Buffett's Berkshire Ends Tech Reluctance, Invests $4.9B in Alphabet's AI Expansion

Berkshire Hathaway Inc., led by Warren Buffett, has invested $4.9 billion in

Inc., signaling a notable change in the company’s investment approach as it prepares for the transition from its 95-year-old CEO to Greg Abel. This purchase, , involved Berkshire buying 17.9 million shares of the parent company, which accounts for 0.31% of Alphabet’s total shares . Following the news, Alphabet’s stock rose 1.7% in after-hours trading , showing investors’ faith in the company’s AI and cloud strategies.

This move stands in contrast to Berkshire’s usual reluctance toward fast-growing tech stocks, a stance Buffett has long upheld. Although Apple Inc. has been Berkshire’s largest stock holding for years,

, leaving it with $60.7 billion invested. Buffett has previously described Apple as more of a consumer brand than a true technology company . The decision to invest in Alphabet points to a broader shift in how Berkshire allocates its capital .

In the third quarter, Berkshire also made several portfolio adjustments. The company exited its position in homebuilder D.R. Horton Inc. and

. At the same time, it boosted investments in Sirius XM Holdings Inc., insurance firm Chubb Ltd., and Domino’s Pizza Inc., indicating a preference for industries with reliable cash generation .

Buffett’s investment in Alphabet reflects his recognition of missed opportunities in technology. Back in 2019, he acknowledged not investing in Google sooner,

. The timing of this purchase aligns with Alphabet’s $40 billion investment in AI data centers in Texas , further supporting its position as a long-term play in an AI-focused market.

As Buffett prepares to step down as CEO at the end of the year, he has been actively investing cash ahead of the leadership change. Recent actions include a $9.7 billion buyout of Occidental Petroleum Corp.’s petrochemical division and a $1.6 billion investment in UnitedHealth Group Inc.

. The Alphabet stake, , showcases the company’s shifting strategy under Combs and Weschler, who have taken a more assertive approach to tech investments .

Alphabet’s shares jumped 5% in premarket trading on Monday

, fueled by the announcement and growing enthusiasm for AI. Still, the position makes up only 1.6% of Berkshire’s portfolio , illustrating a measured approach in a sector Buffett has traditionally viewed with caution.