Berkshire Hathaway sharply increased its Alphabet stake during its biggest quarter for stock buying in years.
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Greg Abel, who took over from Warren Buffett as CEO at the turn of the year, oversaw an 83% increase in Berkshire’s Alphabet holdings to about 106 million shares, worth nearly $38 billion at the end of June.
Berkshire had agreed to buy $10 billion worth of Alphabet stock at a discount to the market price in a private placement in June. It also bought a further 19.6 million shares on the open market last quarter, a portfolio disclosure revealed on Friday.
Alphabet was the third-largest holding in Berkshire’s US stock portfolio at the end of June, trailing only a $66 billion stake in Apple and a $51 billion position in American Express.
That’s striking, as Buffett eschewed tech stocks for most of his career, with the exception of Apple, preferring to own stocks like Coca-Cola and businesses like Geico.
He may no longer be running the show, but Buffett has said that he made the call to invest in Alphabet last year. Given that Abel is now CEO while Buffett is chairman, it seems likely the pair are sharing responsibility for the position.
Alphabet stock has soared by around 170% over the past three years, as investors continue to wager that the search-and-advertising giant will be one of the biggest winners from the AI boom.
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Ringing in the changes
Berkshire boosted its stake in Delta Air Lines by 44% last quarter, giving it a $5.4 billion stake in the airline as of June 30. It also established a fresh stake in D. R. Horton and added significantly to its Lennar and Macy’s positions.
On the other hand, it roughly halved its stakes in Capital One and Nucor, trimmed its holdings in Bank of America and Kroger, and closed a small bet on Constellation Brands.
The portfolio update was hotly anticipated as investors knew Berkshire had been busy. Its second-quarter earnings last week showed that it purchased a net $20 billion of stocks, its largest quarterly outlay since 2022.
Berkshire spent $23.5 billion on stocks while selling only $3.7 billion, ending its run of 14 straight quarters as a net seller.
The sharp uptick in stock purchases — along with $4.5 billion of stock buybacks, the highest quarterly figure since 2021 — helped trim Berkshire’s cash pile from a record $380 billion to $365 billion in the three months ended June 30.
Berkshire’s cash pile ballooned during Buffett’s final years in charge, as the legendary bargain hunter struggled to find value for money in stocks, acquisitions, or buybacks.
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