Berkshire Hathaway made a move that instantly reshaped market sentiment on Monday, taking a multibillion-dollar position in Alphabet and sending the Google parent’s shares up nearly 6% to a new record.
The purchase marks Berkshire’s first major entry into a large technology company built around artificial intelligence, a striking shift for a conglomerate long known for steering clear of Silicon Valley.
Filings released on Friday showed that Berkshire acquired 17.85 million Alphabet shares, valued at about $4.93 billion as of the previous session, according to Reuters. The investment is one of the last major additions to the portfolio under Warren Buffett before he hands the CEO role to Greg Abel at the end of 2025. It also breaks from Berkshire’s long-running caution toward high-growth tech firms, with Apple remaining the only major outlier Buffett had previously embraced because he saw it more as a consumer brand than a technology bet.
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“The stake purchase of a tech company may represent a different type of mentality at Berkshire, though it’s not a total departure from its value-investing model,” Reuters quoted Steve Sosnick, chief strategist at Interactive Brokers, as saying.
The market’s reaction was swift. Alphabet was on track to gain roughly $180 billion in market value if the rally held through close, underscoring how powerful Berkshire’s endorsement remains. Alphabet also became one of the top-three trending names on Stocktwits as retail traders piled in.
The backing arrives at a moment when enthusiasm around artificial intelligence has started to cool. Business leaders and analysts have raised concerns about lofty valuations across tech, arguing that share prices have run ahead of earnings and that the timeline for returns on enormous data-center spending is still uncertain. The Roundhill Magnificent 7 ETF, which tracks giants such as Nvidia, Microsoft, and Alphabet, has been mostly flat since September after outperforming the broader market for much of the year.
Alphabet, however, has stood apart. The stock has climbed nearly 14% in the December quarter and is up 46% so far this year, the strongest performance among the Magnificent Seven. Its valuation has also remained comparatively moderate, trading near twenty-five times forward earnings versus roughly twenty-nine for Microsoft and close to thirty for Nvidia, based on LSEG data.
“Alphabet fits the value-investing theme better than some of the other names that are leading the AI charge right now,” Sosnick said.
Analysts say the company’s positioning in artificial intelligence is a key reason. Google has been accelerating infrastructure investments, rolling out AI-enhanced search tools, and using its immense advertising business to support a broad push into data-center expansion. CFRA analyst Angel Zino said the Berkshire purchase “validates Google’s strong fundamentals and provides Berkshire exposure to a leading AI provider through Google Cloud and Gemini expansion,” adding that Alphabet’s financial strength and valuation likely played a major role in the decision.
Alphabet’s most recent earnings report confirmed that AI investments are reshaping the company’s core businesses. Google Cloud, once trailing its larger rivals, has begun emerging as a major growth engine, driving a wave of investor interest over the past month.
There is also a personal angle tied to Berkshire’s leadership. Buffett and the late Charlie Munger have previously spoken about missing out on Google in its early years, even though Berkshire’s subsidiaries had been major users of its advertising platform. The timing of the Alphabet purchase gives the conglomerate long-sought exposure to a company both men had openly admired but never owned.
It is still unclear whether the investment was made directly by Buffett, by portfolio managers Todd Combs or Ted Weschler, or by Abel. Buffett generally oversees the largest positions, but Berkshire has not clarified the decision-maker.
The move comes as Berkshire continues to build an enormous cash reserve. The firm remained a net seller of equities in the September quarter, cutting back on Apple and Bank of America and pushing its cash pile to a record $381.7 billion. Many investors have interpreted the buildup as a sign that Buffett views valuations across the wider market as stretched. Even with the Alphabet purchase, financial services still make up 36.6% of Berkshire’s equity portfolio, based on Morningstar’s latest tally.
However, the decision to plunge into Alphabet signals a rare moment when valuation discipline, AI leadership, and long-term durability aligned with Berkshire’s investment instincts. And in an environment where investors have become increasingly cautious about AI-driven exuberance, the move from Omaha is seen as an indication that Alphabet continues to stand out not as a technology leader.