Abel's Berkshire storms Alphabet: increased holding by 83%

Berkshire Hathaway sharply increased its holdings in Alphabet during the last quarter, in which it purchased more shares than it has in years. Greg Abel, who replaced Warren Buffett as CEO at the beginning of the year, increased Berkshire's holdings in Alphabet by 83% to a level of 106 million shares, with a total value close to $38 billion as of the end of June.

In June, Berkshire agreed to buy $10 billion worth of Alphabet shares at a discount. It purchased 19.6 million shares on the open market in the last quarter, according to its investment portfolio update revealed yesterday. As of the end of June, Alphabet was the third-largest holding in Berkshire's US investment portfolio, after Apple with shares worth $66 billion and American Express with shares worth $51 billion.

This is an unusual move for Berkshire, after Buffett preferred to hold shares of non-tech companies like Coca-Cola and the insurance company GEICO, with Apple being the exception. Although Buffett is no longer running the show, he said that he was the one who called for investing in Alphabet last year. Given that Buffett still serves as the company's chairman, it is likely that he and Abel share responsibility for the new position. Alphabet shares have soared by about 170% in the last three years, as investors continue to believe that the search and advertising giant will continue to be one of the biggest winners of the AI craze.

In the last quarter, Berkshire also increased its holding in Delta Air Lines by 44%, and held shares worth $5.4 billion in the company as of June 30. It also purchased shares of D. R. Horton, as well as additional shares of Lennar and Macy's. At the same time, the company shed about half of the Capital One and Nucor shares it held, cut its Bank of America and Kroger shares, and brought to an end a small bet on Constellation Brands.

Many were waiting for the update of Berkshire's investment portfolio, after a frantic quarter for it. The earnings report it published last week shows that it purchased shares totaling $20 billion - the largest quarterly amount since 2022. It spent $23.5 billion on shares while selling shares for only $3.7 billion, bringing to an end a streak of 14 quarters in which it only sold.