A Powerful Voice Just Reaffirmed My Confidence in My Non-Stop Alphabet Accumulation

Alex Sirois

Tue, September 22, 2026 at 5:41 PM GMT+3 4 min read

Quick Read

Berkshire Hathaway lifted its Alphabet stake 83%, backing a stock trading at just 16x earnings while Google Cloud posted 82% year-over-year growth.
Unlike Microsoft, Amazon, and Meta, Alphabet pairs its $460 billion Cloud backlog with Waymo's 500,000 weekly autonomous rides as unmatched optionality.
FY26 capex guidance of up to $185 billion pushed free cash flow negative and nearly doubled long-term debt to $98 billion.
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I keep hitting the buy button on Alphabet (NASDAQ:GOOGL), and this month a powerful voice gave me one more reason to keep going. Berkshire Hathaway lifted its Alphabet stake by 83%, making it the firm's third-largest position. When the most patient capital allocator in modern investing goes that hard on a name I already own, I pay attention. I have been adding for months. I plan to keep adding.

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Why That Powerful Voice Matters to Me

Buffett famously avoided Alphabet for two decades. Berkshire's roughly $10 billion direct investment arrives just as Alphabet transforms from a cash-return machine into a capital-intensive AI infrastructure builder. That timing is the tell. Berkshire could buy anything. It bought more of what I own, and it did so while CEO Sundar Pichai was framing the AI cycle as a redefinition of "what's possible across every part of our business."

Three Numbers That Keep My Finger on the Buy Button

Start with valuation. GOOGL trades at a P/E of 16 and an earnings yield of 6.35%. For a business posting a return on invested capital of 29.60% and an operating margin of 32.06%, that multiple looks mispriced to me. The forward P/E of 23 already reflects the AI capex cycle, and I am fine paying it.

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Next, growth is accelerating. Google Cloud grew 82% year over year in Q2 FY26 to $24.77 billion, up from 63% in Q1 and 48% in Q4 FY25. Total revenue hit $119.8 billion, up 24.23%. Reported EPS of 9.11 extended a 12-quarter EPS beat streak.

Third, the balance sheet still carries the business. Debt/equity sits at 0.143, interest coverage at 175.5x, and cash and equivalents at $55.91 billion. Even mid-buildout, this is a fortress.

Why Alphabet Over Microsoft, Amazon, or Meta

Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) are the reflexive cloud picks. Meta (NASDAQ:META) is the reflexive ad-market alternative. My problem with reaching for them instead is the distribution stack. None of them printed 82% cloud growth last quarter. Alphabet also owns Waymo, running 500,000+ autonomous rides per week, an optionality bucket the others cannot match. Nearly 90% of the Fortune 100 already use Gemini Enterprise, and the Gemini App serves 950 million monthly active users. Distribution wins, and Alphabet already owns the pipes.

Risk I Refuse to Wave Away

Capital intensity is the real concern. FY26 capex is guided at $175 to $185 billion. Q2 free cash flow ran negative $5.86 billion. Long-term debt jumped from $46.5 billion to $98.2 billion, the buyback was suspended, and management raised roughly $70 billion in combined equity and debt. That is dilution risk and cycle risk in one package. What keeps me buying anyway is the Google Cloud backlog of over $460 billion. Demand is already booked under contract, and the same buildout is lifting the power, cooling, and networking suppliers we profiled in a free report on seven AI infrastructure names that aren't chipmakers.

Forward Conviction From Here

GOOGL is up 39.72% over the past year and 155.46% over five years, and the Street's average target of $428.16 sits above today's $354.97. I own this for the next decade of compounding cash flows. When Berkshire is buying alongside me at scale, I keep pressing the same button.

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