Berkshire Hathaway under CEO Greg Abel added roughly 40 million Alphabet shares in Q1 2026 and $10 billion more through a June private placement, deepening its bet on artificial intelligence. Alphabet expects 2026 capital expenditure of $195 billion to $205 billion as Google Cloud revenue rose 82 percent year over year to $24.77 billion in Q2.
Berkshire Hathaway under CEO Greg Abel added roughly 40 million Alphabet shares in Q1 2026 and $10 billion more through a June private placement.
"I made a mistake" by not investing in Alphabet sooner, Warren Buffett told CNBC, a regret his successor is addressing. Abel, who took over as Berkshire's chief executive, has built the conglomerate's Alphabet position from roughly 18 million shares bought in Q3 2025 to a stake now exceeding $10 billion in new capital.
The June private placement split evenly between $5 billion in Class A and $5 billion in Class C shares. Berkshire typically offers no commentary on its moves, but the purchases rank among Abel's largest single-stock bets since assuming the top role, funded from a record cash pile of about $397 billion.
The investment is a direct vote of confidence in Alphabet's artificial-intelligence strategy at a moment of heavy spending. Alphabet expects 2026 capital expenditure of $195 billion to $205 billion, and its Q2 free cash flow swung to negative $5.86 billion — the first such quarter in its 22 years as a public company — as it funds data-center buildout. Google Cloud revenue rose 82 percent year over year to $24.77 billion in Q2, with operating margin expanding to 35.6 percent from 20.7 percent. To fund the buildout, Alphabet has raised roughly $84.75 billion in equity since June, including the Berkshire placement, and suspended share buybacks.
Berkshire's stake suggests the AI buildout will pay off. Statista forecasts the global AI market will grow from just over $617 billion in 2026 to $1.2 trillion by 2032. Alphabet shares have climbed roughly 164 percent over five years, versus about 70 percent for the S&P 500.
The bet carries added weight because Berkshire is a disciplined, long-horizon investor that rarely chases missed opportunities. Buffett's regret over Alphabet, expressed in a CNBC interview, highlights the significance of Abel's decision to enter the position now rather than wait. Phillip Securities analyst Serena Lim Yi Qi upgraded Alphabet to Buy on July 27, citing a 16 times trailing price-to-earnings ratio against 82 percent Cloud growth. The broader Street holds a Strong Buy consensus across 64 analysts, with an average 12-month target of $427.59.
For holders, the move points to Berkshire's view that Alphabet's AI infrastructure spending will prove value-accretive over the long term. Investors will watch Alphabet's Q3 earnings in October for whether Cloud margins hold above 30 percent as new TPU capacity comes online.
This article is for informational purposes only and does not constitute investment advice.
