What Is the Highest Priced Stock in the Market?

A stock price represents the cost of a single share of a company’s equity on a public exchange. It reflects the market’s perception of a company’s value, influenced by supply and demand. This article explores the stock with the highest price per share and the factors contributing to such elevated values.

Identifying the Highest Priced Stock

Berkshire Hathaway Class A (BRK.A) holds the distinction of the highest price per share. This conglomerate, led by Warren Buffett, operates across diverse industries like insurance, manufacturing, and utilities. Its Class A shares often exceed half a million dollars per share.

This elevated price is largely due to the company’s deliberate strategy of not performing stock splits. Unlike many companies that split shares for accessibility, Berkshire Hathaway has historically avoided this practice, resulting in a limited number of Class A shares outstanding and contributing to their high individual cost.

Understanding High Share Prices

Several factors contribute to a stock achieving a high price per share. One primary reason is a company’s decision regarding stock splits. A stock split increases the number of outstanding shares while proportionally decreasing the price per share, making individual shares more affordable. Companies that consistently avoid splits, like Berkshire Hathaway, see their share price grow significantly over time as the company’s value increases.

Strong company fundamentals also drive share prices upward. Businesses with consistent growth, robust profitability, and solid earnings attract investor interest. This sustained financial performance indicates a healthy, expanding operation. High demand for a limited number of shares further pushes the price higher.

Certain industries and business models can inherently lead to higher share prices. Companies in established, less volatile sectors, or those with unique market positions, can command higher prices. Their stability and predictable cash flows translate into sustained investor confidence and a reluctance to sell existing shares, creating scarcity.

Share Price Versus Company Value

A common misunderstanding among investors is equating a high share price with a high overall company value. However, the price of a single share does not fully indicate a company’s total worth or its financial health. A more accurate measure of a company’s total value is its market capitalization.

Market capitalization is calculated by multiplying the current share price by the total number of outstanding shares. For example, a company with a share price of $100 and one billion outstanding shares has a market capitalization of $100 billion. Conversely, a company with a share price of $500,000 but only one million outstanding shares would have a market capitalization of $500 billion.

This distinction highlights that a company with a lower share price can have a larger market capitalization than one with a very high share price, especially if it has significantly more shares in circulation. Evaluating a company based solely on its share price can be misleading. Investors should consider market capitalization to understand a company’s true scale and value.

Other Companies with High Share Prices

While Berkshire Hathaway Class A stands out, several other companies also exhibit high share prices due to their financial performance and share management strategies. NVR Inc., a homebuilder, is another example of a company with a high share price. Its strategy, similar to Berkshire Hathaway, involves infrequent stock splits, allowing its share price to climb steadily over the years.

Booking Holdings Inc., known for its online travel services, also maintains a high share price. AutoZone Inc., an automotive parts retailer, is another company cited for its expensive shares. These companies, like Berkshire Hathaway, demonstrate that a high per-share price results from strong business fundamentals and a corporate policy favoring share appreciation.