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Abel goes its own way with new investments in homebuilding and AI
Buffett praises new CEO for ‘quick’ and ‘smooth’ acquisition
Warren Buffett told CNBC’s Becky Quick that Berkshire Hathaway’s new CEO Greg Abel has “kickstarted” with his first big deal, the $6.8 billion acquisition of Berkshire Hathaway. taylor morrison homeis a home builder and developer with operations in 12 states.
On Monday’s “Squawk Box,” Becky quoted Buffett in a phone call the day before the acquisition was announced.
“Greg did this faster than I could, smoother than I could, and I never spoke to the CEO.
“He has left.”
Becky noted that when Buffett wants to make a trade, he will act quickly. “This is basically what Greg thought of and did,” he said.
According to her report, Abel went to Arizona and spent about five hours with Taylor Morrison CEO Cheryl Palmer, but when she returned she didn’t think the deal was done.
Then, a few days later, Mr. Palmer called and said the price was fair and the board was ready to proceed.
Becky said Abel spoke with Buffett and Berkshire’s chief director, Sue Decker, but did not tell the rest of the board until the deal was completed.
“It’s kind of Berkshire’s way of trying to move these things along quickly,” she added.
Appearing on Monday’s “Squawk on the Streets” later that morning, Palmer said joining Berkshire was “a once-in-a-lifetime opportunity for the company, the brand and our team members across the country.” (CNBC Pro subscribers can view the entire interview.)
She started talking to Abel “probably only a few weeks ago.” His “pitch” was that Berkshire “has a great collection of on-site builders, and they typically build around first-time buyers…and given the Berkshire ecosystem and what they’ve built over the decades, I think what Greg saw was an opportunity to build a platform on a national scale.”
Berkshire’s home and home improvement subsidiaries include Clayton Homes, Shaw Industries, Johns Manville, and Benjamin Moore.
A home under construction stands behind a “sold” sign in a new development in York County, South Carolina, USA, on February 29, 2020.
lucas jackson reuter
In a joint news release about the deal, Abel echoed Palmer, saying, “Over time, we look forward to consolidating our on-site homebuilding operations into a unified platform that will enable us to bring the dream of homeownership to more Americans.”
Christopher Davis of Hudson Value Partners told Bloomberg that the goal of consolidation is a “marked departure” from Berkshire’s long-standing practice of having its subsidiaries run independently, but he thinks investors “will welcome the evolution of the approach.”
“Given Greg’s strengths as an operator, it will be interesting to see whether he consolidates these units for greater scale and efficiency,” CFRA research analyst Kathy Seifert told The Associated Press.
UBS analyst John Roballo told clients that the merger between Taylor Morrison and Clayton would create one of the country’s five largest homebuilders, Reuters reported.
He described the deal as a “strong vote of confidence in the medium- to long-term prospects of the homebuilding industry”, which has a shortage of about 7 million homes.
Abel joins Alphabet in big bet on AI ambitions
And in what appears to be a vote of confidence in the future of artificial intelligence, Berkshire will invest $10 billion in Alphabet to fund the company’s massive spending on “world-class AI computing infrastructure to meet unprecedented customer demand.”
Google’s parent company plans to use a private placement to sell $5 billion of its stock as part of a larger plan to raise about $80 billion from stock sales. Class A shares (GOOGL) 351.81 each to Berkshire for an additional $5 billion. Class C stock (GOOG) $348.20 each.
According to Bloomberg, the deal was the result of a “surreptitious weekend call” to Berkshire by Goldman Sachs, which orchestrated Alphabet’s huge stock offering, and “quick approval” from Abell, providing “new reassurance that Warren Buffett’s investment conglomerate remains the first port of call for companies in need of big checks and votes of confidence.”
When the deal was announced after Monday’s close, Berkshire’s purchase price for GOOGL was 5.5% below the stock market price, and GOOG was at a 6.5% discount.
The discount rates have now fallen to 4.5% and 4.8%.
Berkshire already owns $21.3 billion in Alphabet’s Class A stock, making it the fifth-largest holding in the company’s stock portfolio.
Mr. Abel’s decision was clearly the reason Berkshire more than tripled its stake in the first quarter to nearly 58 million shares from the nearly 18 million it bought in the third quarter of last year.
The addition of the new shares would likely make Alphabet Berkshire’s third or fourth largest holding, rivaling its long-held Coca-Cola stock, which is currently worth about $32 billion.
Mr. Abel’s enthusiasm for Alphabet is in sharp contrast to Mr. Buffett, who is very reluctant to invest in technology.
Because he felt he lacked the ability to predict which companies would prosper over the long term, he was “perfectly willing to trade big returns for specific returns” in areas he understood well, especially during what turned out to be the dot-com bubble in the late 1990s.
So far, Buffett has not said anything publicly about Berkshire’s Alphabet investment.
Buffett and Berkshire on the Internet
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CNBC’s Buffett Archive Highlights
Buffett missed the boat with Google (2017)
In a 2017 interview with CNBC, Warren Buffett said GEICO should have known about Google’s potential profits because it was a major customer of the company.
Warren Buffett: GEICO was a heavy user very early on, so they needed to gain some insight into Google.
So here we found something of value. Back then, I don’t know how much we were paying for clicks now, but we were paying $10 or $11 per click for products that had no cost of goods. And I was going to keep doing that. I mean, I could see it.
So I needed to get more insight into that.
Now, whether Bing will emerge or someone else will take over the market is another question.
There’s a lot of technology involved, whether or not there’s some kind of — first user benefit — that takes precedence.
So even if someone could have developed a better technology product, I wouldn’t have had any insight into it.
They certainly had insight into the benefits for users.
berkshire stock watch
BRK.A stock price: $733,550.00
BRK.B stock price: $488.13
BRK.BP/E (TTM): 14.53
Berkshire Market Capitalization: $1,053,525,726,365
Berkshire Cash as of March 31st: $397.4 billion (up 6.5% from December 31st)
Excluding railroad cash and outstanding Treasury bills: $380.2 billion (3.0% increase from Dec. 31)
Berkshire repurchased $234 million of its own stock in the first quarter of 2026.
(All figures are as of the date of publication, unless otherwise noted)
Berkshire’s Top Stock Holdings – June 5, 2026
Berkshire’s top U.S. and Japanese listed stocks by market capitalization, based on the latest closing prices.
Asset holdings are as of March 31, 2026, as reported in Berkshire Hathaway’s 13th Floor filing dated May 15, 2026. However, the following cases are excluded.
A complete list of holdings and current market value is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.
Question or comment
If you have any questions or comments about the newsletter, please send them to alex.crippen@nbcuni.com. (Sorry, we do not forward questions or comments to Mr. Buffett himself.)
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I also highly recommend Buffett’s annual letter to shareholders. It’s collected here on Berkshire’s website.
— Alex Crippen, Warren Buffett Watch Editor
