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(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.) Berkshire ekes out some new highs, but October rally stalls Berkshire Hathaway shares managed to set a few more all-time highs in an otherwise lackluster week of trading. The Class A stock closed Monday at a record high $821,931 but ended the week up just 0.3% at $815,600. It spiked at Friday's open to almost $822,929, but that wasn't enough to top its record intraday high of $824,765 set on Thursday of last week as Berkshire entirely erased what turned into a 15% pullback after Warren Buffett announced last year that he would step down as the company's CEO. The more widely held Class B shares also set a new record high close on Monday, finishing that day at $548.56. But their high during Friday's session of $550.47 is enough for a new all-time intraday record, edging out last Thursday's $549.96. For the week, however, they inched less than 0.1% higher. Despite losing some steam this week, Berkshire shares are ending October with strong gains, especially when compared to the S&P 500 and the Nasdaq Composite. The latter index lost 2.9% Friday, its worst one-day drop since June, as money moves away from high-flying AI and tech stocks over spending concerns. Berkshire appears to be benefiting from the back-to-basics rotation. It's closing out the month with an 8.9% gain, as the S&P fell 0.9% and the Nasdaq dropped 5.3%. BRK.B trimmed its year-to-date deficit against the benchmark S&P from 3.5 percentage points last week to 2.8 percentage points this week. As shown in the "Berkshire Stock Watch" chart below, it's ahead of the S&P over the past 12 calendar months by more than two percentage points. AI jitters cut Berkshire's bet on Alphabet by billions While Berkshire's stock is benefiting from Wall Street's move away from AI stocks, one big holding in its equity portfolio is taking a substantial hit. Google parent Alphabet's market value fell by around $500 billion Thursday as the stock plunged almost 13%, its worst day since going public in 2004. The company's third quarter earnings report late Wednesday included negative free cash flow of $9.1 billion, more than triple the $2.7 billion analysts had expected, raising concerns among investors about the enormous cost of building out AI infrastructure. At the same time, revenue from web searches missed estimates for the second straight quarter, in what CNBC.com is calling the "first real sign AI is taking a bite" out of Alphabet's core business. Berkshire's enormous Alphabet stake, initiated by Buffett last year and boosted by a $10 billion private placement during this year's second quarter, hit a Q3 high of $40 billion in early August. Since then, it's lost a quarter of its value, falling to $29.6 billion Friday, making it Berkshire's fourth largest equity holding. (That's based on the number of shares held as of June 30. The values in October may change based on Berkshire's September 30 portfolio snapshot that will be released in two weeks.) Coca-Cola has moved decisively into third place, with the position increasing by almost 16% from a low of $32.5 billion in late July to $37.6 billion now. Barron's estimates Berkshire likely paid more than $300 a share for Alphabet, and "perhaps close to $320," putting it in the red for the investment, at least so far. DaVita holding trimmed again under deal to keep percentage stake steady In an SEC disclosure this week, Berkshire said it sold $69 million of DaVita shares on Tuesday. The remaining 28.3 million shares of the dialysis provider in its portfolio are worth $5.3 billion. Don't interpret the reduction as sign Berkshire has changed its view of the company. This is the latest in a series of quarterly share reductions under a 2024 agreement with DaVita in which Berkshire agreed to keep its stake in the company at 45% or lower. As DaVita reduces its outstanding shares through buybacks, Berkshire needs to also cut its holdings to keep the ratio intact. DaVita shares are up 65% year-to-date despite a one-week drop of more than 23% in August when the company released disappointing earnings just days before Berkshire's previous trim under the pact. BUFFETT & BERKSHIRE AROUND THE INTERNET Some links may require a subscription: - Business Wire news release: Berkshire Hathaway completes further $330 million investment in Bending Spoons (The planned investment was initially announced last week) - Zacks on Yahoo Finance: Analysts Estimate Berkshire Hathaway B (BRK.B) to Report a Decline in Earnings: What to Look Out for - Barron's on MSN: Alphabet Should Follow the Berkshire Hathaway Playbook on Earnings - The Motley Fool: Warren Buffett Put $10 Billion Into 2 Banks When Their Stocks Were Under Pressure. Here's What Those Deals Teach Today. - Simply Wall St on Yahoo Finance: Berkshire Hathaway (BRK.B) Gains Momentum As Valuation Still Looks In Focus - MarketWatch on MSN: Private equity in your 401(k)? Heed Warren Buffett's warning - Investopedia: How Warren Buffett's Emotional Intelligence Drives His Investing Success And How You Can Apply It - Business Insider on MSN: Warren Buffett hasn't had a drink of water in 50 years. At least, that's what he told Bill Ackman. HIGHLIGHTS FROM CNBC'S BUFFETT ARCHIVE Robinhood takes advantage of 'gambling instincts' (2021) Warren Buffett and Charlie Munger discuss the popular Robinhood trading app, accusing it of encouraging its customers to make short-term bets on stocks and options. Munger calls it "deeply wrong." BECKY QUICK: This question comes from Robert Miles in Nebraska. "The trading apps. What do you think about Robinhood and other trading apps, or fintech companies, enabling all ages and experience to participate in the stock market?" WARREN BUFFETT: (Laughs) Well, I'm looking forward to reading the S-1 on Robin — that's the big thing you file with the SEC when you're going to be offering securities, and — It's — you know, it's become a very significant part of the casino aspect — of the casino group — that has joined into the stock market in the last year or year and a half. And I do want to say I'm concerned of how they handle the source of income when they say they don't charge the customer anything. I mean, you know, I'm — it'll just be interesting to watch how they describe it. I mean, but — But they — they have attracted — maybe set out to attract — but they have attracted, I think I read where 12 or 13% of their casino participants were dealing in (option) puts and calls. I looked up on Apple, you know, the number of seven-day calls and 14-day calls outstanding. And I'm sure a lot of that is coming through Robinhood. And that's a bunch of people writing — they're gambling on the price of Apple over the next seven days or 14. There's nothing, you know — there's nothing illegal about it. There's nothing immoral. But — I don't think you'd build a society around people doing it. I mean, if a group of — a group of us landed on a desert island, and we knew we would never be rescued, and I was one of the group, and I said, well, I'll set up the exchange over here. (Laughs) And I'll trade our corn futures and everything around — I think — I think the degree to which a very rich society can reward people who know how to take advantage, essentially, of the gambling instincts of the — not only the American public — worldwide public — it's, you know, it's not the most admirable part of the accomplishment. But I think what America's accomplished is pretty admirable overall. (Laughs) And I think actually, you know, American corporations have turned out to be a wonderful place for people to put their money and save. But they also make terrific gambling chips. And if you cater to those gambling chips when people have money in their pocket for the first time, and you tell them they can make 30 or 40 or 50 trades a day, and you're not charging them any commission, but you're selling your order flow or whatever, it — I hope we don't have more of it, I'll put it that way. And I will be interested in reading the prospectus. Charlie? CHARLIE MUNGER: Well, that is really waving the red flag at the bull. (Laughter) I think it's just God-awful that something like that would draw investment from civilized men and decent citizens. It's deeply wrong. We don't want to make our money selling things that are bad for people. WARREN BUFFETT: But we've got the states doing it with the lottery, you know. CHARLIE MUNGER: No, but that's bad, too. WARREN BUFFETT: Yeah, I know. I understand, but I'm saying — CHARLIE MUNGER: That's very bad. That's very bad — WARREN BUFFETT: Once you — CHARLIE MUNGER: That's one of the things that's wrong with it. It's getting respectable to do these things. The states are just as bad as Robinhood. WARREN BUFFETT: Well, in a sense they're worse. I mean, they're really taxing the — CHARLIE MUNGER: I know it's — I know, I know. WARREN BUFFETT: Yeah. They're taxing hope. CHARLIE MUNGER: Not only that — WARREN BUFFETT: And they don't get much in the way of taxes from me and Charlie than they do — CHARLIE MUNGER: The states in America replaced the Mafia as the proprietor of the numbers game. That's what happened. WARREN BUFFETT: Yep. CHARLIE MUNGER: They pushed the Mafia aside and said that's our business, not yours. Doesn't make me proud of my government. WARREN BUFFETT: When I was a kid, my dad (Howard Buffett) was in Congress. They had a numbers runner in the House office building (laughs), actually. BERKSHIRE STOCK WATCH Four weeks Twelve months BRK.A stock price: $815,600.00 BRK.B stock price: $542.49 BRK.B P/E (TTM): 13.64 Berkshire market capitalization: $1,162,224,814,491 Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31) Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31) Berkshire repurchased $4.5 billion of its shares in Q2 2026. BERKSHIRE'S TOP EQUITY HOLDINGS - Oct. 30, 2026 Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices. Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for: - Mitsubishi, which is as of April 30, 2026 The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. QUESTIONS OR COMMENTS Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website. -- Alex Crippen, Editor, Warren Buffett Watch
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