Buffett's All-Time Favorite Stock Is Dropping. What's Going On?

By Matthew Benjamin – Feb 12, 2026 at 7:15PM ESTKey PointsThe beverage giant did beat earnings expectations for the fourth quarter, but it missed on revenue.Coke's incoming CEO will have to deal with a tricky trade environment and changing consumer tastes.These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSE: KOCoca-ColaMarket Cap$338BToday's Changeangle-down(0.50%) $0.40Current Price$79.00Price as of February 12, 2026 at 3:58 PM ETCoca Cola shares fell on Tuesday on a softer than expected sales growth outlook.Warren Buffett's Berkshire Hathaway (BRKB +0.01%) has held Coca Cola (KO +0.50%) in the conglomerate's massive portfolio for more than 35 years. The Oracle of Omaha invested $1 billion in the soft drink giant right after the 1987 market crash. As of September, 2025, Berkshire Hathaway held 400 million shares of Coke, worth about $30.8 billion at today's share price. And the stock made up 9.4% of the portfolio, one of Berkshire's largest holdings. Suddenly, however, Coke shares are falling. The share price dropped notably in pre-market trading on Feb. 10 -- as much as 2.5% -- and ended the day down about 1.6%, a big drop for Coca-Cola in a single session. What's going on? Image source: Getty Images. A softening sales outlook sent shares lower Well, Coke released fourth quarter results this past Tuesday morning and they were mixed. It earned $0.58 a share on revenue of $11.8 billion. The earnings figure bested Wall Street's expectation of $0.56, but the revenue figure was below the consensus analyst forecast of $12.05 billion. So sales growth late in 2025 was a bit slower than expected. Management gave a less-optimistic forecast of full 2026 sales growth than analysts expected, which was probably worse for the stock. While analysts were looking for a 5% growth forecast by the company, Coke executives instead said growth would be 4% to 5%. It might not seem like a huge difference, but even tiny decreases in expectations can move a stock because they often indicate that management -- which has much more insight about what's going on at the company -- has grown pessimistic. In addition, Coca Cola is about to undergo a major management change, one that might be making investors slightly nervous. CEO James Quincey is leaving at the end of March and will be replaced by the current COO Henrique Braun. ExpandNYSE: KOCoca-ColaToday's Change(0.50%) $0.40Current Price$79.00Key Data PointsMarket Cap$338BDay's Range$78.80 - $80.4152wk Range$65.35 - $80.41Volume1.1MAvg Vol18MGross Margin63.34%Dividend Yield2.60% It's a complicated time for a change in leadership, as the company has increased its offering of beverages, which now include sports drinks and water, to cater to consumers who are increasingly seeking healthier options than full-calorie soft drinks. Coke, which gets slightly more than half of its total revenue from outside North America, also has to navigate an increasingly tricky global trade environment, with tariffs potentially complicating its financial outlook. There's also a new sugar tax in Mexico that management will need to contend with, too. To be sure, Coke is not in any significant danger at the moment. The stock is up 10% year to date and almost 21% over the past 52 weeks. Still, the difficulties of rising trade frictions and changing consumer tastes could present challenges for the new CEO.Read NextFeb 10, 2026 •By Billy DubersteinWhy Coca-Cola Was Falling TodayFeb 9, 2026 •By Leo SunThe 1 Stock I'd Buy Before Berkshire Hathaway Right NowFeb 9, 2026 •By Adam Levy2 Great Warren Buffett Stocks to Buy Before They Raise Their Dividends Again This MonthFeb 7, 2026 •By Will Ebiefung2 Legendary Dividend Stocks to Buy and Hold ForeverFeb 5, 2026 •By Prosper Junior Bakiny2 Dividend Stocks to Buy in 2026 for a Lifetime of Passive IncomeFeb 4, 2026 •By Neil PatelCould Buying Coca-Cola Today Set You Up for Life?About the AuthorMatthew Benjamin is a contributing Motley Fool stock market and investing analyst covering publicly-traded companies across all sectors. Prior to The Motley Fool, Matt was a senior markets expert at an investing newsletter in Baltimore, an editorial consultant to the World Bank and the International Monetary Fund (IMF), and an economics correspondent at Bloomberg News. He holds a B.A. from Bucknell University and an M.A. from New York University. Fun fact: Matt has met every Federal Reserve Chair from Paul Volcker through Jerome Powell.TMFMbenjamin68Stocks MentionedCoca-ColaNYSE: KO$79.00 (+0.50%) $+0.40Berkshire HathawayNYSE: BRKB$500.08 (+0.01%) $+0.06*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.