Prediction: Following Alphabet, This Could Be the Next Trillion-Dollar Artificial Intelligence (AI) Stock Greg Abel Adds to Berkshire's Portfolio

Warren Buffett's retirement as CEO marked the end of an era at Berkshire Hathaway. While Berkshire remains committed to long-term ownership of high-quality compounders, some recent portfolio moves under new leadership suggest that there is a greater comfort with sophisticated, high-growth opportunities that sit at the center of artificial intelligence (AI).

The evidence appears clearly in Berkshire's recent handling of two "Magnificent Seven" stocks. During the third quarter of 2025, Berkshire initiated a stake in Alphabet. During the first quarter of this year, which was Greg Abel's first full quarter as CEO of Berkshire, the company more than tripled its Alphabet position to nearly 54 million shares. At the same time, filings show that Berkshire completely exited its long-standing -- albeit modest -- investment in Amazon.

These moves suggest that Abel is willing to differentiate among mega-cap technology leaders. Such selectivity could open the door to other companies that combine technological leadership with durable competitive advantage. One name that I think increasingly fits Berkshire's investment profile is Nvidia (NASDAQ: NVDA). Read on to learn why.

Image source: Nvidia.

Nvidia is diversifying its business model

It's no secret that Nvidia holds a commanding position in the graphics processing unit (GPU) market over its primary rival, Advanced Micro Devices. Nvidia's CUDA platform has become the de facto standard for AI developers, creating a powerful moat in hardware and software that competitors are struggling to replicate at scale.

Rather than resting on this dominance alone, Nvidia is systematically expanding its ecosystem across the entire AI stack. The company is deepening its involvement in high-performance networking through a combination of internal development and strategic partnerships. For example, in October, Nvidia invested $1 billion into Nokia in a partnership focused on AI-native radio access networks (RAN) and edge infrastructure.

Nvidia is also quietly supporting data center build-outs through targeted investments in neocloud providers like CoreWeave and optical component leaders such as Coherent and Lumentum. Additionally, Nvidia's NVLink Fusion platform is helping enable new partners like Marvell to develop custom AI chips that can integrate tightly with Nvidia's architecture.

Building a diversified business model reduces Nvidia's reliance on any single data center product while pushing the company closer to the center of the entire AI infrastructure build-out.

Nvidia has strong profitability, robust stock returns, and an attractive valuation

Throughout the AI revolution, Nvidia has translated its market leadership into exceptional financial success. Nvidia's revenue and earnings have risen exponentially thanks to AI-driven demand, which has contributed to share price appreciation of more than 1,000% over the last few years.

What's encouraging is that Nvidia has supplemented its strategic investments by expanding its dividend program as well. This demonstrates management's confidence to continue generating robust free cash flow and a willingness to share excess profits with investors.

From a valuation standpoint, Nvidia's forward price-to-earnings (P/E) multiple has become increasingly reasonable relative to its growth prospects. While Nvidia's forward P/E is notably higher than the long-run average S&P 500 forward earnings multiple of roughly 17, Abel has a bigger appetite for premium valuations, as long as they aren't overstretched.

NVDA PE Ratio (Forward) data by YCharts.

Given the trends in the chart above, Nvidia stock is clearly no longer as expensive as it was during earlier phases of the AI cycle. Currently, Nvidia looks more like a value stock -- precisely the kind of business that Berkshire historically seeks out when it identifies a new business capable of compounding capital over the long run.

Nvidia looks like a strong match for Berkshire's investment discipline

Berkshire's classic investment criteria -- wide economic moats, strong C-Suite, understandable businesses, and the potential for long-term compounding -- align closely with Nvidia's mold.

The company's brand strength in AI chips and expanding infrastructure ecosystem function as formidable barriers to entry and present high switching costs for its customers. Nvidia's steady diversification into networking and custom-chip architectures also helps give it a more resilient, durable profile compared to pure semiconductor plays.

Under Abel's leadership, Nvidia could emerge as a logical technology investment because it offers exposure to secular AI tailwinds without requiring Berkshire to abandon its preference for steady growth from blue chip businesses. In a portfolio already touching many of the companies shaping the next industrial era, Nvidia represents a compelling candidate for a long-term holding.

Adam Spatacco has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Berkshire Hathaway, Coherent, Lumentum, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.