Berkshire's Alphabet Stake Corrects Buffett's Past Overlook, Shifts to Tech

Bloomberg-style News Article:

Berkshire Hathaway's $4.3 Billion Bet on Alphabet Sends GOOGL Stock Up 7%

Warren Buffett's Berkshire Hathaway has signaled a dramatic shift in its investment strategy, acquiring a $4.3 billion stake in Alphabet Inc., Google's parent company, as of September 30, 2025. This move, which marks Alphabet as the 10th-largest holding in Berkshire's $283.2 billion equity portfolio, contrasts with Buffett's historical caution toward high-growth tech stocks. Alphabet shares surged 7% in after-hours trading, reflecting renewed investor confidence.

The investment, likely initiated by Berkshire's portfolio managers Todd Combs or Ted Weschler, comes as the conglomerate continues paring back its long-held Apple stake, which remains its largest equity position at $60.7 billion. Buffett, who has traditionally viewed Apple as a consumer products company rather than a pure tech stock, has sold nearly three-quarters of its original 905 million shares. The shift underscores a broader reallocation of capital into tech amid Alphabet's 46% rally this year, driven by AI demand and cloud computing growth.

Buffett's admission of past missteps with Alphabet adds context to the new investment. At the 2019 annual meeting, he and Charlie Munger lamented missing an opportunity to invest in Google, calling it a "screw-up" despite recognizing its advertising potential. The recent stake appears to correct that oversight, aligning with Berkshire's evolving approach to technology. The firm has also trimmed positions in Bank of America, Verisign, and DaVita, continuing a 12-quarter streak of net stock sales.

The market's reaction highlights the "Buffett effect," where institutional backing from the Omaha-based conglomerate often boosts stock momentum. Alphabet's shares, which had faced volatility, due to AI valuation concerns, gained 1.7% in extended trading following the disclosure. This surge mirrors Berkshire's prior successful foray into Amazon, which Combs and Weschler initiated in 2019.

The investment also signals a transition under Greg Abel, who will succeed Buffett as CEO at year-end. With Berkshire's cash reserves reaching $382 billion, the firm has deployed capital into other sectors, including a $9.7 billion petrochemical acquisition and a $1.6 billion stake in UnitedHealth Group. However, the Alphabet move suggests a strategic pivot toward tech's long-term value, particularly in AI and cloud infrastructure.

While Berkshire's traditional value-investing ethos remains intact, the Alphabet stake reflects a nuanced adaptation to market dynamics. The firm's reduced Apple position and increased focus on AI-driven tech giants indicate a recalibration for a post-Buffett era according to market analysis. For now, the market appears to be embracing the shift, with Alphabet's stock poised to benefit from Berkshire's endorsement according to market reports.