Alphabet Becomes Top Priority for Berkshire Hathaway Under New Leadership

Berkshire Hathaway has undergone significant changes since Warren Buffett's retirement as CEO on December 31. Greg Abel, Buffett's protégé, has taken the reins and is transforming the company's $359 billion investment portfolio.

One of the most notable changes is the repositioning of Alphabet, Google's parent company, which has become Berkshire's No. 3 holding. The market value of Berkshire's Alphabet stock now exceeds its stake in Coca-Cola by $16 million.

Alphabet's dominance in the search engine and social media markets makes it an attractive investment opportunity for Abel. The company's artificial intelligence (AI) ambitions, particularly through Google Cloud, have also caught his attention. Since integrating generative AI and large language model capabilities into Google Cloud, sales growth has skyrocketed 82%.

Coca-Cola, on the other hand, is not going anywhere. It remains one of Berkshire's longest-tenured holdings, with a jaw-dropping yield on cost of around 65%. However, Bank of America may be facing a different story as its stock has vaulted from a 62% discount to book value to a 59% premium since Buffett first took a position in 2011.