Warren Buffett is making headlines again with his latest portfolio adjustments at Berkshire Hathaway, revealing where the legendary investor sees opportunity — and what he’s steering away from. Despite speculation about his succession, Buffett remains at the helm through at least the end of 2025, and these recent moves carry his personal stamp.
Selling Bank of America Shares
One of the biggest surprises this quarter: Buffett sold more than 48 million shares of Bank of America (NYSE: BAC), trimming Berkshire’s stake by 7%. This shift likely reflects concerns about the Federal Reserve’s potential interest rate cuts, which could pressure banks’ profit margins. Despite this sale, Bank of America’s fundamentals remain strong:
- Year-to-date performance: +8.23%
- Past year: +21.96%
- Five-year return: +105.46%
- Attractive valuation: PE ratio of 14.2
- Dividend yield: 2.19%
While Buffett’s sale may signal caution, many analysts still favor the bank. According to Robinhood’s analyst consensus, 85% rate Bank of America a “buy,” with only 15% holding and none recommending a sell.
Buying Domino’s Pizza
On the flip side, Buffett’s team scooped up over 238,000 shares of Domino’s Pizza (NYSE: DPZ), increasing Berkshire’s stake by 10%. Domino’s is the largest pizza chain globally, and the purchase indicates confidence in its resilience — especially if economic conditions soften. However, Domino’s financials present a mixed picture:
- Year-to-date performance: +7.72%
- Past year: -12.93%
- Five-year return: +23.62%
- PE ratio: 25.89 (relatively high for a consumer stock)
- Dividend yield: 1.54%
The decision suggests Buffett sees Domino’s as a defensive consumer staple that could weather economic uncertainty. Hedge funds have also ramped up buying activity in Domino’s recently, despite insider sentiment leaning negative.
Exiting S&P 500 ETFs
Perhaps the most eyebrow-raising move is Buffett’s complete sale of two major S&P 500 ETFs: Vanguard’s VO and SPDR’s SPY. These funds mirror the performance of the broader S&P 500, which has returned around 12% over the past year. By offloading his positions, Buffett signals a shift away from broad-market passive investing, at least in these vehicles.
What Could Buffett Be Thinking?
- Bank of America: While financials are solid and valuations remain attractive, Buffett may be hedging against downside risk from potential Fed rate cuts, which can compress banks’ net interest margins.
- Domino’s Pizza: The purchase could be a bet on consumer staples performing well if the economy slows, with Domino’s offering steady cash flow and a modest dividend — even if its valuation looks rich with a forecast PEG ratio of 2.58.
- S&P 500 ETFs: Selling these funds suggests Buffett may believe the market is broadly overvalued, or he prefers reallocating capital into targeted individual stocks.
Investor Takeaways
Buffett’s moves reflect his classic approach: favoring high-quality businesses with strong fundamentals, but remaining nimble in the face of changing economic conditions. His Bank of America sale highlights caution around rate cuts, while his Domino’s buy suggests confidence in consumer resilience.
For those considering following his lead:
- Bank of America remains fundamentally strong but faces macroeconomic headwinds if rates fall.
- Domino’s Pizza may offer defensive qualities but appears overvalued relative to its growth potential.
- Exiting S&P 500 ETFs might imply caution toward the broad market’s valuation.
As always, investors should do their own research before making decisions, but Buffett’s recent actions offer a fascinating window into his evolving strategy — and where he sees risks and opportunities in today’s market.