Berkshire Hathaway Loads Up on Alphabet with $10 Billion Private Placement

Berkshire Hathaway has significantly increased its stake in Alphabet, the parent company of Google. In June, Berkshire purchased an additional $10 billion worth of shares directly from Alphabet through a private placement, increasing its position to around $36.6 billion.

This investment is now the third-largest position in Berkshire's stock portfolio and raises questions about whether it will follow the same path as its successful investment in Apple. However, the way Berkshire accumulated its Alphabet position differs from how it built up its Apple stake.

Unlike its Apple investment, which was solely through open-market purchases, Berkshire's Alphabet investment includes a $10 billion private placement purchase of Class A and C common shares at a discount to their then-trading prices. This approach is similar to past deals where Berkshire purchased preferred stock from companies like General Electric.

The difference in approach may also indicate that Warren Buffett and Greg Abel, Berkshire's CEO, are taking different views on the investment. While Buffett initiated the investment, Abel was the decider for subsequent purchases, which may be driven by his understanding of how AI is impacting Berkshire's operating businesses.