Berkshire’s Bold Bet on Alphabet: Why the Market Is Listening
Berkshire Hathaway surprised investors by revealing a $4.93 billion stake in Alphabet, Google’s parent company, sparking a rally in the tech giant’s stock. Investing.com+2Investing.com+2 According to Berkshire’s Q3 filing, the company holds 17.85 million shares. Investing.com+2Yahoo Finance+2
What’s Driving Berkshire’s Move
This investment is notable for several reasons:
- A Rare Tech Play for Berkshire
Berkshire, long known for its value‑investing style, rarely takes large bets on high-growth tech firms. Investing.com The size of the stake suggests a strong conviction in Alphabet’s long-term resilience. - Valuation Appeal
Even after strong gains this year, Alphabet is trading at a more modest earnings multiple than some of its AI-heavy peers, making it an attractive entry point. mint - Rebalancing Away from Apple
At the same time, Berkshire trimmed its Apple holdings, reducing its position to 238.2 million shares. Yahoo Finance+1 This signals a potential rotation within its portfolio — moving from one giant tech name to another. - Buffett’s Final Big Move?
Warren Buffett is set to step down as CEO at the end of 2025. Investing.com Given that timing, this could be one of his last major investment decisions — or at least one of the most public.
Risks & Implications
- AI Spending Risks: Alphabet is heavily exposed to AI infrastructure costs — data centers and chip investments — which could pressure margins. Yahoo Finance
- Who Made the Call: It’s unclear whether Buffett himself made the buy, or whether one of his longtime portfolio managers (like Todd Combs or Ted Weschler) led the move. Investing.com
- Long-Term Commitment: While the investment signals confidence, Berkshire has been a net seller in equities recently, suggesting disciplined capital allocation rather than a broad tech pivot. Investing.com
Why It Matters
- Market Confidence: When Berkshire makes a large move into a traditionally growth‑oriented tech stock, other investors tend to pay attention.
- Validation for Alphabet: Berkshire’s stake can be seen as a vote of confidence in Google’s future growth, particularly around AI and cloud.
- Buffett’s Legacy: As Buffett prepares to hand over leadership, this could go down as one of his final signature calls.
