Berkshire Hathaway has underperformed the S&P 500 by 30 to 41 percentage points since Warren Buffett announced his retirement in May 2025. While the S&P 500 has gained between 25% and 31% during this period, Berkshire's shares have remained flat or declined slightly. This performance gap coincides with Buffett's departure and the transition to new CEO Greg Abel, who took over on January 1, 2026. Under Abel's leadership, Berkshire maintains a conservative balance sheet with a record $397 billion in cash and equivalents. Despite the underperformance, analysts suggest this may present an opportunity for value investors, as the company continues to generate substantial cash flow. However, the market remains cautious about the leadership transition and Abel's ability to effectively deploy the cash reserves.