Berkshire's October Rally and Its Alphabet Problem Are Two Different Stories
Published on 11/01/2026 at 03:31 | Editorial boerse-global.de
Berkshire Hathaway's Class B shares have climbed 11% over the past 30 days, a move that says more about shifting market tastes than about anything happening inside the conglomerate. According to media reports, the October advance reflects investors rotating out of AI and technology names and into defensive, value-oriented holdings. That is a change in market preference, not evidence of accelerating corporate profits — a distinction that matters as the company's next earnings report approaches.
The clearest business-side reference point came on October 22, when UBS analyst Brian Meredith reaffirmed his buy rating on the B-shares and lifted his twelve-month price target to $628 from $604. UBS cited expected moderate earnings growth in the third quarter and Berkshire's diversified earnings base. That is a constructive view, but hardly a call for a sudden jump in results — the language itself sets a modest growth bar.
A Date for the Diary
Media reports point to November 7 as the expected release date for the next quarterly figures. Until then, analyst forecasts remain expectations rather than reported numbers, and that report will give investors their next concrete opportunity to test profit estimates against actual performance.
Zacks currently projects third-quarter 2026 operating earnings of $5.91 per Class B share, which would mark a 5.6% decline from the year-earlier quarter. Revenue is forecast at $97.3 billion, up 2.5%. Notably, the research house has raised its operating earnings per share estimate by 4.4% over the past 30 days — an improved outlook that nonetheless remains below the prior-year level. No confirmed date for the report has been officially set.
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Those figures cover operating results only and should not be confused with a net income forecast, which can also absorb investment gains. The second quarter of 2026 illustrated just how wide that gap can be: Berkshire posted operating earnings of $6.02 per Class B share, while net income under US accounting rules came in at $11.91 per share, buoyed by $12.68 billion in investment gains. Such items can heavily shape the headline number without saying much about the underlying business.
Alphabet's Slide and the Stake It Touches
On the investment side, the setback at Alphabet has weighed on the estimated value of Berkshire's holding. Media reports put that value at $29.6 billion on Friday, down from roughly $40 billion in early August. The estimate is based on Berkshire's share position as of June 30, 2026 — meaning it describes the market value of the stake and confirms neither an interim sale nor a realized loss. That caveat is especially important ahead of the next quarterly report.
Alphabet fell 13% on Thursday after disappointing results, according to Bloomberg. Search revenue missed expectations, and free cash flow was negative for a second consecutive quarter. The weakness therefore goes beyond sentiment toward tech stocks: the profitability of Alphabet's core business and the financial toll of heavy investment are now front and center. For Berkshire, the question is how the holding develops over the long run — a short-term revaluation alone does not answer it.
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Where the Capital Is Going
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 move documents a concrete allocation decision, though it says nothing about the future earnings contribution. A purchase shows where Berkshire is putting capital; quarterly results show how the earnings base is developing. The defensive tilt in the market does not substitute for that proof.
When the November figures land, they will need to answer two separate questions: how Berkshire's operating earnings are trending, and how much investment holdings are shaping net income. The Alphabet pullback sharpens the relevance of that split — but it is no substitute for an assessment of the broader earnings picture.
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