Is Berkshire Hathaway Undervalued Right Now? (Chris Bloomstran Explains) (TIP810)

Watch on YouTube ↗  |  April 25, 2026 at 22:45  |  1:37:11  |  We Study Billionaires
Speakers
Chris Bloomstran — CIO, Bloomstran Capital Management

Summary

Chris Bloomstran discusses the intrinsic value of Berkshire Hathaway, estimating ~$570 per B share and 10-12% annual growth. He warns that the S&P 500 is overvalued with high margins and multiples, and that the Mag 7 tech stocks face margin compression from AI capex. He also comments on Greg Abel's leadership, compensation, and the pitfalls of share buybacks.

  • Berkshire Hathaway's intrinsic value is estimated at ~$570 per B share, trading at a discount.
  • Berkshire expects 10-12% per share value growth over the next decade.
  • Greg Abel's first shareholder letter is seen as competent and aligned with Berkshire's culture.
  • S&P 500 is at 26x earnings with near-record profit margins, a recipe for poor returns.
  • Mag 7 tech stocks are at risk from massive AI capex turning them into EBITDA stories.
  • Share buybacks across the S&P 500 largely fail to reduce share count and benefit executives.
  • OpenAI's valuation is questioned given its cash burn and competitive landscape.
  • Chris Bloomstran's annual letter includes a tribute to Warren Buffett's track record.
Trade Ideas
Chris Bloomstran CIO, Bloomstran Capital Management 7:02
Berkshire undervalued, 10-12% growth expected.
Berkshire Hathaway is trading at a discount to intrinsic value (~$570 per B share, ~0.85x fair value) with intrinsic value growing ~9.3% annually, expected to compound at 10-12% per year from operating businesses and share repurchases. Greg Abel has initiated buybacks, signaling management's view of undervaluation.
BRK.B HIGH
Chris Bloomstran CIO, Bloomstran Capital Management 45:50
S&P overvalued, margins and multiples at risk.
The S&P 500 trades at 26x earnings with the second-highest profit margins ever. High multiples combined with high margins historically lead to poor returns. Margins are likely to contract due to rising AI capex, competitive pressures, and mean reversion, resulting in subpar forward returns (possibly 5% or less).
SPY HIGH
Chris Bloomstran CIO, Bloomstran Capital Management 55:24
Mag7 at risk from AI capex, margin contraction.
The Mag 7 (large-cap tech) stocks are at an inflection point. Massive AI capex (nearly $400B) is turning them into EBITDA stories, reducing free cash flow and increasing depreciation and interest expense. Profit margins are at risk of contracting, and the high multiples are vulnerable. The group is likely to underperform.
MAGS HIGH
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This We Study Billionaires video, published April 25, 2026, features Chris Bloomstran discussing BRK.B, SPY, MAGS. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Chris Bloomstran  · Tickers: BRK.B, SPY, MAGS