No. of Recommendations: 2
“ Berkshire Hathaway and its new CEO Greg Abel have both begun repurchasing company stock for the first time in years, according to a securities filing Thursday. It’s a bold departure from former CEO and current Chairman Warren Buffett’s approach, and something Abel says he’ll keep doing.
• A longstanding buyback policy lets Berkshire buy back stock if the CEO, after consulting with the chairman of the board, determines that the repurchase price is below Berkshire’s intrinsic value. Abel succeeded Buffett as CEO on Jan. 1.
• “I absolutely talked to Warren,” Abel told CNBC, saying Berkshire normally wouldn’t divulge the start of a repurchase plan, but felt it was important to do so. Abel consulted with Buffett on the value and the timing, and plans to buy Berkshire stock annually to signal alignment with shareholders.
• Whereas Buffett preferred to reinvest cash in stocks, Abel bought $15 million of Berkshire’s Class A stock, from the after-tax proceeds of his $25 million in compensation this year, a filing showed. Abel holds 249 A shares now valued at about $189 million.
• The moves boosted Berkshire’s Class B shares 2.7% on Thursday, while the S&P 500 index closed down 0.6%. Abel and other Berkshire executives and employees are paid in cash, and receive no stock compensation. Abel must buy stock in the open market if he wants to own more.
What’s Next: Abel wrote in his inaugural shareholder letter that Berkshire is guided by its capital discipline, whether buying a business, an equity share of a publicly traded company, or its own shares. “We will assess value carefully, act patiently, and hold for the long term—preferably forever.”
—Mackenzie Tatananni, Andrew Bary, and Janet H. Cho
Marvell Earnings Beat Estimates on Robust AI Demand
It’s been a big week for two of the main artificial-intelligence hardware stocks with Marvell Technology posting better-than-expected fourth-quarter earnings Thursday just a day after a strong report from rival Broadcom. Custom processors are emerging as a pocket of strength in an otherwise patchy AI trade.
• Marvell reported adjusted earnings of 80 cents a share on revenue of $2.22 billion. Analysts expected earnings of 79 cents a share on revenue of $2.21 billion, according to FactSet. Data-center revenue in the quarter was $1.65 billion, compared to analyst estimates of $1.63 billion and a 21% climb from the same period last year.
• It also said it expects first-quarter earnings of 79 cents a share, plus or minus 5%, and revenue of $2.4 billion, plus or minus 5%. Wall Street was expecting first-quarter earnings of 74 cents a share on revenue of $2.28 billion.
• Tech giants like Microsoft and Amazon.com are rushing to build the data centers that house infrastructure needed to power AI workloads. Marvell makes the products that help power those sites, which has helped drive the company’s recent revenue growth.
• Marvell isn’t the first chip company to report solid results this week. Broadcom posted better-than-expected first-quarter financials and gave a strong second-quarter outlook on Wednesday. CEO Hock Tan said Broadcom had a “line of sight” to sales from that business significantly exceeding $100 billion in 2027.
What’s Next: Hyperscalers, which include companies like Amazon and Microsoft, are slated to spend roughly $650 billion in capex in 2026, which should be a boon for the likes of Marvell.
—Angela Palumbo and Alex Kozul-Wright
—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner
