Abel Axes and Accumulates: Berkshire Hathaway's $355 Billion Portfolio Undergoes Radical Shift

Greg Abel, Warren Buffett's successor at Berkshire Hathaway, has made significant changes to the conglomerate's $355 billion portfolio. In the first quarter, he eliminated 16 positions and reduced six others, including Chevron.

One of the most notable moves was the slashing of Berkshire's Chevron stake by 35% to begin the year. This reduction in shares represents the largest single-quarter decrease since Buffett opened the position in 2020.

Simple profit-taking is one possible reason for this move, given Chevron's significant price increase between January and March, from $152 to $207 per share. However, Abel may have viewed this as an opportunity to lock in gains due to energy supply disruptions caused by the Iran war and the closure of the Strait of Hormuz.

Another factor contributing to the decision might be Chevron's decreasing value proposition. Its forward price-to-earnings (P/E) ratio was approaching 18 at the end of the first quarter, up from 11 in 2023 and 10 in 2024. Abel is known for his focus on value.

On the other hand, Abel found a new favorite in Alphabet, buying 36,403,656 shares of its Class A shares and opening a position in the Class C shares by purchasing 3,585,215 shares. These purchases more than tripled Berkshire's stake in Google's parent company.

The beauty of Alphabet lies in its sustainable moat, built on the dominance of its search engine and YouTube. Its artificial intelligence ambitions also drive valuation and cash flow higher, particularly with Google Cloud's parabolic sales growth since integrating generative AI solutions and large language model capabilities.