Warren Buffett Stepped Back From Berkshire Hathaway With a Bang; Its Investment in 1 AI Stock Now Tops $30 Billion
Brett Schafer, The Motley Fool
Sun, August 2, 2026 at 5:41 PM GMT+3 5 min read
When you hear the name Warren Buffett and the conglomerate Berkshire Hathaway that he built into one of the world's largest market caps, you do not think of cutting-edge technology or artificial intelligence (AI). Buffett made his dough mostly in insurance, newspapers, and consumer goods brands like Coca-Cola.
However, before retiring from day-to-day operations at the end of 2025, Buffett began making a massive new Berkshire investment in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent company of Google, as he confirmed in a recent CNBC interview. Berkshire now has a whopping $30 billion bet on Alphabet.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Should you follow the Oracle of Omaha and buy Alphabet stock for your portfolio?
Berkshire's bet on Alphabet
Back in June, Alphabet sold $10 billion in newly issued common stock to Berkshire Hathaway at a price of roughly $350 per share. On July 30, the stock closed at $333.
That happened after Berkshire's open-market purchases in late 2025, which amount to approximately $20 billion at current trading prices. (Buffett said in a mid-July interview with CNBC's Becky Quick that he initiated that investment.) Therefore, the conglomerate now has a total investment in Alphabet of $30 billion, making it quickly its third- or fourth-largest position.
The investment came as a bit of a surprise, as Berkshire Hathaway is typically one to eschew technology investments. Buffett told CNBC that it was a mistake for Berkshire Hathaway to exclude owning Alphabet for so many years, given how attractive he thinks the Google Search business is.
Taking the long view in AI
Buffett may have told CNBC that he initiated the Alphabet investment because of Google Search, but the business is much more than that. Alphabet is one of the largest AI infrastructure providers through its Google Cloud division, which is growing like gangbusters.
Google Cloud revenue grew at an astonishing 82% year-over-year last quarter, reaching $24 billion with an operating income of $8.8 billion. This was a business with little revenue 10 years ago that was hemorrhaging cash, but Alphabet had the vision that it could deliver massive gains due to the tailwinds in cloud computing and AI, and it is beginning to deliver.
Overall, Alphabet's Google Services revenue grew 15% year over year to $94.5 billion in the recent quarter. Despite fears that AI services like ChatGPT or Claude would dethrone Google, the business is still growing revenue at a double-digit rate. Services like Gemini -- Alphabet's direct competitor to ChatGPT -- are also growing quickly, with 950 million monthly active users last quarter.
The company is generating a boatload in earnings before interest and taxes (EBIT) and trading at a reasonable enterprise value, which is a valuation tool that takes into account debt and cash on the balance sheet.
Is Alphabet a buy now?
The newest Berkshire investment was part of equity offerings totaling $80 billion that Alphabet announced June 1. The company noted it would use proceeds for " ... general corporate purposes, including capital expenditures to scale AI infrastructure and global compute."
Alphabet needs capital to fund data centers for its Google Cloud business. Berkshire Hathaway has the necessary capital to buy these newly issued shares of stock and can put the Buffett stamp of approval on the equity raise as Wall Street gets nervous over all the capital being deployed into AI infrastructure.
Despite negative cash flow, Alphabet stock does not look overly expensive today. Investors cannot use the price-to-earnings ratio (P/E) to measure the stock because of the one-time gains Alphabet has with its Space Exploration Technologies investment that impact net income (earnings), but the enterprise value-to-EBIT (earnings before interest and taxes) ratio -- as seen in the chart above -- can be used to value the stock right now.
As of this writing, the stock's EV/EBIT is 26, which is quite reasonable for those who think this double-digit revenue growth will continue because of the AI revolution. Buffett and Berkshire certainly seem to think so. If you are looking for a nice buy-and-hold AI stock, look no further than Alphabet as a candidate to include in your portfolio today.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,232,139!*
That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.
*Stock Advisor returns as of August 2, 2026.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Berkshire Hathaway. The Motley Fool has a disclosure policy.
Warren Buffett Stepped Back From Berkshire Hathaway With a Bang; Its Investment in 1 AI Stock Now Tops $30 Billion was originally published by The Motley Fool
Yorumlar (0)
Giriş yaparak yorum yazabilirsin.
İlk yorumu sen yaz.