Berkshire Hathaway Boosts Its Alphabet Holdings
Berkshire Hathaway has made a substantial increase to its investment in Alphabet during a quarter marked by significant stock purchases, the largest seen in quite some time.
Greg Abel, who succeeded Warren Buffett as CEO at the start of the year, led the charge as Berkshire raised its Alphabet holdings by 83%, bringing the total to around 106 million shares valued at approximately $38 billion as of the end of June.
In June, Berkshire committed to acquiring $10 billion in Alphabet stock through a private placement at a discount to its market value. Additionally, the company purchased another 19.6 million shares on the open market during the past quarter, as disclosed in a recent portfolio update.
At the close of June, Alphabet stood as the third-largest holding in Berkshire’s U.S. stock portfolio, following Apple, which had a value of $66 billion, and American Express at $51 billion.
This shift is a bit surprising, considering Buffett historically shied away from tech stocks throughout most of his career—except for Apple, of course—favoring investments in more traditional companies like Coca-Cola and Geico.
Although Buffett is no longer at the helm, he mentioned being approached about investing in Alphabet last year. With Mr. Abel now as CEO and Buffett in place as chairman, they likely share the decision-making regarding these investments.
Alphabet’s stock has surged roughly 170% over the last three years, with investors optimistic about the company’s potential to lead in the anticipated AI boom.
Investment Activities
In addition to Alphabet, Berkshire increased its stake in Delta Air Lines by 44% over the last quarter, holding $5.4 billion in Delta stock as of June 30. They also established a new position in DR Horton and enhanced their stakes in both Lennar and Macy’s.
On the flip side, Berkshire cut its stakes in Capital One and Nucor by around half, reduced its investments in Bank of America and Kroger, and divested from Constellation Brands altogether.
Given the buzz around Berkshire’s activities, the recent portfolio update was highly anticipated. Second-quarter results indicated $20 billion in net stock purchases, marking the company’s largest quarterly investment since 2022.
Berkshire spent a total of $23.5 billion on stocks while selling off $3.7 billion, ending a 14-quarter trend of net sales.
The notable uptick in stock purchases, combined with $4.5 billion in stock buybacks—the highest quarterly figure since 2021—contributed to a reduction in Berkshire’s cash reserves from a record $380 billion to $365 billion by the end of June.
During the latter years of Mr. Buffett’s leadership, Berkshire’s cash reserves ballooned as the revered investor faced challenges finding appealing value in stocks, acquisitions, and buybacks.
