Berkshire Hathaway has entered a new chapter under Chief Executive Officer Greg Abel, and one of the company’s most significant investment decisions so far has been its aggressive expansion of its position in Alphabet. Since the beginning of the year, Berkshire has acquired approximately $23 billion worth of Alphabet shares, reinforcing the technology giant’s position as one of the conglomerate’s largest equity holdings.

The investment builds upon Berkshire’s initial purchase of Alphabet shares during the third quarter of 2025, a move that Warren Buffett previously confirmed he had initiated. Although Buffett has stepped down as CEO, Greg Abel has emphasized that Berkshire will continue following the company’s long-established investment philosophy of acquiring high-quality businesses at attractive valuations and holding them for the long term.

Berkshire’s History Suggests More Buying Could Follow

Berkshire Hathaway has historically expanded its largest investments over several years rather than completing purchases all at once.

Apple provides one of the clearest examples. After initiating its position in 2016, Berkshire continued adding shares almost every quarter through 2018, eventually making Apple its largest equity investment.

Similar patterns have occurred with other major holdings, including Visa and Occidental Petroleum, where Berkshire repeatedly increased positions as management’s conviction strengthened.

Alphabet appears to fit this same pattern. Along with an additional $10 billion private placement investment, the company’s shares have already become one of Berkshire’s five largest holdings, suggesting management views Alphabet as a long-term strategic investment rather than a short-term opportunity.

Alphabet Continues to Deliver Strong Financial Growth

Alphabet’s recent operating performance supports Berkshire’s confidence.

During the second quarter, the company reported revenue of $119.8 billion, representing 24% year-over-year growth. Operating income increased 30% to $40.8 billion, while earnings per share climbed to $9.11, benefiting in part from gains related to equity investments.

One of the strongest contributors to growth was Google Cloud.

Cloud revenue surged 82% year over year to $24.8 billion, while Alphabet’s cloud backlog expanded to $514 billion, reflecting strong customer demand for cloud infrastructure and artificial intelligence services.

Although Google Cloud remains smaller than some competing cloud platforms, its growing presence in AI infrastructure, machine learning, and advanced data analytics continues to drive significant enterprise adoption.

AI Investment Remains a Strategic Priority

Alphabet is significantly increasing capital expenditures to expand its AI infrastructure.

Management now expects annual capital spending between $195 billion and $205 billion, up from previous guidance of $180 billion to $190 billion.

The increased investment has weighed on free cash flow in the short term, leading some investors to question the pace of spending.

However, management argues that expanding AI capacity is necessary to support growing enterprise demand, particularly as organizations accelerate adoption of generative AI and cloud-based computing services.

Beyond cloud computing, Alphabet continues to generate substantial cash flows from its core digital advertising business, supported by the company’s dominant position in internet search and its extensive global ecosystem.

Valuation Remains Attractive

One factor that may continue attracting Berkshire Hathaway is Alphabet’s valuation.

The shares currently trade at approximately 18.1 times forward earnings, below the broader information technology sector average of roughly 20 times forward earnings.

Among the “Magnificent Seven” technology companies, Alphabet also carries one of the lowest forward valuation multiples despite maintaining strong revenue growth and expanding profitability.

This combination of accelerating earnings, durable competitive advantages, and relatively modest valuation aligns closely with Berkshire Hathaway’s long-standing investment philosophy.

Outlook

Berkshire Hathaway’s substantial investment in Alphabet reflects growing confidence under Greg Abel’s leadership while maintaining Warren Buffett’s value-oriented investment approach. Alphabet’s accelerating cloud business, expanding artificial intelligence infrastructure, strong advertising franchise, and comparatively attractive valuation position the company for continued long-term growth. Given Berkshire’s history of gradually increasing high-conviction holdings, additional Alphabet purchases remain a realistic possibility if the company’s operational momentum and valuation continue to support the investment case.