Greg Abel makes Alphabet Berkshire's No. 3 holding with $10B bet

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.