Key Points
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Berkshire has built a position in Alphabet worth more than $20 billion under new CEO Greg Abel.
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The stake includes a $10 billion private placement struck in June.
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Alphabet’s cloud business is growing fast, and its backlog has swelled past $460 billion.
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When Warren Buffett handed the reins to Greg Abel at the end of 2025, the big question was what Berkshire Hathaway (NYSE: BRKB)(NYSE: BRKA) would do with its enormous pile of cash. We’re starting to get an answer, and it has a name: Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG).
Berkshire has rapidly built a position in the Google parent worth more than $20 billion. That’s a striking move for a company whose new CEO could easily have spent his first months playing it safe. So what does Abel see in Alphabet, and what does the buying say about how he plans to deploy Berkshire’s capital?
How the stake came together
Berkshire first bought a small amount of Alphabet in the third quarter of 2025, while Buffett was still CEO. But the scale of the purchases changed dramatically once Abel took over. In the first quarter of 2026, Berkshire more than tripled its Alphabet holding. That pushed the position to about $16.6 billion by the end of March, enough to make Alphabet its seventh-largest equity holding.
And then, in June, Berkshire agreed to a $10 billion private placement of Alphabet stock, buying about 28.6 million new shares directly from the company as part of Alphabet’s massive equity raise. The purchase was split evenly between Alphabet’s two publicly traded share classes, at prices modestly below where the stock traded at the time.
Put it all together, and Abel has directed more than $20 billion into a single technology company in a matter of months. And this is a conglomerate that famously moves slowly and sat on more than $390 billion in cash and Treasury bills at the end of the first quarter. Against that backdrop, the Alphabet buying is a decisive statement of conviction.
Why Abel keeps buying
It’s easy to see why Abel probably likes Alphabet stock. Alphabet’s advertising engine, Google Search and YouTube, consistently throws off enormous profits. That’s the kind of toll-booth economics Buffett spent decades favoring. It makes Alphabet look less like a speculative AI bet and more like a high-quality cash machine trading at a reasonable price.
But the part that likely tipped the scale is the cloud business. Q1, Google Cloud revenue jumped 63% year over year to about $20 billion, and the segment’s operating income roughly tripled to $6.6 billion. Even more telling, Alphabet’s cloud backlog, meaning contracted work not yet recognized as revenue, almost doubled in a single quarter to more than $460 billion. That figure points to years of demand already under contract as customers reserve capacity for AI workloads.
Of course, Alphabet is spending heavily to meet that demand, guiding for capital expenditures of as much as $190 billion this year. That kind of outlay is exactly what spooks some investors. But a backlog growing this fast is the counterweight, and it helps explain why Abel was willing to write a $10 billion check on top of the open-market buying. Notably, that private placement helped fund the very build-out the backlog represents, so Berkshire is effectively bankrolling growth it also owns a piece of.
Valuation likely played a role, too. Even after a strong run, Alphabet trades at about 28 times earnings. That’s hardly a bargain, but it’s a sensible price for a business growing operating income 30% year over year with a fast-expanding, increasingly profitable cloud arm underneath it.
For Abel, that mix of quality, growth, and a fair multiple is about as close to a Buffett-style setup as today’s market offers among the megacap technology names.
So what does the buying signal about Abel’s approach? To me, it suggests he intends to put Berkshire’s cash to work in size when he finds a business he understands at a price he likes, rather than hoarding it indefinitely. That’s a meaningful shift in tone, and Alphabet is the clearest early evidence of it. The risk, of course, is that Alphabet’s heavy AI spending doesn’t pay off as hoped, or that regulatory pressure on Google weighs on the stock. But Abel has concentrated real money behind the view that it will. For Berkshire shareholders trying to read the new era, that conviction is worth paying attention to.
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Daniel Sparks and his clients have positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet and Berkshire Hathaway. The Motley Fool has a disclosure policy.
