Berkshire's DaVita Trim Comes With a Contractual Asterisk, While October's Rally Has a Different Engine
Published on 11/01/2026 at 06:32 | Editorial boerse-global.de
Berkshire Hathaway's sale of DaVita shares on Tuesday was never going to be a clean read on management's view of the dialysis operator. The disposal, reported at $69 million, was made to comply with a 2024 agreement capping Berkshire's stake at 45% — a contractual obligation rather than a verdict on DaVita's prospects. Investors tempted to treat the move as a signal of a broader retreat should note what the filing actually says: the stated reason is the ownership ceiling, nothing more.
What remains is still a substantial position. Berkshire holds 28.3 million DaVita shares after the sale, a stake valued at $5.3 billion as of Friday. The size of the residual holding matters as much as the reason for the trim. Anyone reading the transaction as mounting skepticism toward DaVita would be attaching a meaning the contractual backdrop does not support.
Buybacks and Operating Results Offer a Cleaner Yardstick
For a genuine gauge of how CEO Greg Abel is deploying capital, Berkshire's own share repurchases are the better place to look. The company bought back $4.8 billion of its stock in the first half of 2026, with roughly $4.5 billion of that landing in the second quarter alone. Those purchases put money into Berkshire's own equity — a decision distinct in kind from a stake-limit sale, and the two should not be lumped together as a single sell signal.
Operating performance adds a separate benchmark. Second-quarter 2026 operating profit climbed 16.3% to $12.98 billion. Net earnings, by contrast, were shaped by unrealized investment gains, which is why separating the underlying business trend from valuation effects in the equity portfolio remains essential.
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A Rally Built on Market Rotation, Not New Earnings
The stock's October advance tells a story of its own, and it is not one about Berkshire's business improving. Financial coverage attributes the gain to investors selling AI and technology names and rotating into defensive, value-oriented holdings. That describes capital movement across the market — a shift in preference — rather than a fresh company-specific catalyst. Over 30 days, the shares are up 11%, a figure that reflects stronger demand for the stock without answering whether earnings are keeping pace.
UBS supplied a business-side reference point on October 22, when analyst Brian Meredith reaffirmed his buy rating on the B-shares and lifted his twelve-month price target to $628 from $604. The rationale centered on expected moderate earnings growth in the third quarter and Berkshire's diversified earnings base — a constructive call, but hardly a forecast of a sudden jump in results. The next quarterly figures are expected on November 7, giving investors a concrete date to test those expectations against actual performance. Until then, the analyst projection stays an expectation, not a reported number.
A $330 Million Bet Rounds Out the Picture
Additional context comes from the roughly two-week-old position in Bending Spoons. A company statement puts a further completed investment at $330 million, giving Berkshire a 4% stake in the Italian software firm that owns AOL. The commitment documents a specific allocation decision; it says nothing about the future earnings contribution that decision will produce.
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That distinction is the thread running through all of it. The DaVita sale answers a narrow question — Berkshire is honoring its agreed ownership cap. The Bending Spoons purchase shows where capital is going. Buybacks and the 16.3% operating-profit gain show how Abel is putting money to work and how the earnings base is developing. October's defensive rotation shows only that the market currently wants what Berkshire stock offers. None of these substitutes for the others, and the November 7 report is where the earnings case finally gets its hearing.
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