Berkshire buys $4.3B in Alphabet and trims Apple position

Berkshire Hathaway, the American multinational conglomerate holding firm led by Warren Buffett, has announced a new investment in Alphabet, Google’s parent company. Following this move, the company stated that it held approximately a $4.3 billion stake in Alphabet at the end of the third quarter. 

As the multinational powerhouse invested in Alphabet, it continued to reduce its investment in Apple significantly. The company reduced its investment by another 15% this quarter, totaling $60.7 billion. 

Regarding the company’s holdings in Alphabet, several individuals stated that they were shocked by this decision. This is because Buffett is renowned for his value investing strategy and typically hesitates to make investments in rapidly growing tech firms.

Meanwhile, with this investment in place, a regulatory filing revealed that Alphabet solidified its position as the 10th biggest stock holding for the conglomerate as of the end of September.

Buffett confesses to missing out on investing in Google early on

Berkshire has reportedly owned Apple for several years. However, analysts discovered Buffett views the iPhone maker as a consumer products firm rather than a typical tech company. Following this perspective, the analysts concluded that Berkshire’s investment managers, Ted Weschler or Todd Combs, likely made this purchase. According to their argument, these individuals have actively engaged with technology stocks.

Their statement followed reports from sources revealing that one of them began investing in Amazon in 2019, and Berkshire still owns roughly $2.2 billion of Amazon shares. 

Notably, Amazon has been attracting firms to invest in the company after it was ranked as a top performer this year, with its stock price escalating by 46%. On the other hand, the significant demand for AI has greatly enhanced its cloud services business.

Buffett once confessed that he had missed out on investing in Google early on, although he had noticed its advertising possibilities. Interestingly, Berkshire’s auto insurance company, Geico, was once Google’s early user, paying approximately $10 every time someone clicked on their ad.

“I had seen the product work, and I knew what kind of profits they were making,” Buffett said in 2018. He admitted that he did not understand much about technology to conclude whether this would be the one that would defeat all other technologies in the competition.

Berkshire reduces several of its holdings under the leadership of Buffett

Buffett sold off two-thirds of Berkshire’s Apple shares in 2024. This move shocked many individuals as they viewed Buffett as a long-sighted investor. 

Apart from the 95-year-old investor’s move, Berkshire also decreased its Apple holdings in the second quarter of this year. However, despite those ongoing sales, sources pointed out that Apple remains Berkshire’s largest stock investment. 

After reducing its Apple holdings, the company also reduced its stake in Bank of America by 6%, which is worth under $30 billion. Additionally, Berkshire reduced its investments in Verisign and DaVita during the third quarter. 

According to sources close to the situation, Berkshire has been a net seller of stocks for 12 straight quarters as prices climbed in the tech-focused bull market. 

In the meantime, Buffett is stepping off as CEO at year’s end with his longtime partner Greg Abel set to take over. Investors are paying close attention to how Berkshire is positioning itself for insights on the upcoming leadership change and any shifts in its investment strategy.

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