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**Warren Buffett went on CNBC on July 17 and said he — not successor Greg Abel — was responsible for Berkshire Hathaway's push into artificial intelligence, a revelation that reframes the conglomerate's technology strategy.** Warren Buffett took personal credit for Berkshire Hathaway's push into artificial intelligence during a CNBC interview on July 17, saying he directed the conglomerate's $10 billion private placement into Alphabet to support its AI infrastructure build-out. "I've been reading about AI for years, and I told Greg this is something we need to be part of," Buffett, Berkshire's chairman and former chief executive officer, said. "The $10 billion Alphabet deal was my idea." The admission reframes Berkshire's technology strategy, which many investors attributed to Chief Executive Greg Abel after he took over on Jan. 1. Berkshire now holds a $31.1 billion stake in Alphabet alongside a $58 billion Apple position, giving the conglomerate exposure to both AI compute demand and consumer device distribution. The company's cash pile stood at roughly $397 billion as of the most recent quarter. The disclosure carries implications for Berkshire's $1.1 trillion market valuation. If Buffett — who built his reputation avoiding technology bets — is now personally steering into AI, it could accelerate the conglomerate's shift away from its traditional insurance and railroad roots. Investors will watch for whether Berkshire increases its Alphabet stake or pursues direct AI acquisitions. ## Buffett's AI Pivot Rewrites the Succession Narrative For years, the conventional wisdom held that Abel would drive Berkshire's technology expansion while Buffett focused on the businesses he knew best: insurance, railroads, and consumer goods. The CNBC interview upends that assumption. Buffett said he had been studying AI developments for several years and concluded that the technology would reshape the economy in ways that demanded Berkshire's participation. The Alphabet private placement, completed earlier this year, gave Berkshire a direct line into Google's AI infrastructure spending. Alphabet has committed more than $50 billion in capital expenditures for 2026, with the majority directed at data centers and AI model training, according to company filings. Berkshire's $10 billion participation came alongside other institutional investors. ## What Berkshire's AI Bet Means for Investors Berkshire's Class A shares, trading near $739,750, have gained 43 percent over the past three years and 77 percent over five years — roughly matching the S&P 500's 13 percent annualized return over the past decade. The AI push could provide a new growth vector for a company that has long struggled to deploy its massive cash pile at scale. The question for shareholders is whether Buffett's personal involvement signals a more aggressive technology strategy than the market has priced in. Berkshire's $397 billion cash hoard gives it firepower for additional AI-related investments, whether through public market stakes, private placements, or outright acquisitions. The company's existing portfolio already includes a $58 billion Apple stake and the $31.1 billion Alphabet position, creating a technology concentration that would have been unthinkable a decade ago. This article is for informational purposes only and does not constitute investment advice.
Warren Buffett issued a sharp warning about speculative trading and endorsed Alphabet Inc. as beating 95 percent of Wall Street's stock recommendations, speaking in a rare CNBC interview on July 15. "It's tough to find values when everybody is preferring gambling," Buffett, 95, chairman of Berkshire Hathaway Inc., told CNBC's Becky Quick. He likened the stock market to "a church with a casino attached," criticizing the explosion of single-day options trading as pure speculation. Alphabet shares rose 3.6 percent to $370.21 following the interview. Berkshire's position in the Google parent, built in three phases starting in the third quarter of 2025, is now valued at more than $31 billion, making it the conglomerate's third-largest equity holding behind Apple Inc. and American Express Co. Buffett said Alphabet "has a better chance of being a winner than 90 percent to 95 percent of the stocks Wall Street pushes, because Wall Street cares about whether it can sell them." He personally confirmed he initiated the trade, ending months of speculation that the decision came from Berkshire's incoming CEO Greg Abel. Berkshire bought Class A shares at an average price of $351.81 and Class C shares at $348.20, according to Alphabet's filings with the Securities and Exchange Commission. The most recent addition came in June through a $10 billion private deal tied to Alphabet's $80 billion AI fundraising. The endorsement comes as markets trade near all-time highs, driven by a strong earnings season and AI-related stocks, despite persistent inflation and costs from the conflict with Iran. Day traders make up less than 10 percent of stock market brokers, and only about 5 percent turn a profit, according to a MarketWatch report. "Since humans love to gamble so much, there's more money in actually cultivating gamblers than there are cultivating investors," Buffett said. Alphabet reported first-quarter revenue of $110 billion, up 22 percent from a year earlier, with Google Cloud sales jumping 63 percent. The company generated $174 billion in operating cash flow over the past 12 months. However, Buffett acknowledged risks, noting Alphabet's capital expenditure plan of $180 billion to $190 billion for 2026, with further increases expected in 2027 — a scale he called "real money" that exceeds anything the railroad industry has ever invested. He also conceded that missing Google in its earlier, cheaper days was a mistake. The Oracle of Omaha's track record adds weight to the call. His 2016 purchase of Apple became Berkshire's most profitable investment. Whether Alphabet can replicate that success will be tested when it reports quarterly earnings later this month. This article is for informational purposes only and does not constitute investment advice.
Warren Buffett told CNBC he personally initiated Berkshire Hathaway's investment in Alphabet, now a $20 billion-plus position in the conglomerate's portfolio. "I initiated the Alphabet investment," Buffett, 95, chairman of Berkshire Hathaway, said in a CNBC interview on July 15. "It's a business with a tremendous moat." Berkshire holds about 66.4 million Alphabet shares across its Class A and Class C stock, making the Google parent its fourth-largest equity position at 8.8% of the $348.2 billion portfolio, according to the company's latest 13-F filing. Successor Greg Abel, who became chief executive officer at the end of 2025, added to the position by buying 36.4 million shares in the first quarter and later signing off on a $10 billion private placement, bringing total investment in Alphabet to more than $20 billion. The disclosure confirms the Oracle of Omaha personally approved one of Berkshire's biggest technology bets, a departure from his historical aversion to the sector. Alphabet now ranks alongside Apple at 20.6%, American Express at 15.3%, and Coca-Cola at 9.6% as Berkshire's top five holdings, according to the filing. Abel has reshaped the portfolio since taking over, closing 16 positions and trimming the number of holdings to 29. Nearly 30% of Berkshire's equity portfolio is now concentrated in two technology stocks: Apple and Alphabet. Buffett's endorsement carries weight beyond Berkshire. The billionaire co-founded the Giving Pledge and has donated more than $60 billion to philanthropy, including $6 billion in Berkshire stock on July 14. He has pledged to give away his remaining $140 billion stake by 2034. Alphabet shares trade at about 24 times forward earnings, a discount to other mega-cap technology stocks, according to FactSet data. The company's Google Cloud revenue rose more than 60% in the latest quarter, and its backlog nearly doubled to about $460 billion, driven by artificial intelligence demand. The confirmation that Buffett personally chose Alphabet signals his conviction in the company's competitive moat and AI-driven growth trajectory. Investors will watch Berkshire's third-quarter 13-F filing for any further position changes under Abel's leadership. This article is for informational purposes only and does not constitute investment advice.
**Greg Abel's first major acquisition since taking over Berkshire Hathaway faces its first test as Taylor Morrison shareholders vote on the $8.5 billion deal July 22.** Berkshire Hathaway's $8.5 billion all-cash offer for homebuilder Taylor Morrison faces a shareholder vote July 22, testing whether Greg Abel's more active approach to capital deployment can succeed where Warren Buffett largely let acquisitions run independently. "We are investigating whether the consideration and process in the proposed sale of Taylor Morrison are adequate for shareholders," said Charles C. Foti, Jr., former Attorney General of Louisiana and partner at Kahn Swick & Foti. The $72.50 per share offer represents a more than 20% premium to Taylor Morrison's undisturbed price. Taylor Morrison, a $6.6 billion market-cap builder, would join Berkshire's Clayton Homes division. Berkshire held nearly $400 billion in cash at the end of the first quarter, making the $8.5 billion outlay a fraction of its liquidity. The deal follows Berkshire's acquisition of McGuinn Homes, signaling a broader push into site-built housing and build-to-rent projects. If shareholders reject the deal, Taylor Morrison shares would likely revert to pre-announcement levels, erasing the premium. For Berkshire, a scuttled acquisition would raise questions about Abel's deal-making credibility early in his tenure. If approved, the transaction will test whether Abel's strategy of consolidating Berkshire's housing businesses under one roof can generate returns that exceed Buffett's hands-off approach. **Abel's Housing Strategy Takes Shape** The Taylor Morrison acquisition marks a departure from Buffett's decentralized model. Under Buffett, Berkshire's housing companies — including Clayton Homes, the country's largest manufactured-home builder — operated independently. Abel has indicated he intends to merge them into a unified operation, moving deeper into higher-margin community-building and build-to-rent projects. The last time Berkshire made a major housing acquisition was its 2003 purchase of Clayton Homes for $1.7 billion. That deal, executed under Buffett, generated steady returns without significant integration. Abel's approach represents a bet that consolidation can unlock value the conglomerate's hands-off model left on the table. **Law Firm Investigation Adds Uncertainty** Kahn Swick & Foti's investigation introduces a potential legal hurdle. The firm is examining whether the $72.50 per share price adequately values Taylor Morrison and whether the sale process was fair. Shareholder lawsuits are common in large M&A transactions, and while they rarely block deals, they can delay closing or lead to supplemental disclosures. The deal requires approval from a majority of Taylor Morrison's outstanding shares. With the vote scheduled for July 22, the outcome will provide an early signal of investor confidence in Abel's vision for Berkshire's housing portfolio. This article is for informational purposes only and does not constitute investment advice.
**Berkshire Hathaway's $397 billion cash reserve now accounts for nearly a third of its total assets, the highest proportion in the company's history.** Berkshire Hathaway held $397.4 billion in cash and short-term investments as of March 31, nearly triple the $128.6 billion it held at the end of 2022 and raising questions about the company's ability to find attractively priced large-scale investments. "The cash pile reflects a scarcity of opportunities that meet our threshold for size and certainty," Greg Abel, chief executive of Berkshire Hathaway, said in the company's annual meeting in May. The cash balance has grown from $347.7 billion a year earlier, even as total assets reached $1.22 trillion and long-term equity investments rose to $657 billion from $536.3 billion in 2023. Berkshire's selling has outpaced buying: the company systematically reduced Bank of America across eight transactions in September and October 2024, sold 1.22 million DaVita shares on May 5, and exited Liberty Media positions entirely in September 2024. New purchases — Sirius XM accumulated from late 2024 through August 2025 and Occidental Petroleum additions in December and February — have been narrower in scale. The stock's valuation reflects the uncertainty. Berkshire trades at a trailing P/E of 15 but a forward P/E of 24, implying earnings compression ahead. The analyst consensus price target of $520.33 offers less than 3% upside from the July 2 close of $507.78, which sits near the top of the stock's 52-week range of $455.19 to $516.85. With a beta of 0.617, the stock moves less than the market in both directions — a feature for defensive holders but a drag during rallies. **What the Cash Pile Means for Returns** The cash position creates a structural challenge for long-term holders. Berkshire's return on equity stands at 10.5% and return on assets at 5.39%, but the more capital that sits in cash equivalents yielding roughly 4% to 5%, the harder it becomes to sustain those returns. The company pays no dividend and insider ownership is just 0.261%, concentrating the deployment decision at the top. **Where Deals Could Come From** Berkshire's $8.5 billion acquisition of Taylor Morrison in June, announced by Abel, signals a willingness to deploy capital into housing — a sector where the company sees long-term value. The deal, Berkshire's largest under Abel, suggests the new CEO may pursue contrarian bets in industries where valuations have compressed. Investors will watch the next quarterly filing for further clues on portfolio shifts. The $397.4 billion cash pile is both a fortress and a question mark. For a company built on compounding, holding roughly a third of assets in cash equivalents tests whether Berkshire can still deliver the returns that built its legend. The next 13-F filing, due in August, will show whether Abel is finding opportunities where Buffett could not. This article is for informational purposes only and does not constitute investment advice.
**Greg Abel is reshaping Berkshire Hathaway's portfolio, pouring $10 billion into Alphabet in the conglomerate's biggest tech bet yet.** Greg Abel placed a $10 billion private placement into Alphabet in June, pushing Berkshire Hathaway's total stake past $31 billion and making Google's parent its fourth-largest holding. "Abel is making a different type of wager — he's upping Berkshire's bet on a Magnificent Seven stock to increase exposure to the AI megatrend," said Thomas Niel, a markets analyst at The Motley Fool. Berkshire now holds about 86.4 million Alphabet shares, a 9.2% stake worth approximately $31.6 billion, after purchasing $5 billion of each share class in the private placement. The position surpasses Coca-Cola, though Apple at 20.5% of invested assets and American Express remain larger. Alphabet generated $110 billion in first-quarter revenue, up 22% from a year earlier, with operating margins of 36% and $73 billion in free cash flow in 2025. The move marks the most aggressive technology bet of the Abel era and could redefine Berkshire's investment identity. If AI growth sustains, the wager will look prescient. If the sector overheats, Berkshire's nearly $400 billion cash pile — 36% of its market capitalization — provides a buffer, though further tech accumulation would test investor confidence. ## A $31 Billion Bet on AI Infrastructure Alphabet's appeal to Berkshire lies in its dual engine: a search business commanding 91% of global internet traffic and a cloud division whose revenue growth accelerated to 63% in the first quarter from 28% a year earlier, driven by generative AI services. The company plans $180 billion to $190 billion in capital expenditures in 2026 alone, with CFO Anat Ashkenazi projecting further increases next year. That spending spans chips, cloud computing, model development and consumer AI tools — positioning Alphabet to monetize across the AI stack. Berkshire first disclosed an Alphabet stake in the third quarter of 2025, reporting 17.9 million shares worth $4.3 billion. By March 31, 2026, that position had grown to 57.8 million shares valued at $22.7 billion. The private placement added roughly 28.6 million shares, bringing the total to about 86.4 million. The accumulation mirrors Berkshire's approach to Apple, where it built a $150 billion-plus position over several years before Buffett began trimming. ## Abel's Pivot From the Buffett Playbook The private placement contrasts with the deals Warren Buffett favored during his six-decade tenure, which typically involved distressed industrial or consumer companies. Buffett sold 75% of Berkshire's Apple stake over nine quarters before retiring, framing the decision as tax-driven. Abel, by contrast, has added to both Apple and Alphabet, concentrating 30% of Berkshire's $343 billion portfolio in two AI-linked stocks. The shift raises questions about how much technology exposure Berkshire's value-oriented shareholder base will tolerate. The last time Berkshire deployed capital at this scale through a private placement was in 2022, when it bought $8.4 billion in Occidental Petroleum shares during the energy sector rally. That bet preceded a 40% gain in Occidental's stock over the following 18 months, though oil prices have since retreated from their 2022 highs. Abel's Alphabet wager carries a different risk profile — tied not to commodity cycles but to the pace of AI adoption and regulatory scrutiny of Big Tech. For investors, the Alphabet bet offers a window into Abel's strategy: concentrate capital in businesses with durable moats and AI tailwinds, even at premium valuations. Alphabet trades at 26.6 times earnings, slightly above the S&P 500's 25 multiple — a premium Berkshire appears willing to pay for what it views as a generational opportunity. Berkshire's Class A shares trade near their all-time high, supported by the conglomerate's massive cash position and the market's confidence in Abel's stewardship. This article is for informational purposes only and does not constitute investment advice.
Berkshire Hathaway Inc. ended the first quarter with a record $397 billion in cash and equivalents, up from $373 billion at the end of last year, giving new Chief Executive Officer Greg Abel the largest war chest in corporate history to deploy as he reshapes the conglomerate's portfolio. "The cash position is extraordinary, but what matters is what Abel does with it," said Cathy Seifert, analyst at CFRA Research. "His background as an operator suggests he may consolidate Berkshire's units to achieve greater scale and efficiency rather than simply hoarding cash." Abel, who took over from Warren Buffett on Jan. 1, has already moved aggressively. In his first major deal, Berkshire agreed to acquire homebuilder Taylor Morrison for $6.8 billion, or $72.50 a share — a 24 percent premium to its undisturbed price. He also anchored a $10 billion private placement in Alphabet Inc., split evenly between Class A and Class C shares at a roughly 6.5 percent discount, pushing Berkshire's total Alphabet stake past $29 billion. The company restarted buybacks with a $234 million repurchase in March after a 21-month pause. The moves mark a sharp departure from Buffett's playbook. Abel exited 16 positions entirely in the first quarter, shrinking the equity portfolio from 42 holdings to 29, and was a net seller of roughly $8 billion in stocks. He concentrated capital in Alphabet — a bet that addresses what the late Charlie Munger called one of Berkshire's "most shameful" misses, having passed on Google's 2004 IPO. Alphabet shares have surged 89 percent over the past 12 months to about $357, fueled by first-quarter revenue of $109.9 billion, up 22 percent year over year, with Google Cloud revenue crossing $20 billion for the first time. **What Abel's early moves mean for Berkshire's direction** The Taylor Morrison deal ties Berkshire to a national housing shortage, while the Alphabet bet gives it exposure to artificial intelligence through Google Cloud's AI infrastructure spending. Buffett, who remains chairman, publicly praised the homebuilder acquisition, saying Abel executed it faster and more smoothly than he could have himself. On valuation, Berkshire trades at about 1.5 times book value, close to its 10-year average, and roughly 15 times earnings. First-quarter operating earnings rose 18 percent year over year, driven by the insurance units whose float provides cheap capital. The equity portfolio, worth more than $300 billion, includes Apple as its largest holding at about 22 percent, followed by American Express, Coca-Cola, and Bank of America. **The $397 billion question: Can Abel deploy it as well as Buffett?** The record cash pile — equal to more than a third of Berkshire's $1.1 trillion market capitalization — gives Abel firepower to pounce if markets sell off. But it also raises the stakes on deployment. A misjudged megadeal is the clearest downside, and the growing technology tilt adds both opportunity and risk to a portfolio that long avoided the sector. With nearly $400 billion still in reserve and a CEO who has shown he will act, the Abel era looks like continuity with a harder edge. The next deal may come sooner than investors expect. *This article is for informational purposes only and does not constitute investment advice.*
Greg Abel, Berkshire Hathaway's new CEO, exited 16 portfolio positions in the first quarter, including Domino's Pizza, and more than tripled the stake in Alphabet. The moves, disclosed in Berkshire's quarterly 13-F filing, mark the first major portfolio restructuring since Abel succeeded Warren Buffett as chief executive on Jan. 1. Buffett had built a 3.35 million-share Domino's position over six consecutive quarters before his retirement. Domino's posted an international same-store sales decline of 0.4% in the first quarter, its first drop in 32 years. The stock traded at roughly 14 times forward earnings, down from about 25 times through most of 2025, according to the filing. Abel more than tripled Berkshire's stake in Alphabet's Class A shares and opened a new position in its Class C shares. The conglomerate committed $10 billion to Alphabet's $80 billion equity offering announced June 1, with $5 billion allocated to each share class. Berkshire's total Alphabet stake now exceeds $29 billion, making it a top-five holding. Google commands about 90% of global internet search traffic, per GlobalStats, giving Alphabet durable pricing power in digital advertising. The company has also reaccelerated sales growth in its Google Cloud segment through generative AI integration. The portfolio overhaul signals a shift in strategy under Abel, who inherited a $332 billion portfolio and roughly $400 billion in short-term Treasury bills. Investors will watch the second-quarter 13-F filing for further position changes as the new CEO continues to reshape Berkshire's holdings. This article is for informational purposes only and does not constitute investment advice.
**Warren Buffett broke a two-decade tradition by skipping his midyear donation to the Gates Foundation, waiting for the findings of a review into the foundation's ties to Jeffrey Epstein.** Warren Buffett skipped his usual midyear multibillion-dollar donation to the Gates Foundation for the first time in 20 years, delaying the decision until later in 2026 as he awaits the results of an external review into the foundation's ties to convicted sex offender Jeffrey Epstein. "Buffett is waiting to see what the review finds before committing further funds," a person familiar with the investor's plans told the Wall Street Journal. The 95-year-old Berkshire Hathaway chairman has donated roughly $48 billion of Berkshire shares to the foundation since 2006, typically transferring tranches each June or July. The Gates Foundation retained law firm WilmerHale to examine its past engagement with Epstein, with findings expected this summer. Buffett and those close to him have been in touch with foundation leadership, including Chief Executive Mark Suzman, to learn more about the Epstein ties and the review. The delay threatens the funding pipeline of one of the world's largest philanthropic organizations, which has made about $110 billion in charitable distributions since its inception. The foundation plans to give away more than $200 billion over the next two decades before sunsetting at the end of 2045, and in 2026 told employees it would reduce its workforce by up to 500 positions over several years while capping operating expenses. Buffett's relationship with Gates, his longtime friend and Microsoft co-founder, has frayed since the Justice Department released files on the Epstein case in February. In a March interview with CNBC, Buffett said he had not spoken with Gates since the files were released and wanted to see what more he learned before making his annual donation decision. During a deposition with the House Oversight Committee in mid-June, Gates told lawmakers the last time he spoke with Buffett was in January, before the Epstein files were released. "We talked about my health challenges and some other things," Gates, 70, said. Gates also skipped the Berkshire Hathaway annual meeting in May for the first time in many years. While he was not barred from attending, some people advised Gates not to go, the Journal reported. Gates's team was also told he would be unable to sit in the section reserved for Buffett, Berkshire's directors and other business leaders. Buffett stepped down as a Gates Foundation trustee in 2021 after Gates and Melinda French Gates announced their divorce. He told the Journal in 2024 that the foundation would receive no money from him after his death. Melinda French Gates left the foundation that same year to focus on her own philanthropic goals. Whatever decision Buffett makes on the Gates Foundation donation, it is not expected to affect his annual contributions to his family's foundations, including those run by his three children and the Susan Thompson Buffett Foundation, named after his first wife, according to people familiar with the matter. Buffett is expected to make his decision later in 2026, possibly by the time he publishes his annual Thanksgiving letter. This article is for informational purposes only and does not constitute investment advice.
Hedge fund manager Lee Robinson, who turned a $20 million subprime bet into $200 million during the 2008 financial crisis, is shorting US insurers through credit default swaps as he bets the $1.8 trillion private credit market will trigger asset impairments. "The market is not pricing in the risk of writedowns from private credit exposure," Robinson, founder of London-based Altana Wealth, said in an interview. His firm has built short CDS positions against Berkshire Hathaway Inc., MetLife Inc. and Lincoln National Corp. Net notional bets on US insurers' CDS rose to $5.5 billion by May 22 from less than $4.9 billion at the end of last year, according to Depository Trust and Clearing Corp. data. The cost of protection has also climbed, with Lincoln National's CDS trading at about 142 basis points. Other hedge funds have followed Robinson's lead, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. executing similar trades for clients. The thesis hinges on what Robinson calls a "second-order effect" of the private credit boom. US life insurers held about $800 billion in private credit and other illiquid assets as of the end of 2025, roughly one-fifth of their $4 trillion fixed-income portfolios, according to Moody's Ratings. That share has risen from 18% a year earlier, driven by asset managers such as KKR & Co. and Apollo Global Management Inc. pushing insurance assets into higher-yielding private debt. MetLife alone held about $85 billion in private fixed-income assets as of March 31, the company disclosed. Moody's analyst Manoj Jethani warned in a report this month that risks are "emerging, particularly in middle-market direct lending, where credit quality is weakening and borrower stress is rising." The European Central Bank has also flagged potential losses for insurers. In the US, American International Group Inc.'s CDS protection cost has exceeded the broader North American investment-grade CDS index this year. European insurers including Allianz SE, Generali, Aviva Plc and AXA SA have seen similar CDS widening. Robinson's credit opportunity fund has returned 47.5% this year and 416% since its 2020 inception. His new fund adds single-stock options to the CDS positions. He said a single distressed insurer — "any one blowup" — could trigger contagion across the sector. MetLife said its private debt portfolio is about 95% investment grade and "highly diversified with resilience across market cycles," citing Chief Financial Officer John McCallion. Allianz said it is comfortable with its private debt exposure. Berkshire Hathaway declined to comment. Lincoln National did not respond to requests for comment. The short positions have room to run. Lincoln National's CDS at 142 basis points remains far from distressed levels, meaning a market dislocation could generate significant gains for bearish investors. Robinson compared the current low-volatility environment to August 2008, saying, "We were scratching our heads back then, completely unable to understand how volatility could be that low. It feels a bit like that now." This article is for informational purposes only and does not constitute investment advice.
Greg Abel made Alphabet Inc. the third-largest holding in Berkshire Hathaway's $336 billion portfolio, surpassing Coca-Cola Co. after a $10 billion private placement in the Google parent's $84.75 billion equity raise. "Alphabet has established itself as an artificial intelligence leader, and its Google Cloud business is reaccelerating," David Kass, a finance professor at the University of Maryland who tracks Berkshire's portfolio, said. Berkshire tripled its stake in Alphabet's Class A shares during the first quarter, buying 36.4 million shares, and opened a new position in Class C shares with 3.6 million shares, according to the company's 13F filing. The June private placement added $5 billion of each share class at a slight discount to Alphabet's market price at the time. The move marks the most aggressive portfolio shift since Abel succeeded Buffett as CEO on Dec. 31. Coca-Cola, Berkshire's longest-tenured holding dating to 1988, fell to No. 4. Berkshire's cost basis in Coca-Cola is $3.25 a share, yielding roughly 65% annually on cost. Alphabet's Google Cloud revenue grew 63% in the March quarter, and its search engine commands about 90% of global internet traffic, according to GlobalStats. Abel's willingness to rotate out of legacy holdings into AI-driven growth marks a departure from Buffett's long-standing avoidance of big technology stocks. Berkshire held $397.4 billion in cash at the end of the first quarter. Investors will watch the Q2 13F filing in August for further portfolio changes. This article is for informational purposes only and does not constitute investment advice.
The Nasdaq Composite fell 1.6% to 25,758 by midday Tuesday, extending a selloff that has erased more than $400 billion from the tech sector after investors began questioning whether artificial intelligence investments will generate the profits needed to justify lofty valuations. "The market treated AI spending as unquestionably positive for a long time, but investors are now becoming more demanding," Nigel Green, chief executive officer of deVere Group, said. "They want evidence that unprecedented spending will translate into unprecedented profits." The selloff accelerated Monday when the Nasdaq dropped 1.3% to 26,166.6 and the S&P 500 fell 0.4% to 7,472.79, while the Dow Jones Industrial Average rose 0.3% to 51,712.71. Communication Services led the decline with a 3.8% drop, followed by Consumer Discretionary at 2.3%, as Real Estate gained 1.4% in a defensive rotation. The CBOE Volatility Index climbed 3% to 17.28, and trading volume reached 22.97 billion shares, above the 20-session average of 22.12 billion. Decliners outnumbered advancers by a 1.32-to-1 ratio on the NYSE. The selloff spread globally Tuesday, with South Korea's Kospi tumbling 10% to 8,203.84 as regulatory scrutiny in the semiconductor sector compounded the AI spending concerns. The U.S. 10-year Treasury yield edged lower as investors sought safety, while the dollar index held steady near recent levels. **Why Berkshire Hathaway stands to benefit** The rotation out of growth and into defensive value has put Berkshire Hathaway Inc. in focus. The conglomerate's diversified portfolio of insurance, utilities, railroads, and consumer goods — combined with its $325 billion cash pile — positions it as a natural beneficiary when investors flee high-multiple tech names for stable earnings and tangible assets. Berkshire's Class A shares have historically outperformed during periods of tech sector stress, and its insurance float provides a durable funding advantage that pure-play tech companies lack. "Today's big falls in tech stocks without any major catalyst are another illustration of rising volatility in these stocks, a result of what increasingly looks like frothy earnings expectations and valuations," James Reilly, senior market economist at Capital Economics, said. "If the new market leaders, semiconductor firms, also start to struggle, the stock market would be in big trouble." SpaceX shares fell 16.4% Monday — their steepest single-day decline — after the company launched its first-ever debt offering, raising concerns about future financing needs despite holding approximately $100.8 billion in cash. The stock rebounded 5.7% to $163.41 Tuesday but remains well below its post-IPO peak above $200. Nvidia fell 2.8%, Broadcom dropped 2.3%, and Alphabet declined 1.1% during midday trading Tuesday. Meta Platforms and Microsoft have entered bear market territory, defined as a drop of at least 20% from their most recent highs. The selloff marks a sharp reversal from the first half of 2026, when AI-related stocks powered the broader market to record highs. The shift in sentiment has been driven by growing scrutiny of capital allocation: companies are committing unprecedented amounts to data centers, chips, and computing networks without clear visibility into the timing and magnitude of returns. For investors rotating into defensive positions, Berkshire Hathaway's insurance underwriting income, regulated utility earnings, and BNSF railway's pricing power offer a contrast to the binary outcomes of AI infrastructure bets. This article is for informational purposes only and does not constitute investment advice.
More US CEOs crossed the $100 million pay threshold in 2025 than any year since 2021, with Elon Musk setting a $158 billion record. "Executives are increasingly driven by what peers are earning rather than long-term value creation," Warren Buffett wrote in his final Berkshire Hathaway shareholder letter. Shankh Mitra of Welltower received $821 million, one of the largest executive pay packages for a public-company CEO over the past decade. Dylan Field of Figma took home $864 million, while Kaz Nejatian of Opendoor Technologies received $741 million. S&P 500 median CEO compensation reached $17.9 million, with half of chiefs receiving raises of 9.8 percent or more. The surge in nine-figure pay packages comes as the CEO-to-worker pay ratio widened to 99-to-1 on a median basis, up from 92-to-1 in 2024. Tesla's ratio reached 2,522,203-to-1 against a median worker salary of $62,786. Nearly a dozen CEOs topped $200 million, including Hock Tan of Broadcom at $205 million and David Zaslav of Warner Bros. Discovery at $165 million. George Kurtz of CrowdStrike received $248 million. Stephen Schwarzman of Blackstone, David Solomon of Goldman Sachs and Nikesh Arora of Palo Alto Networks each received packages between $100 million and $126 million. Musk's $158 billion award was so large that C-Suite Comp removed him as a statistical outlier before calculating broader market trends. Excluding Musk, median CEO total compensation rose 13 percent year-over-year to $4.75 million, while the average climbed 26 percent to $8.96 million. Welltower awarded four executives packages valued at more than $100 million each, making it only the second company in a decade to have four nine-figure executives in a single year. The company said the awards replace bonuses and equity for a decade and are designed to align incentives with shareholders. Technology was the top-paying sector for CEOs, led by Field's $864 million package at Figma. Real estate ranked second, led by Mitra at Welltower. The health care sector's highest earner was Summit Therapeutics co-CEO Mahkam Zanganeh at $246 million. The pay figures underscore a widening gap between executives and their workforces that has drawn scrutiny from investors and shareholder advocates. The median pay ratio has risen every year since 2022, from 84-to-1 to 99-to-1. Investors will watch upcoming proxy seasons for increased say-on-pay votes and shareholder proposals targeting compensation practices. This article is for informational purposes only and does not constitute investment advice.
**Alphabet's record-setting equity raise, backed by a $10 billion Berkshire Hathaway placement, rewrites the financing playbook for the AI arms race.** Alphabet, sitting on $127 billion in cash and marketable securities, raised $84.75 billion in stock — the largest equity offering in U.S. corporate history — to fund data centers for its AI services. "We are compute constrained in the near term," Chief Executive Sundar Pichai said on the company's first-quarter earnings call, adding that cloud revenue "would have been higher if we were able to meet the demand." The package includes a $30 billion underwritten public offering, a $40 billion at-the-market program starting in the third quarter, and a $10 billion private placement from Berkshire Hathaway split evenly between Class A and Class C stock. Of the total, roughly $34.75 billion is earmarked for AI infrastructure, while the at-the-market component covers tax obligations on employee equity awards. Alphabet lifted its 2026 capital spending guidance to between $180 billion and $190 billion, with a further increase flagged for 2027. The equity route contrasts with peers who borrowed. Nvidia priced $25 billion in bonds, Meta and Oracle each sold roughly $25 billion, and Amazon completed a $37 billion debt deal. Alphabet's choice adds no fixed interest expense but dilutes existing shareholders by roughly 2%, a trade-off that reflects confidence the AI bet will generate returns before the cost of equity becomes punitive. **Why Stock, Not Debt** Alphabet's balance sheet leverage stands at 0.33 times EBITDA, meaning it could have borrowed the full amount without straining its credit rating. Moody's viewed the capital plan as credit positive precisely because the company leaned on equity and hybrid securities rather than piling on traditional debt. The decision suggests management judged a 2% dilution cheaper than the interest burden on $85 billion of new bonds, particularly given the uncertainty around when AI infrastructure spending translates into revenue. Berkshire Hathaway's $10 billion anchor placement carries particular weight. Warren Buffett spent years saying he regretted not buying Google earlier; his successor Greg Abel has now made the largest single technology bet in Berkshire's history, on top of the roughly $10 billion of Alphabet stock the firm bought on the open market in the first quarter. A famously tech-shy investor has effectively co-signed the thesis that today's outlay produces tomorrow's margins. **The Demand That Justifies the Spend** Google Cloud revenue grew 63 percent year over year in the first quarter, and Pichai said the cloud backlog nearly doubled to more than $460 billion, with just over half expected to convert to revenue within two years. The company reached an agreement with Apple earlier this year to power its next-generation frontier AI models with Gemini, adding roughly 2.5 billion active iOS devices as a potential distribution channel — a scale that naturally requires more infrastructure. For investors, the question is whether the demand proves durable. Alphabet's free cash flow is set to compress sharply as the spending lands, and the equity dilution compounds the pressure. But the company's core ad and cloud engines generated enough cash to fund much of the build-out from reserves; the raise accelerates the timeline rather than rescuing the balance sheet. Alphabet trades at roughly 22 times forward earnings, a premium to the broader market that now hinges on whether Pichai's compute-constrained cloud backlog converts into the revenue growth the stock price implies. This article is for informational purposes only and does not constitute investment advice.