Berkshire Hathaway continued its tradition of beating the market, outpacing the historic 24% gain of the S&P 500. Warren Buffett’s investment giant, known for its value investing approach, maintained its dominance with its diversified portfolio, bolstered by tech stocks like Apple and Coca-Cola. Despite trailing the S&P 500’s performance over five and ten years, Berkshire’s consistent dividends, powerful brand presence, and cash reserves of over $300 billion proved a solid foundation for the company’s success.

Berkshire Hathaway’s 2024 Performance

Berkshire Hathaway’s 2024 performance exemplified patience and discipline. While the tech-heavy S&P 500 surged, driven by AI giants like Nvidia and Apple, Berkshire remained focused on its traditional strengths. The company’s Class A shares traded at $677,200, slightly above the analyst target of $673,660, cementing its success.

Key to its performance were stalwart holdings, with Apple still accounting for 30-40% of the equity portfolio. Coca-Cola, a long-standing favorite of Buffett’s, continued to contribute with a steady 3.1% dividend yield. Despite underperforming the S&P 500 in recent years, Berkshire’s portfolio is seen as a reliable investment, offering consistent returns, pricing power, and global brand recognition.

One of the key differentiators for Berkshire, however, is its vast cash reserves, which grew past $300 billion in 2024. This enormous war chest allows the company to seize opportunities when the market faces downturns, a flexibility that analysts predict will be crucial in 2025, especially if the tech-driven market loses momentum.

The Bitcoin Dilemma for Warren Buffett

For years, Warren Buffett has been one of Bitcoin’s most vocal critics, calling it everything from “rat poison squared” to a “mirage.” His argument has been simple: Bitcoin lacks intrinsic value, making it a risky and speculative asset. However, as 2025 unfolds, that viewpoint is beginning to feel increasingly outdated.

Bitcoin has entered a new phase of mainstream acceptance, especially following an all-time high of $108,000 and growing institutional interest. Major financial players, like BlackRock, have embraced the cryptocurrency, with Larry Fink now referring to Bitcoin as “digital gold.” Under the leadership of a crypto-friendly administration, Bitcoin has gained significant traction, and even figures like the director of NASA are voicing support.

Despite this, Buffett remains skeptical. His reluctance to adopt Bitcoin could become a significant issue, particularly when trying to attract younger investors who are increasingly bullish on crypto. These retail investors view Bitcoin as a hedge against inflation, a store of value, and a key component of the future financial landscape. If Berkshire continues to ignore this trend, it risks alienating a generation of potential investors.

The S&P 500’s Tech-Driven Rally

In 2024, the S&P 500’s strong performance was driven largely by the so-called “Magnificent Seven” — tech giants like Nvidia, Apple, and Microsoft. Nvidia alone saw a remarkable 171% rise due to AI hype. However, this tech-driven rally came with its own set of challenges. The S&P 500 ended the year with a four-day losing streak, its first since 1966, serving as a reminder that tech booms can be short-lived.

While Berkshire Hathaway may have underperformed the S&P 500 in recent years, its long-term, value-driven approach positions it well for a potential market correction. The company’s ability to weather market fluctuations and take advantage of opportunities when others panic will continue to serve it well in 2025 and beyond.

A Historic Moment Ahead

Warren Buffett has historically shown a capacity for adapting to new trends. He once dismissed tech stocks as a bubble but eventually invested billions into Apple. Whether he will eventually embrace Bitcoin remains to be seen, but his reluctance could eventually become a significant point of contention in the evolving financial landscape. As Bitcoin’s influence in global finance continues to grow, it will be interesting to see how Buffett and Berkshire Hathaway respond in the coming years.

In the end, whatever direction Warren Buffett chooses, it will be a historic moment in the world of investing. Whether he continues to reject Bitcoin or finally embraces it, Berkshire Hathaway’s journey through 2025 promises to be one to watch closely.