title: "Berkshire Hathaway's 2026 Annual Letter: What Greg Abel's First Shareholder Letter Means for Investors" slug: berkshire-hathaway-annual-letter-2026-greg-abel date: 2026-02-23 category: Portfolio Analysis excerpt: "Greg Abel releases his first shareholder letter on February 28. Here's what Berkshire investors should watch for, from capital allocation signals to the $344 billion cash question." keywords: ["berkshire hathaway annual letter 2026", "greg abel shareholder letter", "berkshire hathaway 2025 annual report", "berkshire hathaway earnings 2026", "greg abel berkshire"] author: Moatifi
Berkshire Hathaway's 2026 Annual Letter: What Greg Abel's First Shareholder Letter Means for Investors
For nearly six decades, investors circled one weekend each February on their calendars: the release of Warren Buffett's annual shareholder letter. It was part investing masterclass, part philosophy lesson, and part comedy special. Buffett's letters moved markets, shaped how a generation thinks about business, and turned Berkshire Hathaway's annual report into the most widely read corporate document in history.
This year is different. On February 28, 2026, Berkshire Hathaway will release its 2025 annual report alongside Greg Abel's first letter as CEO. After Buffett stepped down on January 1, 2026, Abel inherited the role of communicating with shareholders about the state of the business, the logic behind capital decisions, and his vision for the company's future.
The question every Berkshire shareholder is asking: what changes, and what stays the same?
Who Is Greg Abel?
Greg Abel, 63, isn't a newcomer to Berkshire. He ran Berkshire Hathaway Energy for over a decade, transforming it from a regional utility into one of the largest energy companies in North America. He then served as vice chairman of Berkshire's non-insurance operations, overseeing everything from BNSF Railway to Dairy Queen.
Buffett himself wrote in his final shareholder letter that Abel "has more than met the high expectations I had for him when I first thought he should be Berkshire's next CEO."
Abel's background is operations. He's an accountant by training who built his career running actual businesses, not picking stocks. That distinction matters when thinking about what his letter might emphasize versus what Buffett typically covered.
What to Watch For in the Letter
1. Capital Allocation Philosophy
This is the biggest question mark. Berkshire is sitting on roughly $344 billion in cash and short-term Treasury bills. That's around 30% of total assets and the largest cash position in Berkshire's history.
Buffett accumulated this cash pile throughout 2025 by selling Apple shares, trimming Bank of America, and finding few businesses or stocks that met his criteria at current valuations. But Buffett also acknowledged he was in his mid-90s and wanted to leave his successor maximum flexibility.
Abel now has to answer: will he deploy this cash aggressively, or maintain Buffett's patient approach? His letter will likely offer the first real signals about how he thinks about opportunity cost, hurdle rates, and the tension between holding cash in a 4%+ Treasury yield environment versus swinging at acquisitions.
For context, Berkshire's operating earnings in 2025 were approximately $40 billion. The cash pile generates around $14 billion annually in Treasury income alone. Abel doesn't need to rush.
2. Tone and Communication Style
Buffett's letters were famous for their accessibility. He explained derivatives using bathtub analogies and insurance float using simple math. He told stories about See's Candies to illustrate pricing power and wrote about his own mistakes with the same enthusiasm he brought to his successes.
Abel's communication style is largely unknown to public investors. He's described as quiet, intense, and detail-oriented. His letter will set the tone for how Berkshire communicates with shareholders going forward. Investors will be reading between the lines for warmth, transparency, and willingness to admit uncertainty.
3. The Apple Question
Berkshire reduced its Apple stake from over 900 million shares to roughly 300 million shares during Buffett's final year. Apple remains the single largest equity holding at approximately $130 billion. Abel's letter may address whether further trimming is planned or whether the current position represents a long-term hold.
This matters because Apple's weighting in the portfolio (roughly 35% of equity holdings) creates concentration risk that a more operations-focused CEO might view differently than Buffett, who was famously comfortable with concentration.
4. New Investments and Acquisitions
The Q4 2025 13F filing revealed a new position in The New York Times. Investors will want to know whether this investment signals Abel's willingness to make his own bets, or whether it was one of Buffett's final decisions before stepping down.
More broadly, with $344 billion in dry powder, any mention of deal pipelines, sectors of interest, or acquisition criteria will be scrutinized. Berkshire hasn't made a major acquisition since Alleghany in 2022 ($11.6 billion). The elephant gun, as Buffett called it, has been quiet.
5. Insurance and Operating Business Performance
Abel's strength is operations. His letter may shift emphasis away from stock picks and toward the performance of Berkshire's wholly-owned businesses: GEICO, BNSF, Berkshire Hathaway Energy, Precision Castparts, and the dozens of smaller subsidiaries.
GEICO's turnaround under Todd Combs has been significant, with the insurer reclaiming the #2 auto insurance position. BNSF faces ongoing competition from trucking and intermodal shifts. These operational narratives may get more airtime under Abel than they did under Buffett, who tended to focus on capital allocation and investment philosophy.
What the Numbers Will Show
Alongside the letter, Berkshire will report Q4 2025 and full-year results. Here's what analysts are watching:
Operating earnings: Expected to show continued strength from insurance (GEICO turnaround, favorable pricing) and energy operations. Railroad and manufacturing may show mixed results given economic uncertainty.
Investment gains/losses: GAAP net income will be volatile as always due to mark-to-market accounting on the equity portfolio. Berkshire has long asked investors to focus on operating earnings instead, a tradition Abel will likely continue.
Book value per share: With Berkshire's stock hitting all-time highs in late 2025, the relationship between market price and book value tells investors how the market is pricing Abel's stewardship.
Cash position: Confirmation of the exact Q4 cash figure and any early 2026 deployment will be closely watched. Even a $20-30 billion acquisition would barely dent the pile, which underscores how much flexibility Abel has.
How Moatifi Scores Berkshire
Berkshire Hathaway's competitive advantages are well-documented: the insurance float (essentially free leverage), the diversified business portfolio, and a brand that attracts deal flow. On Moatifi's framework, Berkshire's moat sources include:
- Cost advantages: Insurance float provides low-cost capital unavailable to competitors
- Switching costs: Long-term relationships with acquired businesses (Berkshire's "forever holding period" attracts sellers)
- Brand: The Buffett/Berkshire name itself creates deal flow and favorable terms
The key risk post-Buffett is whether these advantages are personal (tied to Buffett) or structural (tied to the business model). Abel's letter will be the first real data point in answering that question.
You can explore Berkshire's full moat analysis and compare it against other holdings in Buffett's complete portfolio breakdown.
The Bottom Line
Greg Abel's first shareholder letter won't replicate Buffett's style, and it shouldn't try to. What investors need is clarity on capital allocation priorities, honest assessment of operating performance, and enough personality to maintain the direct shareholder communication that made Berkshire unique among mega-cap companies.
The letter drops February 28, 2026 at 8:00 AM Eastern. Berkshire's stock has performed well since the CEO transition, but the real test is what Abel does with $344 billion in cash over the next two to three years. This letter is the opening statement.
We'll publish a full analysis of the letter and earnings within 24 hours of the release. Follow Moatifi's blog to catch it.
Want to analyze Berkshire Hathaway's competitive moat and compare it to the rest of the market? Start with Moatifi's free stock screener.