Warren Buffett plans to step down as CEO of Berkshire Hathaway (BRK.A -3.04%) (BRK.B -2.85%) on the finish of this 12 months. Nevertheless, that does not change the extent of scrutiny his inventory picks obtain within the least. Many traders stay extremely fascinated by understanding which shares the “Oracle of Omaha” is shopping for.

We cannot know the shares Buffett purchased within the second quarter of 2025 for an additional couple of weeks or so. Berkshire sometimes submits the 13F regulatory submitting disclosing its fairness holdings for the second quarter in mid-August of every 12 months. Nevertheless, there’s one inventory that the legendary investor undoubtedly did not purchase in Q2.

Picture supply: The Motley Idiot.

A lot of possible candidates

Earlier than we get to that one inventory, I am going to readily admit there are many possible candidates that Buffett did not purchase final quarter. Valuation alone would disqualify a boatload of shares. For instance, Palantir Applied sciences sports activities a ahead price-to-earnings ratio of round 278. The percentages towards Buffett shopping for a inventory buying and selling at such a premium are slim.

I believe the chance that Buffett initiated new positions in shares for which he lately exited positions can be very low. Berkshire bought all of its remaining shares of Citigroup and Nu Holdings within the first quarter of 2025. It might be fairly shocking if Buffett or his funding managers circled and acquired these two shares once more in Q2.

Berkshire’s 10Q submitting for the second quarter, which was launched over the weekend, additionally supplied massive hints about different shares that Buffett most likely did not purchase. For instance, Berkshire recorded an impairment of $5 billion on its funding in Kraft Heinz. May the conglomerate have put extra money in a inventory that has misplaced it a lot cash? It is theoretically doable, however not possible.

One other possible candidate that Buffett most likely did not purchase is American Specific. Berkshire revealed in its newest quarterly replace that it owned 151.6 million shares of the monetary providers large on the finish of Q2. On the finish of Q1, Berkshire owned 151,610,700 shares of American Specific. Perhaps Buffett added a small variety of AmEx shares in Q2, however I doubt it.

The slam-dunk inventory that Buffett did not purchase in Q2

The above listing of potential shares that Buffett did not purchase in Q2 is not exhaustive by any means. Nevertheless, there’s one slam-dunk inventory that Buffett did not purchase in Q2: Berkshire Hathaway itself. Berkshire’s 10Q for the second quarter said bluntly, “There were no share repurchases during the first six months of 2025.”

Buffett has cherished inventory buybacks prior to now. Berkshire’s buyback program permits him to authorize repurchasing shares any time he desires, so long as the corporate’s money, money equivalents, and U.S. Treasury invoice holdings do not fall beneath $30 billion. With Berkshire’s money place at $344 billion, Buffett may have purchased again shares if he selected to take action. So why did not he? Buffett might be involved about Berkshire’s valuation.

The inventory repurchase program permits Buffett to provoke share buybacks when he “believes that the repurchase price is below Berkshire’s intrinsic value.” Though Berkshire’s share value has fallen greater than 10% from its peak earlier this 12 months, the inventory nonetheless trades at 23.4 occasions ahead earnings and is above its ranges all through most of 2024.

An excise tax of 1% on inventory buybacks that went into impact in 2023 most likely additionally components into Buffett’s reluctance to repurchase shares. He even talked about this throughout Berkshire’s annual shareholder assembly in Might 2025, stating, “If Berkshire buys Berkshire shares in repurchases, we now pay more than you will pay if you buy Berkshire shares.” Buffett added that the excise tax “hurts some of our investee companies quite substantially.”

Is Berkshire Hathaway an excellent choose for different traders?

As Buffett mentioned, unusual traders aren’t affected by the excise tax. Is Berkshire Hathaway an excellent choose despite the fact that it isn’t shopping for again its personal shares? I believe so.

Granted, the inventory’s valuation appears excessive at first look. Nevertheless, I do not suppose that is a priority for long-term traders contemplating Berkshire’s progress prospects.

Some is likely to be nervous about Buffett stepping down as CEO. He nonetheless plans to be actively concerned as chairman of the board, although. Importantly, Buffett is assured within the talents of his successor, Greg Abel, telling shareholders earlier this 12 months that he would not plan on promoting a single share. He additionally expressed his view that Berkshire’s prospects can be higher with Abel as CEO.

Buffett undoubtedly is not shopping for Berkshire Hathaway as of late. However that does not imply you should not.