Why the S&P 500 Pulled Ahead of Berkshire Hathaway in 2025

Berkshire Hathaway’s B shares sit at 11.3% up year-to-date as of December 6, while the S&P 500 has climbed 16.8% over the same stretch. Add dividends to the S&P’s total, and it hits 18.2%, putting Berkshire about 7 points behind, CNBC reports in its Warren Buffett Watch newsletter. This gap marks Warren Buffett’s final year as CEO before Greg Abel takes over on December 31.

What’s Behind the Lag

Berkshire started 2025 strong, beating the S&P by 22.4 points in early May right before Buffett announced his exit. Then shares dropped 14.9% over the next three months to a low of $459.11 on August 4. They’ve bounced back 9.9% since to $504.34, but the S&P has rocketed 37.9% from its April low of 4982.77, closing near its record at 6870.40 after a four-day run.

More recent numbers show Berkshire at 13.5% YTD versus 16.7% for the SPDR S&P 500 ETF (SPY), per Benzinga. Over the past month, Berkshire gained 7.4% while SPY dipped 0.4%, and Yahoo Finance pegs the B shares at +3.9% against the S&P composite’s -0.1%.

Buffett’s departure plays a role. Investors baked a premium into the stock for his picks; now they question the team’s moves without him. Berkshire trimmed Apple but added big to Alphabet, joining Amazon in the Magnificent Seven club. Holdings like American Express, Bank of America, and Coca-Cola have beaten the S&P YTD, yet the broader market surge, especially post-August, left Berkshire trailing most of the year. Recent valuations put shares at 12.3% YTD amid portfolio shifts and cash build, Yahoo Finance reports, and BRK.A up about 14% YTD, per Simply Wall St.

This Isn’t the First Time

Berkshire beat the S&P in three of the last four years and 11 of the last 20, Benzinga notes. Long-term numbers show even bigger gaps: BRK posted 5,502,284% gains from 1964-2024 against the S&P 500’s 39,054%, The Motley Fool points out. Underperformance hit in 2023:

2024: BRK.B +27.1%, SPY +24.1%
2023: BRK.B +15.5%, SPY +26.7%
2022: BRK.B +3.3%, SPY -17.5%
2021: BRK.B +29.0%, SPY +28.7%

Berkshire shines in down years—up 3% in 2018’s bear market (SPY -4.6%) and down just 32.1% in 2008 (SPY -36.8%). 2025 echoes 2023’s slip, but recent gains hint at a close finish.