Here's the 1 Stock That Billionaires Warren Buffett, Bill Ackman, and David Tepper All Own

Key Points

• The sole common denominator between the portfolios of Buffett, Ackman, and Tepper is a well-known stock.

• Ackman thinks it has "one of the greatest businesses in the world."

• This stock looks like a good pick for investors who aren't billionaires, too.

• 10 stocks we like better than Alphabet ›

It makes sense that some investors like to closely follow which stocks billionaires own. After all, those billionaires didn't become wealthy by making poor investment decisions. But, more often than not, ultrarich investors don't agree about the best stocks to hold.

As a case in point, Warren Buffett, Bill Ackman, and David Tepper have portfolios that look very different. But there's one stock -- and only one stock -- that all three of these billionaires own.

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The sole common denominator

I won't try to keep building suspense. The sole common denominator between the portfolios of Buffett, Ackman, and Tepper is... Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Don't waste your time trying to find Alphabet listed among Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) holdings, though; it isn't there. However, Buffett does indeed own a position in the technology giant. How? Alphabet is in the portfolio of New England Asset Management, a subsidiary of Berkshire Hathaway that submits its regulatory filings to the U.S. Securities and Exchange Commission (SEC) separately from Berkshire.

On the other hand, you'll easily spot Alphabet among Ackman's Pershing Square Capital Management holdings. The Google parent is Ackman's hedge fund's third-largest position, with class A and class C shares combined making up roughly 14% of the total portfolio.

Tepper's Appaloosa Holdings owns over 2 million shares of Alphabet. The stock ranks as the hedge fund's sixth-largest position.

What these billionaires have said about Alphabet

Although Buffett never made the call to buy Alphabet stock, he admitted to Berkshire shareholders in 2017 that he "blew it" by not investing earlier. Buffett's longtime business partner, the late Charlie Munger, even pointed to Google as his and Buffett's "worst mistake in the tech field."

Ackman initiated a position in Alphabet in early 2023 after Google stumbled with the launch of its first generative AI product following the wildly successful introduction of OpenAI's ChatGPT. He later told CNBC that Google was "one of the greatest businesses in the world." Ackman pointed out the company's multiple competitive advantages and predicted, "They will be a dominant player in AI for the very, very long term."

Tepper hasn't spoken a lot about Alphabet despite the stock being one of his largest holdings. Notably, though, in 2020, the billionaire hedge fund manager said that big tech stocks, including Alphabet, were "fully valued" in what was "maybe the second-most overvalued stock market I've ever seen." At the time, Alphabet's price-to-earnings (P/E) ratio was 27.2. Today, the stock trades at 20.1 times trailing-12-month earnings.

Is Alphabet stock a smart pick for other investors?

Don't think for one second about buying Alphabet stock solely because Buffett, Ackman, and Tepper own it. However, I do view this stock as a smart pick for investors who aren't billionaires.

Ackman's previous comments underscore one great reason to consider investing in Alphabet: It has a great business. In particular, the hedge fund manager's take on Alphabet's AI prospects appears to still be spot on.

Google Search has done a good job of integrating generative AI into its functionality with AI Overviews and AI Mode. Google Gemini ranks among the best (and, for some reviewers, the best) large language models available today. Google Cloud is the fastest-growing among the big three cloud service providers. Waymo is leading the way in autonomous ride-hailing.

As previously mentioned, Alphabet's valuation is much more attractive today than it was when Tepper said the stock was "fully valued" in early 2020. Indeed, the Google parent is the most attractively valued of all the so-called "Magnificent Seven" stocks.

Granted, Alphabet faces regulatory challenges. But I wouldn't bet against the company ultimately prevailing. I suspect that, like Buffett, investors who don't buy the stock now could regret it several years from now.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet and Berkshire Hathaway. The Motley Fool has a disclosure policy.