Market cap

Watch out, Tesla. Increase in market capitalization of Berkshire Hathaway.

Berkshire Hathaway CEO Warren Buffett’s value-driven approach is paying off this year.

Photograph by Johannes Eisele/AFP/Getty Images

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Watch out Elon. Warren wins you over.

With the sharp decline in the shares of

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(ticker: TSLA) this year, the market value of

Berkshire Hathaway

(BRK.A, BRK.B) is similar to that of the leader in electric vehicles.

Berkshire, led by longtime CEO Warren Buffett, is demonstrating its defensive attributes in a bear market with its Class A share down about 8% this year to $415,000, from a drop of nearly 25% in the

S&P500

index.

Tesla stock is down 42% to $206 this year, reflecting recent disappointment in vehicle deliveries and a sharp pullback in growth stocks. CEO Elon Musk’s pursuit of

Twitter

(TWTR) didn’t help. Berkshire sits on what Buffett, 92, calls a Fort Knox balance sheet with more than $100 billion in cash and cash equivalents, mostly US Treasuries. Investors will be eager to see how much of that money Buffett deployed in the second quarter when Berkshire releases its financial results in early November.

Tesla closed at $205 on Friday, down 7.6% for the day, while Berkshire A shares closed at $412,760, down 0.6%.

Berkshire now has a market value of around $606 billion, compared to Tesla at $642 billion. At the start of 2022, Tesla was valued at $1.1 trillion, or $450 billion more than Berkshire.

Berkshire has already passed the flag

Metaplatforms

(META) and

Nvidia

(NVDA) this year to rank sixth in the S&P 500 by market value. Berkshire is behind

Apple

(AAPL),

Microsoft

(MSFT),

Alphabet

(GOOGL),

Amazon.co.uk

(AMZN) and Tesla. Shares of Meta and Nvidia, which outperformed Berkshire in the S&P 500 at the start of 2022, have both fallen around 60% this year.

If it can overtake Tesla, Berkshire will struggle to catch up to the No. 4 company, Amazon, which is valued at more than $1 trillion.

Berkshire’s resilience this year shows the benefits of Buffett’s methodical approach to creating value over more than half a century while providing nightly sleeping comfort for shareholders.

Write to Andrew Bary at andrew.bary@barrons.com