Berkshire Hathaway disclosed in a regulatory filing late Friday that it purchased 17.8 million shares of Alphabet during the third quarter, a position worth about $4.3 billion at the end of September. The move came even as investors debated whether the artificial intelligence surge is a speculative bubble; Alphabet stock rose roughly 4% in after‑hours trading following the disclosure. Berkshire also added smaller stakes in Chubb, Domino’s Pizza, Sirius XM and Lennar while maintaining its Amazon holding. The trade represents Berkshire’s largest single stock addition in the quarter amid a multi‑year pattern of net portfolio selling.
Key Takeaways
- Berkshire purchased 17.8 million Alphabet shares in Q3, valued at about $4.3 billion as of Sept. 30.
- Alphabet shares are up approximately 46% year‑to‑date despite recent AI‑led volatility.
- Other Q3 buys include Chubb, Domino’s Pizza, Sirius XM and Lennar; Berkshire held its Amazon stake steady.
- Morgan Stanley estimates AI hyperscalers plan roughly $3 trillion in infrastructure spending through 2028.
- Berkshire’s overall investment portfolio declined further, marking three consecutive years of net selling.
- Buffett is scheduled to step down as CEO by year’s end and has said he will be ‘going quiet’ on annual communications.
- Berkshire’s cash balances remain near record highs as the company exercises caution on acquisitions.
Background
The AI-driven rally of 2024–25 has concentrated capital in a handful of hyperscale technology firms—Alphabet, Amazon, Microsoft and Meta—whose cloud and AI infrastructure spending has accelerated sharply. Those firms are pouring capital into data centers, custom chips and networking; some estimates project multitrillion‑dollar cumulative outlays over the next several years. Markets have rewarded early beneficiaries, but analysts and investors have grown uneasy about whether relentless spending funded partly by debt will translate into proportionate revenue and profit expansion.
Berkshire Hathaway’s interest in Alphabet is not entirely new: company leaders and longtime advisers have previously acknowledged missing earlier opportunities in Google/Alphabet. Historically, Berkshire has prioritized durable businesses with clear cash generation; its recent Alphabet purchase signals a reassessment of AI’s strategic winners or, at minimum, a tactical bet amid the sector’s rally. At the same time, Berkshire’s balance sheet strategy has emphasized liquidity—cash levels are at or near record highs—reflecting a cautious posture toward bolt‑on acquisitions and broad market exposure.
Main Event
The regulatory filing released late Friday (a standard SEC 13F disclosure) listed 17.8 million shares of Alphabet added during the July‑September quarter, the largest single stock addition in Berkshire’s portfolio that period. Market reaction was immediate: Alphabet shares rose about 4% in after‑hours trading on the disclosure. The position mirrored Berkshire’s pattern of concentrated bets in names it deems poised to benefit from durable secular trends even amid macro or sentiment headwinds.
Alongside Alphabet, Berkshire reported purchases of Chubb, Domino’s Pizza, Sirius XM and Lennar, while keeping its position in Amazon unchanged. The filing also reflects an ongoing reduction in certain legacy holdings—Berkshire has continued to trim Apple shares amid a multiquarter selling pattern. The quarter marked the third straight year in which Berkshire’s publicly reported portfolio shrank on net, according to company disclosures.
The purchase occurred as CEO Warren Buffett prepares to step down by year’s end; in a public note he said he will be ‘going quiet’ and will stop authoring Berkshire’s annual report and speaking at length at shareholder meetings. It is not clear from the filing which executive made the final decision to add Alphabet—Buffett, his designated successor Greg Abel, or another senior manager. Berkshire does not typically disclose intrafirm decision‑making details in 13F filings.
Analysis & Implications
Berkshire’s Alphabet addition is significant for several reasons. First, it signals that one of the world’s most conservative and cash‑focused conglomerates sees long‑term value in a leading AI hyperscaler despite public debate about an AI ‘bubble.’ Second, the size of the stake—$4.3 billion at quarter‑end—shows conviction that Alphabet can convert heavy near‑term capital spending into sustainable returns. That view contrasts with more skeptical market participants who worry about the pace and scale of hyperscaler capex.
Third, the trade highlights how capital allocation philosophies are adapting: even value‑oriented investors are allocating to technology leaders when those businesses demonstrate dominant market positions and pathways to recurring cash flow. Yet the move does not resolve core questions about industry profitability. The Morgan Stanley projection of roughly $3 trillion in hyperscaler spending through 2028 raises the bar for measurable returns; if revenue growth and margin expansion lag capex, investors could face prolonged pressure.
Finally, Berkshire’s purchase arrives amid management transition. Succession can affect both the firm’s public profile and day‑to‑day investment choices. If Buffett had less direct involvement going forward, investors will watch whether Greg Abel or other executives sustain the same appetite for large, technology‑sector positions. A sustained shift in decision‑making could change how Berkshire approaches concentrated equity stakes versus cash reserves and M&A opportunities.
Comparison & Data
| Company | YTD Change (approx.) | Berkshire Q3 Action | Q3 Value / Note |
|---|---|---|---|
| Alphabet | +46% | Added | 17.8M shares, ~$4.3B at 9/30 |
| Amazon | Varied | Maintained | Position unchanged in Q3 filing |
| Apple | Varied | Trimmed | Part of continued net selling |
The table above places Berkshire’s Alphabet purchase in context. Alphabet’s year‑to‑date gain of about 46% underscores the rally that has driven investor appetite for hyperscalers; Berkshire’s purchase is large relative to typical single‑name additions but consistent with its history of concentrated stakes in perceived industry leaders.
Reactions & Quotes
‘I’ll be going quiet,’ Buffett wrote, saying he will step back from writing Berkshire’s annual letter and speaking at length at future meetings.
Warren Buffett / Berkshire statement
‘AI hyperscalers’ infrastructure plans could total roughly $3 trillion through 2028, a figure that underscores why investors and companies view the sector as strategically transformative.
Morgan Stanley (industry analysis)
Market commentators noted the symbolic weight of Berkshire joining other large investors in a big hyperscaler bet; some analysts said the move could encourage other value investors to reexamine technology allocations, while cautious voices pointed to the scale of ongoing capital expenditures and the need for demonstrable returns.
Unconfirmed
- Which individual or executive committee within Berkshire authorized the Alphabet purchase has not been disclosed in the filing.
- The filing does not confirm the exact trade dates or execution strategy used to accumulate the 17.8 million shares.
- It remains unproven whether hyperscaler capital expenditures will produce the revenue and profit growth necessary to justify multitrillion‑dollar investments.
- Any near‑term change in Berkshire’s investment strategy following Buffett’s planned departure is speculative until management provides further detail.
Bottom Line
Berkshire Hathaway’s addition of 17.8 million Alphabet shares in Q3 is a notable endorsement of one leading AI hyperscaler at a time when market sentiment around AI is polarized. The purchase, worth roughly $4.3 billion at quarter‑end, signals that even traditionally conservative investors see potential long‑term value in companies driving the AI infrastructure build‑out.
That said, the broader question—whether massive hyperscaler capex will convert into sustained profit growth—remains open. Investors should view Berkshire’s move as one informed institutional vote in favor of Alphabet, not as definitive proof that the sector’s investment cycle has reached a favorable risk‑reward balance. Watch upcoming earnings, capex efficiency metrics and any clarifying statements from Berkshire’s incoming leadership for clearer signals.