Berkshire Hathaway, under Warren Buffett’s leadership, has revealed a new investment in Alphabet, making Google’s parent company the conglomerate’s 10th-largest equity holding at the end of September, according to regulatory filings.
Berkshire Hathaway disclosed a 4.3 billion USD investment in Alphabet in the third quarter—an unexpected move given Warren Buffett’s traditional value-investing philosophy and his cautious stance toward high-growth tech stocks. Although the conglomerate has held Apple for years, Buffett has long regarded it as more of a consumer-products company than a pure technology firm.
The deal was likely executed by one of Buffett’s lieutenants, Todd Combs or Ted Weschler, both of whom are more optimistic about the tech sector. One of them initiated Berkshire’s investment in Amazon in 2019, and Berkshire still holds 2.2 billion USD worth of the e-commerce giant’s shares.
Alphabet has been one of the standout stocks of the year, soaring 46%. Strong demand for artificial intelligence (AI) has driven robust growth in Alphabet’s cloud-computing business.
Interestingly, Buffett has admitted he made a mistake by not investing in Google earlier, despite having deep insight into the company’s advertising potential. Berkshire’s auto insurer Geico was one of Google’s first customers, paying the search engine 10 USD each time someone clicked on its ads.
“I saw the product working and knew what kind of margins they had,” Buffett said in 2018. “But I didn’t understand technology well enough to know whether this was truly the company that would dominate the competitive race.”
Alphabet becomes a top-10 holding at Berkshire Hathaway by Q3
Continued reduction of Apple stake
At the same time, Berkshire Hathaway continued trimming its Apple position, cutting an additional 15% in the quarter to 60.7 billion USD.
The Oracle of Omaha shocked investors by aggressively selling Apple shares throughout 2024, reducing Berkshire’s holdings by two-thirds—a surprising move for an investor famed for long-term conviction. Berkshire had also reduced its Apple stake in the second quarter of this year.
Despite the ongoing sales, the iPhone maker remains Berkshire Hathaway’s largest equity investment.
Additionally, the conglomerate reduced its Bank of America holdings by 6%, bringing the position to just under 30 billion USD. Berkshire also cut stakes in Verisign and DaVita in the third quarter.
Notably, Berkshire has been a net seller of stocks for 12 consecutive quarters, as valuations continue rising in a tech-driven bull market.
With 95-year-old Buffett set to step down as CEO at the end of the year and long-time deputy Greg Abel preparing to take over, investors are closely monitoring Berkshire’s portfolio for clues about the next era of leadership and potential shifts in investment strategy.
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