Ever see a headline and have to read it twice? That was me when I saw the news that Berkshire bought Google. They now have a multi billion dollar stake in Alphabet, the Google parent company.
For anyone who follows Warren Buffett and his legendary conglomerate, this is a relatively unusual one. Buffett has been famously leery of tech stocks for years, preferring slow and steady businesses over the volatility of companies like Alphabet.
So why did Berkshire Hathaway’s portfolio suddenly include a significant stake in Alphabet stock? Let’s break it down, Rule #1 style, and see what Wall Street analysts, Buffett’s lieutenants, and the investing world are buzzing about.
Berkshire Hathaway Bought Google
Here’s the scoop: According to a recent regulatory filing, Warren Buffett’s Berkshire Hathaway made an unusual purchase. They bought 17.8 million shares of Alphabet's Class A stock in the third quarter of 2025, worth about $4.3 billion. That’s now one of the conglomerate's largest stock holdings: The stake made Alphabet one of Berkshire’s top 10 to 13 equity holdings, representing about 0.3% of Alphabet's outstanding shares.
The investment by Berkshire Hathaway is considered a strategic shift for Warren Buffett's conglomerate, which has historically avoided most tech stocks. If you know Buffett’s career, you know he’s generally bullish on undervalued stocks and slow and steady businesses, not tech companies.
So who made the call? The purchase may have been executed by portfolio managers Todd Combs or Ted Weschler, or incoming CEO Greg Abel, rather than Warren Buffett directly.
Wall Street thinks this move might signal a new approach for Berkshire, especially since Buffett declined to comment on the specifics. Either way, the move validates Alphabet’s position as a fantastic stock, at least in the eyes of Berkshire’s team.
Here's another perspective: Berkshire's Alphabet investment still aligns with a value-investing approach. Alphabet has strong fundamentals and was trading at a more reasonable valuation compared to its peers.
In the end, it might not matter who pulled the trigger—what matters is understanding why a value-focused investor would take such a big swing at Alphabet, right now.
Details of Berkshire Hathaway’s Alphabet Investment
Let’s look through the Rule #1 lens. Alphabet is more than just a search engine. Alphabet gathers prolific revenue growth from its segments: search and YouTube advertising, Google Cloud, and other bets. With two billion monthly users on YouTube alone, and double-digit revenue growth in key areas, Alphabet’s stocks stand out.
But here’s where it gets interesting: In 2022, the competition Alphabet enjoys was disrupted by OpenAI’s ChatGPT, a leading AI beneficiary. Suddenly, AI search became the buzzword, and Wall Street’s expectations shifted. Even the iPhone maker, Apple, noted Alphabet’s search volumes were down—a sign of changing user behavior. Alphabet analysts and JPMorgan analysts alike raised questions about whether Alphabet’s moat was under threat.
Alphabet’s segments continue to generate substantial cash. Through the first nine months of FY2025, the company generated nearly $48 billion in free cash flow, based on its reported operating cash flow and capital expenditures. That’s capital equipment power, fueling investments in building data centers to run AI models like Gemini. Wall Street analysts, including those from Visible Alpha, rate shares as bullish, with the average price target for Alphabet stock reflecting confidence in the company’s prolific revenue growth.
Tech Stocks Have Been Disrupted Throughout History
If you’ve ever studied tech history, you know it’s littered with giants who missed the next big thing. Remember Netscape? Blockbuster? Nokia? Even IBM and Yahoo got blindsided by disruptive competitors.
Almost all tech stocks have been hit by significant disruption. Even Apple stocks took a hit when Microsoft came out, until Steve Jobs returned to save it in 1998. And as you might recall, Buffet later bought Apple stock in 2016 once he understood its competitive moat.
There’s a term for this: The Innovator’s Dilemma. Basically, big companies often hesitate to adopt new tech because it threatens their core business. But if they don’t adapt, a hungrier rival might eat their lunch.
Tech stocks can have some of the biggest upsets. Just ask anyone who held International Business Machines (IBM), Nokia, or Blockbuster during their heyday, and Buffett himself emphasized the risks and unpredictability in tech. The Innovator’s Dilemma shows up when companies, even those with typical brand loyalty, hesitate to disrupt their own cash cows.
Right now, Alphabet faces that exact dilemma. If they go all-in on AI, they risk cannibalizing their own cash cow—Google Search. If they don’t, they might lose out to AI challengers like ChatGPT. It’s a real catch-22, and there’s no easy answer.
It’s a classic case of competition: Alphabet faces a fast-moving AI world. We will be watching closely to see if the company can defend its moat or if Alphabet's competition will chip away at its dominance.
Alphabet’s Financial Strength and Future Prospects
Here’s what makes Alphabet a terrific company: its fortress-like balance sheet and prolific revenue growth. In Q3 2025, Alphabet reported $385 billion in revenue, up 16% average growth rate year over year.
Alphabet’s purchase by Berkshire Hathaway suggests confidence in the stock. Alphabet shares have outperformed many other tech stocks even as the company navigates AI search and regulatory challenges. Its ability to adapt and invest in new segments is impressive.
Yet, it’s normal to feel a bit uncertain.Tech companies can rise and fall quickly. While it's unlikely it'll become an unloved stock that Wall Street forgets, the question remains: will Alphabet be bigger and better in ten years? Only time will tell, but right now, the conglomerate’s largest stock holding in tech sends a strong message.
Personal Investment Decisions: What I Did With My Stake in Alphabet Stock
Let me get personal for a second. I’ve owned Alphabet stock for years. But when Apple reported search volumes declining, and the AI arms race heated up, I started to wonder—was this still the right move? Sometimes you have to know when to walk away. I decided to take profits.
Now, I know what you’re thinking—the stock's meteoric rise happens right after you sell. It happens to everyone, myself included.
The goal at Rule #1 isn't to chase the biggest tech investment or bet on the next AI superstar for quick wins. It’s about protecting your downside—Rule #1: Don’t lose money. If you do that right, the upside usually takes care of itself. And hey, if you’re ever unsure, remember that even Warren Buffett’s Berkshire Hathaway occasionally makes an unusual purchase—sometimes, slow and steady wins the race.
Final Thoughts on Berkshire Hathaway's Portfolio
So, what does Berkshire Hathaway’s Alphabet investment mean? Maybe it’s a conviction play, or maybe it’s just a smart place to park some of Berkshire’s $340 billion cash hoard. There aren’t many tech stocks big enough to move the needle for Berkshire’s portfolio, and Alphabet is one of the few. Analyst predictions for Alphabet stock in 2026 suggest this could be a fantastic stock for the long haul.
The move also signals that Buffett’s lieutenants—maybe Todd Combs or Greg Abel—are willing to look beyond the usual slow and steady businesses for growth. As Alphabet gathers momentum in AI and continues to innovate, this investment might just validate Alphabet’s position as a leader in tech.
What do you think? Is Alphabet the next big thing, or was purchasing tech stock wrong for Berkshire?
Want to Learn the Rule #1 Way?
Invest with confidence—come to our next Rule #1 Investing Workshop! We’ll show you how to analyze stocks using the four-pillar Rule #1 approach that’s helped thousands of people. It even beats Harvard and Yale on NPS scores. No upselling, just real teaching. Ready to take the next step? Join our workshop. Let’s take charge of your financial future together.
