Warren Buffett announced he’s stepping down as head of S&P 500 component Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) on Saturday, naming Greg Abel, vice chairman of non-insurance operations, as his chosen replacement. Berkshire’s board of directors unanimously approved the choice one day later.
The S&P 500 opened 0.8% lower on the news, dragging down the Vanguard S&P 500 ETF (NYSEMKT: VOO) for a 0.7% loss, for now.
The CEO switcheroo will take effect on January 1, 2026. Buffett himself will remain chairman of the board. It’s unusual for an event at just one company, and one telegraphed so far in advance, and, really, so insignificant seeing as it leaves Buffett in charge of his company, to have such a big effect on an entire stock index.
And yet it is. This is probably testimony to how respected Buffett is by value investors, and to their worry that as he draws back from the stock market, perhaps they should be doing likewise.
Earnings
Meanwhile, earnings news is looking mostly positive for index companies today.
Engines-maker Cummins (NYSE: CMI) crushed earnings estimates with a $5.96 per share profit this morning. Chicken-hawker Tyson Foods (NYSE: TSN) likewise beat earnings expectations, reporting $0.92 per share, however the company missed on sales and warned that it was not able to give an accurate forecast for GAAP earnings this year.
Similarly, Zimmer Biomet Holdings (NYSE: ZBH) beat on earnings, but lowered its full-year forecast by $0.25 per share, warning among other things of currency fluctuations and tariffs effects on its international sales.
Analyst Calls
In analyst action, S&P 500 component GE HealthCare (Nasdaq: GEHC) won an upgrade to neutral this morning. Outside the index, Seaport Global upgraded Reddit (Nasdaq: RDDT) stock to buy, citing strong Q1 revenue growth and calling the company “one of the internet’s largest user destinations.”
On the other hand, Phillip Securities downgraded both Microsoft (Nasdaq: MSFT) and Spotify (NYSE: SPOT). Phillip now rates Microsoft only “accumulate,” rather than “buy.” Spotify, however, has been cut to “reduce” (a.k.a. “sell”) on valuation concerns.
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