2 Reasons to Buy Berkshire Hathaway Stock Before May 3

Source The Motley Fool

Warren Buffett's holding company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) reports earnings on Saturday, May 3. The company doesn't conduct quarterly conference calls, but this quarter coincides with the annual meeting. There, we should get much more insight into Warren Buffett's thinking.

I don't expect any bombshells to revealed in Berkshire's upcoming 10-Q. But there are still two reasons to invest before the weekend arrives.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Berkshire Hathaway is loaded with extra cash

Every investor is keenly aware of the volatility that has plagued the market so far in 2025. Several of the market's biggest growth stocks entered correction territory this month, with consumer confidence hitting 45-year lows. For patient investors, the pullback could be a great opportunity to load up on discounted stocks. But there's no saying when the volatility will end. If you're looking to reduce risk in your portfolio, Berkshire should top your watchlist.

Last year, Berkshire's cash hoard doubled to roughly $334 billion. Keep in mind that the company's entire market capitalization is $1.1 trillion, meaning around 30% of Berkshire's valuation is now cash and cash equivalents. Also, Buffett isn't hoarding cash on purpose. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," Buffett told investors in his annual letter. So why is Berkshire loading up on cash? Only one explanation makes much sense: a lack of good deals.

Before the market pullback, the S&P 500 was trading at an astounding 30 times earnings. After the pullback, its valuation is down to around 27.7 times earnings. That's still expensive, but it gives Buffett a little more room to make value accretive deals. But even if he sits on his growing cash pile, that insulates investors from additional market downturns. Theoretically it also limits upside, but not if there aren't any good deals to be had.

Buffett mentioned in February that he was looking to add to his positions, especially his Japanese holdings after regulators lifted limits on foreign investment. If we get news that Buffett deployed some of its cash into his favorite holdings at a relative discount, we could see a small pop in Berkshire's share price.

2. Berkshire's portfolio companies can weather a big storm

It's not just Berkshire's cash pile that insulates investors downside. It's also the type of companies that Buffett prefers to invest in. Last year, for instance, Buffett began secretly putting billions of dollars to work by accumulating Chubb stock. Chubb has a long history of strict underwriting, generating consistent profits from both its underwriting and its investment arm. The business has a lot of synergies with the rest of Berkshire's insurance holdings, and its addition to Berkshire's portfolio reduces the company's overall exposure to volatility considering Chubb's beta in recent years has averaged under 0.5.

To be fair, Berkshire is also disproportionately exposed to tech and financial services companies -- both of which can see heavy declines during market corrections. But the companies it does own are financially stable with durable competitive advantages. If anything else, Berkshire could put its extra cash to work by upping its positions during periods of weakness -- an advantage few investments funds have during times of turmoil.

Berkshire is a great stock to own during market corrections. And regardless of what occurs on May 3, these structural advantages likely won't change. So yes, Berkshire looks like an attractive buy before earnings are announced. But shares are a buy for long term investors regardless of whether you buy this week or next.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $610,327!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $667,581!*

Now, it’s worth noting Stock Advisor’s total average return is 882% — a market-crushing outperformance compared to 161% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US Dollar Index (DXY) advances to two-week high near 99.75; not out of the woods yetThe US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts some buyers for the third straight day and climbs to a two-week high, around the 99.70-99.75 region during the Asian session on Thursday.
Author  FXStreet
10 hours ago
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts some buyers for the third straight day and climbs to a two-week high, around the 99.70-99.75 region during the Asian session on Thursday.
placeholder
EUR/USD Price Forecast: Bullish outlook remains in play near 1.1300The EUR/USD pair weakens to around 1.1295 during the early European session on Thursday, pressured by the renewed US Dollar (USD) demand. The optimism over the potential de-escalation of the US-China trade war provides some support to the Greenback and creates a headwind for the major pair.
Author  FXStreet
10 hours ago
The EUR/USD pair weakens to around 1.1295 during the early European session on Thursday, pressured by the renewed US Dollar (USD) demand. The optimism over the potential de-escalation of the US-China trade war provides some support to the Greenback and creates a headwind for the major pair.
placeholder
Ripple Price Forecast: XRP builds bullish momentum as Ripple eyes Circle with $5B acquisition bidRipple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
Author  FXStreet
10 hours ago
Ripple’s (XRP) price is consolidating at $2.21 at the time of writing on Thursday, reflecting sideways trading in the wider cryptocurrency market. There is a growing need for XRP to hold above the immediate $2.20 confluence support to validate the potential breakout targeting $3.00.
placeholder
GBP/JPY rises to near 192.00 after BoJ’s Ueda speechThe GBP/JPY cross gains ground to near 191.95 during the early European session on Thursday. The Japanese Yen (JPY) softens against the Pound Sterling (GBP) after the Bank of Japan (BoJ) kept interest rates steady and slashed its growth forecasts on Thursday. 
Author  FXStreet
10 hours ago
The GBP/JPY cross gains ground to near 191.95 during the early European session on Thursday. The Japanese Yen (JPY) softens against the Pound Sterling (GBP) after the Bank of Japan (BoJ) kept interest rates steady and slashed its growth forecasts on Thursday. 
placeholder
NZD/USD edges lower to near 0.5900 as US Dollar appreciates ahead of ISM Manufacturing PMIThe NZD/USD pair has trimmed its daily gains and is depreciating, trading near 0.5920 during the early European session on Thursday. The New Zealand Dollar (NZD) faces pressure as expectations mount for further monetary easing by the Reserve Bank of New Zealand (RBNZ).
Author  FXStreet
10 hours ago
The NZD/USD pair has trimmed its daily gains and is depreciating, trading near 0.5920 during the early European session on Thursday. The New Zealand Dollar (NZD) faces pressure as expectations mount for further monetary easing by the Reserve Bank of New Zealand (RBNZ).
goTop
quote