Berkshire Hathaway Bets Big on Alphabet Amid AI Revolution

Berkshire Hathaway's massive equity portfolio has seen a significant increase in Alphabet shares, making it one of its largest positions. This move is notable because Alphabet is a clear bet on artificial intelligence. Berkshire initiated its Alphabet position last year and CEO Greg Abel revealed that executive chairman Warren Buffett was the one who started it.

Under Abel's leadership, Berkshire has significantly increased its position in Alphabet. In the first quarter, the company's holdings of Alphabet class A and C shares increased by over $11 billion. Berkshire also acquired an additional $10 billion from Alphabet in a private placement at an average price of about $350 per share across class A and C shares.

This makes Alphabet the fifth-largest position in Berkshire's portfolio. While Apple currently accounts for 21.6% of Berkshire's portfolio, Alphabet pales in comparison with roughly 8.1%. Buffett likes how shareholder-friendly Apple has been, but he also expressed concerns about all the AI spending and whether this is a company that Berkshire can really live and die with.

Berkshire may have felt they had to invest in some level of AI for the same reason Alphabet feels like it has to invest in all this AI infrastructure: Missing the revolution could be just as costly as getting burned by it. And Alphabet is a safer pick in AI than some other stocks trading at massive valuations that lack the ancillary businesses, scale, and earnings power that Alphabet has.