Berkshire Hathaway’s Warren Buffett Premium is Melting Away—Is the Stock Still a Buy?

There’s no question that many long-term shareholders of Berkshire Hathaway (NYSE:BRK-B) have stuck around for so long because of the great Oracle of Omaha, Warren Buffett. Indeed, Buffett’s legendary leadership and incredible stock-picking skills have been big reasons to justify paying a bit of a premium for Berkshire Hathaway stock at any given moment in time.

With Buffett shocking an arena full of people during the 2025 annual shareholders’ meeting, announcing his plan to finally relinquish his spot as CEO by the end of the year, it felt like a big plunge was just waiting for Berkshire stock on Monday (as usual, Berkshire’s meeting was held over the weekend). Though Berkshire was given a mild initial hit, it was the slow and steady descent into correction that saw the so-called Warren Buffett premium melt away.

A 10% correction in Berkshire stock is now in the books. Is the Buffett premium now gone?

With shares flirting with correction territory (a 10% drop from the top) last week, questions linger as to whether the Buffett premium has now been fully taken off the stock. Indeed, it’s really hard to gauge this, given Buffett’s profound impact on the legendary conglomerate he built up.

Also, there’s no telling how much the anticipation of his departure from the CEO’s office was already baked in beforehand. After all, the man is just over a month away from his 95th birthday! In any case, it’s worth noting that Buffett will be sticking around, especially if market valuations contract by enough to warrant putting some of Berkshire’s cash pile to work. Given this, perhaps the entire Buffett premium shouldn’t be melted away just yet. In any case, Buffett won’t be on stage come the 2026 shareholder meeting, a move that could cut into demand for flights to Omaha next May.

For now, I view the 10% drop in Berkshire stock as mostly an overreaction. Incoming CEO Greg Abel, Ajit Jait, Ted Weschler, and Todd Combs (a dream team of sorts) have been hard at work behind the scenes, and little about the day-to-day operations, I think, will change as Buffett finally passes over the baton.

In any case, I’m not so sure the Buffett premium is completely out of the stock. The stock was quite expensive going into the annual meeting. And the shocking news may have nudged Berkshire shares into a much-needed correction as a result of the extended multiple.

Even at under $490 per share, the stock doesn’t look like all too big of a steal at 1.62 times price-to-book (P/B), especially when you weigh the tariff impact and recession risks.

Berkshire stock is still a buy amid the transition.

It’s a big deal to have the great Buffett step back. That said, I think investors should have more faith in Greg Abel as he looks to steer Berkshire into a post-Buffett era. With solid successors in place, I believe some form of the Buffett premium should exist for the long haul as long as his hand-picked management team looks to make the Oracle proud. In short, Berkshire investors are still in fantastic hands, even as Berkshire moves into new, uncharted waters.

They’ll still have all the same values, but perhaps with a greater willingness to invest in newer, emerging technologies. Indeed, perhaps Berkshire, with a greater willingness to embrace emerging tech trends, could be a good thing for long-term shareholders. In the coming years and decades, we’ll learn a bit more about how Buffett’s successors will operate.

If they can continue driving the outperformance, perhaps they can offset the erosion of the Buffett premium. The big question for investors to ponder is whether the Sage of Omaha is as good at picking managers as he is stocks. If he is, some form of the Buffett premium could stick around for the long haul. In any case, Berkshire stock is a name to stick with as it undergoes a transition that may be met with a bit more selling.

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