Prime Highlights:
- Berkshire Hathaway, led by Warren Buffett, purchased 8 million shares of Alphabet, marking its first-ever investment in the tech giant.
- Alphabet’s strong market position, growing AI and cloud businesses, and diverse revenue streams make it a compelling long-term investment.
Key Facts:
- The total value of Berkshire’s Alphabet holdings at the end of Q3 was approximately $4.4 billion.
- During Q3, Alphabet stock traded between $176 and $243, and its price-to-earnings ratio was around 17, highlighting potential undervaluation.
Background:
Berkshire Hathaway, the investment powerhouse led by legendary investor Warren Buffett, has quietly taken a major new position in tech giant Alphabet (NASDAQ: GOOGL), according to its latest regulatory filing. The move marks the firm’s first-ever purchase of shares in the Google and YouTube parent company.
In its Q3 13F filing submitted late last week, Berkshire disclosed ownership of 17,846,142 Alphabet shares, a stake valued at roughly $4.4 billion at the end of the quarter. Alphabet shares traded between $176 and $243 during Q3, but the exact price Berkshire paid remains unknown. It is also unclear whether the firm added to or trimmed its position after the quarter ended.
The decision stands out, given Alphabet has divided investor opinion in recent years. Some analysts have expressed concern that emerging AI tools, particularly OpenAI’s ChatGPT, could threaten Google’s dominant position in online search.
The tech company’s ecosystem also includes YouTube, which generates revenue comparable to Netflix, and Google Cloud, which is expanding at a faster pace than comparable units at Amazon and Microsoft. Alphabet’s autonomous-driving division, Waymo, has also taken significant steps forward, generating revenue well above Tesla’s early robotaxi operations. Alphabet has a strong balance sheet and steady cash flow.
Its shares have risen nearly 60% since the start of Q3, from $176 to around $276. Because of this big jump, some investors may wait for a lower price before buying. The company still has good long-term growth potential.
Even with the recent rise, Buffett’s investment shows Alphabet is a strong tech company and a good choice for long-term investors.
