2026, the bottom line is projected to grow 5% to $21.56. 

What Do Analysts Expect for Berkshire Hathaway Stock?

While recent numbers paint a mixed picture, analysts continue to express cautious optimism around Berkshire Hathaway. The company’s deep bench of subsidiaries, many of which stand to benefit from the rise of artificial intelligence (AI) and automation, remains a structural advantage. Over time, these efficiencies could lift margins and earnings across sectors.

Berkshire’s broad diversification also acts as a built-in hedge against economic shocks. With the threat of a downturn looming and U.S. tariffs yet to fully take effect, investors may increasingly turn to stable, cash-rich businesses. Berkshire’s $344 billion in cash positions it to take advantage of dislocations while offering downside protection.

As of now, analysts maintain a "Moderate Buy" rating on BRK-B. Of the six analysts covering the stock, two recommend a “Strong Buy” while four advise to “Hold.” 

BRK-B’s average price target of $539.25 represents potential upside of 16%. On the more bullish end, the Street-high target of $597 represents 29% potential upside from current levels.