--- title: "Buffett Misses The AI Boom — But Is He Just Warming Up For The Bust?" description: "Warren Buffett's Berkshire Hathaway has underperformed the S&P 500 by 26% since his retirement announcement, missing the AI rally. Critics argue that Buffett's strategy of avoiding high-flying stocks " type: "news" locale: "en" url: "https://longbridge.com/en/news/251877513.md" published_at: "2025-08-06T16:24:46.000Z" --- # Buffett Misses The AI Boom — But Is He Just Warming Up For The Bust? > Warren Buffett's Berkshire Hathaway has underperformed the S&P 500 by 26% since his retirement announcement, missing the AI rally. Critics argue that Buffett's strategy of avoiding high-flying stocks may leave the company passive, but historically, he capitalizes on market downturns. With over $340 billion in cash, Buffett's approach suggests he may be preparing for a market reset. Analysts express concerns over confidence in his successor, Greg Abel, as Berkshire's recent lag could indicate a potential buying opportunity when the market corrects. Since **Warren Buffett**'s retirement announcement in May, **Berkshire Hathaway Inc** BRK BRK has trailed the **S&P 500** by roughly 26% — the steepest divergence in decades. Critics say he completely missed the AI-fueled rally, but veteran investors know this script: Buffett often underperforms at the top of the cycle — only to swoop in and capitalize when the bust begins. *Track BRK slide since May, here.* With cash piling and growth names dominating, is Berkshire quietly positioning for a market reset? Since May 2 — just before Buffett confirmed he would step down — Berkshire shares have slumped 14%, while the S&P 500 roared ahead by around 11%. That 25‑plus point gap ranks among Berkshire's worst short-term lags since the early 1990s, excluding COVID-19 pandemic turbulence. Analysts note that declining investor confidence in Buffett's successor, **Greg Abel**, and reduced appetite for repurchases has eroded Berkshire's once‑valuable premium. **Read Also: Is Apple Sinking Warren Buffett’s Portfolio? The Oracle Of Omaha’s Winning Streak Faces Collapse** True to form, Berkshire avoided the AI frenzy — apart from **Apple Inc** AAPL, which was relatively late to the AI fest vis-a-vis its **Magnificent 7** peers — and now holds over $340 billion in cash and T‑bills, roughly one‑third of total assets. That discipline has left the firm looking passive or tone‑deaf in a fast‑moving, tech‑driven rally. But historically, Buffett's reluctance to chase performance is fertile terrain for bottom‑feeding bargains. Value investors watch this story with fascination, not frustration. Over the years, Buffett underperformed the S&P more than half the time across daily, weekly and quarterly windows — but often with long‑run outperformance that followed sustained selloffs. It’s a familiar pattern: when markets are euphoric, Buffett stacks cash. When they falter, he goes shopping. Berkshire's recent lag isn’t just a quirk — it might be the calm before the storm. When growth-heavy bubbles burst, Buffett historically turns bearish sentiment into buying power. Right now, it's not whether he's missed the AI rally — but whether the rally itself is ready to crack. - **Jensen Huang Is Closing in on Warren Buffett’s Fortune — And The Numbers Might Surprise You** *Photo: Shutterstock* ### Related Stocks - [BRK.B.US - Berkshire Hathaway B](https://longbridge.com/en/quote/BRK.B.US.md) - [BRK.A.US - Berkshire Hathaway](https://longbridge.com/en/quote/BRK.A.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | Warren Buffett Generated Double The Market's Returns—Until Regulation Changed The Game | Chamath Palihapitiya discussed how regulatory changes, specifically the 2000 Regulation Fair Disclosure (Reg FD), impact | [Link](https://longbridge.com/en/news/276003396.md) | | BASF To Increase BDO Production In Ludwigshafen | BASF SE :BASF SUPPORTS EUROPEAN BDO SUPPLY SECURITY THROUGH INCREASED PRODUCTION IN LUDWIGSHAFEN | [Link](https://longbridge.com/en/news/276046129.md) | | Motor racing-Barcelona to stay on F1 calendar, to alternate with Belgium until 2032 | Barcelona’s Circuit de Catalunya will host a Formula One Grand Prix in 2028, 2030, and 2032 after signing a contract ext | [Link](https://longbridge.com/en/news/276065608.md) | | Have Insiders Sold Barrick Mining Shares Recently? | Barrick Mining Corporation's Senior EVP & CFO, Graham Shuttleworth, recently sold CA$6.4m worth of shares, reducing his | [Link](https://longbridge.com/en/news/276053765.md) | | Molson Coors (TAP) Q4 Earnings Report Preview: What To Look For | Molson Coors (TAP) is set to report its Q4 earnings this Wednesday. Analysts expect a 1% year-on-year revenue decline to | [Link](https://longbridge.com/en/news/276090572.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.