Berkshire Hathaway Places Big Bet on Alphabet with $10 Billion Private Placement

Warren Buffett and his successor Greg Abel have made a significant bet on Alphabet (GOOGL) (GOOG), one of the leading AI companies. Despite having no prior history with technology companies, Buffett initiated Berkshire Hathaway's first purchase of Alphabet stock in the third quarter of 2025.

The initial investment was surprising, given that Alphabet is not typically considered a value investment. However, Buffett and Abel are extremely bullish on the company's dominance in the industry, citing its widely adopted platform, network effects, technical expertise, and considerable profits.

Berkshire Hathaway continued to increase its holdings in 2026, with Alphabet accounting for 10% of its entire portfolio by September 25. The investment is now Berkshire's third-largest holding, and has a current price-to-earnings ratio of 22.8 times, which Buffett considers reasonable.

While the investment in Apple (AAPL) was seen as a bet on a powerful consumer brand, the investment in Alphabet marks an evolution in Berkshire's strategy. The company's use of a private placement to buy $10 billion worth of Alphabet stock directly from the company is similar to its past direct investments in well-known companies such as General Electric.

Buffett clarified that while he initiated the investment, Abel was the decision-maker for subsequent investment decisions. Abel's comments suggest that his confidence in Alphabet stems from seeing how AI affects Berkshire's operating businesses.