Warren Buffett Steps Down as Chairman of Berkshire Hathaway. 3 Predictions for What Comes Next Under CEO Greg Abel.
For decades, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) was a bastion of consistency in a rapidly changing world. Warren Buffett and Charlie Munger stuck to their roots, investing in high-conviction stocks and company-controlled businesses, mostly outside the tech sector. As other asset managers chased hot trends, Buffett and Munger showcased the advantages of compounding returns over time in key positions they understood well, while staying even-keeled no matter what the market did.
Munger passed away at the age of 99 in November 2023. Buffett stepped down as CEO of Berkshire Hathaway on Jan. 1, 2026, replaced by his hand-picked successor Greg Abel. And on Sept. 18, the conglomerate published a press release stating that Buffett was stepping down as chairman of the board, though he's remaining a director and taking the title of chairman emeritus. Howard Graham Buffett, one of Buffett's sons, has been appointed the new chairman of the board, effective immediately.
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With the 96-year-old Buffett focusing more on his personal life, here's what I predict comes next under Abel.
Image source: The Motley Fool.1. Berkshire's core holdings will remain relatively unchangedLess than a year into his term as CEO, Abel has wasted no time making some drastic changes to Berkshire's portfolio, including pole-vaulting Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) to a top-five holding and cutting its stakes in several smaller positions. But he's also made it abundantly clear that many of Berkshire's core holdings will remain pillars of the portfolio.
In his Feb. 28 letter to shareholders, Abel called attention to Berkshire's concentration in a number of key holdings -- including Apple, American Express, Coca-Cola, and Moody's. But instead of describing the portfolio's concentration in those positions as a reason to trim them, Abel did the opposite -- praising the concentrated approach in companies Berkshire understands well, views as having strong leadership teams, and expects to compound for decades.
There's no denying this strategy has paid off big time for Berkshire shareholders. As of Dec. 31, 2025, Berkshire's combined cost basis on Apple, American Express, Coca-Cola, and Moody's was $9.089 billion -- while the combined market value of its stakes was $158.617 billion. Moreover, it collected total dividends of $1.668 billion from those companies in 2025.
2. Abel will make high-value, high-conviction betsWhen Abel took over Berkshire Hathaway, its cash, cash equivalents, and Treasury bill position was at an all-time high. Abel has funded the accumulation of Alphabet stock in part by selling other non-key positions rather than relying solely on the cash pile. As of June 30, Berkshire's cash stockpile sat at $365.5 billion -- more than its combined public stock holdings, which were worth $360.1 billion as of market close on Sept. 17.
Given the sheer amount of cash it has ready to put to work whenever promising opportunities appear, Abel can retain Berkshire's large stakes in core holdings while also making some major purchases of public stock or buying entire businesses outright. Considering how quickly Abel built Berkshire's Alphabet stake, I'd expect new moves to happen relatively rapidly. But not all at once, given that Treasury bill yields are rising, the major stock market indexes are hovering around all-time highs, and Abel continues to follow Buffett's disciplined approach.
Buffett said the following in his Sept. 18 letter to shareholders:
I have served Berkshire since 1965. Sixty-plus years in, I still have the best job in the world. That is not something many people my age can say, and I have never felt better about what comes next. Part of the reason is Greg. My expectations for him were sky high from the start, and he has exceeded them. He has taken hold of the Chief Executive Officer job in every respect. He has been making the decisions that matter for some time now, and I have not had to think twice about any of them.
In sum, Buffett gave Abel the green light to make bolder bets, not because he expects Abel to be reckless, but because he trusts his temperament and decision-making.
3. Berkshire will implement a consistent dividendBerkshire Hathaway hasn't paid a dividend since 1967, as Buffett always preferred to put the conglomerate's capital to work either by investing in expanding its subsidiaries, purchasing stock in other companies, or repurchasing Berkshire Hathaway shares. The logic is sound, as Buffett's No. 1 goal for Berkshire shareholders was outperforming the S&P 500 (SNPINDEX: ^GSPC). And the returns would likely be far better for long-term shareholders if its capital were allocated to great business ideas rather than distributed via dividends yielding a couple of percentage points.
Aside from Buffett's track record of preferring stock buybacks over dividends, I think one of the main reasons Buffett avoided implementing a dividend is that he didn't want to soak up Berkshire's capital by handing himself large quarterly cash payouts, given he's such a large shareholder.
Berkshire's 60-plus subsidiaries include an array of insurance businesses, BNSF Railway, Berkshire Hathaway Energy, and companies operating across the manufacturing, service, and retail industries. They produce stable operating earnings that Berkshire can use to reinvest in those businesses, in other companies, or to collect yield on cash. Given the relative consistency of these earnings, Berkshire is well positioned to pay a stable and growing dividend to directly reward patient shareholders.
It's also worth noting that Berkshire -- with a market cap of about $1 trillion -- has become so large that it can no longer find hidden-gem companies to invest in that can materially improve its operating earnings or meaningfully contribute to its equity portfolio. Buffett has long stressed this size disadvantage. The narrow field of realistic opportunities is yet another reason why Berkshire is perfectly positioned to pay a dividend without worry that it might soak up too much cash that it could better deploy on other endeavors.
Enter the Abel eraBerkshire Hathaway stock is up just 1.3% year to date -- badly underperforming the S&P 500's 11.6% gain. However, that underperformance had little to do with Berkshire's fundamentals and more to do with the financial sector also being up less than 2% this year and Berkshire being relatively underweight on the themes that are driving the major indexes -- particularly, artificial intelligence.
Even with Buffett stepping down as chairman, Berkshire remains one of the best value stocks for long-term investors to buy and hold. I wouldn't be surprised if the next 10 years under Abel are actually better than the last decade under Buffett, given Buffett's confidence in Abel and that Abel has already shown a willingness to stick out his neck on bold ideas without losing sight of the characteristics that have made Berkshire arguably the most trusted stock on the market.
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American Express is an advertising partner of Motley Fool Money. Daniel Foelber has positions in American Express. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, Berkshire Hathaway, and Moody's. The Motley Fool has a disclosure policy.
Warren Buffett Steps Down as Chairman of Berkshire Hathaway. 3 Predictions for What Comes Next Under CEO Greg Abel. was originally published by The Motley Fool
Source: https://finance.yahoo.com/markets/stocks/articles/warren-buffett-steps-down-chairman-141500604.html