Berkshire Hathaway significantly increased its investment in Alphabet, Google's parent company, during the second quarter, making it the third largest stock holding in the conglomerate's portfolio. A filing with US officials on 15/8 revealed Berkshire owned nearly 106 million Alphabet shares as of 30/6, a substantial rise from 57,8 million the previous quarter. The total stake is valued at approximately 37,8 billion USD, including 10 billion USD announced in June to support Google's expansion of its artificial intelligence (AI) infrastructure.
Apple remains Berkshire's largest investment, with shares valued at 66 billion USD at the end of June, followed by American Express at 51,3 billion USD. Coca-Cola and Bank of America trail Alphabet in the portfolio. The second quarter marked a significant shift in Berkshire's trading strategy, as the company bought 23,5 billion USD and sold 3,7 billion USD in stocks, ending a 14-quarter streak of net selling. Chief Executive Officer Greg Abel initiated spending a substantial cash reserve, leading to a reduction in Berkshire's cash from 380,2 billion USD at the end of March to 364,7 billion USD by the end of June.
Despite stepping down as Chief Executive Officer late last year, Warren Buffett remains Chairman of Berkshire. Last month, he revealed on CNBC that the decision to invest in Alphabet was his. Berkshire started buying shares in Google's parent company from QIII last year, with Buffett noting that he and Chief Executive Officer Abel had discussed capital allocation. "I was the initiator," Buffett said. "Abel does not do anything I disagree with. We communicate regularly." Buffett also admitted to "making a mistake" by overlooking Alphabet for many years. He explained that he was ultimately drawn to Alphabet and its hyperscaler competitors due to their substantial investments—hundreds of billions of USD—in data centers and chips. This capital-intensive approach aligns with the types of businesses Buffett has understood and owned for decades.
Historically, Buffett avoided the technology sector, adhering to his principle of not investing in what he did not understand. This stance, however, led Berkshire to miss opportunities with several tech giants. It was not until 2016 that Berkshire Hathaway began investing in the sector, starting with Apple.
Beyond its investment portfolio, Berkshire operates a diverse range of businesses. The conglomerate owns dozens of companies, including railway operator BNSF, auto insurer Geico, manufacturing and energy firms, and retail brands like Brooks, Dairy Queen, Fruit of the Loom, and See's.
Ha Thu (according to Reuters, CNBC)
