Berkshire held 17.85 million shares of Alphabet stock, valued at approximately $4.34 billion, according to the company’s quarterly filing with the SEC.
- Alphabet’s Class A stock trading under the ticker GOOG gained 38% during the third quarter.
- Berkshire’s fresh Alphabet position amounts to approximately 1.6% of the firm’s total holdings’ value.
- Apple has been Berkshire’s largest holding, although the firm has been gradually reducing its position in the tech giant since the first quarter of 2024.
Berkshire Hathaway, Inc. (BRK-A) (BRK-B) has taken a leap of faith into an artificial intelligence-exposed big tech name even as skepticism around the space gains ground. The Warren Buffett-led investment holding firm’s 13-F report filed late Friday showed that it has initiated a position in Alphabet, Inc. (GOOGL) (GOOG) in the third quarter.
Alphabet’s stock has risen over 46% year-to-date, outperforming the SPDR S&P 500 ETF (SPY) (+16%) and the Invesco QQQ Trust (QQQ) (+19.5%) — exchange-traded funds (ETFs) that track the broader S&P 500 and the Nasdaq 100 Index, respectively.
A Rare Tech Bet
Berkshire held 17.85 million shares of Alphabet stock, valued at approximately $4.34 billion, according to the company’s quarterly filing with the SEC. Alphabet’s Class A stock trading under the ticker GOOG gained 38% during the third quarter. Since the end of the third quarter, the stock has added about 14% despite the volatility created by AI bubble fears.
Berkshire’s portfolio reveals that tech hasn’t been its favorite sector. Barring Apple Inc. (AAPL) and Verisign (VRSN), the firm does not hold any other technology stocks in its portfolio.
Apple has been Berkshire’s largest holding, although the firm has been gradually reducing its position in the tech giant since the first quarter of 2024. The latest filing showed that the firm further shrank its Apple stake by 41.8 million. Apple still accounted for 22.7% ($60.66 billion) of Berkshire’s holdings in terms of value at the end of the third quarter. In terms of the number of shares, Apple makes up 9.6% of Berkshire’s portfolio.
Berkshire also held roughly 9 million shares of Versign, a provider of internet infrastructure and domain name registry services. This marked a reduction from the 13.3 million shares it had at the end of the second quarter. Berkshire disclosed the stake sale in late July.
The firm has a stake in Amazon, Inc. (AMZN), which does not qualify as a pure-play tech bet, as its AWS Cloud business accounted for only a little over 18% of total third-quarter sales, though accounting for the bulk of its operating income.
How Google Checked Buffett’s Norms
Buffett’s mantra is long-term value investing: plowing dollars into high-quality companies with durable competitive advantages whose shares are trading at reasonable prices and holding them for the long term.
Alphabet stock has emerged as a leading AI company, driven by innovation, hefty investments, and exposure through its thriving Google Cloud platform. The company also received a regulatory reprieve in the Department of Justice’s (DOJ) antitrust case, as a judge allowed it to keep its Chrome browser and Android mobile operating system businesses.
Buffett had earlier expressed regret about not investing in Google. In a 2017 meeting, the Oracle of Omaha said, “If I were forced to buy [Google-parent Alphabet] or short it, I’d buy it; same way with Amazon. But it’s as little hard when you look at something at ‘X’ and it sells at 10X to buy it.”
The billionaire investor, revered as an investment guru, is preparing to step down as CEO and pass the baton to his designated successor, Greg Abel, while continuing to serve as chairman. The company announced recently that Buffett will no longer write annual letters or speak at the company’s annual shareholder meeting. The Alphabet bet could be seen as one based on the new management’s investment rationale, but one may not know for sure.
A X user and trader said Buffet may not have made the decision, but investment managers Todd Combs or Ted Weschler may have. “My guess is Ted Weschler, he manages 20+ billion in capital and could have easily made an investment like that. He was the reason Berkshire bought Amazon in 2019 and Apple in 2016,” the user said.
Following the company’s third-quarter results, Wedbush analyst Daniel Ives said Alphabet has proved its doubters wrong. “In our view, 3Q performance further validates Alphabet’s position as a leading AI beneficiary, with management already observing tangible results across advertising and cloud,” the analyst said.
That said, skeptics, including hedge-fund manager Michael Burry, have been sounding the alarm about a potential bursting of the AI bubble. Burry has called out the massive capital spending (Capex) by big techs, specifically mentioning Oracle and Meta. He warned that these companies were inflating earnings by increasing the useful life of their AI infrastructure.
Druckenmiller Picks Google Stake
Former hedge fund manager Stanley Druckenmiller, who now runs a family office, has picked a fresh stake in Alphabet. The 13F report filed by Duquesne Family Office late Friday showed a 102,200 fresh stake in the Sundar Pichai-led company.
What Retal Is Saying About Buffett’s Google Buy
On Stocktwits, retail sentiment toward Alphabet stock remained ‘neutral’ as of early Monday, with the message volume on the stream at ‘normal’ levels. But most viewed Buffett’s buy positively.
A bullish user looked forward to an all-time high, citing “Warren Buffett joining the AI chat.” Google ended Friday’s session at $278.56, off the all-time intraday high of $292.01 set on Nov. 12.
Another watcher said, “Warren Buffett put his money to work in $GOOGL. We are not worried Monday, we rally.”
However, retail is concerned about valuation, with user fearing a “big drop,” citing the stock’s outperformance relative to the Magnificent Seven. “The only issue is that it is so extremely overbought technically.”
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