Warren Buffett's Berkshire Hathaway Is Sitting on Nearly $400 Billion in Cash. Is a Stock Market Crash Coming?

Greg Abel's first quarterly report as Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) CEO came with a number that's hard to look past. The conglomerate ended the first quarter of 2026 with a record $397 billion in cash, cash equivalents, and short-term Treasury bills -- up from around $373 billion at the end of 2025, and equal to more than a third of the company's market value.

A pile that size invites a dramatic reading: that Warren Buffett and Abel are bracing for a crash. But that may read too much into it. The cash is less a market call than the result of a simpler problem. At today's prices, Berkshire continues to struggle to find much worth buying.

Warren Buffett. Image source: The Motley Fool.

How the cash got so big

The balance didn't swell in a single quarter. Berkshire has been a net seller of stocks for more than a dozen quarters in a row, parting with well over $150 billion more in equities than it has bought since late 2022.

In the first quarter of 2026 specifically, Berkshire sold about $8 billion more stock than it purchased. Money that leaves the equity portfolio and isn't put into a new investment generally lands in Treasury bills, where it earns a decent yield while it waits.

Buffett, who handed the CEO role to Abel at the start of 2026 but stayed on as chairman and still advises him, has been candid about what he sees in the market.

"We've never had people in a more gambling mood than now," he said at Berkshire's annual meeting in May, pointing to investors paying up for stocks and piling into short-term options and prediction markets.

That helps explain the cash. The S&P 500 has gained about 7% in 2026 and is trading near record highs, while Berkshire has mostly stood aside.

What it would take to put it to work

Abel, however, hasn't sat still. In late May, Berkshire agreed to buy homebuilder Taylor Morrison for about $8.5 billion including debt, working out to $72.50 a share, for the country's sixth-largest homebuilder.

It's Abel's first major acquisition, and a familiar Berkshire move: paying cash for an out-of-favor, cyclical business. But $8.5 billion is a small fraction of a $397 billion cash position. A deal that size barely moves it.

Berkshire has also recently agreed to invest an additional $10 billion in Alphabet as part of the tech giant's $80 billion capital raise. This is a more meaningful amount, but still not enough to move the needle for a nearly $1.1 trillion company in a big way.

Another lever is Berkshire's own stock. In March, Abel restarted share repurchases for the first time since May 2024, spending about $234 million -- a token amount next to the cash, but a notable shift after a nearly two-year pause. He has said he cleared the timing with Buffett, and Berkshire's rules allow it to buy back stock only when management judges the price to be below the company's intrinsic value.

That judgment -- a valuation call -- is the heart of the deployment question at the conglomerate.

So, is a crash coming?

No one can predict the market, and even a $397 billion cash balance isn't a forecast that one is. The more grounded read is that Berkshire can't find enough sizable opportunities priced attractively enough to deploy a big share of its capital -- which is what you'd expect from a disciplined buyer in an expensive market. A deal here and a small buyback there, and the pile keeps growing.

For now, that leaves shareholders waiting. Berkshire stock is about flat in 2026 as of this writing, even as the S&P 500 has risen. If that gap holds and the shares keep lagging, buying back more of its own stock at a cheaper price may turn out to be the best use Abel has for all that cash.

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.