Berkshire Hathaway disclosed a surprising $4.3 billion stake in Alphabet, marking a significant strategic shift in Warren Buffett's final portfolio update before stepping down as CEO.
The investment revealed 17.85 million shares of Google's parent company as of September 30, making Alphabet Berkshire's 10th-largest U.S. stock holding.
The move comes as Berkshire continued trimming its massive Apple position, reducing holdings from 280 million to 238.2 million shares during the third quarter.
Despite the reduction, Apple remains Berkshire's most significant equity investment at $60.7 billion, though the conglomerate has now sold nearly three-quarters of the more than 900 million shares it once controlled.
Why Did Berkshire Finally Invest in Alphabet After Years
The Alphabet investment represents a remarkable reversal for Buffett, who publicly admitted missing the opportunity years earlier. At Berkshire's 2019 annual shareholder meeting, both Buffett and late Vice Chairman Charlie Munger expressed regret about not investing in Google sooner, with Munger bluntly stating they had screwed up.
Buffett explained that Google's advertising model bore striking similarities to what worked for Berkshire's GEICO auto insurance unit, which was an early Google advertising customer.
The direct-to-consumer approach and cost-efficient customer acquisition through digital advertising created the kind of economic moat Buffett typically seeks.
Yet the opportunity was initially overlooked, despite its obvious connection to GEICO's success.
Did you know?
Warren Buffett's GEICO was one of Google's earliest advertising customers, paying the search engine just $10 per click when someone searched for auto insurance, a partnership that demonstrated the advertising model Buffett would later praise at shareholder meetings.
How Deep Are the Apple Stake Reductions
Berkshire's systematic reduction of its Apple holdings has accelerated throughout 2025, with the company selling approximately $12.5 billion in stocks while purchasing only $6.4 billion during the third quarter.
Apple likely accounted for three-quarters or more of these sales, reflecting either profit-taking amid elevated valuations or a strategic rebalancing amid leadership transitions.
The iPhone maker still commands the top position in Berkshire's equity portfolio despite the dramatic sell-off.
Buffett has long viewed Apple differently from typical technology companies, classifying it more as a consumer products business with exceptional brand loyalty and pricing power, qualities that align with his value investing philosophy.
What Does the Record Cash Position Signal
Berkshire's cash reserves climbed to an unprecedented $381.7 billion by the end of the third quarter, marking the twelfth consecutive period as a net seller of equities.
The massive liquidity cushion reflects Buffett's increasingly cautious stance toward market valuations and provides enormous flexibility for future strategic moves or acquisitions.
Investors and analysts interpret the growing cash hoard as evidence that Berkshire finds limited attractive opportunities at current market prices.
The company has avoided major acquisitions for nearly a decade and has not repurchased its own shares for more than a year, suggesting patient capital deployment remains the priority as Greg Abel prepares to assume leadership on January 1, 2026.
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Which Other Holdings Did Berkshire Adjust
Beyond the Alphabet addition and Apple reduction, Berkshire trimmed its Bank of America stake by 6 percent during the quarter, extending a selling pattern that began in mid-2024.
The financial institution remains Berkshire's third-largest stock holding despite the ongoing reductions, which have now eliminated hundreds of millions of shares from the original position.
The conglomerate completely exited its position in homebuilder DR Horton while adding to its stakes in insurer Chubb and restaurant chain Domino's Pizza.
These adjustments reflect ongoing portfolio optimization across Berkshire's $283.2 billion equity holdings, with investment managers Todd Combs and Ted Weschler likely responsible for smaller positions while Buffett typically directs larger strategic investments.
What Happens When Greg Abel Takes Over in January
Greg Abel's promotion to CEO represents the most significant leadership transition in Berkshire's history, with Buffett remaining as chairman after six decades at the helm.
Abel brings deep operational experience from Berkshire Hathaway Energy and has been groomed for the role through increasing responsibilities across the conglomerate's diverse businesses.
The record cash position positions Abel to make his mark through major capital allocation decisions, whether through acquisitions, stock purchases, or other strategic investments.
Market observers will closely watch how the new CEO deploys Berkshire's financial resources while maintaining the disciplined, value-focused approach that has defined the company's investment philosophy for generations.
Alphabet shares rose 1.7 percent in after-hours trading following the disclosure, reflecting investor confidence in Berkshire's endorsement.
The market reaction demonstrates how Buffett's investment decisions continue to influence sentiment, even as he prepares to hand operational control to the next generation of leadership at the $1.1 trillion conglomerate that owns nearly 200 diverse businesses ranging from BNSF railroad to Dairy Queen and See's Candies.
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