Berkshire Hathaway (BRK-A, BRK-B) is on track to become the next $1 trillion company by market capitalization, says market reporter Paul, who joins Yahoo Finance to discuss Berkshire's rise. La Monica said.
La Monica said Apple (AAPL) is “by far the biggest stock” in Berkshire's portfolio and is driving the company's profits. But he points out that Berkshire is more than just Apple: it's a “huge industrial conglomerate” with ownership interests across many sectors.
This diverse investment portfolio of stocks, insurance, and utilities has helped Berkshire build a market valuation of $860 billion.
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Editor's note: This article was written by angel smith
video transcript
Josh Lipton: The $1 trillion market capitalization club may soon gain new members, but they may not be part of the Magnificent Seven. That's according to our next guest, who is following the progress of one iconic name that may soon have a few more zeros added to it. Let market reporter Paul La Monica reveal who he is. Paul, who are you?
Paul La Monica: Berkshire Hathaway. Yes, Warren Buffett isn't necessarily known as the savviest tech investor, even though he obviously owns a large stake in Apple. However, the company's market valuation is currently around $860 billion, so it's not far off from $1 trillion.
Julie Hyman: Hi Paul. This is Julie. First of all, I'm very happy to meet you. Secondly–
Paul La Monica: thank you.
Julie Hyman: Second, if you look at Berkshire's portfolio, you'll see that Apple is a large part of the portfolio. But what underpinned Berkshire Hathaway's recent growth, and what will fuel its next leg?
Paul La Monica: Yes, that's very interesting, Julie. Apple, of course, is by far the biggest stock in Berkshire's portfolio. In other words, it helps drive the return on the investment side of the business. But remember, Berkshire Hathaway and Warren Buffett, the late Charlie Munger, were known for picking stocks, but Berkshire Hathaway is also this huge conglomerate. It owns Geico, it owns BNSF Railway, it owns Dairy Queen, it owns so many consumer, energy and insurance subsidiaries.
The insurance side of the business is doing very well, which is one of the reasons why operating profit increased by about 20% in the first three quarters of 2023. Fourth quarter numbers are expected to be released at the end of the month. And when Berkshire Hathaway's Warren Buffett releases his annual shareholder letter, everyone will be scrutinizing what he says about the economy and market conditions.
