Berkshire Hathaway's Class A shares fall after $3.8 billion write-down, operating profit weakness
The write-down of Berkshire Hathaway's 27.4% stake in Kraft Heinz (KHC.O), opens new tab, its second for the company, reflects a significant decline in the value of the investment.
Berkshire had taken a $3 billion write-down in Kraft Heinz in 2019.
The conglomerate also reported a 4% dip in operating income, which fell from $11.6 billion the year earlier, as underwriting premiums fell and trade policy uncertainties hurt most of Berkshire's consumer businesses.
The Omaha, Nebraska-based company, which has not repurchased any shares since May 2024, indicated it remains cautious about market valuations amid ongoing uncertainty over tariffs and economic growth.
Class A shares of the company, which have gained about 2% in 2025, lagged the benchmark S&P 500 index (.SPX), opens new tab. The stock shed gains since Buffett's announcement to step down as the CEO of the conglomerate at the end of the year.
Buffett, 94, has led the company for over five decades.
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The Independent
12 minutes ago
- The Independent
Trump's planned 100% computer chip tariff sparks confusion among businesses and trading partners
President Donald Trump 's plans for 100% tariffs on computer chips that aren't made in the U.S. are stoking confusion among businesses and trading partners — boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications. The U.S. imports a relatively small number of chips because most of the foreign-made chips in a device — from an iPhone to a car — were already assembled into a product, or part of a product, before it landed in the country. "The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation,' said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Trump said Wednesday that companies that "made a commitment to build" in the U.S. would be spared the import tax, even if they are not yet producing those chips in American factories. 'We'll be putting a tariff of approximately 100% on chips and semiconductors,' Trump said in the Oval Office while meeting with Apple CEO Tim Cook. 'But if you're building in the United States of America, there's no charge.' Wall Street investors interpreted that as good news not just for U.S. companies like AMD, Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories. But it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the AI boom but still make semiconductors inserted into essential products like cars or washing machines. These producers "probably aren't large enough to get on the map for an exemption and quite probably wouldn't have the kind of excess capital and margins to be able to add investment at a large scale into the United States,' Chorzempa said. The announcement came more than three months after Trump temporarily exempted most electronics from his administration's most onerous tariffs. During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation. Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt. 'There's a chip that allows you to open and close the window," Chorzempa said. "There's a chip that is running the entertainment system. There is a chip that's kind of running all the electronics. There are chips, especially in EVs, that are doing power management, all that kind of stuff.' Much of the investment into building U.S. chip factories began with the bipartisan CHIPS and Science Act that President Joe Biden signed into law in 2022, providing more than $50 billion to support new computer chip plants, fund research and train workers for the industry. Trump has vocally opposed those financial incentives and taken a different approach, betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for electronics.
Reuters
13 minutes ago
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US jobless claims edge up, but 'no-hire, no-fire' trend remains intact
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Reuters
13 minutes ago
- Reuters
Why is Trump targeting Intel CEO Lip-Bu Tan?
BEIJING/SAN FRANCISCO, Aug 7 (Reuters) - U.S. President Donald Trump has called for the immediate resignation of Intel CEO Lip-Bu Tan, just months after he took the top job at the chipmaker, following concerns over his ties to Chinese firms through several investments. Reuters reported exclusively in April that Tan made hundreds of investments in Chinese companies over decades, either himself or through venture funds he founded or operates. Intel did not immediately respond to Reuters' requests for comment following Trump's demand. The following are some key investments uncovered by Reuters and their connections to Chinese state entities: Through Walden International, the San Francisco venture capital firm Tan founded in 1987, he became a seed investor in Semiconductor Manufacturing International Corp, China's largest chip foundry, in 2001, the year after it was founded, and served on the board until 2018. In 2020, SMIC was placed under sanction by the U.S. government for its close ties to the Chinese military, and Tan exited his SMIC investment in 2021, according to the U.S. House Select Committee on the Chinese Communist Party. SMIC did not respond to a Reuters request for comment. The firm remains invested in 20 funds and companies alongside Chinese government funds or state-owned enterprises, according to Chinese corporate databases, including tech hubs like Hangzhou, Hefei, and Wuxi. Walden has also invested in six Chinese tech firms alongside leading PLA supplier China Electronics Corporation, which was sanctioned by President Trump in 2020 as part of an executive order that banned purchasing or investing in "Chinese military companies." CEC did not respond to a Reuters request for comment. Those joint investments, detailed in Chinese government databases, include Shanghai-based QST Group whose sensors have been found in Russian military drones captured by Ukraine, according to a Ukrainian government database. QST Group did not respond to a Reuters request for comment. Another joint investment with CEC is a 2% stake in Intellifusion, a surveillance company thatwas placed on a U.S. Department of Commerce trade blacklist in 2020, opens new tab for alleged involvement in human rights abuses in the Xinjiang region. Two Walden funds currently own over 5% of Wuxi Xinxiang Information Technology Company Limited, a supplier of remote control equipment to leading Chinese memory chipmaker Yangtze Memory Technologies Co. Ltd, according to procurement data found in Chinese corporate databases. The Commerce Department added YMTC to a trade blacklist in 2022 and the Pentagon added it to a list of "Chinese military companies operating in the United States, opens new tab" on January 31, 2024. Intellifusion, Wuxi Xinxiang and YMTC also didn't respond to comment requests. Tan is listed as sole owner of Sakarya Limited, a Hong Kong-based holding company that invests in China, according to an earnings report from a Sakarya-backed chipmaker published on April 29. Sakarya controls 38 Chinese firms including Huaxin Yuanchuang (Qingdao) Investment Management Co., Ltd., which is Walden's main investment entity in mainland China that ties Tan to over 500 Chinese companies, according to Chinese corporate databases. Sakarya and Huaxin Yuanchuang did not respond to a request for comment and Walden declined to comment. Tan holds stakes in 68 Chinese firms through Seine Limited, another Hong Kong-based entity controlled by Walden Technology Ventures III LP, according to Chinese corporate databases. Seine holds a 3.1% stake in Guangdong-based component maker Dapu Technologies, which the U.S. House Select Committee on the Chinese Communist Party identified as a PLA contractor, and an 8.3% stake in HAI Robotics, a firm the committee said has bid for a PLA contract and works with Chinese surveillance companies, according to filings. Seine Limited and Dapu did not respond to requests for comment. Hai Robotics confirmed Seine's stake in the company and said it has never bid for any military contracts. "All technology R&D and commercialization is centered on logistics technology innovation, focusing on civilian warehousing scenarios, and in strict compliance with the control laws and regulations of China, the U.S., and Europe," the company said in a statement. Reuters exclusively reported on August 6 that U.S. Republican Senator Tom Cotton questioned Tan's ties to Chinese firms and a recent criminal case involving his former company Cadence Design (CDNS.O), opens new tab. In a letter to Intel's board, Cotton specifically questioned whether the company was aware of subpoenas issued to Cadence during Tan's leadership and whether Intel had taken steps to mitigate potential national security risks before appointing him. Separately, Cadence had sold chip design products to a Chinese military university, according to the Reuters report. Last week, Cadence Design agreed to plead guilty and pay more than $140 million to resolve the charges. Tan ran Cadence as CEO from 2008 through 2021 and was executive chairman until May 2023. The sales to Chinese entities occurred under his leadership at Cadence, which makes design software and other tools used to manufacture chips.
