Legendary investor and Berkshire Hathaway CEO Warren Buffett made a bold statement that has already stirred the markets. During the morning broadcast of Squawk Box, he expressed confidence that Alphabet (GOOGL) shares could outperform 90% to 95% of all assets typically recommended by Wall Street financial analysts.
Following these remarks, Alphabet's stock surged 3.65%, reaching $370.36. As a result, the value of the stake managed by Berkshire now exceeds $31 billion. Currently, the tech giant trails only Apple and American Express in the fund's investment portfolio.
Buffett Personally Initiated the Purchase
For a long time, rumors circulated that the purchase of the IT giant was the work of Berkshire's new CEO, Greg Abel. However, Buffett dispelled these doubts with a succinct phrase: "I initiated it." He clarified that the final decision still rests with Abel — they consult daily and coordinate all decisions.
The position in Alphabet was built gradually. Berkshire began purchasing in the third quarter of 2025 and increased its stake until early 2026. In June, the company acquired an additional $10 billion through a private transaction related to Alphabet's $80 billion fundraising for AI development. According to Alphabet's SEC filing, Berkshire paid $351.81 per Class A share and $348.20 per Class C share.
Buffett also acknowledged past miscalculations: he regrets ignoring Google for so long when the search engine business was worth significantly less.
Billions in AI Spending — "Real Money"
The Berkshire chief openly discusses the associated risks. Alphabet plans to allocate approximately $180–190 billion in capital expenditures this year alone, with experts expecting this budget to increase in 2027. Buffett emphasized that such investments far surpass the spending of the largest railroad networks and respectfully characterized them as "real money."
The corporation's financial reports clearly demonstrate its strength. In the first quarter, Alphabet's revenue grew by 22%, reaching $110 billion. Meanwhile, Google Cloud's revenue surged by 63%. The tech giant's operating cash flow over the past twelve months stood at an impressive $174 billion.
"...the chances of such a company being a winner are higher than, probably, 90% or even 95% of everything Wall Street promotes. Wall Street is interested in what can be sold," Buffett said on air.
Of course, such a high assessment came with important caveats. The legendary investor admitted that within Berkshire Hathaway itself, there are four or five subsidiaries he likes much more. Speculators and stock analysts also took a hit: in his view, experts are overly focused on short-term quarterly results rather than evaluating long-term business profitability.
My comment as an analyst: Buffett once again demonstrates his classic "buy and hold" strategy, betting on a fundamentally strong business with enormous cash flow. Alphabet is not just a search engine but a giant platform dominating cloud computing and AI. In the current market environment, where many investors chase hype, this long-term approach looks particularly wise. However, it's worth remembering that even Buffett has made mistakes, and $180 billion in capital expenditures is a serious risk if the return on AI falls short of expectations.