TLDRs;
- Alphabet (GOOG) jumped over 4% Friday after Berkshire Hathaway disclosed a $4.3B investment.
- Berkshire trimmed Apple shares from 280M to 238.2M, signaling selective tech adjustments.
- Warren Buffett’s firm sold $12.5B in stocks, marking its twelfth straight net-selling quarter.
- Greg Abel’s upcoming CEO role could allow more tech-friendly investment strategies.
Alphabet Inc. (GOOG) saw its stock price climb over 4% on Friday, fueled by Berkshire Hathaway’s latest SEC filing that revealed a substantial $4.3 billion investment in the Google parent company.
The move marks a significant vote of confidence in Alphabet amid a quarter of heavy portfolio reshuffling by Warren Buffett’s conglomerate.
Berkshire now owns 17.85 million shares of Alphabet, making it the firm’s tenth-largest U.S. stock holding. The purchase comes alongside a reduction in Apple holdings, which fell from 280 million shares to 238.2 million. Despite the cut, Apple remains Berkshire’s largest holding at $60.7 billion. The conglomerate also made additional adjustments, selling 6% of Bank of America shares, exiting its DR Horton position, and increasing stakes in Chubb and Domino’s Pizza.
Berkshire Buys $4.3B in Alphabet
While the SEC filing does not specify who orchestrated the Alphabet acquisition, investors are speculating whether the move was directed by Warren Buffett himself or his portfolio managers, Ted Weschler and Todd Combs.
Historically, Buffett has avoided major tech investments beyond Apple, which he categorizes as a consumer products company rather than a tech play.
In 2019, Buffett and vice chairman Charlie Munger admitted that they had “screwed up” by not investing in Google sooner, despite early data from Berkshire’s auto insurer, GEICO, which paid $10 to $11 per click, highlighting Google’s online dominance. The current investment could signal a reconsideration of that earlier stance.
Apple Holdings Trimmed Significantly
The reduction in Apple shares represents a strategic trimming, part of a broader pattern of selective divestments during the third quarter.
Between July and September, Berkshire bought $6.4 billion in stocks while selling $12.5 billion, continuing a streak of net-selling for the twelfth consecutive quarter. Analysts note that such movements often reflect a combination of market timing and portfolio rebalancing rather than a lack of faith in the companies involved.
Cash Reserves Reach Record Levels
Berkshire Hathaway’s cash reserves surged to a record $381.7 billion, positioning the firm to make large-scale acquisitions or strategic investments in the near future.
The cash buildup also coincides with the planned CEO transition, where Warren Buffett is expected to hand over leadership to Greg Abel on January 1. Abel’s approach may be less conservative on technology, potentially influencing the firm’s future investment decisions.
Investors Eye Potential Strategy Shift
Financial technology platforms and retail investors often track Berkshire’s quarterly moves closely, using them as signals for broader market trends. The increase in Alphabet holdings, paired with Apple reductions, may indicate a subtle shift in Berkshire’s technology strategy, encouraging investors to reassess GOOG’s long-term growth prospects.
Fintech apps and brokerages can offer tools such as custom ETFs, direct indexing, and real-time alerts to capitalize on such filings, reflecting a growing demand for data-driven investment strategies.
As trading closed on Friday, Alphabet’s shares reflected market enthusiasm, rising from $276.98 at the previous close to $288.25 in after-hours trading, a 4.07% jump. Analysts are now watching Monday’s opening closely to gauge whether the momentum will continue, potentially signaling a new chapter for Berkshire Hathaway’s approach to the tech sector.
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