Berkshire Annual Meetings

Warren Buffett significantly increases Chevron bet, now in Berkshire's top 4 positions

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Warren Buffett makes massive investment in Chevron — now one of Berkshire's top positions
Warren Buffett makes massive investment in Chevron — now one of Berkshire's top positions

Berkshire Hathaway added to its Chevron bet significantly during the first quarter, making the energy stock the conglomerate's fourth biggest equity holding.

The "Oracle of Omaha's" Chevron investment was worth $25.9 billion at the end of March, the company's first-quarter filing Saturday showed, a big jump from its value of $4.5 billion at the end of 2021.

Shares of Chevron have rallied more than 30% this year on the back of surging oil prices, but Berkshire's position has increased fivefold reflecting Buffett's buying.

Energy has been a standout winner this year with the S&P 500 energy sector up 35% compared to the broader benchmark's 13% loss year to date.

Many oil and gas companies are also good income generators, offering attractive dividends. The energy sector yields 4.7%, compared to S&P 500′s 1.5% dividend yield. Chevron pays a 3.6% dividend.

Warren Buffett and Becky Quick at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, April 29, 2022.
David A. Grogan | CNBC

Chevron is not the only energy stock Buffett likes. Last month, the investor bought $7 billion worth of Occidental Petroleum's common shares in additional investments.

"Together with the $10 billion in OXY preferred, Berkshire's bet on the oil sector is now over $40 billion," said James Shanahan, a Berkshire analyst at Edward Jones.

Berkshire's biggest holding was still Apple, worth $159 billion at the end of the first quarter. Bank of America and American Express were the two other big holdings, worth $42.6 billion and $28.4 billion, respectively.

The significant Chevron bet might indicate that Berkshire will not acquire Occidental despite the recent jump in the ownership.

"It says that energy is the most attractive place in the market to Warren and that he won't take OXY private," said Cole Smead, president and a portfolio manager at Smead Capital Management.

Buffett first bought Chevron in the third quarter of 2020. Based on the stock price moves in April, Chevron may have moved into the third biggest position above American Express depending on whether Buffett bought or sold any shares during the month.

Check out all of the CNBC Berkshire Hathaway annual meeting coverage here.