Warren Buffett’s Berkshire Hathaway is making a big bet on Alphabet, the parent company of Google, despite ongoing fears that the AI stock boom could be a bubble.
In a regulatory filing on Friday, Berkshire revealed it bought 17.8 million shares of Alphabet during the third quarter. The shares were worth approximately $4.3 billion at the end of September. Following the announcement, Alphabet stock rose 4% in after-hours trading.
This purchase was Berkshire’s largest stock addition last quarter. The company also bought shares of Chubb, Domino’s Pizza, Sirius XM, and Lennar. Berkshire kept its holdings in Amazon, another major AI company, unchanged.
Alphabet has seen a massive rally this year, rising 46% even after a recent AI-driven market selloff. The company is now a leading player in AI, along with Amazon, Meta Platforms, and Microsoft. Analysts estimate that these “AI hyperscalers” plan to spend around $3 trillion on data centers and infrastructure through 2028.
The heavy spending has raised questions on Wall Street about whether AI companies can turn these investments into long-term profits.
It is unclear whether Buffett, who plans to step down as Berkshire CEO by the end of the year, personally approved the purchase, or whether successor Greg Abel or another executive made the call. Buffett has announced he will “go quiet” and will no longer write Berkshire’s annual report or speak at the annual meeting.
Despite this big purchase, Berkshire’s overall stock portfolio has shrunk over the past three years, including steady selling of Apple shares. The company has also been cautious with acquisitions, keeping its cash reserves at record levels.
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