Alphabet Inc (NASDAQ:GOOG) shares are up 3.3% ahead of the bell after Warren Buffett finally made the move that appears to go against his investment credo and may help soothe fears (albeit fleetingly) that the AI bubble is about to pop.
Berkshire Hathaway has unveiled a new stake worth about US$4.3 billion, a rare tech foray for a firm better known for its banks, insurers and industrials.
The disclosure has lit a (small) fire under the stock and given traders fresh fodder at the start of a jittery week.
Berkshire’s regulatory filing shows a position of 17.85 million Alphabet shares, marking a notable shift for Buffett.
While he has typically preferred steady cash generators to Silicon Valley growth stories, Alphabet’s current profile seems far closer to the kind of durable economics he prizes.
The company generated roughly $88 billion of free cash flow last year, its cloud arm is expanding rapidly and its Gemini-led push into artificial intelligence has strengthened its competitive position.
The market reaction was immediate. Alphabet stock gained ground in premarket trade, helped by a backdrop of strong recent earnings, including quarterly revenue of US$84.7 billion and net income of US$23.8 billion.
For Berkshire, the move hints at a strategic evolution as Greg Abel prepares to take the reins.
For Alphabet, it is a high-profile endorsement at a time when investors are trying to sift long-term value from the noise surrounding the AI boom.