Warren Buffett's last major move before stepping back from daily operations at Berkshire Hathaway at the end of 2025 was a $30 billion position in Alphabet, a stake that now ranks among the conglomerate's three or four largest holdings.
The two-tranche build
Berkshire accumulated roughly $20 billion through open-market purchases in late 2025, then added $10 billion in a direct issuance in June at about $350 a share. The stock closed at $333 on July 30, meaning the direct tranche is already underwater on a mark-to-market basis. Buffett told CNBC's Becky Quick in mid-July that he initiated the investment himself.
Why Search, not AI, was the pitch
Buffett framed the bet to CNBC as a correction of a long-standing omission: he said it was a mistake for Berkshire to have excluded Alphabet for so many years given how attractive he finds the Google Search business. He did not cite artificial intelligence as the catalyst.
Cloud is the growth engine anyway
The numbers tell a different story. Google Cloud revenue grew 82 percent year over year last quarter to $24 billion, throwing off $8.8 billion of operating income, a business that had negligible revenue a decade ago and was burning cash. Google Services revenue rose 15 percent to $94.5 billion, and Gemini, Alphabet's answer to ChatGPT, claimed 950 million monthly active users. The fear that AI chatbots would dethrone Search has not yet shown up in the top line.
The capital match
Alphabet announced $80 billion of equity offerings on June 1, earmarking proceeds for "general corporate purposes, including capital expenditures to scale AI infrastructure and global compute." Berkshire's $10 billion direct purchase effectively put the Buffett stamp of approval on a raise that Wall Street was eyeing warily given the scale of AI data-center spending.
Valuation through the noise
Because one-time gains from Alphabet's Space Exploration Technologies investment distort net income, the price-to-earnings ratio is unreliable. The source points to enterprise value-to-EBIT as the cleaner metric, arguing the stock does not look expensive despite negative free cash flow driven by the infrastructure build-out.