In its most recent 13F filing, which was made public after Friday's market close, Berkshire Hathaway disclosed a new $5.06 billion stake in Alphabet Inc., one of the most unexpected actions of billionaire investor Warren Buffett's later career.
According to Berkshire’s latest 13F filing, as of September 30, the corporation held nearly $4.3 billion in Alphabet stock, making it Berkshire’s tenth largest equity investment.
After hours trading saw a roughly 7% increase in Alphabet's shares to $293.40 after Berkshire Hathaway acquired a $4.3 billion stake in the parent company of Google.
Since Google was established in 1998, Berkshire Hathaway has never invested in the company before. Investors were taken aback by the move, particularly since Warren Buffett has always referred to Apple, Berkshire's largest stake, as a consumer goods company rather than a tech venture.
According to Berkshire's most recent 13F filing, the company has reduced its ownership of Apple by around 15%, or $10.6 billion, to roughly 238 million shares. Apple continues to be Berkshire's largest holding despite the reduction.
For the first time since the company's inception in 1998, Berkshire Hathaway has purchased stock in Alphabet, the parent company of Google.
Analysts claim that as new executives have more responsibility, Berkshire's approach to technology investments is changing.
The two investment managers who increasingly influence Berkshire's $300 billion stock portfolio, Todd Combs and Ted Weschler, most likely chose the Alphabet position, according to a Reuters story.
Combs and Weschler have both previously encouraged Berkshire to make investments in technology, such as the 2019 acquisition of Amazon.
Even though Warren Buffett is getting ready to resign as CEO at the end of the year, the amount of the investment indicates that he approved of it.
"The Alphabet acquisition may signal that Berkshire is expanding its comfort zone in technology as leadership moves to the next generation," stated Bill Stone, chief investment officer at Glenview Trust Company, in a CNBC story.
Alphabet's financial stability is another important consideration, according to analysts. According to Angelo Zino, an Alphabet analyst at CFRA, who was cited by CNBC, "we think Berkshire finds more comfort investing in GOOGLE over other tech plays given the high free cash flow potential of its core business coupled with an attractive valuation at about 22x 2027 EPS amid a healthy top line growth trajectory."
According to experts, Berkshire's purchase of Google shares for the first time in 27 years can be explained by a number of factors, including a change in leadership, increased knowledge with the tech industry, and Alphabet's robust cash creation and value.
In his yearly letter to shareholders as CEO of Berkshire Hathaway, a custom that dates back to 1965, Warren Buffett said that he will be "going quiet" following his retirement at the end of this year.
Buffett will still offer an annual Thanksgiving speech and "step up" his generosity by donating the $149 billion in Berkshire Hathaway stock he still owns, but he will no longer write the message on top of the company's annual report.
Greg Abel will compose Berkshire Hathaway's yearly shareholder letter and answer questions at the company's annual meeting beginning in 2026.
Instead of spearheading the event, Warren Buffett stated that he intends to join the directors on the arena floor. Investors were informed by Buffett that he would "continue talking to you and my children about Berkshire via my annual Thanksgiving message."
The shareholder letter this year was noteworthy for being twice as long as the one from 2024, with over seven pages. It addressed well known Buffett topics, such as aging, good fortune, enduring ties in Omaha, and admiration for Berkshire's executives and stockholders.
Buffett also made it apparent that he had faith in Abel's capacity to manage the business. He recalled fingerprinting nuns while they were in the hospital as a boy, explaining that it was done because "someday a nun would go bad."
