Warren Buffett's Successor, Greg Abel, Has Over $42 Billion of Berkshire Hathaway's Capital Invested in 3 Virtual Monopolies

It's been a year of historic change for shareholders of Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB). On Dec. 31, Warren Buffett, who oversaw a greater-than-6,000,000% outperformance of the benchmark S&P 500 while involved with Berkshire, retired as CEO, giving his understudy, Greg Abel, control over Berkshire's $358 billion portfolio. Earlier this month, he also stepped down as chairman of Berkshire's board.

But as several things change for this trillion-dollar conglomerate, the search for value and businesses with sustainable competitive edges remains the same. As of the closing bell on Sept. 25, Abel was overseeing more than $42 billion invested in a trio of virtual monopolies: Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), Sirius XM Holdings (NASDAQ:SIRI), and VeriSign (NASDAQ:VRSN).

Virtual and legal monopolies play a big role in Berkshire's $358 billion investment portfolio. Image source: Getty Images.

Alphabet: $36.37 billion (both share classes, combined)

Abel wasted little time leaving his mark on Berkshire Hathaway's portfolio. In his first quarter as CEO, he jettisoned 16 holdings and reduced six others.

But he's also made one sizable purchase: Google parent Alphabet. During the first quarter, Abel more than tripled Berkshire's stake in Alphabet and added another $17 billion in the June-ended quarter. It's now Berkshire's No. 3 holding.

Google can be best described as a virtual monopoly. In August, it accounted for more than 91% of worldwide internet search traffic, according to data by GlobalStats. Between Google and streaming platform YouTube, the second-most-visited social site on the planet, Alphabet commands exceptional ad-pricing power.

However, it's Alphabet's artificial intelligence (AI) ambitions that really have Abel (and investors) excited. The integration of generative AI and large language model capabilities into Google Cloud has sent sales of this significantly higher-margin operating segment soaring.

Image source: Sirius XM.

Sirius XM Holdings: $3.23 billion

Satellite-radio operator Sirius XM isn't, technically, a virtual monopoly. Since it's the only licensed satellite-radio operator domestically, it's a legal monopoly -- and Berkshire holds 37% of its outstanding shares. Operating as a legal monopoly affords Sirius XM above-average subscription pricing power.

But Sirius XM's biggest advantage might just be its revenue mix. Whereas terrestrial and online radio providers are heavily reliant on advertising revenue, Sirius XM generates the lion's share (76.5% of net sales through the first six months of 2026) of its sales from subscriptions. The latter approach produces more consistent operating cash flow during recessions than an ad-driven model.

Furthermore, some of Sirius XM's costs are more or less fixed, such as transmission costs. Regardless of how many subscribers the company has, transmission costs are relatively constant. Investors appreciate this sort of predictability.

VeriSign: $2.58 billion

The third virtual monopoly Abel oversees, which is a carryover from Warren Buffett's decades as CEO, is domain-name registry service VeriSign. Berkshire holds a 10% stake in VeriSign and has been a continuous shareholder since the fourth quarter of 2012.

VeriSign's legal monopoly status concerns its registration rights to leading .com and .net domains. Although businesses aren't registering domain names in droves as we witnessed in the late 1990s and early 2000s, this remains a steady cash-flow driver for VeriSign, affording it reasonably strong pricing power.

Additionally, VeriSign can count on consistently juicy operating margins, often in the mid-to-high 60% range. Its infrastructure expenses are relatively low, and its only other major cost is the fees paid to the Internet Corporation for Assigned Names and Numbers (ICANN), the entity that grants VeriSign the registration rights.

Sean Williams has positions in Alphabet and Sirius XM. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, and VeriSign. The Motley Fool has a disclosure policy.