Story
Berkshire Hathaway Boosts Alphabet Stake by 83%, Making It Third-Largest Holding
Summary
Warren Buffett's firm significantly increased its investment in the Google parent during the second quarter, according to a new regulatory filing. The move signals a broader shift in capital allocation, as Berkshire became a net buyer of stocks for the first time in over three years.
Berkshire Hathaway significantly increased its investment in Google-parent Alphabet during the second quarter, boosting its stake by 83% and making the tech giant its third-largest stock holding. According to a regulatory filing on Friday, the conglomerate's position grew to nearly 106 million shares valued at approximately $37.8 billion as of June 30.
A Major Bet on Big Tech
The increased stake in Alphabet, up from 57.8 million shares at the end of the first quarter, elevates the company in Berkshire's closely watched equity portfolio. The filing confirms the position now ranks behind only Apple, worth $66 billion, and American Express, valued at $51.3 billion. Bank of America and Coca-Cola round out the top five holdings.
The larger investment includes a $10 billion infusion announced in June, which was designated to help Alphabet expand its artificial intelligence infrastructure. Berkshire first began building its position in the search and cloud computing leader in the third quarter of last year.
Shift in Capital Allocation
This move is part of a broader strategic shift for Berkshire, which became a net buyer of stocks for the first time in 14 quarters. The firm purchased $23.5 billion in equities while selling just $3.7 billion, signaling a more aggressive deployment of its vast cash reserves under CEO Greg Abel, who took over from Warren Buffett.
AdBerkshire's cash pile consequently fell to $364.7 billion on June 30, down from $380.2 billion three months prior. The decline also reflects $4.5 billion spent on stock buybacks. Buffett, who remains chairman, told CNBC last month that the initial Alphabet investment was his idea and that he continues to consult with Abel on major capital allocation decisions.
Other Portfolio Adjustments
The quarterly filing revealed several other changes to Berkshire's U.S.-listed stock holdings, which totaled $323.8 billion. Key adjustments include:
- Exited Position: The company eliminated its entire stake in alcoholic beverage producer Constellation Brands.
- Increased Stakes: Berkshire added to its positions in Delta Air Lines, which grew 44% to a value of $5.4 billion, and more than doubled its investment in retailer Macy's.
- Reduced Stakes: Holdings were trimmed in several financial and industrial companies, including Ally Financial, Bank of America, Capital One, DaVita, Kroger, and Nucor.
- New Positions: The firm disclosed a new, small stake in home builder D.R. Horton and added to its existing investment in Lennar.
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