Warren Buffett’s Company, Berkshire Hathaway, Has Reached Its Highest-Ever Cash Reserves—What Does This Mean?

US investment giant Berkshire Hathaway increased its cash reserves to an all-time high of $397 billion in the first quarter of 2026.

The company’s move, coinciding with a period when valuations in the US stock markets have reached historical highs, has reignited the “selling at the peak” debate.

The company’s first-quarter cash flow increase was driven by a total of $8.1 billion in net equity sales. This development marked one of the first major portfolio moves under new CEO Greg Abel.

Looking at the financial results, Berkshire Hathaway’s performance remained strong. The company generated $93.67 billion in revenue in the first quarter of 2026, exceeding both the same period last year and market expectations. Net profit was reported at $10.10 billion, a significant year-on-year increase but slightly below expectations. Total fixed-income investments reached $17.66 billion.

Warren Buffett, the legendary investor who led the company for many years, has frequently emphasized his approach to cash in the past. Buffett describes cash as a “necessary but not ideal” asset, likening it to oxygen for businesses. According to Buffett, cash is a “war reserve” waiting until attractive opportunities arise. If market valuations are high and suitable investment opportunities are limited, opting to hold onto cash instead of making aggressive purchases is seen as a more rational strategy.

On the other hand, the upward trend continues in US stock markets. The S&P 500 and Nasdaq Composite indices are testing their all-time highs, while valuation multiples have reached remarkable levels. As of April, the S&P 500’s price-to-earnings (P/E) ratio has risen to approximately 24, well above the long-term average (around 16). Offering a broader perspective, the Shiller P/E ratio has surpassed 37, reaching one of its highest levels since the dot-com bubble.

According to experts, this chart shows that markets have entered a “high expectations + high valuation” combination. The current rally is based on optimistic assumptions such as AI-powered profit growth, falling inflation, easing interest rate policies, and risks under control. However, any deviation from these factors creates a fragile foundation that could lead to sharp corrections in the markets.

*This is not investment advice.