No Warren Buffett, No Problem: Former Hedge Funder Says Berkshire Stock ‘Likely to Beat the S&P 500 Over the Next Five Years’

Conglomerate Berkshire Hathaway (NYSE:BRK)(NYSE:BRK) has gone through several major changes over the past nine months, with longtime CEO Warren Buffett stepping down as CEO at the start of the year and recently announcing he was leaving the chairman role. The news sent Berkshire Hathaway shares lower, but one former hedge funder believes this is an overreaction.

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Berkshire Hathaway Shares Undervalued

Under Buffett’s leadership, Berkshire Hathaway stock often outperformed the S&P 500, which is tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY).

Buffett’s retirement CEO and chairman shouldn’t have a huge impact on the company’s financials, former hedge fund manager Whitney Tilson said in a recent newsletter.

"This has no impact on the company. Greg Abel has been running Berkshire since he took over as CEO at the beginning of this year, and Buffett remains on the board," Tilson said.

Tilson said Buffett made plans for his son Howard to succeed him as chairman years ago.

"Today’s news also has no impact on the company’s intrinsic value."

Tilson recalls highlighting Berkshire Hathaway stock as being undervalued back in August, while Buffett was still chairman.

"My conclusion from back then hasn’t changed. I’m especially bullish because in addition to today’s discounted stock price, I’m optimistic that new CEO Greg Abel can create value via operational improvements and capital allocation."

Tilson estimates that Berkshire Hathaway is "highly likely to beat the S&P 500 over the next five years." The former hedge funder predicts Berkshire Hathaway beating the S&P 500 by two to three percentage points.

Berkshire Hathaway Stock vs. S&P 500

Berkshire Hathaway trailed the S&P 500 in 2025, the last year with Buffett as CEO. Before, Berkshire Hathaway stock had beaten the S&P 500 in three of the previous four years.

Over the final 25 years of Buffett as CEO, Berkshire Hathaway beat the S&P 500 13 years and trailed in 12.

Berkshire Hathaway stock is up 1% year-to-date as of Monday, trailing the 13.2% gain of the SPY over the same time period. Berkshire stock is down around 2.5% over the past five days, falling on news of Buffett leaving the chairman role.

Over the last five years, Berkshire Hathaway stock has posted a gain of 80.7%, outperforming the 74.3% gain of the SPY.

Tilson sees the long-term gains like this continuing, which could mean that the recent drop in price on the Buffett news is a buying opportunity for patient investors.

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