Berkshire Hathaway, Warren Buffett’s investment company, recently made a big bet on one of the world’s hottest tech stocks.
According to a regulatory filing made public Friday afternoon, Berkshire bought 17.8 million shares of Alphabet Class A (GOOGL) in the third quarter of this year. The holding is expected to be worth nearly $5 billion by Monday’s close.
Alphabet shares jumped more than 3% on Monday, in line with the trend when Berkshire makes billion-dollar investments. Interestingly, most other large tech stocks also recorded declines.
The move is considered unusual because Berkshire usually chooses stocks that are less popular in the market, rather than entering stocks that are currently at the peak of attention.
Alphabet is also included in the Magnificent Seven group, with a more than 50% rise since the beginning of the year driven by a recovery after the market pressured by tariff concerns in mid-July.
This isn't Berkshire's only holding in the Mag 7 group. Apple (AAPL) remains the largest holding at around $65 billion. However, Berkshire has been reducing its stake for the past two years, including selling about another 15% last quarter.
Meanwhile, Alphabet recently raised its full-year capital expenditure estimate, expecting to spend more than $90 billion on data centers and chip development to train and run AI models.
The aggressive move, however, has raised questions among investors who have become wary of AI spending, especially about when the real returns will be seen.
