Warren Buffett Adds $521 Million to Chevron

Berkshire Hathaway made one of its biggest stock purchases last quarter, adding nearly $521 million worth of Chevron (CVX) shares. After several quarters of selling, this marks a clear shift in strategy.

Buffett first bought Chevron in 2020, when oil prices collapsed during the pandemic. He’s been in and out of the position since then, selling heavily in 2021, then rebuilding in 2022. Now, after six quarters of net selling, he’s buying again, increasing Berkshire’s stake to about 7% of the company.

Buffett typically trims positions when valuations rise too far ahead of fundamentals, and buys back when sentiment weakens. His latest move suggests he sees relative value in Chevron.

The S&P 500 trades at around 31 times earnings, far above its historical average, while Chevron trades at roughly 19 times. In Buffett’s world, that counts as a bargain. The company generates strong free cash flow and pays a 4.5% dividend yield, both appealing traits when market valuations are stretched and volatility risk is high.

However, the outlook for oil is mixed. Prices recently dropped below $60 per barrel, and global inventories are building. Analysts expect a surplus by 2026 due to rising supply. That means Chevron’s short-term upside may be limited unless oil prices rebound.

Why Buffett Might Be Buying Anyway

Chevron is an integrated energy company, it earns from refining, chemicals, and power generation, which helps buffer it during price downturns. Its management is known for tight cost control and disciplined capital spending, those are the qualities Buffett values highly.

Buying Chevron right now may be less about chasing growth and more about defensive positioning. With much of the stock market priced for perfection, Buffett appears to prefer steady cash generation and strong dividends over speculative tech valuations.

Buffett’s move doesn’t necessarily mean he’s bullish on oil, it could also mean he’s cautious on everything else. Berkshire’s cash reserves have been climbing, showing that he’s finding few true bargains. Chevron, trading at a discount to the market and offering predictable cash returns,investment that holds value when broader markets look overheated.

Chevron Bottom Line Is

Buffett’s $521 million Chevron purchase shows that he still sees value, but not across the board. In a market where most assets look expensive, Chevron offers stability, yield, and familiarity — three things Buffett tends to buy when others chase momentum.