Warren Buffett’s Berkshire Hathaway reveals new position in Alphabet

Warren Buffett’s Berkshire Hathaway made headlines recently when it was revealed that the conglomerate had taken a new position in Alphabet, the parent company of Google. This move came as a surprise to many, given Buffett’s traditional value investing philosophy and his historical reluctance towards high-growth tech companies. At the end of the third quarter, Berkshire disclosed a $4.3 billion stake in Alphabet, making it the conglomerate’s 10th largest equity holding.

The decision to invest in Alphabet was likely made by Berkshire’s investment managers, Todd Combs or Ted Weschler, who have shown a willingness to explore technology names in the past. In fact, one of them initiated an investment in Amazon back in 2019, and Berkshire still holds $2.2 billion worth of Amazon shares. Alphabet has been a standout performer in the market this year, with shares rallying 46% thanks to strong demand for artificial intelligence driving momentum in its cloud business.

Interestingly, Buffett himself has admitted to missing out on investing in Google early on, despite having insight into its advertising potential. Berkshire’s auto insurance unit, Geico, was actually an early customer of Google, paying the search engine for ad clicks. Buffett acknowledged that he didn’t fully grasp the technology behind Google at the time, which led to him missing out on a potentially lucrative investment opportunity.

In addition to the new position in Alphabet, Berkshire Hathaway also continued to trim its massive stake in Apple, reducing the position by another 15% in the quarter to $60.7 billion. This move follows Buffett’s surprising selling spree in Apple in 2024, where he slashed two-thirds of Berkshire’s shares in the company. Despite the continuous sales, Apple remains Berkshire’s largest equity holding.

Furthermore, Berkshire also reduced its holdings in Bank of America by 6% to just under $30 billion, as well as trimming positions in Verisign and DaVita in the third quarter. Overall, Berkshire has been a net seller of stocks for 12 consecutive quarters as valuations in the tech-driven bull market have continued to climb.

With the 95-year-old Buffett set to step down as CEO at the end of the year, all eyes are on longtime lieutenant Greg Abel, who is poised to take the reins. Investors are keenly watching Berkshire’s investment moves for clues about the future direction of the company under new leadership. As Berkshire Hathaway prepares for a new era, the market will be watching closely to see how its investment approach may evolve under new leadership.