"Old ginger is still spicier"! Outperforming Semiconductor and Debt Fears, Post-Buffett Era Berkshire (BRK.A.US) Hits New Highs Again

Title context: "Old ginger is still spicier"! Outperforming Semiconductor and Debt Fears, Post-Buffett Era Berkshire (BRK.A.US) Hits New Highs Again Text: Berkshire Hathaway Class B shares rose as much as 3.2% to $543.06 intraday on Wednesday, refreshing the all-time high set on May 2, 2025. When Buffett announced his departure a year ago, the stock fell for several consecutive months; now the market has completed its first pricing of the "post-Buffett era" with a new high. Notably, against the backdrop of sharp volatility in AI semiconductors and persistently brewing corporate debt pressures, Berkshire's new high is interpreted by the market as a victory for the defensive logic. Cash reserves approach $400 billion, Abel holds "optionality" Less than a year into his tenure, Abel has been active: restarting share buybacks, acquiring Taylor Morrison Home Corp. for $8.5 billion, and substantially increasing its stake in Alphabet to about $37.8 billion in the second quarter. But analysts point out that the core support for the new stock high is not these deals themselves, but the balance sheet Buffett left behind. Data shows Berkshire's cash reserves have risen to about $397 billion, continuing to set records from $373 billion at the end of 2025, with liquidity approaching $400 billion accounting for more than 50% of total investable assets. KBW analyst Meyer Shields said bluntly that high short-term interest rates mean this cash "will earn more profit." In other words, while others are forced to contract, Berkshire still has the ability to actand that in itself is a form of alpha. AI semiconductors fall for eight straight days, cracks emerge in financing structure The Philadelphia Semiconductor Index has fallen more than 13% cumulatively over the past eight trading days, wiping out about $2 trillion in market value, the longest losing streak since the 2008 financial crisis. On the surface, it is the "AI bubble theory" fermenting again, but the real crack has appeared on the credit side. CoreWeave shares plunged more than 25% in a single week, its bonds fell to distressed levels, CDS rose to 1,128 points, the market is pricing a default probability of over 50%, and bonds with a face value of $1 are trading at only about $0.78. BofA's Michael Hartnett pointed out that the market's focus has shifted from "how big the AI space is" to "how much profit the massive investment can ultimately generate." AI infrastructure capital expenditure is approaching $1 trillion per year, a considerable proportion of which relies on debt financing, while the 10-year U.S. Treasury yield has risen to 5.09%. High rates simultaneously the present value of future cash flows and raise financing costs, creating a double squeeze on the AI narrative that relies on leveraged expansion. Debt default chain bypasses Berkshire Debt pressure is not limited to the AI sector. Data shows that the spread between CCC-rated U.S. corporate bonds and Treasuries has widened to 12 percentage points, compared with 8.08 percentage points a year ago; the default recovery rate over the past 12 months was only 29%. JPMorgan strategists expect the high-yield bond default rate to rise from 2.25% in 2026 to 2.75% in 2027, with the leveraged loan default rate reaching 4.50% over the same period. Moody's previously estimated that more than $1 trillion of investment-grade debt will mature in the coming years, and rising interest rates will force companies to refinance at higher costs. In this chain, Berkshire is almost the only large entity that does not need to answer "what to do when debt matures"its cash generates interest, while others' debt generates pressure. Its holdings in Apple and Coca-Cola have recently hit records one after another, further supporting book value. The essence of being "seasoned": not being forced to sell on the day of the decline Abel stated clearly at the shareholders meeting that "we will not do AI for the sake of AI," and argued that the electricity costs of data center expansion should be borne by hyperscale customers. Such remarks seemed conservative during the AI frenzy, but viewed again after CoreWeave bond yields broke through 15%, they were in fact discipline. Analysts point out that the legacy Buffett left behind has never been just a stock-picking record, but a structure that preserves the right to use cash to choose the future while others use debt to bet on the future. What Berkshire's new stock high is pricing is precisely the scarcity of this structure when volatility amplifies.