Abel Piles into Alphabet as Berkshire Hathaway Ditches Bank of America

Warren Buffett's successor, Greg Abel, has made significant changes to Berkshire Hathaway's portfolio since taking over as CEO on December 31. One of his notable moves was continuing an eight-quarter streak of paring down Bank of America shares by selling 30,230,000 in the second quarter. This brings the total position reduction to 53% or nearly 549.5 million shares, raising questions about whether profit-taking is the only reason for this decision.

Abel's investment strategy has also led him to increase Berkshire Hathaway's stake in Alphabet, making it the company's third-largest holding at $36.6 billion in combined market value between Class A and C shares. This move may be attributed to Abel's appreciation for companies with sustainable moats, which Alphabet possesses through its virtual monopoly on internet search and ownership of streaming platform YouTube.

Alphabet's artificial intelligence (AI) ambitions are also a key factor in Abel's decision. The integration of generative AI and large language model capabilities into Google Cloud has accelerated sales growth for the world's No. 3 cloud infrastructure service platform, with high-margin sales jumping 82% in the June-ended quarter.