Berkshire Hathaway, upholding Warren Buffett’s investment philosophy, significantly increased its stake in Alphabet (GOOG, GOOGL) during Q2, deploying approximately $16.35 billion into the AI-focused tech giant. This substantial move highlights Alphabet’s growing dominance in artificial intelligence, driven by robust Google Search revenue and an exploding Google Cloud business, which saw an 82% growth rate in Q2. Investors can now acquire Alphabet stock at a more attractive operating price-to-earnings ratio than Berkshire’s average Q2 purchase, making it a compelling AI investment.
Even without Warren Buffett at the helm as CEO, Berkshire Hathaway (BRKA -0.74%, BRKB -0.55%) continues to captivate the investment world, steadfastly upholding Buffett's revered principles. His ongoing presence on the board ensures his vision remains central. In a highly anticipated Q2 investment portfolio update, Berkshire unveiled no major surprises but continued a trend Buffett himself initiated in Q3 2025 before his departure: a substantial increase in its holdings of Alphabet (GOOG -1.02%, GOOGL -1.18%) stock.
This strategic move represented Berkshire's most significant investment in Q2 by a considerable margin, underscoring that even the most disciplined value investors can discover compelling opportunities within the burgeoning artificial intelligence (AI) sector. We believe Alphabet stands as an exceptional buy for all investors, a conviction strongly echoed by Berkshire's recent additions.
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Alphabet's AI Dominance Attracts Billionaire Backing
Tracking major investment funds like Berkshire Hathaway involves monitoring their Form 13F filings, which are required quarterly for funds managing over $100 million in assets. While this data offers a snapshot of end-of-quarter holdings and is released 45 days post-filing, it provides invaluable insight into Berkshire's long-term investment philosophy, which prioritizes enduring value over short-term fluctuations.
NASDAQ: GOOGL
Alphabet
Today's Change
(-1.18%) $-4.05
Current Price
$340.67
Key Data Points
- Market Cap: $4.2T
- Day's Range: $338.57 - $343.90
- 52wk Range: $201.30 - $408.61
- Volume: 18.6M
- Avg Vol: 32M
- Gross Margin: 60.94%
- Dividend Yield: 0.25%
In Q2, Berkshire significantly expanded its position in Alphabet, acquiring an additional 48.1 million shares, distributed almost equally across its two stock classes. At Alphabet's current share price of $340, this translates to an approximate capital deployment of $16.35 billion into the tech giant's stock.
This substantial investment signals a profound vote of confidence in Alphabet's trajectory, cementing Berkshire's belief in its potential as a premier AI stock and its continued prowess in the digital advertising realm. But what makes Alphabet so appealing to a discerning investor like Berkshire?
Alphabet Firing on All Cylinders, Driven by AI
While Berkshire's Q2 purchasing decisions were informed by Alphabet's Q1 results, subsequent Q2 earnings reports provide even stronger evidence of Alphabet's accelerating dominance in the AI landscape.
Firstly, Google Search, the company's foundational revenue generator, demonstrated robust growth with a 17% year-over-year increase. This impressive performance from a mature business firmly refutes earlier predictions that AI would disrupt Google Search. In fact, Alphabet's seamless integration of AI search overviews has likely fortified its position, making it more indispensable than ever.
The most dramatic impact of AI on Alphabet's operations is evident in its Google Cloud division. The immense computational demands of AI workloads often exceed the in-house capabilities of many AI firms, compelling them to lease computing power from providers like Google Cloud. This segment is experiencing explosive growth, underscored by Alphabet's massive $200 billion capital expenditure plan for the year, primarily dedicated to expanding its data center infrastructure. Google Cloud's Q2 growth rate soared to an astounding 82%, a significant leap from 32% in the same quarter last year. As more AI computing capacity becomes available, this acceleration is poised to continue, further boosting Alphabet's financial performance.
Given these compelling factors, is Alphabet a worthwhile investment today? Absolutely. While a substantial one-time investment gain currently skews Alphabet's traditional price-to-earnings (P/E) ratio, evaluating the stock using its operating price-to-earnings ratio offers a clearer picture, excluding this distorting effect. From this operational perspective, Alphabet is currently trading at a more attractive valuation than at any point during Q2, except for a brief dip in April.
GOOG Operating PE Ratio data by YCharts
Even if Berkshire capitalized on the April dip, current investors have the opportunity to acquire Alphabet shares at a more favorable valuation than Berkshire's average Q2 price. This makes Alphabet an undeniably strong candidate for immediate consideration in any investment portfolio.
