TheChek News Flow

Elon Musk’s Legal War With OpenAI’s Sam Altman Set for Showdown in Court

The artificial intelligence era’s biggest legal battle heads to a showdown next week, as Elon Musk and OpenAI CEO Sam Altman are scheduled to face off in a federal courtroom in Oakland, Calif., over the future of the company that pioneered the AI boom.

The trial in Musk’s lawsuit against Altman, OpenAI and its partner Microsoft starts with jury selection on Monday and is expected to run through mid-May, barring some last-ditch settlement.

People close to both Musk and OpenAI executives have been trying to convince the parties to settle by agreeing to give Musk a piece of the OpenAI foundation, according to several people familiar with the conversations. But it is unclear if either side has been receptive to their suggestions.

The trial promises to be one of the biggest spectacles of power and pettiness that Silicon Valley has produced, with a witness list that includes not only Musk and Altman, but Microsoft CEO Satya Nadella and other current and former top executives from Microsoft, OpenAI and Musk’s corporate empire.

The stakes could be monumental for OpenAI, which Musk co-founded a decade ago with Altman as a nonprofit. Musk alleges the startup broke promises to him and violated its charitable mission in several ways. He is seeking the disgorgement of assets that can be traced back to his original contributions. An economist that Musk hired estimated in December that his interest was worth up to $109 billion, at a time when OpenAI was valued at $500 billion. At OpenAI’s latest valuation, that estimated interest could equate to as much as $187 billion.

Yvonne Gonzalez Rogers, the judge hearing the case, has said that she didn’t find the methodology of Musk’s economist convincing, saying he appeared to be “pulling these numbers out of the air.”

OpenAI has said that Musk’s claims are a baseless attempt to disrupt its growth by a tycoon who competes with it through xAI, which he founded in 2023. Musk’s AI startup is now part of SpaceX, the conglomerate he leads that is planning a massive IPO for June. An OpenAI spokesperson on Friday said that Musk’s case has been about trying to attack the OpenAI nonprofit. Asked about the possibility of any legal settlement, they said: “We will continue to stand and fight for the mission.”

The implications extend to a host of other tech giants and prominent investors that have pumped money into OpenAI, including Amazon and Nvidia. They are also benefiting enormously from the AI frenzy that OpenAI initiated when it launched ChatGPT more than three years ago. OpenAI this month finalized a $122 billion funding round—the largest in history—which valued it at $852 billion including the new cash.

If a jury finds OpenAI liable, Musk is also asking the judge to issue an order reversing OpenAI’s October restructuring, which converted its for-profit wing to a corporation with traditional equity. OpenAI has said that the restructuring, already approved by regulators, was a necessary step toward its ambition of going public, so unwinding it could obstruct that plan. Lawyers following the case have said the court is unlikely to issue such a disruptive order.

Musk also wants the court to order OpenAI to observe its charitable mission by prioritizing work on AI safety and releasing its research publicly, and to remove Altman as a director of OpenAI’s nonprofit board.

“This is going to be an enormously significant case,” said Anupam Chander, who teaches AI regulation and contracts as a law professor at Georgetown University. “This is going to be a trial in the courtroom, but also in the press, where the parties are going to throw stones at each other, but they all live in kind of glass houses.”

“Many Americans don’t see a good guy in this rivalry,” he said. “For many Americans, it’s a pox on both their houses.”

The trial will retrace how Musk donated $38 million to help establish OpenAI in its early days, when it was a charity chartered to ensure that powerful AI benefits humanity. And it will show how Musk had a falling out with his co-founders—including OpenAI President Greg Brockman, whom Musk also names as a defendant—and left the fledgling organization before it took investments from Microsoft and established the for-profit arm to finance its need for pricey AI chips.

Musk alleges that by taking Microsoft’s money, keeping OpenAI’s technology proprietary and deprioritizing safety efforts, OpenAI committed fraud, was unjustly enriched and breached its “charitable trust.” He claims Microsoft abetted that breach, in part by interfering in the OpenAI board’s brief ouster of Altman in 2023.

Musk first sued OpenAI two years ago, then dropped that suit and refiled after hiring Marc Toberoff, a prominent Hollywood attorney with a flair for drama. In the renewed complaint, Toberoff set the tone for the lawsuit, writing that OpenAI’s “perfidy and deceit are of Shakespearean proportions.”

Since Musk filed the suit, he and Altman have traded insults and accusations in an endless series of social media posts and legal filings—one reason people have been skeptical that a settlement could be reached. Altman has accused xAI of creating “anime sex bots for children,” while Musk has referred to him on X as “Scam Altman.”

Among the unresolved legal questions on the trial’s eve: whether OpenAI’s nonprofit or for-profit entity would have to disgorge billions of dollars if it loses, and who would receive those funds.

Musk has said he doesn’t want any money for himself, but wants the OpenAI corporation to transfer any money to its nonprofit. Microsoft countered in a legal filing Wednesday that such an outcome is “anomalous and untenable” because it would return money to the very nonprofit that Musk alleges betrayed its mission.

Musk’s lawyers have said he would drop his fraud claims as long as the court agrees to proceed on the claims of breach of charitable trust and unjust enrichment.

OpenAI’s lawyers responded in a legal filing Wednesday that Musk shouldn’t be allowed to make his decision conditional on the court. They seized on his latest move to argue that Musk “has no standing to sue on behalf of the public [or] the OpenAI nonprofit.” If Musk no longer says he was injured personally, their argument goes, that leaves him without standing to argue for OpenAI to give up its money. “A plaintiff cannot come to court just to air a grievance,” they said.

Late Friday, Judge Gonzalez Rogers affirmed that the breach of charitable trust and unjust enrichment claims are going to trial, and therefore dismissed the fraud claims as Musk’s lawyers requested.

During evidence discovery, both parties unearthed email records supporting their sides. Musk’s lawyers will invoke threads in which Altman stated he was enthusiastic about OpenAI maintaining its charitable structure and private notes from Brockman contemplating the fastest way he could become a billionaire.

OpenAI’s lawyers are sure to point to email records of Musk proposing that OpenAI could merge with Tesla, his own for-profit corporation. They will also argue that Musk waited too long to bring his case, and the statute of limitations has expired.

Chander said he already plans to discuss the trial when he teaches his contracts course in the fall to illustrate the perils of resting millions of dollars on a handshake deal. “I think this is all going to be new legal ground,” he said. “It’s going to be taught in casebooks in the future.”

Canadian and German start-ups to focus on ‘sovereign’ AI systems independent of US and China

Canadian AI start-up Cohere has agreed to take over Germany’s Aleph Alpha in a deal valuing the combined group at about $20bn, as western governments and companies seek alternatives to US Big Tech providers.

The transaction, supported by the German and Canadian governments, will create a transatlantic company focused on “sovereign” AI systems that allow customers to retain control over their data and infrastructure.

The merger reflects growing concern outside the US about reliance on Silicon Valley groups such as OpenAI and Google.

“Our countries need to come together and collaborate and establish mutual dependencies in order to boost our resilience,” said Cohere’s chief executive Aidan Gomez.

The deal also gives an early sign of consolidation in the sector, following deals such as SpaceX’s agreement to acquire coding start-up Cursor.

Cohere, the larger partner, will retain its name and operate with dual headquarters in Canada and Germany. Aleph Alpha shareholders will receive one Cohere share for every nine shares held, according to two people familiar with the terms.

Cohere and Aleph Alpha declined to comment on the financial details.

Cohere and Aleph Alpha have both focused on corporate and government customers rather than consumers, betting that demand for secure, locally controlled AI will provide a foothold against far larger rivals.

The deal will be accompanied by a fresh funding round led by Schwarz Group — the retail company, which owns supermarket Lidl — which said it has committed $600mn, including equity and research funding.

The data centres of Schwarz Group’s technology arm Schwarz Digits are expected to provide the infrastructure for deploying Cohere’s AI systems. 

The tie-up reflects a broader push by so-called middle powers to collaborate more closely in response to a volatile geopolitical situation dominated by the US and China.

Canada’s AI minister Evan Solomon told the FT that “joining forces is powerful” and “super mutually beneficial”.

“We want to make sure that governments and companies have an option between the hyperscalers and the hegemon,” he said.

A spokesperson for Germany’s digital ministry said the tie-up was of “high geostrategic and economic value”, adding that it would help ensure that AI systems used by public authorities are developed and operated under domestic control.

The German government is expected to act as an anchor customer for the combined company. Berlin plans to prioritise sovereign, secure AI solutions in public procurement as it rolls out automation across government services.

Cohere, founded in 2019 by former Google researchers, develops large language models for enterprise customers and focuses on deploying systems within clients’ own infrastructure. The group, founded in Toronto in 2019, was valued at $6.8bn in a funding round last year.

Aleph Alpha, based in Heidelberg, has built close ties with German industry and government but has struggled to grow at the pace of larger rivals. It was valued at roughly €500mn in a funding round in 2023.

Its former chief executive Jonas Andrulis stepped down earlier this year to found a new AI start-up with consultancy Roland Berger.

Schwarz Digits is a key backer of Aleph Alpha with a stake of more than 20 per cent in the company. It is also investing heavily in data centre capacity in Germany, including an €11bn facility designed to support AI workloads near Berlin.

The nuclear energy company scrapped a public offering less than three years ago, before the artificial-intelligence boom took hold

Nuclear-energy company X-Energy XE 26.96%increase; green up pointing triangle scrapped a public offering less than three years ago after investors showed little interest.

On Friday, X-Energy’s shares closed up 27% in their stock-market debut, giving the company a market valuation of around $11.5 billion. X-Energy has benefited as artificial intelligence drives demand for new sources of electricity.

Its high-profile backers include Amazon.com AMZN 3.49%increase; green up pointing triangle and Ken Griffin, the founder of hedge-fund firm Citadel.

Based on the closing price of the stock, Griffin scored paper gains of more than $300 million from a $100 million personal investment he made just a year-and-a-half ago, according to people familiar with the matter. It came after Griffin gave a speech in Singapore in 2023 about the growing need for nuclear power to satisfy the electricity needs of emerging data centers. David Kaplan, Ares Management’s co-founder, heard about the talk. Soon, Griffin was contacted by bankers representing X-Energy searching for capital after the failed offering.

Ares is another huge winner, other people familiar with the matter said. The investment firm was set to make more than four times the over-$160 million it invested in the company, the people said, noting that Kaplan and a partner, Allyson Satin, led the investment.

Founded in 2009 by aerospace veteran Kamal “Kam” Ghaffarian, X-Energy spent years developing industrial-size modular nuclear reactors to produce energy for factories and other industrial facilities. By 2022, the Maryland-based company had a deal to sell reactors to the chemical-company Dow’s facility in Seadrift, Texas, but investors worried that its potential market was limited.

In December of that year, Ares invested $30 million in the company, along with two hedge funds, aiming to take the company public. But a merger with Ares Acquisition, a blank check company backed by the Los Angeles firm, was scuttled in October 2023 as investors cooled on special-purpose acquisition companies and became cautious on new issues. After the SPAC fell through, Ares added to investment by providing new financing.

X-Energy’s fortunes improved as companies began searching for new sources of energy amid the growth of artificial intelligence. In 2024, Amazon, which has backed nuclear-power projects across the U.S. and is eager to get energy from small, modular reactors, became both an investor and a client. Amazon has said it received a commitment of more than five gigawatts of new nuclear energy from X-Energy.

Griffin made his investment in X-Energy in the fall of 2024. Steve Cohen’s Point72, Jane Street, Cathie Wood’s ARK Invest and the University of Michigan also made investments, X-Energy has said. They all stand to benefit from Friday’s IPO. Amazon owns close to 20% of X-Energy.

The investors can’t lock in profits until they sell their shares. And it isn’t clear how the stock will fare on the public market. X-Energy is still years away from completing a reactor and obtaining regulatory licensing. It has competitors racing to provide nuclear power, including TerraPower, backed by Bill Gates, Oklo and NuScale Power.

Hyperscalers including Amazon, Microsoft and Meta have a growing demand for electricity to power massive data centers and manage AI processing, sparking enthusiasm for nuclear power.

Ukraine Is Europe’s War Now

The European Union signed off on loans to keep Kyiv afloat—but it may not be enough

The fight against Russia in Ukraine is now firmly Europe’s war.

The European Union this week signed off on the equivalent of $105 billion in loans to keep Kyiv afloat through the end of next year—but officials warned that it may not be enough.

With Russia determined to continue its four-year invasion until it dominates its neighbor, and President Trump pulling back from Europe and focused on the Middle East, Ukraine finds itself reliant on the traditionally gun-shy EU in its war for survival.

The confirmation of the loan ahead of a summit in Cyprus on Thursday, long blocked by recently ousted Hungarian Prime Minister Viktor Orbán, marked a fresh sign of resolve and unity in the bloc.

“For the first time in years there are no Russians in the room,” Polish Prime Minister Donald Tusk wrote on social media, an apparent reference to Orbán, who had warm ties with Moscow but stayed away from the EU summit after recently losing an election. “Huge relief,” Tusk added.

The funding decision, which Orban cleared this week following his election defeat, comes at a critical moment for Ukraine, which needs the cash to sustain its economy and its military amid relentless Russian assaults as Moscow seeks to grab more land in its neighbor’s east. Kyiv now depends on its Western neighbors for money to shore up its budget and fund weapons purchases to help it hold off Russia’s giant military. The Trump administration has stopped providing military aid to Ukraine and sought to mediate an end to the war.

Ukrainian President Volodymyr Zelensky said the EU funding could push Russia toward negotiations. “It means that we are not empty, and we are strong,” he said.

The loan follows recent announcements that Ukraine will jointly produce weapons in allied European countries, including Germany, Denmark, Norway and the U.K.

Shifting the burden of the war onto Europe’s shoulders has long been a goal of the Trump administration. Vice President JD Vance said at a rally that halting funding to Ukraine was “one of the things I’m proudest of.”

Still, asked if the European loan was a sign that Ukraine no longer needs the U.S., Zelensky said his country needs all the assistance it can get.

“During the war we need everything and everybody,” he said Thursday on his way into a meeting with European leaders. “We need the United States.”

The U.S. provides crucial aerial interceptors that Ukraine needs to shoot down Russian ballistic missiles. It also furnishes Ukraine’s military with battlefield intelligence. Europe isn’t in a position to replace these capabilities.

While the Biden administration provided military equipment directly to Ukraine, European countries are now buying weapons from the U.S. and sending them to Ukraine.

Zelensky expressed concerns that the U.S. military’s use of weapons, especially interceptors, in the Middle East, was draining stocks that Ukraine needs to defend itself. He noted that European purchases of U.S. weaponry continued.

Kyiv secured $4 billion in fresh defense commitments from Germany at a meeting this month of the countries that back Ukraine, according to Ukrainian Defense Minister Mykhailo Fedorov. The agreements focused on air defense, drones and joint defense production.

Zelensky has sharpened his tone toward the U.S. in recent weeks. The Ukrainian leader said Thursday that he expected U.S. envoys Jared Kushner and Steve Witkoff to visit Kyiv. He said that not visiting would be “disrespectful” given that they had already been to Moscow, in an interview with Ukrainian media this week.

“At present, for us, the war in Ukraine is the number one issue. For the Americans, the war in Iran is the number one issue,” Zelensky told journalists via WhatsApp on Thursday.

While the 90-billion-euro ($105 billion) loan resolves a protracted battle in Brussels, there are already concerns that the bloc will have to turn back to funding Ukraine next year, rather than in 2028 as was hoped.

The EU’s loan was supposed to cover two-thirds of Ukraine’s core budget and defense funding needs for this year and next. Japan and Western nations such as the U.K. are in talks to provide the estimated €45 billion needed through the end of 2027, diplomats said, but no money has been locked in.

In addition, Ukraine’s funding gap for next year has grown since the loan package was initially planned, according to diplomats. Ukraine needs an additional €19 billion to cover its budget needs next year, they said. That means EU leaders could potentially have to seek a new loan of tens of billions of euros again in 12 months.

In recent months, the EU has faced multiple challenges including a crisis in its relationship with the Trump administration and a fresh surge in energy prices caused by the Iran war. Nationalist parties in France and Germany are calling for an end to funding for Ukraine. Any push for new money for Ukraine next year will bump up against a French presidential election next year.

For now, the threat from Russia and staunch support for Ukraine from some of the wealthier members of the bloc, above all Germany, Nordic countries, the Netherlands and Poland, have ensured that Brussels’ backing for Ukraine remains solid. So does the military and drone experience Kyiv can bring to Europe. Looking to the future, Europeans would rather see Russia tied down in Ukraine than threatening EU borders.

Yet leaders and senior officials acknowledge the fight to keep capitals focused and supportive on Ukraine is growing harder.

Meanwhile, progress in Ukraine’s long quest for EU membership has been slow. Officials in Brussels have floated offering Ukraine some of the benefits of membership in coming years as a symbolic step toward accession. But Zelensky rejected the idea as insufficient.

“Ukraine does not need symbolic membership in the EU. Ukraine is defending itself and is definitely defending Europe. And it is not defending Europe symbolically—people are really dying,” Zelensky said.

The idea that Mythos is too hot to handle ought to be good for the company’s valuation

When something is hard to get, the price goes up. Consider the perpetually out-of-stock Birkin handbag sold by luxury house Hermès. Wealthy customers want it because it’s beautiful, but also because they can’t easily get it. Is AI giant Anthropic attempting something similar?

It might appear so, given the frenzy around its new large language model, Mythos. Anthropic has deemed the technology, which has shown aptitude for revealing old bugs in oft-used software but also creating ways of exploiting them, too dangerous to release the usual way. Instead, a select group of big companies, from Amazon to Morgan Stanley, are tinkering with it to explore its disruptive potential.

Anthropic is right to be cautious. But the idea that Mythos is too hot to handle ought also to be good for the company’s valuation — and there are many parties who stand to benefit from that. Several of the companies now trialling Mythos — including Google, Nvidia, Cisco and more — are investors, so have reason to enthuse about what they find. Fellow experimenters Goldman Sachs, Morgan Stanley and JPMorgan are all in talks to underwrite Anthropic’s initial public offering later this year, Bloomberg has reported.

It remains to be seen how potent Mythos really is. The roll-call of bugs it has found is impressive, and so is the low cost at which it did so. But some of its feats may be overstated: the model did “escape” its so-called sandbox to send an email to a developer notifying them of a bug, but it had been instructed to try. Mythos didn’t show any signs of being able to alter its own “weights”, the parameters that define a model’s knowledge. And previous models, such as Opus 4.6, are also dab hands at spotting glitches.

Meanwhile, Mythos isn’t the first technology to be deemed unsafe for mass consumption. OpenAI held its GPT 2 model back for a while in 2019 because of its ability to produce “fake news” quickly and copiously. Japan in 2000 demanded PlayStation 2 consoles obtain export licences, for fear their relatively high computing power might be used to guide missiles. It’s not that they were wrong, but technology then considered “leading edge” quickly became commonplace.

If Mythos is the real deal, the priority isn’t keeping the model scarce, but making its fruits ubiquitous. If Microsoft and other tech participants in what Anthropic calls “Project Glasswing” create patches that can be rolled out universally, all can benefit. But if Mythos points out flaws that require DIY attention by companies, smaller ones that can’t easily throw money at additional IT resources could be left exposed. The US has 4,000 banks; only a handful of them are getting to play with Mythos.

Anthropic and its investors might actually prefer that Mythos turns out to be less a great leap, and more a step along a long road also travelled by many others. In critical sectors such as finance and payments, for example, a sudden step change in vulnerability for IT-constrained companies could quickly become a widespread problem — and a political one too. Scarcity begets demand, but accidentally breaking the system would garner Anthropic attention of a much less desirable kind.

Eli Lilly’s most recent acquisition shows its aspirations beyond weight loss drugs. There’s time for investors to get in and buy the stock.

Lilly agreed this week to buy privately held Kelonia Therapeutics for $3.25 billion. The deal could be worth $7 billion if Kelonia hits certain milestones.

Kelonia is known for its “In vivo CAR-T therapy,” an intravenous injection that offers a cheaper, faster, and potentially more effective way to fight cancer. The treatment doesn’t require the use of a lab dish outside the patient’s body, reducing the amount of work and time needed to treat the patient. Kelonia is even trying to solidify the drug’s use for autoimmune diseases. The company is pre-revenue, but the multiple-myeloma treatment is in Phase 1 of clinical trials.

Eli Lilly stock dropped in immediate reaction to this announcement, a common occurrence for large companies making acquisitions. Shares recovered today, but are down 17% since closing at a record high in November. Analysts have lifted sales and earnings estimates since late 2025, according to FactSet, but investors have taken profits after the stock’s rally over the past five years.

Now, shares look attractive at 25 times expected analyst earnings for the coming 12 months, versus the S&P 500’s 21 times. The stock has averaged a multiple nearly double the index’s in the past three years. The market clearly has concerns about GLP-1 competition, but Lilly is executing well across its business. It has growth potential outside of GLP-1s, making the valuation look appealing.

The acquisition further expands Lilly’s oncology capabilities, an area where it has made other purchases recently. It acquired five smaller companies in the In vivo CAR-T space since 2024. In February it purchased Orna Therapeutics, which also provides an injection aimed at treating cancer and autoimmune diseases, for $2.4 billion. Orna takes a slightly different approach than Kelonia to cancer treatment, so this helps Lilly get several shots at taking market share in cancer treatments.

“We are positive on a potential deal, as it would add a complementary in vivo approach that could broaden Lilly’s push to build oncology,” writes BMO analyst Evan Seigerman.

The acquisition helps Lilly “diversify the pipeline for long-term growth beyond the GLP-1 franchise,” adds UBS analyst Michael Yee.

Total oncology spending was $256 billion in 2025, according to Fortune Business Insights. This is expected to grow to almost $700 billion by 2034. Taking a small part of this total addressable market can drive a material amount of additional revenue for Lilly. Analysts anticipate $81.9 billion in total 2026 sales.

Oncology can also help Lilly protect against any competitive speed bumps in GLP-1s. Novo Nordisk is the primary competitor in that area, though Amgen, Gilead Sciences, and Merck are also developing weight loss therapies.

For now, Lilly’s weight loss business is still thriving. With Zepbound as one of the most effective and best-selling weight loss offerings on the market, and the fact that its Foundayo is one of the first oral GLP-1s, analysts expect the company’s total GLP-1 sales to grow 14% annually through 2031 to about $45 billion.

Most of its other businesses should grow as well, though a few drugs are in decline as they lose patent exclusivity. Still, analysts forecast total sales to grow 13% to $133.9 billion by 2031. Lilly has beaten sales estimates the last four quarters, including for Zepbound.

The growth can lift earnings by 18% annually over their period, as profit margins rise. Analysts forecast more moderate growth of large expenses such as research and development and general and administrative, as management moves past the early days of ramping up those costs for its growth opportunities.

For anyone who missed the past few years of Lilly’s rally, now is a chance to jump in.

Berkshire Hathaway stock is in the midst of one of its worst periods of underperformance relative to the S&P 500 since Buffett took control in 1965.

Berkshire Hathaway stock is down 7% this year, underperforming the S&P 500’s 4% return and creating a 40 percentage point gap over the past year.

The conglomerate holds $373 billion in cash, has $50 billion in annual earnings power, and resumed a share repurchase program.

CEO Greg Abel now oversees most of the $300 billion equity portfolio, facing expectations to improve flat operating revenues and deploy cash.

Berkshire Hathaway stock has gone from expensive to cheap over the past year.

At its current price, not a lot has to go right for this trillion-dollar conglomerate to generate market-beating returns—even without Warren Buffett at the helm.

Berkshire has a capable manager in Greg Abel as CEO, earnings power of about $50 billion annually, a stock repurchase program in place that might total $50 billion this year, and $373 billion in cash on its balance sheet to make new investments.

The stock is in the midst of one of its worst periods of underperformance relative to the S&P 500 since Buffett took control of Berkshire in 1965.

The Class A shares are down 6% this year to $706,000, while the Class B shares are off a similar percentage to $470. The S&P 500 has returned about 4% so far in 2026.

The gap is more glaring over the past year, with Berkshire down about 13% since it peaked on May 2, 2025. That was the final trading day before the Berkshire annual meeting when Buffett surprised everybody by announcing he would step down as CEO at year-end in favor of longtime Berkshire executive Greg Abel while remaining chairman. The S&P 500 has returned 26% since then, resulting in a gap of almost 40 percentage points over Berkshire.

The current price offers a good entry point for investors and potentially allows the company to repurchase a lot of stock.

The stock’s weakness appears to reflect a few factors: the disappearance of any Buffett premium, a wait-and-see attitude toward Abel, lackluster revenue trends, and doubts about whether Abel will be able to deploy much of Berkshire’s cash.

These are legitimate issues, but they appear to be reflected—and then some—in Berkshire’s stock price.

Investor Christopher Davis of Hudson Value Partners (no relation to the Berkshire board member with the same name) says investors this year are gravitating to so-called HALO stocks (Heavy Assets, Low Obsolescence) like Caterpillar amid concerns about disruptions caused by artificial intelligence, but are ignoring one of the best plays—Berkshire.

“Berkshire is the ultimate HALO company, given the durability and inflation protection of the insurance business and the very-hard-to-replicate industrial operating businesses,” he says. Berkshire owns Burlington Northern Santa Fe, one of the two largest railroads in North America; Berkshire Hathaway Energy, one of the country’s biggest electric utilities; and a slew of industrial businesses including Lubrizol (chemicals) and Precision Castparts (aircraft parts). Davis calls the stock a “coiled spring” at the current price.

UBS analyst Brian Meredith also is a fan of the stock, telling Barron’s it is attractively priced relative to intrinsic value and also defensive given its diversified earnings power and huge cash position.

“The business fundamentals are fine but not phenomenal,” he says. There’s room, he says, for Abel to improve performance at key divisions like BNSF and Berkshire Hathaway Energy, which both lag peers in key profit measures. Meredith has a Buy rating and a price target of $871,000 on the A shares, nearly 25% above current levels.

Berkshire resumed its share-repurchase program on March 4 after a nearly two-year hiatus and bought over $200 million of stock that day, Barron’s calculates, based on information in the Berkshire proxy. With the shares down 3% since then, the company may have continued or accelerated that program.

The company will detail its first-quarter share repurchases and probably those in the first three weeks of April in its next 10-Q report. That filing and Berkshire’s first-quarter earnings releases are due on May 2, the date of the annual meeting.

The stock now trades for less than 1.4 times our estimate of the company’s first-quarter book value of about $505,000 per class A share—against 1.8 times a year ago, which was near the highs of the past 25 years. The current price/book ratio is below the average of the past three years.

Book value, or shareholder equity, has been a good yardstick for Berkshire stock during Buffett’s tenure. Buffett emphasizes intrinsic value—or the value of Berkshire’s businesses rather than their carrying value on the company’s balance sheet since most are worth way more than their historic carrying value.

Buffett doesn’t reveal his intrinsic value estimate, but some analysts and investors share theirs. Longtime Berkshire watcher Chris Bloomstran of Semper Augustus Investments in St. Louis does an annual estimate, and his latest earlier this year was $855,000 per share—21% above the current stock price. UBS’ Meredith estimates it at $758,000, 7% above.

Bloomstran sees Berkshire stock as capable of generating around 10% annual returns over the next decade, driven by growth in book value.

Berkshire isn’t as cheap when it’s valued at 23 times projected 2026 earnings—as the analyst consensus has it—but the company is carrying a lot of low-yielding cash and investments on its balance sheet. Adjust for those factors and the effective price/earnings ratio is lower, roughly in the high teens.

There’s probably room for improvement at Berkshire on the operational and investment sides.

“Operating revenues were flat at Berkshire last year,” says Cathy Seifert, an analyst at CFRA. “I’d like to see Greg Abel confront the issues and outline a plan for profit and revenue improvement.”

Abel may also need to address how he plans to deploy Berkshire’s huge cash position. Most of that can be invested, but he may need to set aside a chunk to backstop Berkshire’s huge property and casualty insurance operations.

In a mild surprise, Abel is asserting control over virtually all of Berkshire’s $300 billion equity portfolio. Ted Weschler, a longtime Berkshire manager, is getting authority over 6% of it, up from 5% when Buffett was CEO.

Buffett had originally envisioned Weschler and Todd Combs running the entire equity portfolio under the oversight of Buffett’s successor as CEO. Combs left Berkshire in December for an investment job at JPMorgan Chase Abel, however, has no formal experience as a portfolio manager and is fully engaged on the operations side. He ought to consider hiring more investment talent and give Weschler more authority.

Berkshire’s 13-member board of directors—including two of Buffett’s three children—has long been deferential to Buffett and could use stronger independent members now that Buffett is no longer CEO. One great addition would be Apple CEO Tim Cook, who is set to leave the top job in September while remaining chairman.

Buffett admires him, and Cook could bring stature and tech savvy to a company that isn’t a leader in employing technology. Berkshire does own about $60 billion of Apple stock, but that issue likely could be finessed to get Cook.

Berkshire is in better shape than its stock price suggests. For long-term investors, betting on Berkshire should pay off—even after a legendary investor passes from the scene.

In our latest Big Money poll, professional investors see attractive gains in small-caps, international stocks, and energy. Weighing the impacts of the Iran war.

Markets are looking beyond the Iran war to a year of healthy profits and stock gains. Investors in our latest Big Money poll share that sentiment.

Despite the Middle East conflict and other hurdles facing the economy, more than 54% of Big Money participants said they had a bullish outlook for the next 12 months, up from 47% in our survey in October. Bearish sentiment slipped to 17% from 19%. About 29% of respondents were neutral on stocks, down from 34% in our prior survey.

Most of them call the market fairly valued or undervalued, and see plenty of opportunities in areas like small-caps, international stocks, and the year’s hottest sector: energy.

Barron’s conducts the Big Money poll twice a year, in the spring and fall, with the help of Erdos Media Research in Ramsey, N.J. For this poll, we received 105 responses from March 25 to April 10. Our questionnaire is sent to portfolio managers and strategists throughout the country.

That doesn’t mean the war and other headwinds aren’t taking a toll. About 59% of respondents cited geopolitical conflict, stagflation, and higher energy prices as the biggest concerns over the next six months. Their average year-end target for the S&P 500 index

SPX

+0.80%

: 7059. That’s near current levels, and well below Wall Street’s consensus average of 7460.

The poll may be skewed a bit bearish; most responses came in as the Iran war was raging, before the cease-fire and rebound. But there’s still unease; 41% of respondents expect a bear market within the next 12 months, up from 38% in October.

Investors aren’t sanguine on corporate profits. Only 19% of respondents expect S&P 500 earnings growth to top 10% this year. About 30% expect earnings to increase 6% to 10%, and 28% forecast profits rising 1% to 5%. All those estimates are well below Wall Street analysts’ consensus forecast for 18% profit growth this year, according to FactSet.

One bit of relief, investors say, is that Federal Reserve is likely to maintain its independence under a new chair, widely expected to be Kevin Warsh. About 54% of respondents say they are confident in Warsh. Just 7% had an unfavorable opinion of Warsh. The remaining 39% had no view.

Warsh’s path to the job eased on Friday after the Justice Department dropped a criminal probe of Fed Chair Jerome Powell. Warsh is likely to win confirmation soon.

While President Donald Trump wants rate cuts, Warsh promised in hearings that he would maintain Fed independence. Most of our poll respondents (68%) say the Fed’s current policy stance is appropriate. Investors expect Warsh to maintain the Fed’s data-driven approach, with some tweaks.

“Warsh is a credible choice and he’s not in Trump’s pocket,” says Lori Van Dusen, CEO of LVW Advisors in Pittsford, N.Y.

There’s no consensus on where rates go from here. The federal-funds rate is now around 3.75%. Half of respondents expect it to fall by the end of the year, 34% think it will remain unchanged, and 16% predict a hike.

Bonds are a toss-up. Inflation expectations have risen as markets price in higher energy costs, pushing up bond yields. Investors in our poll were split on the next moves. About 45% expect the 10-year Treasury yield to be higher a year from now; the remainder see flat or slightly declining yields. Investors have kept their bond exposure steady at an average 17% since our last poll.

One area of agreement: Oil will be higher for longer. Even if oil flows soon through the Strait of Hormuz, energy is likely to price in higher geopolitical risk premiums. The median forecast in our poll is for oil to cost $80 a barrel a year from now, 20% higher than before the war.

The oil shock is keeping some investors from taking a more bullish view.

“High commodity prices are going to percolate through everything over the next two quarters, and I expect inflation to increase,” says Peter Tuz, president of Chase Investment Counsel in Charlottesville, Va. He expects the Fed to hold rates steady until inflation settles and sees S&P 500 earnings growth on the lower end, at 6% to 10% for the year.

Bearish investors say the market’s recovery masks underlying fractures. “Short covering” may have helped fuel the rebound, says Thomas Forester, chief investment officer of Forester Capital Management. Traders who had wagered against the market were forced to buy stocks as markets surged with the cease-fire. That isn’t a good reason to be bullish, he says. Along with worries about an artificial-intelligence bubble, “there are housing headwinds, China’s economy looks soft, and there’s the oil shock.”

Why The Bulls Are Still In Charge

The market isn’t buying the bearish story. Stocks have rebounded since the Iran war started; the S&P 500 and Nasdaq Composite recently hit record highs. The major indexes are now in positive territory this year. Small-caps are having a banner run, with the Russell 2000 index up 11.4%.

Markets are betting the war will end soon, easing the energy pressure and allowing the U.S. economy to keep growing. “I’m more bullish now because of the cease-fire,” says Jonathan Reichek, a portfolio manager with Brasada Capital Management in Houston.

Earnings are coming in strong, supplying another bulwark. More than 85 companies have reported first-quarter results and 87% have beaten consensus estimates, up from the five-year average of 78%, according to FactSet. Growth is strongest in tech, with profits estimated to be up 45% from a year ago, but other sectors are also delivering solid gains, including financials, energy, and utilities.

“We’re still on track to have double-digit earnings growth this year. The market is resilient,” says Dory Wiley, president and CEO of Commerce Street Holdings in Dallas.

Wall Street is more optimistic on S&P 500 earnings than at the start of the year. That 18% earnings-growth figure for 2026 is up from nearly 15% in January, according to FactSet. Leading the charge for full-year earnings are energy, tech, and materials.

Big Money investors see the market as more fairly priced. About 42% of respondents said stocks are overvalued, down from 57% six months ago. The remaining 46% say stocks are fairly valued, and 12% say stocks look cheap.

The S&P 500 is hardly inexpensive at 21 times forward earnings, above its 10-year average of 19. That premium is warranted, some investors said. While tech—especially the Magnificent Seven—is doing the heavy lifting, earnings growth is broadening. Mag Seven earnings growth is estimated at 24.6% this year; the other 493 companies in the S&P 500 should deliver 15.9%, according to FactSet estimates.

“Earnings growth in the midteens seems right,” says advisor Jon Smucker with Marietta Investment Partners in Milwaukee. “The tax bill will help a lot. Consumers are still spending. Oil has been volatile, but underlying demand trends haven’t changed.”

’Big Money’ Picks and Pans

Energy has been the hottest sector this year, up 25%. Yet about 24% of investors cited it as the most attractive sector, against 14% seeing it as the least attractive.

The sector’s 10% slump since early April may be a good buying opportunity, says Amy Robinson, CEO of Robinson Value Management in San Antonio. “Energy has been out of favor, but the stocks are well-positioned and have become more affordable.”

Eric Green, chief investment officer with Penn Capital in Philadelphia, also favors energy. Even with an Iran peace deal, it would only take a few missiles from militants to disrupt the flow of energy again, he says: “I’m significantly overweight energy. The sector looks better than before.”

Tuz’s top energy pick is services firm SLB. Damage to infrastructure in the Middle East will benefit SLB, he says, and prospects are improving for exploration and production in less-volatile areas. Baker Hughes and Halliburton look attractive for similar reasons, he adds.

The tech sector is more of a toss-up, investors say. While 17% cite it as the most attractive sector, another 17% say it was the least. Overvaluation and worries about AI disruption top the list of concerns. Within tech, Palantir Technologies and Nvidia came in as the most overvalued stocks in our poll. Tesla was cited as the priciest stock overall, named by 27% of respondents.

There wasn’t a strong consensus about top stocks, though Microsoft, Boeing, and Alphabet were the most popular, receiving multiple votes.

Several investors also named Micron Technology as a pick. The memory-chip maker has surged on AI-related demand, but investors are skeptical that the good times will last. The stock trades below 10 times earnings due to concerns that a cyclical glut is building and will decimate chip prices.

That doesn’t faze Harris Nydick with CFS Investment Advisory Services in Totowa, N.J., who favors Micron. The company has told investors that while more chip capacity is coming globally, it won’t start to affect supplies until 2027, while demand forecasts have escalated. AI-related growth should keep the stock moving up, Nydick says.

Many investors see better values beyond the S&P 500. Nearly 30% of participants expect mid-caps to be the best equity category over the next 12 months.

Small-caps also look appealing, favored by 36% of investors. “All the ingredients are there for good year,” says Penn Capital’s Green. He expects merger activity to pick up, benefiting smaller companies, and sees earnings gains from tax changes and deregulatory moves by the Trump administration.

Valuations are attractive, too. The S&P Small Cap 600 index trades at 15.5 times earnings estimates for the next 12 months. That’s a 26% discount to the S&P 500, compared with its 10-year average discount of 15%, according to FactSet.

The foreign-stock rally took some hits with the war, but Big Money investors aren’t deterred. Nearly 66% of respondents say they’re bullish on non-U. S. equities, and 43% say they plan to increase exposure to international stocks, which have rebounded since the cease-fire.

“I expect more of a broadening of the rally, and international stocks will do better,” Reichek says. “They’re still cheaper than U.S. stocks.”

Emerging markets such as South Korea, Taiwan, Brazil, and Eastern Europe look attractive, says Robert Phipps, director of portfolio management for Per Stirling Capital Management. He expects the dollar to weaken, providing a tailwind for U.S.-dollar investors, and he likes valuations in those markets.

Most investors in our poll (52%) see the dollar resuming its slide this year. The dollar is down about 10% against a basket of major currencies since Trump took office, though it has recovered a bit lately. Lower U.S. interest rates would pull it down, along with more diversification moves by global asset managers. Those forces may help international stocks to keep beating the U.S.

As for gold and Bitcoin, investors aren’t enamored. They see gold at $4,967 an ounce a year from now, right around current levels, and Bitcoin at $68,557, well below recent prices around $78,000. The crypto has been rallying lately as a “risk-on” asset. Big Money investors don’t see it lasting.