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The great Warren Buffett, a man known as the Oracle of Omaha, has finally retired after a legendary 60-year career that helped power Berkshire Hathaway (NYSE:BRK-B) to annualized gains that have nearly doubled that of the S&P 500 (close to 20% vs. 10.4% for the S&P 500). It’s certainly the end of an era, and while Berkshire Hathaway shares have shed some of their Buffett premium, questions linger as to whether it’s still worth staying aboard as a Berkshire investor.
As a conglomerate that’s worth more than $1 trillion, it’s going to take more than star stock picking to keep outpacing the S&P 500. And while Berkshire’s new CEO, Greg Abel, has large shoes to fill, I do think that he has what it takes to make the Oracle proud. Undoubtedly, if you believe in Warren Buffett’s ability to pass on his knowledge to the next generation of leadership, you should be even more bullish on Berkshire with Greg Abel as CEO.
Of course, there’s no replacing Warren Buffett, but it is an exciting time as a new leader steps in with an approach that might just help the conglomerate get back to its market-beating ways. Undoubtedly, there’s a relatively low bar entering 2026, with Berkshire underperforming the S&P 500 by around 5%. Now, Abel is an operational leader rather than a stock picker, and that might have some investors on pause.
Greg Abel is the man to take Berkshire Hathaway to the next level
However, the transition from a legend in Buffett to a proven operational leader seems to rhyme in many ways with the one that saw Apple (NASDAQ:AAPL) CEO Tim Cook take over from the late Steve Jobs. There might be no replacing the legend, but that doesn’t mean the new top boss cannot do extraordinarily well in an attempt to take a legendary company to the next level. Given Berkshire’s magnificent balance sheet, I’d say Abel is not only set for success, but he and his team have the optionality to make their own mark on a company.
While 2026 will be a critical year for Berkshire Hathaway, as investors keep tabs on the performance under Abel, I do think that long-term thinkers shouldn’t make too much of Abel’s first year, especially considering he’s already been in the driver’s seat well ahead of Buffett’s retirement.
Additionally, it will be very interesting to see how Abel swings at the opportunities that come his way in 2026. As the AI data center boom continues in 2026, Berkshire Hathaway Energy and its like will be stepping up in a big way to meet electrification demand.
Arguably, playing the energy side could be a high-reward/low-risk way to monetize the secular trends driving the AI revolution. And given Abel seems very much in tune with AI, given his commentary on the technology, it’s not too far-fetched to think that some sort of Abel premium can offset the Buffett premium that’s since been eroded when Buffett broke the news at the company’s last annual meeting of shareholders.
The Alphabet investment is a different kind of bet
While time will tell how AI shapes Berkshire Hathaway under the Abel era, I do think that the latest big bet in shares of Alphabet (NASDAQ:GOOG) is a sign that the conglomerate is not going to be left behind as the revolution mints many winners but losers as well.
When it comes to winning the AI race, I think the key is not utilizing the technology with minimal upfront spend while also betting on the leaders in the space when the price of admission is on the lower end.
For firms that approach AI with ROI at the top of mind, I do think there’s significant profit to be had. In any case, it’ll be interesting to see how the 2026 Berkshire Hathaway shareholder meeting goes. Though we won’t see Buffett on the stage, we will see Abel, likely tackling a handful of AI questions thrown his way.
Given the opportunity to be had and Abel’s exceptional stewardship, I think it’s time to stay the course with Berkshire as the company navigates a new technological era with the same value mindset it always had under Buffett. Given the low price of admission and uncertainties about Berkshire under Abel, I think Berkshire is a table-pounder to start 2026.