For three weeks, Wall Street sold the hottest trade in the market and bought one of the oldest. Chip stocks lost 15% while Warren Buffett’s Berkshire Hathaway gained 7%.
That swing carried Berkshire’s Class B stock (BRK-B) to a record close Tuesday, its first since May 2, 2025 — the day before Buffett said he would hand the CEO job to Greg Abel. The stock pushed to an intraday record Wednesday, as did the Class A stock (BRK-A).
The wait took 17 months, a stretch in which the S&P 500 (^GSPC) gained more than 35%.
From Oct. 6 through Tuesday, the iShares Semiconductor ETF (SOXX) fell in 10 of 11 sessions. Berkshire rose on nine of those days, and on chips’ two worst days, Oct. 14 and Oct. 16, it posted two of its best gains of the run.
For now, that price action has made Berkshire look like a hedge against the AI chip trade. Since Oct. 1, it has mostly risen on the days chips fell.
Berkshire is on track to rise in 14 of its last 15 sessions. Along the way, it strung together a 10-day winning streak, its first since 2018, according to Yahoo Finance calculations.
A gap last seen during the dot-com bust
From Oct. 2 through Tuesday, Berkshire beat SOXX by 22 percentage points. That’s the widest gap over any 12-session stretch since early 2010, according to Yahoo Finance calculations that compare Berkshire with the PHLX Semiconductor Index (^SOX) back to 1994. The 12-session window is the one that captures this month’s widest gap.
The rarer signal is the combination.
Chips fell at least 14% while Berkshire gained at least 7% over 12 sessions. Before this month, that last happened Oct. 3, 2001. Every earlier case came in 1995-96 or in 2000-01, the latter as the dot-com bubble burst.
History sends a mixed message from here.
In the near term, chips bounced. They were higher a week later in five of the six earlier cases, and they’re rebounding Wednesday,too. A year out, chips were lower in five of six instances, and the S&P 500 fell in four.
Four of those six cases came during the same bear market, though. Treat this as a rare signal, not a forecast.
Abel’s Berkshire is spending again
Abel has also changed how Berkshire uses its cash. Berkshire bought back about $4.5 billion of its own stock in the second quarter and ended 14 straight quarters of net stock selling while its cash pile fell from a record $397 billion.
Buffett said Sept. 18 he would also step down as chairman. The stock bottomed two weeks later.
The next test comes with third quarter results, expected to be released Saturday, Nov. 7.
