Berkshire Hathaway’s Alphabet stock turned out to have surprisingly good timing, with its stock up 13% since Google announced its new AI model, Gemini 3, in mid-November. The conglomerate recently disclosed a $4.3 billion position in Alphabet in its latest 13F filing, making Google parent Berkshire’s 10th largest holding at the end of September. At the time, the move was notable in large part because Berkshire had long been reluctant to enter high-growth technology companies other than Apple. The timing of the purchase is attracting investors’ attention. Berkshire likely entered the position just weeks before Alphabet’s biggest AI release in years, an announcement that triggered a sharp rise in the stock price. The latest advances put Alphabet on pace for a 70% increase in 2025, the YouTube owner’s biggest annual profit since 2009. GOOGL Mountain Alphabet Stock Year to Date Still, Buffett will be the first to reject any suggestion of market timing. He has been warning investors for decades not to try it, but the investment almost certainly came from one of his lieutenants, Todd Combs or Ted Weschler, who are comfortable making technology-oriented bets. Buffett, who will step down as Berkshire’s CEO at the end of the year, previously admitted he had “failed” by not investing early in Google’s advertising, despite having insight into its potential. Berkshire’s auto insurance division, Geico, was an early customer of Google, paying the search engine $10 every time someone clicked on an ad. Buffett said in 2018: “I had seen the product work and I knew what margins[the product]had. I didn’t know enough about the technology to know if this was really going to stop the competition.” Burley’s Take Michael Burley, of “The Big Short” fame, believes that Alphabet is actually the most traditional “value” play among big technology companies, a company that investors often justify as being cheaper than its peers. “Google is value investors’ favorite of that group. It’s the one that everyone says, ‘Well, it’s cheaper than the others and has a higher relative value,'” Barry said on a recent podcast with The Big Short author Michael Lewis. Burley also questioned how much generative AI will ultimately change everyday consumer behavior compared to search engines. Google’s profitability has long depended on its ability to handle a large portion of the world’s search traffic, so if users migrate to AI chatbots, that could hurt, he said. “The appeal of Google search was how low it was, so why not lose a lot of money on it? AI is going to change that. AI is expensive,” Barry said. “Google was making these searches down to the tiniest penny. So that business is the golden goose. And that’s basically all of their cash flow.”
