Greg Abel Triples Berkshire's Alphabet Stake to 6% of Portfolio

Greg Abel, Warren Buffett's successor at Berkshire Hathaway, has made a significant strategic move by tripling the company's stake in Alphabet during the second quarter. Berkshire's initial 2% stake in Alphabet has grown to 6% of its U.S. stock portfolio, making it the company's second-largest equity investment after Apple. This move carries substantial weight: Alphabet's position now represents a meaningful allocation within Berkshire's $263 billion（約42兆円） U.S. stock portfolio, which itself accounts for a large percentage of the company's $1 trillion（約160兆円） market value.

Alphabet's appeal as an investment lies in its comprehensive approach to artificial intelligence monetization across the technology value chain. Unlike competitors that rely on third-party suppliers, Alphabet develops products at every layer—from custom silicon to cloud services to consumer applications. CEO Sundar Pichai emphasized this advantage on the earnings call: "It's clear that our AI investments and full-stack approach are driving performance across our business." This integrated strategy creates cost efficiencies and enables the company to innovate faster than vertically fragmented competitors. Alphabet's revenue streams span custom chips (tensor processing units, or TPUs, which rank as the second-most popular AI accelerators behind Nvidia's GPUs), cloud infrastructure services, proprietary AI models (Gemini), and applications including Google Search, YouTube, and Gemini Enterprise.

Alphabet's second-quarter financial results underscore the strength of this AI-driven strategy. Revenue climbed 24% to $119.8 billion（約19兆円）—the sixth straight acceleration—while cloud segment sales demonstrated particularly strong growth. Operating income (which excludes unrealized gains from SpaceX investments) increased 31% to $40.8 billion（約6.5兆円）. Most strikingly, cloud revenue accelerated 82% during the second quarter, marking the fifth consecutive quarter of acceleration and significantly outpacing cloud growth reported by Amazon and Microsoft in recent quarters. Pichai noted that Alphabet is expanding its TPU sales beyond cloud platform rentals: "As TPU demand grows from AI labs, capital markets firms, and high-performance computing applications, we will begin to deliver TPUs to a select group of customers in their own data centers," opening a nascent but promising growth opportunity in custom silicon.

Alphabet's stock has faced recent headwinds following the July 22 earnings announcement, declining 7% and trading 21% below its May record high. The drawdown reflects market anxiety over Alphabet's raised capital expenditure guidance for 2026: the company updated its capex forecast to $195 billion（約31兆円） to $205 billion（約33兆円）, up from a prior estimate of $180 billion（約29兆円） to $190 billion（約30兆円）. CFO Anat Ashkenazi explained that "demand for AI infrastructure continues to exceed supply," necessitating aggressive investment. While the market appears to have overreacted to this spending increase, Wall Street consensus projects 14% annual earnings growth over the next three years, placing the stock's current valuation of 16 times earnings in reasonable territory relative to growth prospects and Alphabet's commanding position in AI infrastructure.

Greg Abel's decision to triple Berkshire Hathaway's Alphabet stake reflects a strategic recognition of the company's AI infrastructure leadership. While Warren Buffett built Berkshire's largest equity position in Apple—which still accounts for 22% of its U.S. stock portfolio—Abel is diversifying into a second megacap technology stock with deeper exposure to artificial intelligence. Alphabet's full-stack approach, in which the company develops products at every layer of the value chain, distinguishes it from competitors that depend on third-party suppliers. This vertical integration creates cost advantages and enables multiple monetization pathways: custom silicon (TPUs), cloud services, proprietary models, and consumer applications. The timing of Abel's investment follows Alphabet's strong earnings, with cloud revenue accelerating 82% in the second quarter—the fifth consecutive quarter of acceleration—while overall revenue climbed 24% and operating income jumped 31%.

The market's recent 7% decline in Alphabet stock since earnings on July 22 appears to stem from investor anxiety over the company's raised capital expenditure guidance ($195 billion（約31兆円） to $205 billion（約33兆円） for 2026, up from $180 billion（約29兆円） to $190 billion（約30兆円）). However, this spending surge directly addresses booming demand for AI infrastructure that continues to exceed supply. Notably, neither Amazon nor Microsoft has reported cloud sales growth remotely close to Alphabet's 82% expansion in recent quarters, suggesting Alphabet's investments are translating into competitive advantage. At 16 times forward earnings with Wall Street consensus projecting 14% annual earnings growth over the next three years, the valuation appears reasonable relative to the company's AI growth trajectory and infrastructure leadership.

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