Is Berkshire Hathaway Stock Halal?

Conventional insurance violates Shariah principles on two independent grounds. First, the contract itself involves gharar (excessive uncertainty): the policyholder pays fixed premiums for a payout that may never come, in an amount no one can know in advance, which classical scholars overwhelmingly treat as an impermissible commercial exchange. Islamic law's alternative is takaful, a mutual-guarantee structure where participants pool contributions and share surpluses. Second, and specific to how Berkshire actually makes money, insurance generates float: premiums collected today against claims paid years from now. Warren Buffett has described float as the foundation of Berkshire's growth, and at the end of fiscal 2025 it stood at approximately $176 billion. A large share of that float sits in U.S. Treasury bills and bonds earning interest, which is riba. Berkshire's insurance operations (GEICO, Berkshire Hathaway Reinsurance, General Re, and a stable of specialty insurers) produced $12.5 billion in after-tax investment income in fiscal 2025 alone. The underwriting is gharar, the float income is substantially riba, and together they form the financial core of the company.

Berkshire's fiscal 2024 10-K reports $371.4 billion in total revenues. The impure lines are insurance premiums earned ($88.3 billion) and interest, dividend, and other investment income ($21.8 billion), together $110.1 billion, or 29.64% of revenue. The rest comes from businesses that are, taken individually, largely permissible: the BNSF railroad hauls freight, Berkshire Hathaway Energy runs utilities and pipelines, and the manufacturing, service, and retail group spans everything from Precision Castparts to See's Candies, contributing over $200 billion in sales and service revenue. That is precisely what makes Berkshire deceptive on a naive percentage screen: the permissible conglomerate revenue dilutes a core prohibited business below the levels a pure insurer would show. Two further impurities hide inside the structure. Berkshire's equity portfolio is concentrated in financial stocks (American Express, Bank of America, Moody's, Chubb), so its dividend stream draws heavily on conventional finance. And its railroad and energy subsidiaries carry conventional interest-bearing debt. The 29.64% figure is therefore a floor, not a ceiling.

Computed mechanically, 29.64% falls in our 5-33% "questionable" band rather than above the non-compliance line, so this entry deserves an explanation of why the verdict is non-compliant anyway. The revenue-percentage tolerance in AAOIFI-style screening exists for incidental impurity: a software company earning interest on its cash, a retailer with a small tobacco counter. It was never meant to launder a deliberately operated prohibited business simply because permissible subsidiaries are stapled to it. AAOIFI's business activity screen asks first whether the company's primary activity is permissible, and Berkshire fails that question: it is, by charter, history, and management's own description, an insurance company that uses float to buy other businesses. Every major halal screener reaches the same conclusion: Zoya, Musaffa, and Islamicly all publish non-compliant verdicts on BRK shares, each citing the insurance core. This is exactly the situation our complianceOverride exists for: when the arithmetic band and the correct ruling diverge, the ruling follows the substance. A holding company built on gharar-based underwriting and riba-earning float is non-compliant at any diluted percentage.

Berkshire Hathaway is one of the most successful capital allocation stories in market history, and many Muslim investors ask about it precisely because its buy-quality-and-hold philosophy feels compatible with patient, ethical investing. The philosophy is fine; the vehicle is not. Owning BRK-B means owning GEICO's underwriting, the reinsurance book, the Treasury float, and a bank-heavy stock portfolio, permanently and by design. There is no realistic path to compliance: Berkshire will not divest the insurance operations that fund everything else, and no purification amount can cleanse a position whose foundation is the prohibited activity itself. The good news is that the investing style is replicable in compliant form. Investors drawn to Berkshire's approach can hold screened, diversified halal ETFs or build positions in the same kinds of high-quality operating businesses Berkshire buys (railway-adjacent industrials, consumer staples, energy infrastructure) directly, after screening each one. Anyone currently holding BRK-B should treat divestment as the corrective action and may donate any gains attributable to the holding period if they wish to exit conservatively; a qualified Shariah advisor can guide the details of unwinding a long-held position.