According to CNBC, Warren Buffett’s Berkshire Hathaway revealed a new position in Alphabet worth $4.3 billion as of September’s end. The Google parent company now ranks as Berkshire’s 10th largest equity holding. This marks a surprising move given Buffett’s traditional value investing philosophy and historical reluctance toward high-growth tech names. While Berkshire has owned Apple for years, Buffett has characterized it more as a consumer products company than pure technology. The Alphabet investment likely came from Berkshire’s investment managers Ted Weschler or Todd Combs, who previously initiated the Amazon position in 2019. Alphabet shares have rallied 46% this year amid strong artificial intelligence demand driving cloud business momentum.
The Buffett Tech Evolution
Here’s the thing about Buffett and technology – he’s been slowly warming up to it for years, but always with caveats. He famously avoided tech during the dot-com bubble, calling it outside his circle of competence. Then came Apple, which he framed as a consumer brand rather than a tech company. Now with Alphabet, we’re seeing the evolution continue. It’s probably not Buffett himself making these calls – the filing suggests it’s more likely his lieutenants Weschler and Combs pulling the trigger. But the fact that Berkshire is comfortable putting $4.3 billion into a company that’s essentially an AI and advertising powerhouse? That tells you something about how the investment world is changing.
Why Alphabet Now?
So why would Berkshire jump into Alphabet after the stock already rallied 46% this year? That seems counterintuitive for value investors. But look at the cloud business – it’s been showing serious momentum thanks to AI demand. Maybe Berkshire sees Alphabet as playing catch-up in AI while still having that massive, cash-generating search business. The company’s trading at multiples that might look reasonable compared to some other tech giants. And let’s be honest – when you’re sitting on nearly $150 billion in cash like Berkshire was, even a $4.3 billion bet starts to look like dipping a toe in the water rather than diving in headfirst.
Berkshire’s Tech Portfolio Takes Shape
Between Apple, Amazon, and now Alphabet, Berkshire’s building a pretty substantial tech exposure. Apple remains the giant at over $150 billion, making this Alphabet position look almost experimental by comparison. But it’s interesting that they’re willing to bet on multiple tech horses. Amazon at $2.2 billion, Alphabet at $4.3 billion – these aren’t token positions, but they’re not all-in bets either. It feels like Berkshire is carefully constructing a tech portfolio within the broader conglomerate. And given how much of the market’s growth is coming from technology, can you really blame them?
