Berkshire Hathaway trades near its 52-week high at about 15 times trailing earnings, while Micron Technology trades at about 20 times despite a share price down more than a third from its peak. Both multiples sit below the broader market's, but only one of the two earnings streams is durable enough to trust at face value.
Berkshire Hathaway sits near its 52-week high at roughly 15 times its trailing earnings. Micron Technology trades at roughly 20 times even though its shares have fallen more than a third from their peak. Both valuations sit below the overall market's — yet the profit behind each multiple carries very different risk.
Berkshire's cash reserve keeps growing
Berkshire's operating earnings for the first quarter climbed 18% year over year to $11.3 billion, drawn from insurance, the BNSF railroad, a regulated energy business, and a wide roster of manufacturers. The conglomerate also held roughly $397 billion in cash and short-term Treasury bills at quarter's end.
New CEO Greg Abel has begun deploying that reserve, including an acquisition of homebuilder Taylor Morrison that closed in late July. Priced at about $512 a share, Berkshire's market cap stands near $1.1 trillion.
Micron's profit surge is the best in its history
Micron sells the DRAM, NAND flash, and high-bandwidth memory that AI accelerators require, and current chip scarcity has produced among the steepest profit ramps in the market. The chipmaker earned $4.60 a share in fiscal Q1 2026, $12.07 in fiscal Q2, and $24.67 in fiscal Q3, the quarter that ended May 28, 2026. Management expects fiscal Q4 earnings near $31 a share on roughly $50 billion in revenue.
Memory, though, is a commodity business. Micron posted a $5.8 billion net loss in fiscal 2023, the last time chip prices collapsed, and that history is why record profit still leaves the stock at only 20 times earnings.
Why one multiple is safer than the other
Berkshire's 15 means close to what it states: the earnings behind it are diversified, mostly recurring, and not sitting at any obvious cyclical extreme, so investors can compare it fairly with the rest of the market. Micron's 20 works differently — it divides today's share price by the most profitable 12 months the company has ever recorded.
If those earnings normalize anywhere between the current boom and the last bust, a normal year of Micron profit would cost far more than 20 times. Fool contributor Daniel Sparks says he likes both stocks at these prices, but trusts the durability of Berkshire's earnings over its valuation slightly more than Micron's.
Source: Fool
Trading involves risk.
Risk Disclaimer
