Key Facts on Berkshire Hathaway’s Investment in Alphabet
Berkshire Hathaway, led by CEO Greg Abel, increased its stake in Alphabet (NASDAQ: GOOGL) to 6% of its U.S. stock portfolio in the second quarter of 2023, up from an initial 2%. This shift represents a significant investment strategy change, as Berkshire’s total U.S. stock portfolio is valued at $263 billion.
Alphabet reported substantial second-quarter revenue of $119.8 billion, a 24% increase, driven largely by cloud segment growth. Operating income rose 31% to $40.8 billion. Despite strong performance, the stock has fallen 7% since the earnings announcement, trading 21% below its May record high, influenced by concerns over raising capital expenditure guidance to between $195 billion and $205 billion for the year.
The cloud revenue surged by 82% in the second quarter, reflecting Alphabet’s effective investments in AI infrastructure. Wall Street anticipates a 14% annual earnings growth for Alphabet over the next three years, valuing the stock at 16 times earnings, seen as a reasonable buy opportunity post-sell-off.
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