Warren Buffett's Strategic Portfolio Overhaul Before Stepping Down as Berkshire's CEO

When Warren Buffett handed over the CEO reins at Berkshire Hathaway to Greg Abel at the end of 2025, it wasn’t a sudden departure. For several quarters leading up to his transition, the investing legend had been making bold moves to reshape his company’s portfolio—and they tell a revealing story about how Buffett thinks about value, timing, and future market conditions.

Thanks to Form 13F filings with the Securities and Exchange Commission, investors got a window into what the Oracle of Omaha was actually doing in the lead-up to his retirement. One filing at a time, a striking pattern emerged: aggressive selling in one of his most trusted holdings while methodically building a position in an unexpected consumer favorite.

Warren Buffett’s Massive Retreat From Bank of America

For nearly a decade, Bank of America held a top-three spot in Berkshire Hathaway’s investment portfolio. The logic seemed unassailable. Few investors understood the financial sector better than Buffett, and he had long appreciated how bank stocks benefit from the natural rhythm of economic cycles—expansions vastly outlast recessions, allowing banks to grow their loan portfolios steadily while the broader economy thrives alongside them.

Bank of America, in particular, possessed a quality that captivated Buffett: extreme sensitivity to interest rates. Compared to other major U.S. money-center banks, none moves more dramatically when the Federal Reserve adjusts rates. When the central bank hiked aggressively from March 2022 through July 2023, Bank of America’s net interest income surged as a result. By all traditional measures, holding BofA seemed like a natural fit for Berkshire’s playbook.

Yet between July 17, 2024, and September 30, 2025, Buffett orchestrated the liquidation of 464.8 million Bank of America shares—roughly 45% of the entire position. This wasn’t a quiet trim; it was a deliberate, large-scale divestment.

The Case for Selling

On the surface, profit-taking provides an easy explanation. With President Trump lowering the corporate tax rate, locking in gains became financially advantageous. Berkshire held tremendous unrealized gains in BofA—second only to its massive Apple holdings. Recognizing those profits at a lower tax rate than might have applied previously made mathematical sense.

But the numbers tell a deeper story. Bank of America’s valuation had shifted dramatically over Buffett’s decades-long ownership. When he initially purchased preferred stock in August 2011, the company’s common shares traded at a steep 68% discount to book value—a screaming bargain by value investor standards. By early 2026, that same stock commanded a 35% premium to book value. While hardly egregiously expensive, it was no longer the kind of deep-value opportunity that historically excited the Oracle of Omaha.

There’s also the matter of interest rates. Buffett may have sensed what was coming: a potential easing cycle from the Federal Reserve. For a bank as rate-sensitive as Bank of America, lower rates would compress net interest income and pressure earnings more than it would affect competitors less dependent on rate differentials. If Buffett anticipated headwinds ahead, reducing exposure made strategic sense.

Warren Buffett’s Quiet Accumulation of Domino’s Pizza

While Buffett was methodically paring back Berkshire’s most vulnerable positions, he was simultaneously making a contrasting move that captured surprisingly little mainstream attention: he was building an outsized stake in Domino’s Pizza.

Over five consecutive quarters ending September 30, 2025, Berkshire—under Buffett’s direction—acquired approximately 3 million shares of the pizza delivery giant:

• Q3 2024: 1.28 million shares
• Q4 2024: 1.10 million shares
• Q1 2025: 238,000 shares
• Q2 2025: 13,000 shares
• Q3 2025: 348,000 shares

The accumulation represented 8.8% of Domino’s outstanding equity. For an investor who had been a net seller of stocks for 12 straight quarters, this sustained commitment to a single consumer stock stood out as exceptional.

Why Domino’s Caught Buffett’s Eye

The reasons become clearer upon inspection. Domino’s has delivered a stunning 6,700% total return since its 2004 IPO—a figure that reflects not just stock appreciation but also consistent dividends. Yet performance alone doesn’t explain Buffett’s interest. Rather, three factors likely converged to make the stock compelling to him.

First, Domino’s has built genuine customer loyalty—something Buffett never underestimated. In 2009, the company made a counterintuitive decision: instead of defending its pizza quality, management launched a startling “mea culpa” campaign that frankly admitted the product had serious problems. Rather than damage the brand, that transparency actually strengthened customer trust. People respond to honesty, and Domino’s proved that principle in practice.

Second, Domino’s management executes with precision. The company doesn’t simply project one year out; it sets ambitious five-year strategic targets and hits them. The current initiative, called “Hungry for MORE,” emphasizes deploying artificial intelligence and advanced technology to boost delivery speed and supply chain performance. It’s the kind of forward-thinking playbook that appeals to Buffett’s appreciation for operator discipline.

Third, the international opportunity remained vast. Through 2024, Domino’s had achieved same-store sales growth internationally for 31 consecutive years. In an era when many American companies struggle to expand abroad, Domino’s demonstrated a repeatable, globally scalable business model—exactly the kind of competitive advantage Warren Buffett sought throughout his career.

What This Portfolio Reshuffling Reveals

The contrast between Buffett’s moves tells a coherent story. He exited a financial services holding that, while historically cheap and strong, had lost its margin of safety as valuations expanded. Simultaneously, he built a position in a consumer brand with durable competitive advantages, predictable cash flows, and genuine international growth prospects.

In essence, Warren Buffett was repositioning Berkshire’s portfolio for an era beyond his hands-on leadership. He wasn’t chasing performance; he was securing stability. He moved out of a one-time bargain that had become fairly valued, and into a business model with longevity and customer resilience built into its DNA.

For investors watching the Berkshire 13F filings, the lesson was clear: even in his final quarters at the helm, Warren Buffett remained faithful to his core principles—buying what’s cheap and selling what’s fairly priced, always with an eye toward the quality of the business underneath the market price.