While Berkshire remains near record levels in absolute terms, it is losing ground in the race against the broader market.

The AI Trade Takes The Lead

The recent weakness in the BRK.A/SPY ratio comes as investors have piled back into technology and artificial intelligence winners.

That divergence has helped fuel one of Berkshire’s sharpest periods of relative underperformance in years.

A New Era For Berkshire

The timing is notable.

At Berkshire Hathaway’s annual meeting in May 2025, Buffett announced plans to step down as CEO at the end of the year, handing the reins to longtime lieutenant Greg Abel.

The company’s massive cash pile and diversified collection of businesses helped Berkshire outperform during periods of market uncertainty. But investors now appear willing to pay a premium for growth and AI exposure instead.

Temporary Rotation Or Structural Shift?

The key question is whether Berkshire’s recent lag is simply the result of another growth-stock cycle or something more significant.

Buffett’s investing approach has survived the dot-com boom, the financial crisis and countless market rotations. Yet the current AI-driven rally is once again testing whether value-oriented investing can keep pace with the market’s fastest-growing companies.

For now, the chart tells a simple story: Berkshire is still climbing, but the S&P 500 is climbing faster.

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