rewrite this title Berkshire Hathaway shares fall 5% after shocking Buffett exit and an earnings decline

Berkshire Hathaway shares were under pressure Monday as investors process Warren Buffett’s surprise announcement to step down and envision a new path for the conglomerate after his legendary 60-year run.

Buffett, 94, picked the very last moment at Berkshire’s annual meeting in Omaha, Nebraska, to tell his loyal shareholders that it’s time for Greg Abel, vice chairman of noninsurance operations, to replace him as CEO. The board voted unanimously on Sunday to make Abel president and CEO on Jan. 1, 2026, and for Buffett to remain as chairman.

Berkshire Class A shares dropped 4.9% to about $769,960, after closing at a record high at $809,350 apiece. Class B shares fell a similar amount to $512.94 after hitting an all-time high at $539.80 on Friday. Berkshire issued Class B shares in 1996 at a price equal to one-thirtieth of a Class A share. In 2010, Berkshire Class B shares split 50-for-1.

“Shareholders should welcome this transparent transition, but also have confidence that Warren isn’t going anywhere,” said Macrae Sykes, portfolio manager at Gabelli Funds and a Berkshire shareholder. “Retaining the position of Chairman means he can continue to mentor Greg and the Berkshire leaders, while also providing additional intellectual capacity when the inevitable time for more major capital allocation occurs.”

It marks an end of an epic era for Berkshire, which was a failing New England textile mill six decades ago when Buffett used an investment partnership he ran to take control. Berkshire has grown into a one-of-a-kind juggernaut worth nearly $1.2 trillion with businesses encompassing insurance, railroad, retail, manufacturing and energy. Buffett is handing over his reins on a particularly high note as Berkshire shares just reached a new peak Friday.

“Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows,” Brian Meredith, UBS’ Berkshire analyst, said in a note. “Operationally, we expect little change at BRK and the culture/strategy to remain unchanged under Abel.”

The stock could also be reacting to Berkshire’s first-quarter results that showed a 14% decline in operating earnings, driven by a 48.6% plunge in insurance underwriting profit. Berkshire said the Southern California wildfires led to a $1.1 billion loss during the period.

Berkshire shares have significantly outperformed the S&P 500, rising nearly 19% this year. Investors seeking relatively safe places to hide find Berkshire appealing because of the defensive nature of its huge insurance empire and the conglomerate’s unmatched balance sheet.