(Bloomberg) --Berkshire Hathaway Inc. became the first US company outside of the tech sector to surpass $1 trillion in market value.
Shares of Warren Buffett's conglomerate rose as much as 0.8% on Wednesday to push its market capitalization above the trillion-dollar mark for the first time. The stock has rallied this year on strong insurance results and economic optimism. The Omaha, Nebraska-based company joins the ranks of a small group to crack the milestone, dominated by technology giants like Alphabet Inc., Meta Platforms Inc. and Nvidia Corp.
"Berkshire has done it the slower, but more sure, way," said Steve Check, the founder and chief investment officer of Check Capital Management. His firm has about $2 billion in assets under management, with Berkshire as their largest holding. "It's harder to make money the old-fashioned way."
Berkshire's rally this year has outpaced the S&P 500's gains, with the company off to one of its best annual starts in a decade. It's gained 30% in 2024, while the market benchmark is up 18%. The company isn't that far behind the so-called Magnificent Seven: a gauge of the biggest tech stocks is up 35% this year.
Buffett has spent the bulk of his life turning Berkshire Hathaway from a struggling textile maker into a sprawling business empire. He shaped the company alongside
Berkshire's market value climbed by
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The conglomerate's strength comes as optimism for the economy builds, with the Federal Reserve expected to cut interest rates at its September meeting. Consumer confidence
The stock has added more than $200 billion in market capitalization this year alone — a record for the firm, but a sharp contrast to Nvidia's nearly $2 trillion increase. Berkshire's rally has pushed it into overbought territory, based on the relative strength index, and prompted a bit of reticence from analysts.
The fundamental outlook for Berkshire's core businesses isn't necessarily that much brighter ahead, according to Bloomberg Intelligence analyst Matthew Palazola, but the firm boasts an "all-weather" portfolio.
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Meanwhile, lower interest rates could impact returns on the record cash pile Berkshire amassed while slashing its Apple Inc. stake and