Warren Buffett's Berkshire Hathaway has unveiled a new investment in Alphabet, positioning the Google parent company as its 10th largest equity holding as of the end of September, according to recent regulatory filings.
Berkshire reported a $4.3 billion stake in Alphabet at the close of the third quarter, a move that comes as a surprise given Buffett's traditional preference for value investing and his cautious approach to high-growth technology stocks. Although Berkshire has maintained a stake in Apple for several years, Buffett has often categorized it more as a consumer products company rather than a pure tech entity.
The decision to invest in Alphabet appears to have been driven by Berkshire's investment managers Todd Combs or Ted Weschler, who have shown a greater inclination towards technology investments. Notably, one of them initiated Berkshire's investment in Amazon back in 2019, and the company currently holds $2.2 billion in Amazon shares.
This year, Alphabet has been a standout in the market, with its shares climbing 46%. The strong performance is largely attributed to robust demand for artificial intelligence, which has bolstered Alphabet's cloud business.
Buffett has previously acknowledged missing the opportunity to invest in Google early on, despite recognizing its advertising potential through his experience with Berkshire’s auto insurance unit Geico, an early customer of Google. In 2018, Buffett admitted, "I had seen the product work, and I knew the kind of margins [they had]. I didn't know enough about technology to know whether this really was the one that would stop the competitive race."