Berkshire Hathaway increased its position in Alphabet by $17 billion in the second quarter, bringing the total value of its investments to $36.6 billion. This decision sharply contrasts with warnings from renowned investor Michael Burry, who sees signs of haste and a lack of discipline in the actions of Berkshire's new management.
Alphabet becomes the third-largest position
According to my analysis of the latest 13F filing data, Berkshire now holds nearly 106 million shares of Alphabet (Classes A and C), making the tech giant the third-largest holding in its portfolio. Alphabet has surpassed Coca-Cola ($35.1 billion) but still trails American Express ($51.9 billion) and Apple ($69.7 billion).
Notably, about 60% of the new shares were acquired through a $10 billion private placement agreed upon in June, with the remaining $7 billion purchased on the open market. This marks Berkshire's first net stock purchase in 14 quarters, which in itself signals a shift in direction.
In parallel, Berkshire increased its stake in Delta Air Lines by 44% (an additional $1.6 billion) and boosted positions in Macy's (+142%, about $100 million) and Lennar (+$280 million). The return to aviation is particularly telling given the exit from four airlines in 2020 at a loss.
Burry: "The fear has materialized"
Michael Burry, who predicted the 2008 mortgage crisis, has openly criticized the actions of Warren Buffett's successor, Greg Abel. In his view, the new purchases are "a semblance of activity" rather than strategic investments. He noted that Berkshire's cash reserve has shrunk from a record $397 billion in the first quarter to roughly $360 billion in the second, but remains excessively large.
Burry also warned against shorting Berkshire's own stock, although both classes of its shares fell more than 3% over the week. Alphabet shares also declined amid the departure of top AI executives, though this is unlikely to be related to Berkshire's actions.
My take on the situation
Abel's actions can be interpreted in two ways: either this is the beginning of a long-term shift toward more aggressive capital deployment, or cautious steps aimed at reassuring the market. The key signal—the return to aviation and the bet on Alphabet—suggests that Berkshire is seeking new growth points in the technology and cyclical sectors. However, as Burry rightly points out, time will tell whether this is strategy or improvisation. Investors should closely monitor the further use of the remaining $360 billion in reserves—this will be the primary indicator of the new management's true intentions.