Berkshire Hathaway Inc. more than tripled its stake in Google-parent Alphabet Inc. during the first quarter, a significant technology bet marking new CEO Greg Abel’s first major portfolio shift since succeeding Warren Buffett.
The move contrasts with Buffett's long-held reluctance to invest in tech companies he claimed not to understand, a rule he famously broke for Apple Inc. after recognizing its consumer dominance.
The conglomerate’s holdings in Alphabet grew to nearly 58 million shares valued at almost $17 billion by the end of March, a 224% increase from the 17.8 million shares worth $5.6 billion it held three months prior, according to regulatory filings.
This multi-billion dollar investment suggests a new era for Berkshire's portfolio strategy, potentially opening the door to larger positions in the tech sector that were previously avoided. The shift comes as the firm also exited positions in Amazon, Visa, and Mastercard.
Greg Abel, who took over as CEO in January, appears more comfortable with the technology sector than his predecessor. While Buffett famously made an exception for Apple, recognizing the power of its consumer ecosystem, Abel's first quarter at the helm shows a willingness to make large-scale investments in other tech giants.
The company's regulatory filing also revealed other significant changes. Berkshire purchased nearly 40 million shares of Delta Air Lines, an industry Buffett has historically been sour on. In 2008, Buffett told shareholders that "if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down."
In addition to the new Alphabet and Delta stakes, Berkshire also initiated a new position in Macy's with approximately 4 million shares. Concurrently, the firm liquidated its holdings in Visa, Mastercard, Domino’s Pizza, Amazon, and United Healthcare.
The significant allocation to a "Magnificent Seven" stock suggests Berkshire may become a more active player in the tech industry. Investors will be closely watching Berkshire’s next 13F filing in August for further signs of Abel’s evolving investment philosophy.
This article is for informational purposes only and does not constitute investment advice.
