Berkshire Hathaway’s class A shares have fallen by 14% since May 2 of this year. May 2 was also the last trading day before CEO Warren Buffett said he would hand over control to Greg Abel. Berkshire Hathaway’s fall in share price lies in contrast with the S&P 500, which has rallied 11% in the same time frame, according to a Financial Times shares report. The price dip compared to the S&P 500 is the most significant Berkshire has suffered in a 3-month period since 1990. The COVID-19 pandemic was one instance when the company’s stock was behind the index.

Will Berkshire Hathaway Recover From Its Price Fall?

Berkshire Hathaway’s price dip was likely triggered by Warren Buffett announcing his retirement. Buffett has helmed the organization for almost six decades. Investors may be wary about the future leadership.

The price dip may have been propelled by the recent tariff developments. President Trump has announced tariffs on multiple trade partners. The move seems to have spooked market participants. The US stock market faced a massive selloff last week, resulting in almost $1.1 trillion being liquidated. While the stock market has since made a slight recovery, global economic worries continue to haunt investors.

According to Bill Stone, the chief investment officer of Berkshire Hathaway investor Glenview Trust, “As the worries about tariffs started to build… there were people rotating into the safety of Berkshire.”

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While the dip is concerning, the Financial Times report notes that Berkshire Hathaway’s shareholders do not believe that a three-month window is a fair measure of the company’s performance. The company’s trajectory will most likely change over the coming months. The Federal Reserve will probably announce an interest rate cut in September. A rate cut will likely lead to a boost in investor sentiment. The investment firm has been among the most successful int he last few decades. It will most likely than not reclaim its crown.