Berkshire Hathaway has built Alphabet into its third-largest holding, with Warren Buffett and successor Greg Abel signaling rare confidence in a technology stock. The conglomerate's stake now makes up a tenth of its entire portfolio, a bet the two executives are making just as Alphabet ramps up massive AI spending.
Warren Buffett, who recently stepped down as chairman of Berkshire Hathaway, doesn't have a history of owning technology businesses. Berkshire's investment in Apple can be read as a bet on a strong consumer brand, but its sizable position in Alphabet signals something different: a direct wager on artificial intelligence.
It came as a surprise when Berkshire revealed in July that Buffett himself had initiated the conglomerate's first purchase of Alphabet shares in Q3 2025. He evidently sees a dominant business in Alphabet's widely adopted platforms, network effects, technical expertise, and sizable profits.
Berkshire added to that stake in 2026. Alphabet made up 10% of the conglomerate's entire portfolio as of Sept. 25, and between its Class A and Class C shares it is now Berkshire's third-largest holding.
Abel and Buffett are building this position in a stock that trades at a reasonable 22.8 times consensus earnings estimates, even as Alphabet has raised tremendous amounts of capital to invest aggressively in data centers.
The two executives must have a firm belief that Alphabet will generate satisfactory returns on its massive capital expenditures.
Source: The Motley Fool
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