Warren Buffett's Successor, Greg Abel, Just Plowed $10 Billion into this Magnificent Artificial Intelligence (AI) Stock

Here’s one trait emerging in the fledgling tenure of Greg Abel as CEO of Berkshire Hathaway (NYSE:BRKA) (NYSE:BRKB): He’s not afraid to make big moves.

Abel, who’s been in the top job since Jan. 1 following the retirement of the legendary Warren Buffett, bought 36.4 million shares of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) stock in his first three months on the job. That alone instantly made Alphabet one of Berkshire Hathaway’s biggest holdings, at roughly $20 billion. It was an extraordinary move considering how new Alphabet is to the Berkshire portfolio -- the conglomerate only opened its position in the third quarter of 2025.

But now Abel is doubling down on that bet, agreeing to buy another $10 billion in Alphabet stock through a private placement. The transaction includes buying $5 billion of Class A stock at about $352 per share and $5 billion of Class C stock at about $348 per share — a 6% discount to market prices.

So now Berkshire has about $30 billion in Alphabet stock, representing nearly 9% of the company’s entire $325 billion investment portfolio. Obviously, Abel and the Berkshire Hathaway team see something special in Alphabet right now. Let’s take a closer look.

Image source: Alphabet.

Why is Alphabet selling stock?

The Berkshire purchase was part of an $80 billion sale announced by Alphabet to help fund its build-out of artificial intelligence infrastructure. Alphabet, like many of the big tech companies, is investing heavily in data centers and chips to meet an ever-increasing demand for AI computing capacity. The company recently revised its full-year capital expenditure guidance to as much as $190 billion.

“The company is experiencing strong demand for its AI solutions and services from enterprises and consumers, at levels that are exceeding the company’s available supply,” Alphabet said in a statement. “By scaling its investments, the company seeks to expand its foundational infrastructure to support the significant growth opportunity ahead.”

Alphabet’s sale will also include $30 billion in underwritten offerings and $40 billion for an at-the-market offering program for Class A and Class C stock, likely beginning in the third quarter.

Alphabet already held bond sales in November and February that brought in $55 billion, and raised another $11 billion in the European market.

Why Alphabet stock is appealing in 2026

All year, I’ve predicted that Alphabet would have the best year of all the Magnificent Seven stocks. And it’s well on its way, having gained 15% so far in 2026 and 115% over the last year. The company has leveraged AI to further solidify its mammoth advantages in internet advertising and is deploying Google Gemini, its intelligent assistant and family of AI models, across its ad infrastructure.

Alphabet also added AI-generated summaries to its popular Google search engine, warding off threats from popular generative AI chatbots to cut into its search traffic. And it’s worked -- revenue in the first quarter from Google search was up 19% from a year ago. Alphabet’s overall revenue in the first quarter was $108.89 billion, up 21% from last year, and 81.5% of that money came from advertising sources, including Google Search, YouTube, and the Google Network.

Advertising is the engine that makes Alphabet go -- but the growth of its cloud computing division, Google Cloud, is what’s driving Alphabet stock higher these days. Google Cloud is the No. 3 cloud computing company in the world by usage, accounting for 14% of the global cloud infrastructure services market. It generated $20.02 billion in revenue from Google Cloud in the first quarter, up 63% year over year. It also nearly doubled its backlog to $462 billion on the strength of its enterprise AI offerings and its decision to sell tensor processing units (TPUs), the company’s in-house semiconductor chips. Management expects to convert more than half of the backlog into revenue over the next two years.

Abel’s bet on Alphabet

The thing that strikes me the most about Abel’s quick purchases of Alphabet stock is how it fits into Berkshire Hathaway’s overall investment strategy. The conglomerate is known to make careful purchases and avoid stocks of companies it deems overvalued. It’s been selling a lot more stock than it’s been buying in recent quarters, and Buffett himself has lamented that Berkshire would like to find more deals.

For Berkshire to scoop up $30 billion in Alphabet stock in less than a year speaks volumes about how management views the stock. Its forward price-to-earnings ratio of 25.3 is much lower than Berkshire favorite Apple (35.2) or Amazon (28.6), a cloud computing company that was a long-time Berkshire Hathaway holding until Abel abruptly exited the position last quarter.

Considering the significant advantages that Alphabet maintains in its internet search and advertising businesses, and its rapid growth of Google Cloud -- including its incredible backlog that will convert to cash -- Abel’s aggressive move makes sense.

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.