Berkshire Hathaway (BRK.B) shares plummeted 5.66% in Monday's trading session, continuing a downward trend that began in pre-market trading. The significant drop comes as investors reassess the company's valuation following an impressive year-to-date performance that saw the stock surge by 17%, substantially outpacing the broader market.

The selloff can be attributed to growing concerns that Berkshire's stock may have advanced too rapidly in recent months. Despite its strong performance, the company's valuation remains a topic of scrutiny among market participants. With a market capitalization of $1.15 trillion, Berkshire Hathaway currently stands as the sixth-most valuable U.S. company, trailing behind tech behemoths such as Apple and Microsoft.

Investors are likely taking a closer look at Berkshire's three main components: its $287.59 billion equity portfolio, $334.2 billion in cash and short-term investments, and controlled businesses valued at $528.2 billion. The company's strategic shift towards emphasizing its controlled businesses and maintaining a substantial cash position may be influencing market sentiment. As Berkshire continues to evolve under Warren Buffett's leadership, the market appears to be digesting these changes and adjusting expectations accordingly. Despite the recent plunge, analysts suggest that Berkshire's valuation remains reasonable when considering its diverse portfolio of businesses and substantial cash reserves.