Shares of Alphabet, Google’s parent, touched an all-time high Monday of $293.95, before giving back some of those gains, after Berkshire Hathaway disclosed it bought nearly 18 million shares valued at over $4 billion in the third quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOGL | ALPHABET INC. | 285.59 | +9.18 | +3.32% |
The move served as an endorsement of the tech giant’s artificial intelligence efforts amid heightened worries over a looming bubble. Plus, it is one of the final major investments by the conglomerate under Warren Buffett and marks a rare foray into the industry by tech-averse Berkshire.
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The vote of confidence comes as broader sentiment on tech has turned cautious, with several business leaders and experts warning that the AI frenzy driving up tech stock prices has detached valuations from fundamentals and that returns from hundreds of billions in data-center spending remain uncertain.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOX | ETF OPPORTUNITIES TR T REX 2X LONG ALPHABET DAIL | 59.30 | +3.29 | +5.87% |
| GXPC | GLOBAL X FDS PURECAP MSCI COMMUNICATION | 27.80 | +0.24 | +0.87% |
| FCOM | FIDELITY COVINGTON TRUST MSCI TELECOMMUNICATIONS SVC | 68.15 | -0.43 | -0.63% |
T-Rex 2X Long Alphabet Daily Target ETF, Global X PureCap MSCI Communication Services ETF and Fidelity MSCI Communication Services Index ETF are the top three funds that count Alphabet as its number one holding, as tracked by VettaFi.
Still, Alphabet has been an outlier, with its shares rising nearly 14% so far in the December quarter to make it the year’s best-performing “Magnificent Seven” member with a 46% gain.
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“Alphabet fits the value-investing theme better than some of the other names that are leading the AI charge right now,” Sosnick said.
Several analysts say Alphabet has a leading position in AI due to its growing infrastructure investments, strong early adoption of AI search tools and a massive ad business that can fund its data-center spending spree.
“The move validates Google’s strong fundamentals and provides Berkshire exposure to a leading AI provider through Google Cloud and Gemini expansion,” said CFRA analyst Angel Zino, adding that Alphabet’s cash flow and valuation likely gave the conglomerate “more comfort” in its decision.
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Investors piled into the stock last month, after earnings showed AI investment was turning Google Cloud, once an also-ran, into a key growth engine.
Buying Alphabet shares would also address Buffett and the late Vice Chairman Charlie Munger’s long-standing regret over missing Google early, just before the “Oracle of Omaha” readies to pass on the CEO role to Greg Abel at the end of 2025.
It was unclear if the Google purchase was made by Buffett, portfolio managers Todd Combs or Ted Weschler, or Abel, though Buffett typically oversees Berkshire’s largest investments.
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Overall, Berkshire continued to be a net seller of stocks in the September quarter, further trimming its position in Apple and Bank of America to swell its cash pile to a record $381.7 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 266.79 | -5.62 | -2.06% |
| BAC | BANK OF AMERICA CORP. | 52.61 | -0.26 | -0.49% |
Some investors see Berkshire’s cash reserve buildup as a sign that Buffett believes valuations are too high.
The company’s equity portfolio remains heavily tilted towards financial services, which accounted for 36.6% of the holdings as of September, according to Morningstar.
Reuters’ Niket Nishant and Aditya Soni in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila, contributed to this report.
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