Berkshire Hathaway’s latest 13F filing confirmed it now owns three Mag 7 companies. Apple, Amazon, and now Alphabet collectively give Berkshire a front-row seat to the AI arms race, and Alphabet’s debut in the portfolio was the standout surprise.
The filing showed Berkshire continued trimming Apple, though it still accounts for about 21% of the equity book, but its dominance has come down sharply.
The real story was Berkshire’s new $4 billion plus position in Alphabet, nearly 18 million shares, a meaningful stake that immediately became larger than its Amazon position.
Key Points
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Berkshire opened a major new stake in Alphabet while continuing to trim Apple, signaling rising confidence in Google’s AI-driven model.
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Alphabet’s high margins, dominant search moat, and expanding AI ecosystem make it a classic long-term Buffett-style compounder.
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With Apple, Amazon, and now Alphabet, Berkshire is positioned to benefit from AI across multiple layers of the tech stack.
Alphabet Fits the Buffett Playbook
Alphabet’s economics are precisely the kind Buffett has favored for decades. The core search-and-ad platform scales with almost no incremental cost, which is why Alphabet routinely delivers gross margins above 55% and operating margins near 30%.
As Google threads AI deeper into search, ads, cloud, and internal compute systems, it’s squeezing out more efficiency and driving more revenue per user, a quiet but powerful flywheel many investors still underestimate.
Google’s global search share is 7 points short of total domination. Every query improves its models, pulling the company further ahead. That data advantage also supercharges its AI systems, giving Alphabet a moat that compounds with time.
Meanwhile, Google Cloud is now a multibillion-dollar growth engine, YouTube is an advertising titan, and even Waymo appears closer to meaningful commercialization than the market gives it credit for.
Valuation Leaves the Door Open
At under 30x earnings, Alphabet trades above its recent averages but still looks reasonable for a company with this level of dominance.
Berkshire likely bought early in the quarter at slightly lower prices, but the firm wasn’t trying to catch a bottom, it was betting on long-term compounding. Given Alphabet’s margin profile, AI leverage, and still-expanding ecosystem, that’s a bet that could pay off handsomely.
Buffett openly admitted he misjudged Google years ago, and this new position reflects a second chance to own the business he once passed on.
Apple remains Berkshire’s favorite thanks to its unmatched customer stickiness and recurring revenue engine. But Alphabet complements it perfectly, a high-margin digital platform with a moat widening every year.
The Takeaway
Whether intentional or not, Berkshire now owns three foundational pillars of the Mag 7. Apple’s device ecosystem, Amazon’s cloud and AI infrastructure, and Alphabet’s search and model-training engines each control a different layer of the future tech stack.
Alphabet is a long-run compounder with a cost structure and competitive position that fit squarely within the classic Buffett framework. And Berkshire’s move suggests the market still isn’t fully appreciating how central Alphabet will be to the next decade of AI-driven growth.