Berkshire Hathaway’s Investment Shift
Greg Abel has taken over as CEO of Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) at the beginning of 2023, marking a shift in capital allocation strategy. In the first quarter, Berkshire sold its entire stake in Amazon (NASDAQ: AMZN), approximately 2.3 million shares, while initiating a position in Delta Airlines (NYSE: DAL) with over 39.8 million shares purchased.
Delta Airlines Performance
Delta Airlines reported second-quarter adjusted revenue of $17.7 billion, a 14% year-over-year increase, though profitability fell 24.3% to $1.6 billion. Despite challenges like rising fuel costs, Delta’s stock has surged 51% over the past year, outperforming the S&P 500 airline industry, which gained 38.2%.
Amazon’s Growth Potential
Amazon’s first-quarter revenue grew by over 28% year over year to $37.6 billion, with operating income up 22% to $14.2 billion. The company’s robust cloud computing segment, Amazon Web Services, holds a 28% market share. Despite Berkshire’s divestment, analysts suggest that Amazon remains a strong investment opportunity given its lower P/E ratio of 29 compared to historical averages.
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