Alphabet shares surge as Berkshire Hathaway announces major stake purchase

Berkshire Hathaway has made a significant move in the technology sector by acquiring 7.85 million shares in Alphabet, the parent company of Google, in the September quarter. The stake is valued at approximately 3.9 billion pounds, marking one of the final major investments overseen by Warren Buffett before he steps down as chief executive at the end of the year. Buffett, aged 95, has historically displayed caution around technology shares, often preferring businesses he can readily understand and accurately evaluate.

The decision to invest in Alphabet reflects a shifting perspective from Berkshire Hathaway regarding technology companies. While Apple, Berkshire’s largest holding, has at times been likened to a consumer goods company, Alphabet represents the firm’s growing interest in artificial intelligence and digital infrastructure. Alphabet remains one of the least expensive large technology shares in the AI sector measured by price-to-earnings ratio; the company continues to attract bullish attention from analysts for its robust infrastructure spending, rapid adaptation of AI tools in search functionality, and dominant advertising business, which supports significant data centre investments.

Alphabet’s share price responded to the news by climbing nearly 5 percent to 230 pounds in mid-morning trading in New York. The uplift follows closely on the heels of Google’s announcement regarding a planned 31 billion pound investment in new data centres in Texas. These developments underscore Alphabet’s commitment to expanding its AI and cloud computing capacity to remain competitive in a rapidly evolving landscape.

Investors and business leaders have recently demonstrated mounting caution over technology share valuations, with prominent figures such as Michael Burry of “The Big Short” fame making public bets against companies like Nvidia and Palantir Technologies. Peter Thiel’s hedge fund, Thiel Macro, also sold its Nvidia stake in the preceding quarter, focusing its exposure on Apple, Microsoft, and a reduced position in Tesla. Concerned voices have drawn comparisons to the late 1990s dotcom boom regarding the current cycles of large-scale investments and share swaps involving AI-focused firms.

Despite this atmosphere of unease, Alphabet’s strong balance sheet, vast advertising revenues, and early adoption of artificial intelligence in core products have positioned the company as a likely beneficiary of continued growth in the sector. The Roundhill Magnificent 7 Exchange Traded Fund, which tracks the leading technology shares, has remained relatively stable since September after a prolonged period of outperformance against the broader S and P 500 index. Market analysts will be closely monitoring Berkshire Hathaway’s move as a potential bellwether for future trends across the technology and investment landscape.