Most Expensive Stocks: Why Some Shares Cost Thousands

What Are the Most Expensive Stocks?

The most expensive stocks by price per share are those that have achieved extraordinary price appreciation over many years without executing stock splits to reduce their nominal share price. The undisputed leader is Berkshire Hathaway Class A (BRK.A), which trades above $600,000 per share — a figure that reflects decades of compounding under Warren Buffett's leadership combined with a deliberate refusal to split the stock.

But here is the crucial insight that many beginning investors miss: a stock's price per share tells you almost nothing about whether it is a good investment, whether the company is large or small, or whether the stock is expensive or cheap in a valuation sense. A $600,000 stock can be undervalued while a $5 stock can be wildly overvalued. What matters is what you get for that price — the company's earnings, assets, cash flow, and growth prospects relative to its total market capitalization.

Understanding this distinction is one of the most important lessons in investing, and the most expensive stocks in the market provide the perfect illustration.

The Most Expensive Stocks by Share Price

Here are the highest-priced stocks trading on U.S. exchanges:

Note: Chipotle was on this list at over $3,000 per share before executing a 50-for-1 stock split in June 2024, reducing the price to around $55. This demonstrates how splits are cosmetic — Chipotle's market cap did not change.

Berkshire Hathaway: The $600,000+ Stock

Why BRK.A Has Never Split

Warren Buffett has been explicit about why he refuses to split Berkshire Hathaway's Class A shares. In his shareholder letters, he has stated that he wants to attract long-term investors who are committed to holding the stock for years, not short-term speculators who are attracted to low-priced shares and frequent trading.

Buffett's reasoning:

• High share prices discourage speculation and day trading
• They attract a shareholder base aligned with Buffett's long-term value investing philosophy
• They reduce transaction costs by keeping trading volume modest
• They create a natural filter against short-term thinking

Class A vs. Class B

Buffett eventually acknowledged that the high Class A price created accessibility problems, so in 1996 he created Berkshire Hathaway Class B (BRK.B) shares. Class B originally traded at 1/30th the price of Class A (and after a 50-for-1 split in 2010, now trades at approximately 1/1,500th the Class A price — around $400-$450 per share).

The key differences:

• BRK.A: 1 share of voting power, no splits ever
• BRK.B: 1/10,000th of the voting power per share, has been split

Class A shares can be converted into Class B shares at any time (at the 1,500:1 ratio), but Class B cannot be converted into Class A. This ensures that Class A shares can never trade below the implied value of 1,500 Class B shares.

Why Share Price Does Not Equal Value

This is the single most important concept for understanding expensive stocks. Let us illustrate with a comparison.

The Share Price Illusion

Company A's stock "costs" 100x more per share than Company B, but both companies are valued identically by the market. If Company A executed a 100-for-1 stock split, its share price would drop to $5 — the same as Company B — with zero change in the company's value, earnings, or prospects.

What Actually Determines Value

The metrics that determine whether a stock is truly "expensive" (overvalued) or "cheap" (undervalued) include:

• P/E ratio: Price relative to earnings per share
• Price-to-sales ratio: Market cap relative to revenue
• Price-to-book ratio: Market cap relative to the company's net asset value
• Enterprise value to EBITDA: Enterprise value relative to operating profit
• Free cash flow yield: Free cash flow relative to market cap

A company trading at $600,000 per share with a P/E of 15 is "cheaper" in a valuation sense than a company trading at $10 per share with a P/E of 100.

Why Some Companies Avoid Splitting

The Long-Term Investor Argument

Companies like Berkshire Hathaway, NVR, and AutoZone have historically argued that high share prices attract a more patient, long-term-oriented shareholder base. The theory is that a stock priced at $5,000 per share self-selects for serious investors who have done their homework, while a $50 stock attracts more speculative and short-term-oriented traders.

There is some evidence supporting this. Studies show that stocks with higher nominal prices tend to have lower volatility, lower turnover (fewer shares changing hands relative to the total), and less short-term speculative trading.

The Buyback Effect

Some of the most expensive stocks owe their high prices partly to aggressive share repurchase programs. AutoZone is a prime example — the company has bought back over 90% of its shares outstanding since it began its repurchase program. Fewer shares outstanding means higher EPS and higher price per share, all else being equal.

NVR has similarly used buybacks to reduce its share count dramatically, contributing to its multi-thousand-dollar share price.

Some Companies Eventually Split

Many companies that resisted splitting eventually gave in as their share prices became impractical:

• Apple split 4-for-1 in 2020 (from ~$500 to ~$125)
• Tesla split 5-for-1 in 2020 (from ~$2,200 to ~$440)
• Amazon split 20-for-1 in 2022 (from ~$2,800 to ~$140)
• Alphabet (Google) split 20-for-1 in 2022 (from ~$2,300 to ~$115)
• Chipotle split 50-for-1 in 2024 (from ~$3,200 to ~$64)

These splits were largely motivated by inclusion eligibility for the Dow Jones Industrial Average (which is price-weighted, making very high-priced stocks impractical for index construction) and by making shares more accessible for retail investors and employee stock plans.

Fractional Shares: The Game Changer

The argument that high share prices exclude retail investors has largely evaporated thanks to fractional share trading. Most major brokerages now allow investors to buy dollar amounts of any stock, regardless of the share price.

How Fractional Shares Work

With fractional shares, you can invest $100 in Berkshire Hathaway Class A even though one share costs $600,000+. Your brokerage executes the trade and allocates you approximately 0.000167 shares. You participate proportionally in all price movements and dividends.

Brokerages offering fractional shares include:

• Fidelity
• Charles Schwab
• Interactive Brokers
• Robinhood
• SoFi

Limitations of Fractional Shares

While fractional shares solve the accessibility problem, they have some limitations:

• Fractional shares typically cannot be transferred between brokerages
• Not all brokerages offer fractional shares for all stocks
• Fractional shares may not receive voting rights
• Liquidity and execution may differ from whole shares

The Price-Weighted Index Problem

One practical consequence of high share prices is their effect on price-weighted indices like the Dow Jones Industrial Average. In a price-weighted index, each stock's influence on the index is proportional to its share price, not its market cap.

This means a stock priced at $500 has 10 times the influence of a stock priced at $50 — regardless of which company is larger. This is why Berkshire Hathaway has never been included in the Dow, and why companies like Amazon, Alphabet, and Chipotle split their shares before being considered for inclusion.

The S&P 500, by contrast, is market-cap-weighted, so share price is irrelevant. This is one reason the S&P 500 is generally considered a better representation of the overall market than the Dow.

Expensive Stocks vs. Expensive Valuations

High Price, Reasonable Valuation

Some of the most expensive stocks by share price have surprisingly reasonable valuations:

• Berkshire Hathaway trades at a P/E of approximately 8-10 (below the S&P 500 average)
• AutoZone trades at a P/E of roughly 20 (in line with the market)
• NVR trades at a P/E of approximately 16 (below the market average)

These companies are "expensive" only in the nominal share price sense. On a fundamental basis, they may actually be cheap relative to their earnings power.

Low Price, Expensive Valuation

Conversely, many low-priced stocks have extreme valuations:

• Penny stocks trading under $1 may have no earnings at all (infinite P/E)
• Pre-revenue biotech stocks priced at $3 may be valued at billions based on speculative drug pipelines
• Meme stocks can trade at P/E ratios of 500+ despite single-digit share prices

The price tag on a share of stock is simply a function of how many slices the company chose to cut its ownership into. It conveys no information about value.

FAQ

What is the most expensive stock in the world?

Berkshire Hathaway Class A (BRK.A) is the most expensive publicly traded stock in the world, trading above $600,000 per share. Warren Buffett has famously refused to split the stock, preferring to attract long-term investors.

Should I avoid stocks with high share prices?

No. Share price alone has no bearing on whether a stock is a good investment. With fractional share trading available at most brokerages, you can invest any dollar amount in any stock. Focus on fundamental valuation metrics like P/E ratio, free cash flow, and growth prospects rather than the nominal price per share.

Why do some investors prefer high-priced stocks?

Some investors view high share prices as a filtering mechanism that attracts more sophisticated, long-term shareholders. Companies that maintain high share prices often have lower stock turnover and less speculative trading activity, which can contribute to more stable long-term performance.

Does stock price affect options trading?

Yes. Each standard options contract controls 100 shares, so a stock trading at $5,000 per share means each options contract controls $500,000 of stock. This makes options on high-priced stocks very expensive and impractical for many retail traders. Some brokerages do not yet offer fractional options, though this may change over time.

Can a stock price go infinitely high?

Theoretically, there is no upper limit to a stock's price. As long as the company continues to grow its earnings and does not split its shares, the price can continue rising indefinitely. Berkshire Hathaway has demonstrated this by going from $12 per share in 1965 to over $600,000 today — a compound annual return of approximately 20% over nearly 60 years.