Berkshire Hathaway CEO Greg Abel announced on Wednesday that the conglomerate has made Alphabet its third-largest common stock holding, with a $37.8 billion stake in the tech giant as of June 30. The investment includes a $10 billion commitment made three months prior, executed at a 6.5% discount to Alphabet’s market price.
Abel highlighted Alphabet’s role as a “significant player” in artificial intelligence (AI) during an interview with CNBC, citing the company’s infrastructure and AI capabilities as key factors in Berkshire’s decision. The conglomerate also noted potential benefits for its energy business, given the rising electricity demand from AI data centers.
Berkshire’s energy segment could see growth opportunities as data centers increasingly rely on power grids. Abel estimated that in Iowa, where Berkshire Hathaway Energy operates, 8% of the energy load last year came from data centers. He emphasized that energy supply may become a limiting factor for AI expansion, positioning Berkshire to capitalize on this trend.
The investment in Alphabet follows Berkshire’s broader strategy under Abel, who succeeded Warren Buffett as CEO at the start of 2024. Buffett initiated Berkshire’s stake in Alphabet last year, while Abel oversaw the additional $10 billion allocation. Berkshire’s decision to expand its position came after being invited to participate in a private placement in late May, which Abel discussed with Buffett before finalizing the deal.
Berkshire’s portfolio now includes 106 million Alphabet shares, making it the third-largest equity holding after Apple and American Express. The conglomerate also increased its stake in Delta Air Lines by 44%, adding roughly $1.6 billion to its position during the second quarter.
Abel acknowledged ongoing pressures on American consumers, citing elevated inflation and mortgage rates as factors contributing to financial strain. He described the housing market as facing a “bumpy road” in the near term, though Berkshire has also invested in homebuilders such as Taylor Morrison, Lennar, and D.R. Horton.
The announcement underscores Berkshire’s evolving investment approach under Abel, blending traditional value investing with strategic bets on high-growth sectors like AI. The conglomerate’s energy business stands to benefit indirectly from AI expansion, given the sector’s role in powering data infrastructure.