Abel Buys Big into Alphabet as Berkshire Reduces BofA Stake
Greg Abel's tenure as Berkshire Hathaway's CEO has started off strong, with significant changes to the company's $357 billion investment portfolio. One notable move is the reduction in Bank of America shares for an eighth consecutive quarter, which may be due to profit-taking or a change in valuation. In contrast, Abel has continued to buy shares of Alphabet, increasing Berkshire's stake by over 300% since the first quarter and making it one of the company's core holdings.
Abel's preference for businesses with sustainable moats is evident in his decision to invest heavily in Alphabet, which has maintained an 89-93% share of global internet search traffic over the past decade. The company's strong performance in the second quarter, with revenue growth of 24% year-over-year and operating margin expansion, has likely contributed to Abel's enthusiasm for the stock.
Alphabet's artificial intelligence ambitions are also a key factor in its appeal to Buffett and Abel. The integration of generative AI and large language model capabilities into Google Cloud has led to significant growth in this segment, which is expected to continue driving revenue.