A Stellar Year for Berkshire Hathaway

In a year marked by market volatility, Berkshire Hathaway, the Omaha, Nebraska-based conglomerate led by Warren Buffett, has emerged as a standout performer. As of March 2025, the company’s Class B shares have surged nearly 17% year-to-date, a remarkable feat when compared to the S&P 500’s decline of 3.7% over the same period. This performance, illustrated in a recent chart from FactSet, underscores Berkshire Hathaway’s resilience and ability to deliver value to shareholders even in challenging market conditions. If the Class B shares close higher today, they will mark their fifth consecutive record close, according to Dow Jones Market Data. Meanwhile, the company’s Class A shares are also on track to reach an all-time high, further cementing Berkshire’s position as a powerhouse in the investment world.

Berkshire Hathaway’s success in 2025 is not an isolated phenomenon. The company’s strong performance is closely tied to its significant presence in the insurance industry, a sector that has seen solid gains this year. This article explores the factors driving Berkshire Hathaway’s share price growth, the broader industry trends supporting its success, and what this means for investors looking ahead.

A Tale of Two Indices

The chart provided by FactSet paints a clear picture of Berkshire Hathaway’s outperformance in 2025. The green line, representing the company’s Class B shares, shows a steady upward trajectory, climbing from a modest gain of around 2.5% in January to nearly 17% by mid-March. This growth has not been without its fluctuations—there were periods of consolidation in January and February—but the overall trend is undeniably bullish. A sharp rally in early March pushed the shares to new heights, reflecting strong investor confidence in the company’s fundamentals and future prospects.

In stark contrast, the S&P 500, represented by the yellow line, has struggled to find its footing in 2025. The index started the year with a slight dip, briefly recovered to near-flat performance in February, and then declined sharply in March, ending the period down 3.7%. This divergence highlights Berkshire Hathaway’s ability to weather market headwinds that have weighed on broader indices. While the S&P 500 reflects the performance of 500 large-cap U.S. companies across various sectors, its decline suggests broader economic concerns—potentially including inflationary pressures, interest rate hikes, or geopolitical uncertainties—that have not significantly impacted Berkshire’s operations.

Insurance Sector Strength Fuels Gains

A key driver of Berkshire Hathaway’s success this year lies in its core business: insurance. The company is one of the largest players in the global insurance industry, with subsidiaries like GEICO, General Re, and Berkshire Hathaway Reinsurance Group contributing significantly to its revenue and profitability. In 2025, the insurance sector as a whole has performed well, with many stocks posting solid gains. This industry-wide strength has provided a tailwind for Berkshire Hathaway, amplifying its share price growth.

Several factors may be contributing to the insurance industry’s robust performance. First, rising interest rates—a likely concern for the broader market—can benefit insurers by increasing the returns on their investment portfolios, which are often heavily weighted toward fixed-income securities. Second, improved underwriting discipline and favorable claims trends may be boosting profitability across the sector. For Berkshire Hathaway specifically, its diversified insurance operations and conservative approach to risk management have likely positioned it to capitalize on these trends more effectively than its peers.

Additionally, Berkshire Hathaway’s insurance businesses generate significant “float”—the premiums collected before claims are paid out—which Warren Buffett has historically used to fund investments in other sectors. This float, often described as a form of low-cost leverage, gives Berkshire a unique advantage, allowing it to deploy capital into high-return opportunities. In a year when other sectors may be struggling, the stability and cash flow from its insurance operations have likely provided a buffer, enabling the company to outperform.

What’s Next for Berkshire Hathaway?

As Berkshire Hathaway continues its record-setting run in 2025, investors are left wondering whether the momentum can be sustained. The company’s strong performance in the insurance sector is a positive sign, but broader economic conditions will play a significant role in its future trajectory. If interest rates continue to rise, Berkshire’s investment income could see further gains, but a potential economic slowdown might dampen demand for some of its consumer-facing businesses. Additionally, the market will be closely watching for any updates on succession planning, as Warren Buffett, now 94, and his longtime partner Charlie Munger (who passed away in 2023) have been central to the company’s success. Vice Chairman Greg Abel, widely seen as Buffett’s successor, will need to prove he can maintain the company’s winning streak.

For now, though, Berkshire Hathaway remains a beacon of stability in a turbulent market. Its Class B shares’ 17% gain in 2025, compared to the S&P 500’s 3.7% decline, is a testament to the enduring appeal of Buffett’s investment philosophy. If the shares close higher today, marking their fifth consecutive record close, it will be yet another milestone in a year of remarkable achievements for the Omaha-based conglomerate.

Our opinion

Berkshire Hathaway’s stellar performance in 2025 highlights the strength of its business model and the resilience of the insurance industry. While the S&P 500 has struggled amid broader market challenges, Berkshire’s Class B shares have soared nearly 17%, driven by solid gains in its core insurance operations and a diversified portfolio of high-quality businesses. As the company approaches a potential fifth consecutive record close for its Class B shares and an all-time high for its Class A shares, investors are reminded of the value of long-term thinking in an often short-sighted market. Whether this momentum will carry forward remains to be seen, but for now, Berkshire Hathaway continues to prove why it is one of the most admired companies in the world.