Berkshire Hathaway has made a significant move under new CEO Greg Abel, increasing its stake in Alphabet by 224% to nearly 58 million shares, valued at approximately $23 billion. This decision, made in Abel’s first three months at the helm, positions Alphabet among Berkshire’s top seven equity holdings, signaling strong confidence in the tech giant’s future.
Alphabet’s first-quarter performance underscores this bullish sentiment, with revenue surging 22% to $109.9 billion and operating income climbing 30% to $39.7 billion. The cloud segment is a standout performer, boasting a 63% revenue increase, which is crucial for future growth. However, the company’s rising capital expenditures, projected between $180 billion and $190 billion for 2026, could pressure free cash flow and warrant caution among investors.
For market professionals, the key takeaway is that while Alphabet’s stock has appreciated significantly—trading around $393 compared to $243 when Berkshire first invested—its current valuation remains reasonable given its growth trajectory. A cautious approach may be prudent, with potential for a small initial investment for those looking to enter the stock.
Source: fool.com