Berkshire Hathaway has become the first US company outside of the tech sector to surpass $US1 trillion ($1.5 trillion) in market value.

Shares of Warren Buffett’s conglomerate closed 0.9 per cent higher to push its market capitalisation above the trillion-dollar mark for the first time. The stock has rallied this year on strong insurance results and economic optimism. The Nebraska-based company joins the ranks of a small group to crack the milestone, dominated by technology giants like Alphabet, Meta Platforms and Nvidia.

“Berkshire has done it the slower, but more sure, way,” said Steve Check, the founder and chief investment officer of Check Capital Management. His firm has about $US2 billion in assets under management, with Berkshire as their largest holding. “It’s harder to make money the old-fashioned way.”

Berkshire’s rally this year has outpaced the S&P 500’s gains, with the company off to one of its best annual starts in a decade. It’s gained 30 per cent in 2024, while the market benchmark is up 18 per cent. The company isn’t that far behind the so-called Magnificent Seven: a gauge of the biggest tech stocks is up 35 per cent this year.

Buffett, who turns 94 on Friday, has spent the bulk of his life turning Berkshire Hathaway from a struggling textile maker into a sprawling business empire. He shaped the company alongside longtime business partner Charlie Munger, who died in November at age 99. Buffett still owns more than 14 per cent of Berkshire despite having donated more than half his shares to charity since 2006.

Berkshire’s market value climbed by roughly 20 per cent a year from 1965 through last year - nearly double the S&P 500’s annual return in that time. That’s turned Buffett into the eighth-richest person in the world with a net worth of $US145 billion, according to the Bloomberg Billionaires’ Index, and perhaps the most prolific investor ever.

The conglomerate’s strength comes as optimism for the economy builds, with the Federal Reserve expected to cut interest rates at its September meeting. Consumer confidence rose to a six-month high in August. Berkshire’s businesses span from truck stop operator Pilot Travel Centres to ice cream chain Dairy Queen and battery brand Duracell.

The stock has added more than $US200 billion in market capitalisation this year alone - a record for the firm, but a sharp contrast to Nvidia’s nearly $US2 trillion increase. Berkshire’s rally has pushed it into overbought territory, based on the relative strength index, and prompted a bit of reticence from analysts.