Is Buffett's Playbook Losing Its Edge? Berkshire Lags S&P 500 By Most Since 2008

For years, Warren Buffett‘s Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) was the stock investors turned to when markets got nervous. Now, the market appears to be rewarding a different playbook.

A chart comparing Berkshire Hathaway’s Class A shares to the S&P 500-tracking State Street SPDR S&P 500 ETF Trust (NYSE:SPY) shows the BRK.A/SPY ratio has fallen sharply from its 2024-2025 highs, marking one of its deepest relative slumps since the run-up to the 2008 financial crisis.

While Berkshire remains near record levels in absolute terms, it is losing ground in the race against the broader market.

The AI Trade Takes The Lead

The recent weakness in the BRK.A/SPY ratio comes as investors have piled back into technology and artificial intelligence winners.

The S&P 500’s advance has been powered by mega-cap names such as Nvidia Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and other AI-linked stocks. Berkshire, meanwhile, remains heavily tilted toward more traditional businesses spanning insurance, railroads, energy and consumer brands.

That divergence has helped fuel one of Berkshire’s sharpest periods of relative underperformance in years.

A New Era For Berkshire

The timing is notable.

At Berkshire Hathaway’s annual meeting in May 2025, Buffett announced plans to step down as CEO at the end of the year, handing the reins to longtime lieutenant Greg Abel.

The company’s massive cash pile and diversified collection of businesses helped Berkshire outperform during periods of market uncertainty. But investors now appear willing to pay a premium for growth and AI exposure instead.

Temporary Rotation Or Structural Shift?

The key question is whether Berkshire’s recent lag is simply the result of another growth-stock cycle or something more significant.

Buffett’s investing approach has survived the dot-com boom, the financial crisis and countless market rotations. Yet the current AI-driven rally is once again testing whether value-oriented investing can keep pace with the market’s fastest-growing companies.

For now, the chart tells a simple story: Berkshire is still climbing, but the S&P 500 is climbing faster.

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