Berkshire built a $38B Alphabet stake. Buffett likely placed the bet

Warren Buffett is no longer Berkshire Hathaway's CEO. The $38 billion Alphabet stake the company disclosed Friday suggests he is still picking the stocks.

Berkshire owned roughly 106 million Alphabet shares worth nearly $38 billion at the end of June, according to its quarterly portfolio update. Buffett, who turns 96 this month, told CNBC in July he initiated the position during the third quarter of 2025. The stake ranked as Berkshire's third-largest equity holding on June 30, behind only Apple and American Express.

David Kass, a finance professor at the University of Maryland who tracks Berkshire, told Business Insider he believes Buffett is "still largely managing Berkshire's stock portfolio" alongside investment manager Ted Weschler. "He comes into the office every day, and investments are his primary interest," Kass said.

Alphabet's $4.2 trillion market cap makes it one of the world's most valuable companies. Its shares have jumped nearly 70% over the past year and more than tripled since May 2023, as investors bet it will be a primary beneficiary of the AI boom. Buffett told CNBC that Alphabet was "more likely to be a winner based on their record than probably 95% of what gets merchandised through Wall Street." He also noted the hundreds of billions of dollars Alphabet and its peers are pouring into AI infrastructure. "That's real money," he said. "That's the game they're playing now."

Buffett has historically avoided tech stocks, calling them outside his circle of competence and noting they often trade at high valuations with unpredictable long-term prospects. It is not entirely clear why he changed course. Kass said: "Buffett probably believes that Alphabet's size and leadership role in search, advertising, the cloud, and YouTube provide a moat or a durable competitive advantage." Michael Burry, the investor known for "The Big Short," called Alphabet the "value investor's favorite" in a December podcast interview.

Buffett made Apple Berkshire's largest holding after concluding it was essentially a consumer-electronics company with indispensable products. The Alphabet bet follows a similar logic: a dominant platform with pricing power.

The Alphabet position, partly built through a $10 billion private placement at a discount to market price in June, was one of several aggressive moves last quarter. Berkshire bought a net $23.5 billion of stocks over three months, breaking a streak of 14 consecutive quarters as a net seller dating to 2022. The company also repurchased $4.5 billion of its own stock, its biggest buyback quarter since 2021, after not buying a single share for the prior 18 months. In May, Berkshire agreed to buy homebuilder Taylor Morrison for $8.5 billion in cash; the deal closed in late July.

The spending spree trimmed Berkshire's cash pile from a record $380 billion to $365 billion. Buffett had nearly tripled the cash hoard during his final three years as CEO, as he struggled to find bargains in a historically expensive market. Valuations did not crash to levels that typically trigger Buffett buying.

Kass said Berkshire was "too conservative over the past three years with the S&P 500 increasing by an average of about 23% per year." He added: "Perhaps Buffett is acknowledging that the current market environment still provides an attractive long-term entry point for a company like Alphabet that has a large potential for growth."

The scale of the Alphabet stake and the timing – initiated just before Buffett stepped down as CEO – point to his continued involvement in portfolio decisions. Greg Abel succeeded Buffett as CEO at the turn of the year, but Buffett remains Berkshire's chairman and its largest shareholder. Kass said Buffett is in the office daily, and investments remain his focus.

BRK.B stock page scores a Moderate 58 on AlphaScala's Alpha Score, while AXP scores Mixed 46.

Alphabet's rise has been dramatic. The stock has tripled since May 2023, making it one of the best performers among mega-cap tech. The AI trade that lifted it shows no sign of reversing. Buffett's bet says he sees more room to run.