Released on August 14, Berkshire Hathaway’s second-quarter 13F filing showed the conglomerate became a net buyer of nearly $19.8 billion in stocks, its first net-buying quarter in 14 quarters. The shift was driven primarily by an 83% increase in its Alphabet Inc. (NASDAQ:GOOGL) stake, to about 106 million shares worth $37.8 billion, making it Berkshire’s third-largest holding behind only Apple and American Express. About $10 billion of the increase came from a June private placement Alphabet arranged to fund its AI buildout. Warren Buffett, now chairman, told CNBC, “I initiated it,” adding that CEO Greg Abel “has the last word.”
Bull Case
Alphabet Inc. (NASDAQ:GOOGL) now ranks among Berkshire’s largest positions, trailing only Apple and American Express. That size gives Berkshire real exposure to a fast-growing cloud and AI franchise that looks nothing like its traditional insurance, railroad, and consumer-staples holdings, diversifying the growth the portfolio can capture.
The purchase also marks a shift in how Berkshire uses its money. The conglomerate ended a 14-quarter net-selling streak with nearly $19.8 billion in purchases, CNBC reported, deploying part of a cash pile that had jumped to $397.4 billion. That shows management now sees enough value to finally put record reserves to work.
Roughly $10 billion of the new shares came through a private placement arranged directly with Alphabet in June, split between Class A and Class C stock, rather than open-market buying alone. Getting a position at negotiated terms straight from the firm is an advantage few investors can access.
Buffett’s own framing shows continuity as he told CNBC, “I initiated it,” but said Greg Abel “has the last word… he is the decider.” Buffett still contributing high-conviction ideas while Abel exercises real authority to approve them is exactly the transition investors hoped for.
Bear Case
Berkshire is buying well after Alphabet’s AI-driven rally has already played out. Buffett has openly said he “blew it” by passing on Google years ago and stepping in decades later, after the stock’s run. It raises the question of whether this corrects an old regret rather than finds a genuine bargain.
The position adds to Berkshire’s growing concentration in mega-cap names. With Alphabet now sitting alongside Apple and American Express among its largest holdings, more of the portfolio depends on the fortunes of a few giant companies. It reduces the diversification benefit that has historically set Berkshire apart.
Even after this purchase, Berkshire still holds roughly $365.5 billion in cash, down only modestly from $397.4 billion. That gap shows Alphabet was a specific high-conviction call. It is not a sign management sees stocks broadly as cheap, so a disappointment here would not reflect the same reasoning across the portfolio.
How much of this continues is now Greg Abel’s call, not Buffett’s. Buffett said Abel “has the last word.”It means future decisions on the Alphabet Inc. (NASDAQ:GOOGL) stake rest with a CEO who has far less of a public track record than Buffett had when he made his own biggest bets.
Conclusion
Berkshire’s Alphabet bet is significant. It is now the fund’s third-largest holding and the centerpiece of Berkshire’s first net-buying quarter in over three years. This massive position shows strong conviction, but it concentrates more of Berkshire’s money in giant tech stocks right after their big rally. The bull case rests on Alphabet’s cloud and AI growth continuing, while the bear case strengthens if Abel’s judgment on this scale of bet is tested before he has Buffett’s decades of results behind him.
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Disclosure: None. This article is originally published at Insider Monkey.
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