Greg Abel, stepping into the formidable role of CEO at Berkshire Hathaway, has swiftly demonstrated his investment acumen, deploying tens of billions of dollars in capital last quarter across three significant ventures. These initial strategic moves, encompassing a major acquisition, a key international partnership, and a substantial equity market play, have all delivered exceptional performance, setting a confident tone for his leadership.
As the new CEO, Abel is tasked with overseeing Berkshire’s vast portfolio of marketable equities, identifying new opportunities for wholly owned subsidiaries, forging strategic partnerships, and ensuring the robust performance of existing operating businesses. While the challenge of replicating Warren Buffett’s legendary track record is immense, Abel’s first quarter at the helm has been marked by decisive action and promising results, with three large purchases already producing very positive outcomes for the conglomerate.
Oxychem Acquisition Bolsters Industrial Holdings
One of Abel’s significant moves involved the acquisition of Oxychem from Occidental Petroleum. Although the agreement was reached in October when Warren Buffett was still CEO, the $9.7 billion all-cash deal for Occidental’s chemicals business closed in January, with Greg Abel playing an instrumental role in its negotiation. The timing of the acquisition appears prescient, as it occurred when the chemical industry was near the bottom of an earnings cycle. Berkshire paid an estimated 8 times OxyChem’s 2025 EBITDA, a valuation roughly in line with peers like Eastman Chemical and Dow at the time.
The investment has quickly paid dividends. Valuation multiples for chemical stocks have expanded in 2026, driven by disruptions in international commodity supply chains due to the ongoing conflict in Iran and the closure of the Strait of Hormuz. This has granted American chemical producers significant pricing power. OxyChem is also poised to benefit from planned modernization efforts at its facilities, which are expected to enhance cash flow and earnings. A notable additional benefit of the deal is Berkshire’s retention of its preferred shares in Occidental Petroleum, which continue to yield an 8% dividend on approximately $8.3 billion.
Strategic Expansion into Japanese Insurance with Tokio Marine
Abel further diversified Berkshire’s core insurance operations through a strategic investment in Tokio Marine. Berkshire paid $1.8 billion for an initial 2.5% stake in the Japanese insurer and secured permission to increase its ownership to 9.9% through open market purchases. This partnership extends beyond equity, including a quota-share agreement where Berkshire subsidiary National Indemnity will absorb some of Tokio Marine’s insurance risk, potentially generating additional upside through sound underwriting.
The market responded positively to the announcement, sending Tokio Marine shares higher. While Berkshire reportedly paid a premium—approximately two times book value, compared to smaller Japanese non-life insurers trading closer to book value—the investment appears justified by Tokio Marine’s strong fundamentals. The company reported a 17% year-over-year increase in underlying profit last year, fueled by international market momentum, and an 11% rise in adjusted earnings per share. Management has guided for similar profit growth this year. The alliance with Berkshire is also expected to provide Tokio Marine with greater flexibility to return capital to shareholders via dividends and buybacks, further supporting its stock price and earnings per share.
Tripling Down on Alphabet Amid AI Boom
Abel’s largest marketable equity investment last quarter was a significant expansion of Berkshire’s position in Alphabet, a stake initially established under Buffett’s leadership. Abel tripled Berkshire’s holdings in the tech giant, committing an estimated $11 billion last quarter, pushing Alphabet to become the company’s fifth-largest marketable equity position, with a total stake valued at approximately $22.5 billion as of this writing.
The timing of this increased investment proved impeccable. Alphabet’s stock soared approximately 35% since the end of last quarter, benefiting from a broader market recovery in April and blowout first-quarter earnings results. The company is experiencing robust financial performance driven by its artificial intelligence initiatives. Google Cloud revenue growth accelerated to 63% in the first quarter, with its operating margin expanding dramatically to 32.9% from 17.8% a year prior. Continued increases in capital expenditures planned for the year suggest further revenue acceleration. Strong demand for Google’s custom AI accelerators, TPUs, and Gemini-based AI services could also lead to additional operating margin expansion.
Furthermore, the integration of AI models into Google’s core Search and advertising business is yielding positive financial results. Features like AI Overviews and AI Mode have increased user engagement with Google Search, creating more monetization opportunities. Gemini models have enhanced the company’s ability to understand user intent, resulting in more relevant search results and improved advertisements. Generative AI tools are also simplifying the creation and targeting of new ad campaigns for marketers, boosting their effectiveness. This synergy has contributed to accelerating Search revenue growth, which reached 19% last quarter.
With Alphabet poised for strong revenue and earnings growth and trading at just 27 times forward earnings estimates, it would not be surprising to see Abel continue to build on this position despite its impressive performance to date. Abel’s initial quarter as CEO underscores a strategic approach that combines opportunistic acquisitions, international partnerships, and high-conviction equity investments, signaling a confident and effective transition for Berkshire Hathaway.
