Warren Buffett’s Rule for Stock Buybacks Is Very Specific. Berkshire Spent a Record $9.6 Billion on Them Last Quarter.
Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) has never spent this much on its own stock in one quarter. The company spent about $9.6 billion on repurchases in the third quarter of 2026. This inches past the nearly $9.3 billion it spent in the third quarter of 2020.
At Berkshire, a buyback also says something about price. The company repurchases shares only if management thinks they cost less than the business is worth.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
And the Class B shares now trade near $570 as I write, about 12% over the average price Berkshire paid in September. I think the record buyback says a lot about what the stock was worth then, and a lot less about what it’s worth at today’s price.
Warren Buffett. Image source: Getty Images.
Buffett’s two tests
Warren Buffett, now Berkshire’s chairman emeritus, spelled out his rule for repurchases in his 2011 letter to shareholders.
“Charlie and I favor repurchases when two conditions are met: first, a company has ample funds to take care of the operational and liquidity needs of its business; second, its stock is selling at a material discount to the company’s intrinsic business value, conservatively calculated,” he wrote, referring to his late partner, Charlie Munger.
Intrinsic value is an estimate of what a whole business is worth.
Versions of both tests remain in Berkshire’s latest quarterly filing, which says it can repurchase shares whenever its CEO, after consulting the chairman of the board, “believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.” These two roles now belong to Greg Abel and Howard Buffett, Warren’s son.
Berkshire also won’t buy back stock if doing so would push its cash and Treasury bills below $30 billion. And it had around $352 billion in both insurance and other businesses at the end of September, so the first test isn’t a big hurdle.
The program no longer has a set price limit, though. Until 2018, Berkshire wouldn’t pay over a 20% premium to book value (what’s left after subtracting a company’s liabilities from its assets). Based on a book value of about $358 per Class B share at the end of September, that limit would be roughly $429, well under the stock’s 52-week low of about $464. So, Berkshire is buying at prices the old valuation limit wouldn’t have allowed.
Berkshire kept buying while the price rose
Showing how fast the buying has accelerated, Berkshire repurchased no stock in 2025. Then it bought around $235 million in the first quarter of 2026 and about $4.5 billion in the second quarter.
Across both share classes, Berkshire spent around $3.4 billion in July at an average of about $496 per Class B share, about $847 million in August at about $504, and about $5.4 billion in September at around $507. So its biggest month of buying came at its highest average price of the quarter.
The buying also seems to have kept going. Berkshire’s share count dropped by the equivalent of about 3.8 million Class B shares from Sept. 30 to Oct. 28, suggesting about $2 billion more in buybacks. The filing doesn’t give prices for those weeks, when the Class B shares closed between about $501 and $549.
Is the stock still cheap at $570?
A buyback signals to investors that the CEO believed the shares were worth more than the price paid. It doesn’t say how much more. Sure, “conservatively determined” suggests the full value might be well above what Berkshire paid. But the company doesn’t publish its estimate.
Today’s buyer pays around 15% more than Berkshire’s July average. That’s a valuation of about 1.6 times book value at the end of September, up from around 1.4 times book value at September’s average price.
The third quarter’s numbers don’t explain the stock’s run-up since September, either. Berkshire’s third-quarter operating earnings (which leave out the swings in its stock portfolio that skew net income) dropped around 6% year over year to about $12.7 billion. Without foreign-currency effects on Berkshire’s debt, they dropped less than 1%. But insurance underwriting earnings fell about 43%.
At roughly $570, the stock trades at about 26 times last 12 months’ operating earnings.
In the end, I think the record buyback is a strong sign that about $507 was a good price for Berkshire stock, and a far weaker one than about $570 is.
I’d still consider buying near $570, given how much cash Berkshire has left to deploy. But I’d be a lot more interested at prices closer to what Berkshire itself paid.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $341,966!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,146,819!*
Now, it’s worth noting Stock Advisor’s total average return is 852% — a market-crushing outperformance compared to 203% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Daniel Sparks and his clients have positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
An aerial view shows a Google data centre construction site in Muhos, northern Finland September 11, 2026. (Ville Honkonen/STT/Lehtikuva/via REUTERS) By Lewis Krauskopf | REUTERS US midterm elections, a heavy slate of corporate earnings and the monthly jobs report will further test stock investors next week, after a series of setbacks for the market-leading AI
Shares of The Trade Desk (NASDAQ:TTD) charged sharply higher on Monday, surging as much as 16.6%. As of 11:38 a.m. ET, the stock was still up 15.2%. Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to
Half off sounds like a deal. On Wall Street, it can be the start of a much bigger sale. Right now, Intel (INTC), Arm (ARM), Sandisk (SNDK), and CoreWeave (CRWV) are among the AI darlings trading at less than half their 2026 highs, and chip stocks just lost nearly 30% in five weeks. Stocks are
Market Closed – 11:20:00 2026-11-09 am EST 5-day change 1st Jan Change 83.00 DKK -0.12% -12.72% -33.60% Published on 11/09/2026 at 10:00 am EST Publicnow English Published: 2026-11-09 15:53:00 CET Matas A/S – Changes in company’s own shares Matas share buy-back programme: Reporting of transactions in week 45 Company announcement no. 34 2026/27Allerød, 9 November
Quick Read Nvidia (NVDA) tumbled about 6% after its board opened an independent investigation into CEO Jensen Huang, who remains in his role and supports the review. AMD and Broadcom jumped more than 6% as selling stayed concentrated in Nvidia, with AMD climbing 7% to $482. Jim Cramer wanted a $500 billion buyback modeled on
– Michael M. Santiago/Getty Images Nvidia’s shares are sliding after the company’s board launched an investigation into reports that Chief Executive Jensen Huang had been a spying target after a romantic relationship with an executive suspected of working for Chinese intelligence. The chip giant is on track to lose hundreds of billions of dollars in
Robin Marchant/Getty Images/SNEHIT PHOTO/Shutterstock Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Jim Cramer is ‘furious’ as Intel crashes nearly 30% — but Uncle Sam is the top shareholder. What it means for taxpayers Jim Cramer had high hopes Intel’s stock (NASDAQ:INTC) would soar to a new
This article was written by Follow I have been involved in the financial world for over 25 years with experience as an advisor, teacher, and writer. I am a full believer in the free-market system and the idea that financial markets are efficient with most stocks reflecting their real current value. The best opportunities for
Wall Street has priced plenty of CEO scandals. It has never priced one at a company worth $4.5 trillion that makes up nearly 7% of the S&P 500 (^GSPC). Nvidia (NVDA) CEO Jensen Huang admitted in a Nov. 8 memo to employees to an affair with Alice Huang, whom US intelligence officials believe worked for
Is a market crash imminent? No one knows for sure, but on the day that I’m writing this, the S&P 500 has pulled back by more than 4% — a big move. Will that continue? We can’t know. A pullback of some sort, potentially triggering a recession for a while, is likely at some point,
Talk about a delayed reaction. On Wednesday, stock market pundits’ read on the Democratic sweep of Congress was that “gridlock is good.” That included the presumed difficulty of getting legislation passed at the federal level, with commentary noting that any limitations would come at the state level. Then on Thursday, it seems investors noticed what
Ark Invest CEO Cathie Wood is shrugging off this week’s market jitters, telling CNBC on Friday that concerns among investors actually reinforce her optimism that further gains lie ahead. U.S. equities sold off sharply on Thursday, reversing the initial rally seen in the wake of the midterm elections. AI-related stocks led the rout, sending the
Artificial intelligence (AI) stocks were rising again as investors take in the results of the election, sending the S&P 500 higher. But that good news didn’t extend across the board. Coffee shop chain Dutch Bros (NYSE: BROS) released its third-quarter earnings on Wednesday, and its stock plummeted. It’s now a crushing 58% off its high.
AMD (AMD +11.04%) and Nvidia (NVDA +2.77%) are two of the largest competitors in the AI processor industry. The third primary one is Broadcom (AVGO +0.74%), but its niche in that segment differs from theirs. Nvidia and AMD compete in the same field, designing powerful general-purpose chips while Broadcom designs highly specialized computing units for
This past week’s stock market meltdown could hardly have come at a more critical moment for Anthropic (ANTH.PVT). The sell-off cast a shadow over the frontier artificial intelligence developer’s expected pre-Thanksgiving public debut, raising questions about its potential valuation and ability to sustain the next phase of AI growth. “The only thing that matters the
It’s been a roller-coaster of a week for the stock market. The Nasdaq Composite (^IXIC +1.09%) officially entered correction territory after falling by more than 10% from its October peak, while the S&P 500 (^GSPC +0.31%) and Dow Jones Industrial Average (^DJI -0.46%) are down by around 6% and 5%, respectively. Investors are also grappling
Quick Read Futures put the odds of a quarter-point Fed increase on December 9 at about 78% after October’s 165,000 jobs, with inflation at 3.6% and the S&P 500 5.6% below its October 6 high. Since 2000 the Fed has raised rates 14 times with the index 5% or more below its high; a year
Love him or hate him, President Donald Trump’s time in the White House has historically correlated with strong stock market returns. In fact, the benchmark S&P 500 (SNPINDEX: ^GSPC) is up by over 39% since his inauguration in late 2024, showcasing widespread optimism among many on Wall Street. So far, excitement about his pro-business policies
Choosing between established giants and high-growth disruptors remains a classic dilemma for investors. For those interested in exposure to the tech industry, deciding whether the steady cash generation of Adobe (ADBE -2.90%) or the accelerating momentum of Palantir Technologies (PLTR +3.48%) can be a challenge, as both have different pros and cons. Adobe provides the
