Key Highlights
- Berkshire Hathaway purchased $10 billion worth of Alphabet shares through a private transaction at over 6% below Monday’s market close
- This transaction forms part of Alphabet’s unexpected $80 billion capital raise announced to investors
- Shares of Alphabet’s Class A (GOOGL) and Class C (GOOG) declined more than 3% following the announcement
- Berkshire’s total Alphabet investment now stands at approximately $31 billion, positioning it alongside Coca-Cola as the company’s third-biggest holding
- Greg Abel’s decision as CEO has generated mixed reactions — supporters applaud the move while critics point to the elevated valuation near 25x forward 2026 earnings
Warren Buffett’s Berkshire Hathaway is committing an additional $10 billion to Alphabet, significantly expanding a position initiated only three quarters earlier.
The tech giant agreed to issue Berkshire $5 billion in Class A shares priced at $351.81 each and $5 billion in Class C shares at $348.20 per share. These prices reflect discounts exceeding 6% compared to Monday’s market close.
This private placement represents one component of Alphabet’s broader $80 billion equity offering unveiled after markets closed Monday. Management stated the proceeds would fund capital investments, particularly expanding artificial intelligence computing capabilities.
Alphabet’s stock experienced selling pressure following the revelation. By Tuesday afternoon, GOOGL had declined approximately 2% to $368.93 while GOOG fell roughly 1.9% to $365.35.
The massive capital raise surprised Wall Street. During April’s earnings conference call, Alphabet management hadn’t indicated plans for such an offering, leading most analysts to expect the company would finance its $180–$190 billion yearly capex requirements through operating income and borrowing.
Expanding Investment Footprint
Berkshire initially revealed its Alphabet position during Q3 2025, acquiring approximately 17.8 million shares. The conglomerate has increased its holdings each subsequent quarter. Following this latest transaction, Berkshire’s Alphabet investment will total roughly $31 billion — representing about 58 million shares purchased since 2025, combined with approximately 28 million newly issued shares.
This positions Alphabet essentially level with Berkshire’s Coca-Cola investment as the portfolio’s third-largest position. Apple maintains the top spot exceeding $60 billion, with American Express second at approximately $47 billion.
Greg Abel remains in the early stages of managing Berkshire’s investment decisions, making this transaction noteworthy as an indicator of his investment philosophy. The Alphabet investment followed closely after Berkshire’s announcement to purchase homebuilder Taylor Morrison for $6.8 billion cash.
With nearly $380 billion in cash reserves as of March 31, the $10 billion commitment represents only a modest deployment of Berkshire’s substantial liquidity.
Valuation Concerns Surface
The deal hasn’t received universal praise. Alphabet currently commands approximately 25 times estimated 2026 earnings — significantly higher than the roughly 15x multiple Berkshire traditionally targets.
Skeptics on social media highlighted the unusual nature of Berkshire effectively financing Alphabet’s infrastructure spending through equity participation, with one observer commenting: “It was the top when Berkshire funded Google capex via equity.”
Proponents view the situation more favorably. Five Points Capital commented: “Between the Taylor Morrison acquisition and the Alphabet deal, I really like the direction they’re going. The massive cash pile could prove advantageous at a time when the largest, most profitable companies in the world need to raise money.”
Alphabet’s shares have approximately doubled during the past twelve months, indicating Berkshire is entering after substantial appreciation — a departure from the value-hunting strategy Buffett popularized.
At Tuesday’s trading levels, Berkshire’s $10 billion investment at the private placement pricing still delivers a substantial discount versus prevailing market prices.
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