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Warren Buffett’s Berkshire Hathaway has revealed a significant new investment in Alphabet, acquiring a $4.3 billion stake in the Google parent company, while further reducing its long-held position in Apple. The disclosure, filed with the US Securities and Exchange Commission on Friday, reflects a strategic pivot towards AI and search-driven growth amid concerns over smartphone market saturation and regulatory pressures.
This move, part of Berkshire’s quarterly 13F filing, signals renewed confidence in Alphabet’s ecosystem, including its Gemini AI models and cloud infrastructure, even as the broader tech sector navigates valuation debates and geopolitical trade tensions.
The investment marks the first major Alphabet holding for Berkshire since 2023, comprising approximately 6.5 million shares acquired in the third quarter. Concurrently, the conglomerate sold an additional 100 million Apple shares, trimming its stake by about 25% year-to-date and leaving it valued at around $60 billion.
Buffett, known for his value-oriented approach, has cited Apple’s maturing iPhone sales and antitrust scrutiny as factors, while praising Alphabet’s “durable competitive advantages” in digital advertising and AI innovation. Berkshire’s cash reserves now exceed $325 billion, providing ample firepower for selective bets in a market where the S&P 500’s tech-heavy weighting has sparked bubble warnings.
Investment Rationale and Market Context
Berkshire’s shift underscores a broader reassessment in tech investing. Alphabet’s stock has risen 15% year-to-date, buoyed by robust ad revenues and a 30% surge in Google Cloud, which now powers over 50% of Fortune 500 AI workloads. The stake acquisition aligns with Buffett’s evolving views on technology, influenced by protégé Todd Combs, who manages portions of the portfolio. Analysts interpret this as a vote for AI’s long-term potential, with Alphabet’s $40 billion data centre expansion in Texas—announced last week—positioning it as a key player in the $500 billion AI infrastructure race.
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Apple, conversely, faces headwinds: iPhone 17 Pro reviews highlight incremental upgrades, contributing to a 5% share dip last week. Berkshire’s sales, which began earlier this year, have realised over $20 billion in gains, allowing redeployment into undervalued assets. This comes amid US-China trade frictions, where tariffs could hike component costs for both firms, though Alphabet’s diversified revenue—spanning YouTube, Android and Waymo—offers resilience.
The filings also spotlight other adjustments: Berkshire boosted stakes in Occidental Petroleum and Chubb while exiting Citigroup entirely. Tech peers like Amazon and Meta remain untouched, suggesting selective exposure to megacaps. Wall Street’s response was muted, with Alphabet shares edging up 0.8% in pre-market trading, while Apple’s held steady.
Broader Implications for Investors and the Sector
For the tech industry, Berkshire’s endorsement of Alphabet reinforces AI as a growth engine, contrasting with scepticism from figures like Michael Burry, who recently warned of an “AI bubble.” It may encourage institutional flows into search and cloud plays, potentially lifting related ETFs like the Invesco QQQ. However, risks persist: Regulatory probes into Alphabet’s ad monopoly and Apple’s app store policies could cap upside, while global growth forecasts from the IMF—tempered at 3.2% for 2025—add caution.
As November’s earnings season ramps up—with Alphabet reporting next week—these disclosures offer a lens into conservative strategies in a high-flying sector. For Buffett, at 95, it’s a reminder that even the Oracle of Omaha sees tech’s future in intelligent machines, not just hardware. Investors will watch closely as Berkshire deploys its war chest, potentially reshaping portfolios in an era of disruptive innovation.
