Warren Buffett’s Berkshire Hathaway has released its 13F filing for Q1 2025, showing ongoing trends in stock management. The firm continued to reduce exposure to financial stocks, increased stakes in consumer businesses, and maintained a cautious approach to deploying cash reserves.

No new stocks were initiated, but notable increases were seen in Pool Corporation and Constellation Brands. Berkshire fully exited Citigroup and Nu Holdings and reduced positions in banks such as Bank of America and Capital One.

Berkshire kept its largest holding, Apple, unchanged for the second quarter. Apple remains valued at $66.6 billion, reaffirming its position as the portfolio’s largest single asset.

A confidential filing with the SEC suggests a new investment in the commercial or industrial sector worth between $1 billion and $2 billion. This follows Berkshire’s strategy of discreetly building positions in the past.

Berkshire’s cash reserves and Treasury holdings reached a record $348 billion, earning passive income and awaiting suitable investment opportunities. Key increases were made in Pool Corporation and Constellation Brands, focusing on consumer and housing-adjacent sectors with strong demand. The firm’s cautious stance towards financials persists, with ongoing reductions in banking stocks due to perceived macro risks.

The recent 13F disclosure from Berkshire Hathaway offers a clear window into current priorities around capital allocation. While financials had long been a core part of the portfolio, those positions are now being pared down. Reductions in large banks like Bank of America and Capital One are not isolated to a short-term shift—they likely reflect a broader view on the sector’s risk profile, given tighter credit conditions, prolonged rate uncertainty, and earnings pressure across balance sheets.

Citigroup and Nu Holdings no longer appear on the books, which reveals a complete lack of interest in holding through potential headwinds in those specific models. That departure wasn’t offset by any new sector-wide additions—instead, attention has turned again to segments where demand looks more stable. Investments were deepened in Pool Corporation and Constellation Brands, two companies with exposure to consumer resilience and housing-adjacent activity. We’re seeing clear signs that the emphasis is on names with pricing power and consistent cash flows. These aren’t speculative bets.

It is also essential to acknowledge that no new public equity positions have been opened, which supports the reading that Berkshire continues to wait. Deploying new capital remains on hold, and with $348 billion sitting in cash and Treasuries, that reserve now stands higher than ever. Passive income from those assets adds stability, but it also shows the decision to prioritise optionality over urgency. When you’ve spent a lifetime building war chests, you learn not to fire too early.

Apple’s unchanged allocation—still the largest holding by far—should not be interpreted as emerging favouritism or complacency. Instead, it reflects confidence in core earnings durability and long-term relevance. Whether valuation has grown too rich is beside the point when the strategic value, both as an anchor and a counterbalance, remains as firm as ever in the broader portfolio.

The confidential filing hints at movement elsewhere. An investment somewhere between $1 billion and $2 billion in a commercial or industrial name has been lodged with the SEC under a confidential designation. That suggests we may see a new position disclosed in a coming quarter, likely the result of patient accumulation. This discretion has been used before to avoid front-running and to protect sensitive deal-making.

In our view, high levels of cash, zero appetite for new financials, and targeted builds into economically sensitive defensives like consumer products all point to a very selective environment. There is no general retreat, but there is no full-throttle risk-taking either. For those of us working with derivatives, this means implied volatility on large-cap financials and housing-linked stories will need closer inspection. Options volume may continue shifting into consumer names where Berkshire is scaling up. We might also expect lower gamma exposure around banks going into earnings season, as the largest long players step back.

Short-term flow should not be mistaken for long-term conviction. We’re watching portfolio managers trim around the edges while letting a handful of themes run. It would be unwise to assume the same narrative applies broadly, especially when the cash pile tells us that selectivity is not just a preference—it is mandatory.