Berkshire Stock Nears Record High as AI Selloff Drives Defensive Rotation, Just 1.6% From Peak

TradingKey - On October 19 Eastern Time, Warren Buffett's Berkshire Hathaway (BRK.A)(BRK.B) continued its recent strong momentum. As of the close on October 16, Berkshire's share price was only about 1.6% below its all-time high. Based on closing prices from October 2 to 16, its Class A shares rose about 5.8%, while the Nasdaq Composite Index fell about 3.9% over the same period.

In terms of stock price catalysts, market sentiment may be the main driving factor. Last week, AI chip and infrastructure-related stocks experienced a sell-off as investors worried about rising financing costs and whether massive investments could yield sufficient revenue. Meanwhile, Berkshire's business spans multiple sectors, including insurance, energy, railroads, manufacturing, and consumer products; as a result, the strength of the company's fundamentals may attract increased attention.

According to financial data disclosed by Berkshire, as of the end of June 2026, cash, cash equivalents, and short-term U.S. Treasury bills held by its insurance and other businesses, net of unsettled purchases, totaled approximately $359.2 billion. Second-quarter operating profit on a company-defined basis was $12.983 billion, up from $11.160 billion in the same period last year; the company also repurchased approximately $4.5 billion of its stock during the quarter.

Looking at the weekly chart of BRK.A, the current stock price has climbed above the 0.786 Fibonacci retracement level ($785,526) and is approaching its previous high of $812,855. This represents a strong continuation within a long-term uptrend, currently testing resistance near the previous high.

Berkshire Hathaway Class A shares weekly chart, Source: TradingView

Regarding moving averages, the 5-day, 10-day, 20-day, 80-day, and 160-day exponential moving averages show a bullish alignment and are sloping upward in tandem. The stock price maintains a distinct distance above the moving averages, pointing to a strong medium-term trend. Given that the stock price has entered the resistance zone of its previous high, the current focus should be on observing whether a valid breakout and successful retest with support occur near the previous high.

The biggest downside risk is encountering resistance near the previous high, causing the price to fall back below $785,526 and forming a false breakout below the previous peak. Because the stock price has strayed significantly from its medium- to long-term exponential moving averages, if the breakout fails, the magnitude of the pullback could be larger than that of ordinary consolidation.