What Is the Most Expensive Stock on the Market?
Uncover the stock with the highest individual share price and learn what drives it, distinguishing between a high price and a company's true market value.
A stock represents fractional ownership in a company, and its price reflects what investors are willing to pay. Prices vary dramatically, from a few dollars to hundreds of thousands per share. A high individual share price does not automatically mean a company is the “most valuable” overall; its true worth involves a different calculation.
Identifying the Highest-Priced Stock
The stock consistently holding the title for the highest individual share price belongs to Berkshire Hathaway Inc., specifically its Class A shares. Trading under the ticker symbol BRK.A, these shares have recently commanded prices around $690,000 to over $700,000 per share. Berkshire Hathaway also offers Class B shares (BRK.B), which are significantly more affordable, typically trading in the hundreds of dollars, and were introduced in 1996 to make ownership more accessible to a broader range of investors while maintaining the integrity of the Class A shares.
Factors Contributing to a High Share Price
A primary reason for an exceptionally high individual share price, as seen with Berkshire Hathaway, is the company’s historical stance on stock splits. A stock split is a corporate action where a company increases the number of its outstanding shares by issuing more shares to current shareholders, proportionally decreasing the price of each individual share. For instance, a 2-for-1 split means each shareholder receives two shares for every one previously held, with each new share priced at half the original value. Companies often implement splits when their stock price becomes very high, aiming to make shares more accessible and liquid for smaller investors. Berkshire Hathaway’s Class A shares have never undergone a stock split, allowing their per-share price to compound over decades as the company’s value grew.
Strong fundamentals, including consistent profitability and sustained growth, also contribute to a high share price. Furthermore, a relatively limited number of shares available to the public, known as a limited float, can also contribute to a higher per-share price due to increased demand relative to supply.
Share Price Versus Company Valuation
Understanding the difference between a high individual share price and a company’s overall valuation is important. Market capitalization, or market cap, is the total value of a publicly traded company’s outstanding common shares. It is calculated by multiplying the current market price per share by the total number of shares outstanding. For example, a company with 100 million shares outstanding trading at $100 per share would have a market capitalization of $10 billion. Market capitalization provides a more accurate representation of a company’s true size and value than its individual share price.
While Berkshire Hathaway has the highest per-share price, its market capitalization, though substantial, does not consistently rank as the absolute highest globally. Companies like Apple, Microsoft, and Amazon frequently exhibit some of the world’s largest market capitalizations, often exceeding trillions of dollars, despite their individual share prices being significantly lower than Berkshire Hathaway’s Class A shares. This is because these companies have billions of shares outstanding.
For investors, a high share price alone does not indicate if a stock is “expensive” or a worthwhile investment. A $700,000 share might be undervalued based on earnings and assets, while a $50 share could be overvalued.
Valuation metrics beyond just share price, such as the price-to-earnings (P/E) ratio or price-to-sales (P/S) ratio, offer a more comprehensive view of a company’s financial standing and potential value.