Berkshire Hathaway is First of its Kind to Reach This Milestone

Warren Buffett’s Berkshire Hathaway, which owns NetJets and Executive Jet Management, recently reached a market value of $1 trillion. They are the only non-tech company to have passed this milestone.

Other trillion-dollar club members include Apple, Nvidia, Microsoft, Alphabet, Amazon, and Meta.

“Occasionally, markets and/or the economy will cause stocks and bonds of some large and fundamentally good businesses to be strikingly mispriced,” stated Buffett in a report.

Berkshire Hathaway generated $364 billion in total revenue and $75 billion in investment contracts last year. In the last quarter, however, SEC filings showed decreased earnings due to extra maintenance, staff, and fuel costs.

Buffett has frequently second-guessed his choice to invest in the aviation industry, going as far as to say that “if a far-sighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

He invested in the airlines for the first time in 1989 despite growing industry competition.

“I did not expect [industry] leaders to engage in prolonged kamikaze behavior,” he stated. “In the last two years, airline companies have acted as if they are member of a competitive tontine, which they wish to bring to its conclusion as rapidly as possible.”

Private aviation has been equally as challenging for Buffett. He purchased NetJets in 1998 for $711 million. The company was a financial “failure” for the first few decades, bringing $1.9 million in debt, but made a remarkable turnaround. Now, it is worth nearly as much as its part 121 peers.

The trillion-dollar milestone is huge for Berkshire Hathaway and its melting pot of businesses. Andrew Kligerman, TD Cowen's Berkshire analyst, said: "Berkshire has achieved this through a conglomerate structure, a model that many view as 'archaic,' as corporations have increasingly moved to specialization over the decades."

FMI: www.berkshirehathaway.com, www.netjets.com