Berkshire Just Made a Huge Alphabet Bet—Should You Follow?

Berkshire Just Made a Huge Alphabet Bet—Should You Follow?

Ryan Hasson, MarketBeat

Tue, August 18, 2026 at 5:20 PM GMT+3 5 min read

Key Points

• Interested in Alphabet Inc.? Here are five stocks we like better.

• Berkshire Hathaway's second-quarter 13F filing revealed an 83% increase in its Alphabet stake, a purchase Warren Buffett said he personally initiated.

• Alphabet's search revenue grew 17% and Google Cloud's backlog topped half a trillion dollars, easing fears that AI would erode its core business.

• Despite a strong rally, Alphabet trades at a forward earnings multiple of about 17, and analysts maintain a Buy consensus with meaningful upside potential.

When Berkshire Hathaway (NYSE: BRK.B) reveals a major new bet, the market usually listens. And when the firm's latest 13F filing hit after the close on Aug. 14, one position towered over the rest: Alphabet (NASDAQ: GOOGL).

Berkshire lifted its stake in Google's parent by 83% during the second quarter, adding roughly 48 million shares in a buying spree worth about $17 billion. That pushed Alphabet into the upper ranks of Berkshire's portfolio and raised an obvious question for investors: if Berkshire is aggressively accumulating, is it time to follow?

→ Looking Beyond CrowdStrike? 3 AI Security Stocks Stand Out

The Details Behind the Buy

The scale is what stands out with the latest buy. Berkshire now holds close to 106 million Alphabet shares worth roughly $37 billion, ranking the tech giant among its largest equity positions, ahead of the decades-old Coca-Cola (NYSE: KO) stake.

Around 60% of the new position, roughly $10 billion, came directly from Alphabet through a private placement tied to the capital raise the company announced in early June. The rest, about $7 billion, was bought on the open market.

→ 3 Robotics Stocks Under $10: Value, Momentum, or Bet?

There is an important note for readers worth clarifying. Warren Buffett, arguably the most successful investor of all time, stepped down as Berkshire's CEO at the start of 2026, handing the reins to Greg Abel, who now oversees the equity portfolio.

Yet this particular purchase carried Buffett's personal fingerprints. "I initiated it," he told CNBC, confirming the Alphabet position was his own conviction call, made in his continuing advisory role, rather than Abel's alone. For a legendary investor who had spent years lamenting that he had passed on Google, it marked a striking change of heart and helped push Berkshire to become a net buyer of stocks for the first time in 14 quarters.

→ Michael Burry Is Betting Against Palantir Again—Should Investors Care?

Why the Thesis Holds

Although Alphabet is an innovation and technology giant, the overall logic actually fits a familiar Buffett and Berkshire template. GOOGL is a dominant, cash-rich company available at a sensible price and valuation. The concern that generative AI would hollow out Google's search empire has not materialized in the numbers. Search revenue climbed 17% last quarter, and user query volumes reached fresh records, suggesting AI is broadening the business rather than cannibalizing it.

At the same time, the divisions Wall Street spent years discounting have come alive. Google Cloud is now growing at a remarkable pace, expanding profitability sharply as its contracted backlog pushes past the half-trillion mark. With trailing net income of $132 billion and net margins near 55%, this looks far more like the traditional durable compounder Buffett favors than a speculative technology wager.

Valuation and Technical Positioning

Even after a strong year, Alphabet trades at a forward earnings multiple of roughly 17, cheaper than the broader market and virtually every mega-cap rival. For a company compounding cloud revenue this quickly while still owning search, that gap between quality and price is exactly what value investors hunt for.

Wall Street is aligned, with a Buy consensus from 54 analysts and an average target of $419.86, indicating 22% upside potential.

On the chart, GOOGL closed Monday at $344, up about 10% on the year and almost 70% over the prior year. Despite pulling back over 15% from its 52-week and all-time high set back in May, the overall setup and structure remains constructive.

The stock remains in a higher-timeframe uptrend, well above its 200-day simple moving average near $330. Its recent higher low near $320 will be the all-important line in the sand investors watch on the downside going forward. But for further upside momentum to continue, in the short term the bulls will want to see the stock break back above its 20-day simple moving average near $350, with $380 thereafter serving as a major potential breakout level across multiple higher timeframes.

Should You Be Buying Too?

It's easy for investors to get carried away when a Berkshire filing hits, but it's important to remember that 13F filings look in the rearview mirror. They disclose what Berkshire owned as of the end of June, not what it is doing now, and Alphabet has climbed meaningfully since much of that accumulation. Mirroring any institution's trade months after the fact is never a sound plan in itself.

Still, the investment case stands regardless of whose name is attached to it. Alphabet combines a commanding core business, a fast-growing cloud arm, deep reserves of untapped optionality, and an undemanding valuation. Berkshire's buying does not make the stock a buy on its own, but it is a notable endorsement of a thesis that was already convincing before the filing landed.

The article "Berkshire Just Made a Huge Alphabet Bet—Should You Follow?" was originally published by MarketBeat.

View MarketBeat's top stocks for August 2026.