Berkshire Hathaway expanded its Alphabet stake by 83% in the second quarter to roughly 106 million shares, about $37.8 billion, and joined a $10 billion private placement that Alphabet said would help scale AI infrastructure and global compute. Though Warren Buffett has stepped down as CEO, he said the investment was his idea, making Alphabet Berkshire’s third-largest holding behind Apple and American Express. Alphabet’s AI push is translating to top-line momentum: revenue grew 24% to $119.8 billion, while Google Cloud revenue surged 82% to $24.8 billion and operating income more than tripled to $8.8 billion. At roughly 17 times forward earnings, some analysts argue the stock remains attractive, with upside tied to monetizing custom TPUs and cloud capacity. The risk: Alphabet lifted its 2026 capex outlook to $195–$205 billion and reported a rare quarterly cash burn of $5.9 billion, underscoring the capital intensity of staying ahead in AI. For Berkshire, the wager is that Alphabet’s AI economics will outpace the rising bill for compute, chips, and data centers.
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