Buffett's Berkshire Ends Tech Reluctance, Invests $4.9B in Alphabet's AI Expansion

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Buffett's Berkshire Ends Tech Reluctance, Invests $4.9B in Alphabet's AI Expansion

Bitget-RWA2025/11/17 12:46

By:Bitget-RWA

- Berkshire Hathaway invests $4.9B in Alphabet , marking its first major tech bet amid CEO transition to Greg Abel. - The move contrasts with Buffett's traditional aversion to high-growth tech stocks, as it reduced Apple holdings by 15%. - Buffett acknowledged past tech missteps, aligning the investment with Alphabet's $40B AI expansion in Texas as a long-term bet. - Alphabet shares rose 5% premarket, though the stake remains 1.6% of Berkshire's portfolio, reflecting cautious optimism.

Berkshire Hathaway Inc., led by Warren Buffett, has invested $4.9 billion in

Alphabet

Inc., signaling a notable change in the company’s investment approach as it prepares for the transition from its 95-year-old CEO to Greg Abel. This purchase,

revealed in a 13F filing

, involved Berkshire buying 17.9 million shares of the

Google

parent company, which accounts for 0.31% of Alphabet’s total shares

as detailed in the filing

. Following the news, Alphabet’s stock rose 1.7% in after-hours trading

based on market data

, showing investors’ faith in the company’s AI and cloud strategies.

This move stands in contrast to Berkshire’s usual reluctance toward fast-growing tech stocks, a stance Buffett has long upheld. Although Apple Inc. has been Berkshire’s largest stock holding for years,

the firm recently cut its Apple stake by 15%

, leaving it with $60.7 billion invested. Buffett has previously described Apple as more of a consumer brand than a true technology company

according to his public remarks

. The decision to invest in Alphabet points to a broader shift in how Berkshire allocates its capital

as noted in financial disclosures

In the third quarter, Berkshire also made several portfolio adjustments. The company exited its position in homebuilder D.R. Horton Inc. and

reduced its holdings in Bank of America Corp. and Verisign

. At the same time, it boosted investments in Sirius XM Holdings Inc., insurance firm Chubb Ltd., and Domino’s Pizza Inc., indicating a preference for industries with reliable cash generation

according to portfolio reviews

Buffett’s investment in Alphabet reflects his recognition of missed opportunities in technology. Back in 2019, he acknowledged not investing in Google sooner,

admitting, "We screwed up"

. The timing of this purchase aligns with Alphabet’s $40 billion investment in AI data centers in Texas

as reported by the company

, further supporting its position as a long-term play in an AI-focused market.

As Buffett prepares to step down as CEO at the end of the year, he has been actively investing cash ahead of the leadership change. Recent actions include a $9.7 billion buyout of Occidental Petroleum Corp.’s petrochemical division and a $1.6 billion investment in UnitedHealth Group Inc.

as announced

. The Alphabet stake,

now ranking as Berkshire’s 10th-largest stock holding

, showcases the company’s shifting strategy under Combs and Weschler, who have taken a more assertive approach to tech investments

according to investment reviews

Alphabet’s shares jumped 5% in premarket trading on Monday

based on market data

, fueled by the announcement and growing enthusiasm for AI. Still, the position makes up only 1.6% of Berkshire’s portfolio

according to portfolio reviews

, illustrating a measured approach in a sector Buffett has traditionally viewed with caution.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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