Berkshire Hathaway Inc. has acquired a $2.65 billion stake in Delta Airlines Inc. through the purchase of 39.8 million shares as of the end of March, according to a regulatory filing reported by Business Standard. The investment represents a 6.1% stake in the airline and sent Delta shares up more than 3.2% in late trading. This marks the first major investment under newly installed Chief Executive Officer Greg Abel, who took the reins at Berkshire this year after Warren Buffett stepped down following six decades at the helm. As reported by CNBC, this represents a notable return to the airline sector after Berkshire sold all of its airline holdings in 2020 during the early phase of the COVID-19 pandemic. According to recent analysis, Delta Air Lines now trades at roughly 11 times earnings with a forward PE of about 13, making it attractive by historical standards despite the cyclical nature of the airline industry.
The airline investment comes as airlines face higher fuel costs following the US-Iran war, which effectively closed the Strait of Hormuz and sparked concerns over energy supply. According to Business Standard, this move reignites Berkshire's complicated relationship with the airline industry, which has seen multiple reversals over the decades. Under former CEO Warren Buffett, Berkshire had a tense relationship with airlines, famously joking in 2001 that he would declare himself an 'air-o-holic' if he ever got the urge to invest in airlines again. The investment signals a strategic shift under new leadership as Berkshire re-enters the airline sector after its pandemic-era exit, while hedge fund Appaloosa, led by David Tepper, sold its entire stakes in Delta Air Lines, American Airlines, and United Airlines during the first quarter of 2026, signaling broader concerns about airline profitability amid rising fuel expenses. Delta reported adjusted Q1 pre-tax income of $532 million, representing a 42% jump year over year, even with elevated fuel costs, demonstrating the airline's operational resilience.
The Delta Airlines investment is part of comprehensive portfolio adjustments by Berkshire during the quarter. As reported by Business Standard, the conglomerate more than tripled its stake in Alphabet Inc., increasing its holding to $16.6 billion by adding 36.4 million shares in Google's parent company, while doubling its holding in the New York Times. Berkshire also initiated a new position in Macy's Inc., as reported by CNBC, valued at roughly $55 million. The conglomerate fully exited Visa ($2.91 billion) and Mastercard ($2.28 billion) positions, along with Amazon, UnitedHealth Group, Aon, Pool Corporation, Domino's Pizza, and Charter Communications, while trimming Chevron. According to recent analysis, Abel sold nearly $25 billion in equities and spent less than $16 billion replacing them, with the net result being $8.2 billion in cash that now joins a pile approaching $400 billion. This represents a significant rotation away from high-multiple growth platforms to cash-generative names trading at single-digit or low-teens earnings multiples. The exact timing of the sales was not disclosed, but the decision reflects concerns about the impact of rising fuel expenses on airline stocks, with Appaloosa instead increasing holdings in companies like Amazon and Uber, signaling a broader shift away from airlines to other sectors.
The UnitedHealth Group stock dropped roughly 2.5% in post-market trading on Friday, as reported by Business Standard, as the company continues to rebuild investor confidence after struggling to adapt to changing US government payment policies. In a positive development, Macy's Inc. shares jumped more than 6% in late trading after the retailer revealed Berkshire had amassed a stake. Abel has offloaded equity holdings previously managed by Todd Combs, Berkshire's former stock-picker, who joined JPMorgan Chase & Co. in December for a broad investing advisory role. The $2.65 billion investment in Delta reflects investor confidence in Berkshire's endorsement of the airline sector under new leadership, with the move marking a significant strategic shift in the conglomerate's investment approach amid broader industry challenges. Recent analysis suggests this represents a portfolio repricing rather than a Combs liquidation, with Berkshire sitting on $397 billion in cash and resuming share buybacks in Q1 with $234 million in repurchases - the first buybacks since 2024. As reported by Business Standard, the conglomerate now holds 26 direct equity positions, down from about 40, with the core holdings of Apple, American Express, Coca-Cola, and Bank of America still intact.
