AI and tech giants fuel record highs as Berkshire Hathaway sits on $400B cash

The Nasdaq and S&P 500 have hit fresh record highs, but the rally is being carried by just a few giant companies. Names like Alphabet, Nvidia, Amazon and Apple dominate gains, while broader market momentum remains uneven. Meanwhile, Berkshire Hathaway is holding back, preferring to keep its cash rather than invest in what it sees as an overheated market. A small group of AI and tech stocks continues to drive the market upward. The information technology sector accounts for most of this year’s gains, with AI infrastructure and hyperscalers leading the charge. Companies like Nvidia and Alphabet have seen outsized influence, while other sectors struggle to keep pace.

Intel stands out as a rare success story beyond the AI giants. The chipmaker has surged 464% since April 2022, making it a top performer in the Cabot Turnaround Letter portfolio. Yet such exceptions remain few, leaving much of the market reliant on a handful of heavyweights. Berkshire Hathaway, under new CEO Greg Abel, is taking a cautious approach. The firm now holds a record $400 billion in cash, mostly parked in U.S. Treasuries. Abel has signalled patience, unwilling to deploy capital in a market that Berkshire views as overvalued. For now, the company seems content to wait for better opportunities.

The current bull market stays afloat thanks to AI and a few mega-cap stocks, but cracks appear elsewhere. Berkshire Hathaway’s massive cash reserves highlight concerns about valuations, while most gains remain concentrated in a narrow group of tech leaders. Without broader participation, the rally’s durability could face further tests.