Berkshire Hathaway (BRK.B) shares tumbled 5.08% in pre-market trading on Monday, as investors appear to be reevaluating the company's valuation following its impressive year-to-date performance. This significant drop comes on the heels of a strong run that saw the stock surge 17% since the beginning of the year, 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 recent gains, 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 pre-market plunge, analysts suggest that Berkshire's valuation remains reasonable when considering its diverse portfolio of businesses and substantial cash reserves.