Does Berkshire’s big tech bet signal a new risk tolerance in Omaha?

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Just one week after Berkshire Hathaway’s announcement last Friday of acquiring 17.8 million Class A shares of Google’s parent company, Alphabet, in the third quarter (July-September), the position has seen a $415 million increase in market value, reaching nearly $5.35 billion.

GOOGL saw an 8.4% gain this week while its major tech competitors experienced significant declines, with Nvidia’s strong earnings failing to dispel concerns of an “AI bubble.”

Alphabet shares saw a 3.1% increase on Monday following Berkshire’s purchase.

The launch of Google’s new Gemini 3 AI model on Wednesday, which has received positive feedback, further boosted the stock.

(Reports suggest that Google’s AI developments are beginning to concern Sam Altman at OpenAI.)

While the complete impact of the move will only be evident in the coming months or years, someone in Omaha is likely smiling right now.

Warren Buffett is being credited in many headlines, as is customary, with numerous publications assuming he is behind all of Berkshire’s actions.

However, it’s known that portfolio managers Ted Weschler and Todd Combs have the autonomy to make independent decisions, as highlighted in a CNBC interview.

As mentioned previously, Alphabet doesn’t align with Buffett’s typical investment choices.

CNBC.com’s Yun Li suggests that Weschler or Coombs likely made the investment decision, referencing their involvement in Berkshire’s tech-focused investments, including the Amazon stake worth $2.2 billion.

(Even before the Amazon stake was disclosed in 2019, Buffett clarified to CNBC’s Becky Quick that it wasn’t his call and that no change in his approach had occurred.)

Bloomberg Opinion columnist Nir Kaissar recalls Buffett’s well-known principle of avoiding investments in businesses he doesn’t fully comprehend, which shielded him from the internet bubble in the late 1990s, citing the complexity of AI compared to online retail.

Kaissar suggests that CEO-designate Greg Abel may be driving a different strategy at Berkshire, showing a willingness to pay a premium now for potentially higher future growth, a risk Buffett rarely took.

There has been no response from Berkshire regarding the decision-maker behind the Alphabet purchase, as the company typically keeps such information confidential.

Warren Buffett explains that his reluctance towards tech stocks stems from uncertainty about the industry’s future trajectory.

AUDIENCE MEMBER: In terms of these tech stocks, you say that you don’t understand them… I can’t imagine you not understanding something.

WARREN BUFFETT: Oh, we understand the product. We understand what it does for people. We just don’t know the economics of it 10 years from now.

That, I mean, you can understand all kinds — you can understand steel. You can understand home building. But if you look at a home builder and try and think where it’s going to be in five or 10 years, the economics of it, that’s another question.

I mean, it’s not a question of understanding the product they turn out or the means they use to distribute it, all of those sort of things. It’s the predictability of the economics of the situation 10 years out. And that — that’s our problem.