Buffett’s Berkshire buys $4B in Google shares, boosting AI confidence

Shares in Alphabet, Google’s parent company; The stock hit an all-time high of $293.95 on Monday after Berkshire Hathaway said it bought about 18 million shares worth more than $4 billion in the third quarter, but has since clawed back some of that gain.

The move supports the tech giant’s efforts in artificial intelligence as concerns grow over a looming bubble. Additionally, this is one of the last major investments by. Conglomerate under Warren Buffett This marks a rare foray into the industry by technology-averse Berkshire.

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The vote of confidence comes as widespread sentiment toward the technology is cautious, with several business leaders and experts warning that the AI ​​frenzy is driving up tech stock prices, decoupling valuations from fundamentals, and that the returns from hundreds of billions of dollars in data center spending remain uncertain.

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 their No. 1 holding. Tracked by VettaFi.

Still, Alphabet is an outlier, with its stock up nearly 14% so far in the December quarter, and its 46% rise makes it the best-performing member of the Magnificent Seven this year.

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“Alphabet fits the value investing theme better than other companies currently leading the AI ​​space,” Sosnick said.

Analysts say Alphabet’s leading position in AI is due to increased infrastructure spending, strong early adoption of AI search tools, and a large advertising business that can fund increased data center spending.

Google and Alphabet CEO Sundar Pichai attended a press event announcing Google as the new official partner of the women’s national team held at Google Berlin. (Photo by Christoph Soeder/picture Alliance via Getty Images / Getty Images)

“This move confirms Google’s strong fundamentals and provides Berkshire with exposure to a major AI provider through the Google Cloud and Gemini expansions,” said CFRA analyst Angel Gino, adding that Alphabet’s cash flow and valuation likely gave the conglomerate “more comfort.”

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Investors bought into the stock last month after earnings showed that investments in AI were turning the once-peerful Google Cloud into a major growth driver.

Berkshire Hathaway’s top executives Warren Buffett and Charles Munger before Munger’s passing. (Johannes Eisel/AFP via Getty Images)

The purchase of Alphabet’s stock would also address long-held regrets by Buffett and late Vice Chairman Charlie Munger about missing out on Google early, just before the “Oracle of Omaha” prepared to hand over the CEO job to Greg Abel at the end of 2025.

It’s unclear whether Mr. Buffett, portfolio managers Todd Combs or Ted Weschler, or Mr. Abel will be responsible for the Google acquisition, but Mr. Buffett typically oversees Berkshire’s biggest investments.

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Overall, Berkshire continued to be a net seller of stocks in the September quarter, further reducing its positions in Apple and Bank of America, and its cash pile ballooned to a record $381.7 billion.

Some investors see Berkshire’s growing cash reserves as a sign that Buffett thinks valuations are too high.

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The company’s stock portfolio remains heavily tilted toward financial services, accounting for 36.6% of its holdings as of September, according to Morningstar.

Reuters’ Niket Nishant and Aditya Soni in Bengaluru. Saumyadeb Chakrabarty and Sriraj Kaluvila contributed to this report.