As the AI trade fades and tech stocks wobble, one of the market's oldest safe havens has once again proven its worth, according to Zhitong Finance.
Berkshire Hathaway (BRK.B) has just recorded one of its most striking relative gains in more than a decade.
Just how rare is this data? Only three times in 30 years. Over the past month through last Thursday, the conglomerate outperformed the S&P 500 (SP500) by 19.2 percentage points — its largest rolling monthly relative advantage since 2010 and the fourth-largest gap in the past 30 years. Only the turmoil of the 2008 financial crisis produced a wider gap: that year, Berkshire Hathaway led the broad market by 29.6 percentage points.
This divergence stems from the sharp contrast in absolute performance between the two sides: over the past month, Berkshire Hathaway shares rose 13.2%, hitting a record high, while the S&P 500 fell 3.7% over the same period. By Tuesday's close, the gap had narrowed slightly to 16.9 percentage points, but by the records since comparable data began in 1996, this level remains extremely rare.
In just half a year, offense and defense have swapped places. As recently as May, Berkshire Hathaway was trailing the S&P 500 by 14.3 percentage points — at a time when the market was riding high on AI enthusiasm, with the tech-heavy index leading the way while Berkshire Hathaway, built around traditional operating businesses such as insurance, railroads, and energy, appeared slow-footed.
Why Berkshire: cash, operating businesses, and not betting on a single narrative
This rapid reversal highlights how quickly the market environment can turn in favor of the company's structural characteristics — a cash-rich balance sheet and a portfolio of mature operating businesses. The logic is not mysterious: when the market's focus of concern shifts from "can AI rise even faster" to "can the massive debt behind AI infrastructure earn back its cost," the anchor of valuation moves from dreams back to cash flow. Berkshire Hathaway's enormous cash reserves, often criticized in bull markets as "lazy assets dragging down returns," serve in an environment of shrinking risk appetite and widening credit spreads as both a buffer against volatility and ready "dry powder" — the higher the market's panic, the greater the option value of that cash. At the same time, earnings from its operating businesses such as BNSF Railway, energy, and insurance come from real-economy demand, not from the continuation of any single hot narrative. This week, volatility across AI-related assets from chip stocks to computing power suppliers has surged sharply — and Berkshire Hathaway's earnings structure has almost no direct exposure to that narrative.
Placing the current gap in a 30-year context, it ranks second only to the 2008 financial crisis — also a period when "cash and certainty earned a premium while leverage and narrative assets were sold off." History seems to suggest a simple rule: Berkshire Hathaway's excess returns are often not born in bull markets, but realized when the market relearns awe.
It should be noted that the persistence of this kind of relative advantage depends heavily on the continuation of the market environment: if AI sentiment recovers and risk appetite returns, Berkshire Hathaway's gap relative to the broad market could also narrow again, as it did on Tuesday. For investors, the 19.2 percentage points do not record that a company has become stronger, but that the market has repriced "certainty" itself.
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