Prediction: Berkshire Hathaway Joins the $2 Trillion Club Before 2032

Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) now has its next generation of leadership in place. Greg Abel has been CEO since January. And earlier this month, Warren Buffett became chairman emeritus while his son, Howard Buffett, took over as chairman of the board.

The company they inherited is worth about $1.09 trillion, with the B shares at about $507 as of this writing -- not far below their 52-week high of $537.74.

I think that value tops $2 trillion before 2032. The math behind that prediction is less demanding than it sounds.

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It takes a little over 12% a year

Reaching $2 trillion from about $1.09 trillion means about 84% upside. Spread over the five-plus years through the end of 2031, that comes to a little over 12% annually -- about what the stock has delivered each year over the past five.

I'm also not counting on a richer valuation. Berkshire trades at about 23 times its operating earnings from the past four quarters. If that multiple of operating earnings simply holds, market value grows as earnings grow.

The whole forecast, then, comes down to one question: Can Berkshire come close to doubling its operating earnings, to about $88 billion, in a bit over five years?

Growth has been running near the required pace

Berkshire's second-quarter operating earnings rose 16% year over year to about $13 billion, and the first-half total climbed 17% to $24.3 billion, though currency gains on non-U.S.-dollar debt (losses a year earlier) helped. Operating earnings are a non-GAAP (adjusted) measure that already excludes the stock portfolio's swings. Take out the currency swing too, and first-half growth was about 6%.

The underlying gains were broad, too. In the second quarter, manufacturing, service and retailing earnings jumped 24% year over year, Berkshire Hathaway Energy's earnings grew 27%, and railroad BNSF's rose 6%. Insurance was the soft spot, as underwriting earnings fell 13% and investment income slipped 9%.

Zoom out, and the growth record holds up. Operating earnings totaled $27.5 billion in 2021. By 2024, they had reached $47.4 billion, before dipping about 6% to $44.5 billion last year on weaker insurance results.

That works out to about 13% compounded annually across the four years. And 2026 has growth pointed back up. In other words, the pace needed for $2 trillion is about what the company has been delivering anyway.

Sure, insurance results can swing sharply from year to year, as 2025 showed. But the five-year trend sits right around the needed rate.

A $365 billion decision

Of course, some of those operating earnings come from the cash pile itself. Berkshire held $365.5 billion of cash and Treasury bills at the end of June -- a war chest that earns billions of dollars in interest. Cash and bills alone represent about a third of the company's entire market value.

However, that income is already shrinking, as the second quarter showed. And interest on Treasury bills isn't the kind of earnings stream that doubles from here.

A pile that size earning less means the operating businesses have to do more of the work.

More important is where the cash goes from here. And Abel has started moving it.

The cash pile is down from a record of about $397 billion at the end of March. Berkshire repurchased about $4.5 billion of its own shares in the second quarter, nearly all of its first-half total of about $4.8 billion and a sharp acceleration from the first quarter's pace. The conglomerate also became a net buyer of other companies' stocks, with nearly $20 billion in net purchases, after 14 straight quarters of selling more than it bought.

Buybacks, it's worth noting, shrink the share count rather than grow the company, so they help the stock's per-share returns more than its total market value. For the market-value milestone specifically, the job belongs to earnings growth and to moving more of that $365 billion into businesses and stocks that could earn more than Treasury bills. Getting that much money into better-earning assets is the hard part, because bargains that size don't come along often.

Ultimately, Berkshire doesn't have to become a different company to get there. Operating earnings have compounded at about 13% a year since 2021, and the cash is finally moving. Nothing about the path depends on a richer multiple of operating earnings.

A bad insurance year or a market short on bargains may push the timing out. But I think Berkshire crosses $2 trillion before 2032. If it's late, I'd guess it isn't late by much.

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.