Both Berkshire Hathaway and Micron Stocks Look Cheap on the Surface. But I Like 1 Better Than the Other.
2026-08-01 12:23
•Daniel Sparks •The Motley Fool
••• ••• Axe Cap view
Berkshire or Micron: Which Value Plays into JSE Context?
Berkshire’s steady earnings beat Micron’s volatile semiconductor cycle for cautious investors.
Berkshire Hathaway trades at a reasonable 15 times earnings with steady, diversified cash flows and a hefty cash reserve. Its business mix—insurance, railroads, utilities—generates recurring income, which resonates with South African investors used to banks and industrials like Standard Bank or Barloworld. In contrast, Micron's impressive recent earnings appear more like a top-of-the-cycle spike in semiconductor memory chips—a notoriously volatile sector with sharp booms and busts. For JSE investors, thinking about companies like Sasol or AngloGold Ashanti helps: cyclicals can reward at peaks but punish at troughs. While Micron looks cheap relative to its recent earnings, this is probably a false bargain without a clear idea of when the cycle will roll over. Berkshire’s valuation, underpinned by steady businesses and cash, feels safer, especially amid rand volatility. But if the semiconductor boom extends, Micron could surprise. this is just our opinion and not financial advice
On balance, I would prefer a position echoing Berkshire’s model—focus on durable, diversified companies on the JSE like Standard Bank or Sanlam, rather than chase cyclical earnings spikes. Trim or avoid Micron-like exposures unless you have conviction in the tech cycle extending.
- Standard Bank
- Sanlam
- USD/ZAR
- semiconductor cycle extends unexpectedly
- rand weakens sharply impacting foreign earnings translation
7/10
While both Berkshire Hathaway and Micron Technology appear undervalued at 15x and 20x earnings respectively, their underlying business dynamics differ significantly. Berkshire's diversified, recurring earnings stream justifies its valuation, whereas Micron's exceptional current earnings are at a cyclical peak in a commodity business prone to boom-bust cycles. The author favors Berkshire's earnings durability over Micron's cyclical volatility.
Our take is based on reporting first published by The Motley Fool.