Buffett’s Bold Shift: From iPhones to AI – A $4.3B Bet in Google’s Parent

A Surprise Strategy Twist

Most of the eyes of the market were on the amount of the investment, as Berkshire Hathaway disclosed a $4.3 billion dollar investment in Alphabet Inc., the mother company of Google. The disruption presents a significant transformation signal of the strategy for the big tower which has been mostly run by Warren Buffett. In fact, these are not only the words of the new strategy but also the words of the future plan: tech pivot, AI bet, and portfolio realignment.

Why Alphabet?

Berkshire has been a strict fence-sitter, most of the time, looking to the tech sector as the high-risk, high-return market for growth and thus avoiding the fast-growing tech companies and investing in value companies that grow slower. However, the recent increase in shares (roughly 17.85 million) of the US company made Alphabet the 10th largest US public equity holding of Berkshire. To top it all, the investment in the late-2024 is considered rather a good bet in the light of a booming 2025 for Alphabet (riding the AI wave).

Exiting Apple: The Other Side of the Trade

Meanwhile, Berkshire is still divesting from Apple shares. The 3rd quarter disclosures reflect that the number of shares has been reduced to 238.2 million approximately, that is a decrease from 280 million (one quarter ago) and a drastic reduction of the previous positions.

After the decrease, Apple is still, however, the biggest single stock in Berkshire's portfolio and accounts for roughly $60 billion at market prices.

What Does It Signal About Buffett’s Mindset?

It is a trade that goes beyond the surface—the move anticipates a probable alteration of Buffett’s strategy. Tech has been a sensitive area for him, judging harshly even in some cases, now he seems to realize that growth-driven, AI-powered businesses such as Alphabet have value worth paying attention to. With Buffett planning to step down as CEO, some analysts argue that it might be a signature, or farewell, move or simply a decision of his deputies.

Implications for Investors

•Portfolio watchers: The move serves as a “seal of approval” effect—investors tend to emulate what Berkshire does with its portfolio.

•Valuation caution: For a long time now, Berkshire has been a net seller of stocks, and this quarter is no different (12th consecutive net selling quarter).

•Tech-value crossover: The change points to the fact that even value-investors are slowly accepting the tech/AI ​‍​‌‍​‍‌​‍​‌‍​‍‌ecosystem.