In a significant shift in its investment strategy, Berkshire Hathaway dramatically increased its holdings in Alphabet during the second quarter, catapulting the Google parent company into its exclusive club of top three stock investments. This bold move signals a renewed bullish outlook on technology and cyclical sectors for the Omaha-based conglomerate.
Led by CEO Greg Abel, with pivotal support from Chairman Warren Buffett, Berkshire Hathaway now commands approximately 106 million Alphabet shares. Valued at an impressive $37.9 billion at the close of June, this position saw an 83% surge in the latest quarter. Alphabet now stands as Berkshire's third-largest U.S.-listed equity holding by market value, trailing only its long-standing bets on Apple and American Express. A key driver behind this substantial increase was a $10 billion private stock purchase announced in early June, aimed at financing Alphabet's ambitious AI infrastructure expansion.
Berkshire's investment spree wasn't limited to big tech. The firm also significantly expanded its wager on the airline industry, a sector where Buffett has previously demonstrated both enthusiasm and caution. Its stake in Delta Air Lines soared by 44% during the quarter, bringing its total to 57.3 million shares, with an estimated value of $5.4 billion by the end of June. This re-engagement with Delta marks a notable return after Berkshire famously divested its entire airline portfolio in the nascent stages of the pandemic.
Furthermore, the conglomerate diversified its exposure to cyclical businesses by boosting its investments in the housing market. Berkshire's Class A shares in Lennar witnessed a nearly 30% increase, reaching 13.1 million shares valued at approximately $1.19 billion. Its Class B holdings in Lennar also rose by 25% to around 298,000 shares. Additionally, Berkshire initiated a new, albeit smaller, position in D.R. Horton, holding 3,600 shares at the quarter's end. The quarter also saw the completion of Berkshire's acquisition of Taylor Morrison, a Scottsdale, Arizona-based homebuilder.
This aggressive investment posture breaks a 14-quarter streak of net stock sales, with Berkshire emerging as a net buyer of equities in the second quarter, making nearly $20 billion in net purchases. Consequently, the conglomerate's vast cash reserves diminished from a record $397.4 billion to $365.5 billion by the end of June, indicating a strategic deployment of capital into new investments and share repurchases.
