Berkshire Hathaway Invests Big in Virtual Monopolies
Greg Abel, the new CEO of Berkshire Hathaway, has made his mark on the company's $358 billion investment portfolio. Since taking over from Warren Buffett in December, Abel has invested more than $42 billion in three virtual monopolies: Alphabet (Google), Sirius XM Holdings, and VeriSign.
Alphabet is Berkshire's No. 3 holding, with a stake that has been increased to over $17 billion in the June-ended quarter. Google can be considered a virtual monopoly due to its dominance in internet search traffic, accounting for more than 91% of worldwide searches in August. Alphabet's artificial intelligence (AI) ambitions are also driving growth, particularly through its integration into Google Cloud.
Sirius XM Holdings is a legal monopoly, with Berkshire holding 37% of its outstanding shares. The company benefits from subscription pricing power and a revenue mix that generates consistent operating cash flow during recessions. VeriSign, another virtual monopoly, has seen steady growth due to its registration rights to leading .com and .net domains.