Warren Buffett's Recent Buys Reveal Where to Find Value in 2025's Expensive Market

The investment moves Warren Buffett made in late 2025 tell a compelling story about how to navigate a market that most would consider overpriced. While Berkshire Hathaway has been aggressively selling stocks throughout the year—shedding over $24 billion worth of equities through the first nine months—the company’s recent purchases totaling approximately $14 billion suggest Buffett hasn’t given up on finding opportunities. Instead, he’s simply getting more selective about where he looks.

By the end of Q3 2025, Berkshire’s cash position had swelled to an unprecedented $354 billion, reflecting years of disciplined selling. The traditional view might suggest Buffett was waiting on the sidelines entirely. But his recent activity shows a more nuanced strategy: patient capital seeking out the most attractive valuations wherever they might be found.

A Year of Heavy Selling Sets the Stage for Strategic Investments

Warren Buffett has been a net seller of stocks for 12 consecutive quarters—a remarkably long stretch that underscores his conviction about current market conditions. The math is straightforward: when stocks rise faster than their underlying earnings, valuations become disconnected from reality. That’s precisely what Buffett sees happening across much of the market right now.

The Buffett Indicator, which measures total U.S. stock market value as a percentage of GDP, currently sits around 225%—a level Buffett himself has called dangerous. Similarly, the S&P 500’s price-to-earnings ratio and cyclically adjusted PE ratio both hover near the extremes reached during the dot-com bubble era. These aren’t just abstract numbers; they reflect a real concern about how much investors are willing to pay for each dollar of earnings.

This backdrop of elevated valuations explains why Berkshire Hathaway spent most of 2025 in selling mode. But it also explains something equally important: why the company’s recent purchases carry such weight. In an expensive market, Warren Buffett’s decision to commit capital carries a clear message to attentive investors.

Three Major Acquisitions Worth $14 Billion

Through the first nine months of 2025, Berkshire made approximately $13.4 billion in equity purchases. But the most significant deals came in the latter part of the year, with three transactions standing out:

Alphabet shares: Berkshire acquired 17.8 million shares of the tech giant, representing roughly $4 billion in fresh capital deployment. What makes this particularly noteworthy is that Buffett has historically avoided major tech stock positions. Most observers believe one of Berkshire’s other investment managers, likely Ted Weschler or Todd Combs (who departed Berkshire in late 2025), made this purchase. Yet the numbers suggest even Buffett may have found Alphabet compelling. The stock traded below 20 times forward earnings estimates—well below typical AI stock multiples and even below the S&P 500 average. Factor in the company’s tens of billions in quarterly free cash flow despite massive AI infrastructure spending, and the valuation suddenly looks reasonable relative to peers.

OxyChem acquisition: Berkshire agreed to purchase the entirety of OxyChem from Occidental Petroleum for approximately $9.7 billion (deal closing expected in late 2025 or early 2026). This deal highlights a crucial aspect of Warren Buffett’s strategy: sometimes the best valuations aren’t available on public exchanges. By acquiring an entire subsidiary rather than picking individual shares, Berkshire secured a chemicals business at a multiple below what Occidental itself trades for. The arrangement also allows Berkshire to maintain its substantial preferred stock position in Occidental, which yields 8%—double what Treasury bills currently offer. The deal supports Occidental’s long-term stability, and Berkshire’s 28% stake in the parent company benefits accordingly.

Japanese trading houses: Berkshire increased its positions in Mitsubishi and Mitsui, continuing a strategy that reflects Charlie Munger’s long-standing emphasis on international diversification. Begun in 2020, this investment thesis has weathered well. Even as their price-to-book ratios have climbed to around 1.5 times, Japanese equities continue to offer more compelling valuations than large-cap U.S. stocks. For an investor willing to look beyond domestic markets, the opportunity remains attractive.

Why These Specific Investments Send a Clear Signal

Each of these three deals shares a common thread: Warren Buffett expanded his investment universe beyond the usual suspects. Alphabet required overcoming decades of tech-stock skepticism. OxyChem required moving beyond publicly traded securities into direct acquisitions. Japanese trading houses required accepting international exposure and currency considerations.

The common denominator isn’t sophistication—it’s necessity. When most of the market appears expensive by historical standards, finding value requires doing harder work. It means examining smaller companies where analyst coverage is thinner. It means considering international markets. It means being willing to understand businesses outside your traditional comfort zone.

For large-cap U.S. stocks, the Buffett thesis is clear: expensive. For small-cap domestic stocks and European or Japanese equities, the calculus shifts. These markets haven’t seen the same valuation expansion and offer more reasonable entry points for patient investors. The challenge is that fewer analysts cover these areas, and information quality is lower. But for those willing to research, opportunity awaits.

The Broader Lesson for Investors

Warren Buffett’s 2025 activity suggests several important principles:

Selling doesn’t mean abandoning the market. Twelve straight quarters of net selling reflects caution, not capitulation. The cash accumulation was strategic—holding ammunition for the right moments.

Opportunity exists everywhere, but you must search for it. The lesson from recent purchases is that traditional U.S. large-cap stocks aren’t where value lives right now. But value still exists, hidden in less obvious places.

Valuation discipline beats market timing. Buffett didn’t try to call a market bottom. Instead, he waited for individual securities or opportunities where the price justified the risk. That’s a framework all investors can apply.

Diversification takes new forms in expensive markets. Whether through Japanese equities, chemical companies, or tech stocks at reasonable multiples, spreading capital across different areas reduces risk when traditional diversification has broken down.

The takeaway from Warren Buffett’s recent buys isn’t that you should rush to replicate his specific moves. Berkshire has advantages individual investors lack—access to private deals like OxyChem, the scale to manage international currency exposure, the reputation to negotiate favorable terms. Instead, the lesson is philosophical: even in expensive markets, disciplined investors can find compelling opportunities if they’re willing to look beyond the obvious and do the work required to understand less-followed areas.

For most investors, that means exploring small-cap stocks, international equities, and sectors with less attention. It means understanding that when Warren Buffett finally commits capital after months of restraint, he’s likely found something worth studying closely—even if the specific investment won’t work for everyone’s portfolio.