Berkshire Hathaway cuts cash reserves by $30 billion in Q1

Berkshire Hathaway's famously large pile of cash shrank by about $30 billion last quarter after Greg Abel took over from Warren Buffett as CEO. The move came in the first quarter of 2024, when the company reported a cash balance of roughly $109 billion compared with $139 billion a year earlier. Abel, who had been CFO and a long‑time Buffett protégé, stepped into the top job in May after Buffett announced he would retire from the board in 2025.

Buffett built Berkshire into a cash‑rich juggernaut by buying undervalued companies and holding onto cash for opportunistic deals. Under his stewardship, the firm accumulated a reserve that was the largest in the world, often sitting idle while he sought the next big buy. Abel has signaled a shift toward a more active use of that capital. Early signs include the purchase of a minority stake in 3M and a $1.5 billion investment in a Texas-based electric‑vehicle battery maker. These deals reflect a broader strategy to deploy cash into high‑growth sectors rather than holding it for long‑term speculation.

The $30 billion dip is the biggest quarterly draw in Berkshire’s history, and it sent the stock down about 1.5 % on the day of the earnings release. Analysts note that the cash outflow is part of a deliberate plan to avoid the “cash‑sinking” that has plagued Buffett’s later years, when the firm’s dividend payout was cut and the company’s valuation lagged peers. Abel’s first quarterly report also highlighted a 2.3 % increase in earnings per share and a modest rise in the company’s net profit margin, suggesting that the cash burn is not hurting profitability. Investors are watching closely to see whether the new strategy will translate into higher returns or simply a shift in risk profile.

Looking ahead, Abel has indicated that Berkshire will keep a sizable cash buffer but will focus on acquisitions that offer strategic synergies and scalable growth. He has also hinted at a potential push into renewable energy and technology infrastructure, areas where Berkshire has shown limited exposure so far. The company’s board has pledged to maintain transparency about future investments, and the next earnings call is expected to detail upcoming targets. For shareholders, the move signals a new chapter for the insurance‑investment conglomerate, one that could redefine its legacy of patient, value‑driven investing.