Prediction: This Magnificent Artificial Intelligence (AI) Stock Will Become Berkshire's Next Forever Holding

Under Warren Buffett's leadership and now continuing with Greg Abel at the helm, Berkshire Hathaway has long sought out exceptional businesses capable of compounding value over decades rather than chasing short-term market movements.

In years past, Buffett described certain portfolio investments as forever stocks -- stakes in companies that are so fundamentally strong that Berkshire intends to own them indefinitely. These types of ownership interests are in businesses that have proven, durable competitive advantages, predictable cash flow, and an ability to reinvest earnings at high returns on an annual basis.

I think Berkshire's decision to steadily increase its position in Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) reflects a deep commitment to long-term ownership that has defined the investment conglomerate for decades. Let's take a look at what makes Alphabet so unique and assess how it could evolve into Berkshire's next forever stock.

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What makes a stock a forever holding?

The most classic example of a forever stock in Berkshire's portfolio is Coca-Cola. Berkshire began accumulating shares in the late 1980s and has held shares through multiple market cycles, recessions, and leadership changes without ever dumping the core position.

The appeal lies in Coke's unmatched brand moat, vast distribution network, and pricing power -- qualities that generate consistent profitability regardless of economic conditions. Similar thinking could be applied to larger holdings such as American Express, where network effects and customer loyalty create barriers to entry and switching costs that competitors struggle to overcome at scale.

The takeaway here is that forever holdings ultimately reward patience: Berkshire benefits from decades of compound earnings growth and dividend increases while avoiding the cost and taxes associated with frequent trading.

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When did Berkshire first buy Alphabet stock?

According to 13F filings, Berkshire first disclosed a stake in Alphabet during the third quarter of 2025 -- acquiring 17.8 million shares. By the end of the first quarter of 2026, Berkshire's Alphabet position had more than tripled to roughly 54 million shares.

The most recent addition came just last month. After Alphabet announced plans to raise $80 billion in equity to fund its artificial intelligence (AI) infrastructure build-outs, Berkshire agreed to purchase $10 billion of new shares through a private placement. The transaction was split evenly: $5 billion across both Class A and Class C shares.

This deal directly follows Berkshire's earlier purchases, signaling continued conviction in Alphabet's long-term trajectory even as the C-suite transitioned at Berkshire.

Why Alphabet could become a forever holding

Alphabet possesses several characteristics that have historically attracted Berkshire to permanent ownership. For starters, Alphabet's business model is exceptionally diverse, spanning internet search (Google), video (YouTube), mobile software (Android), cloud computing (Google Cloud), and ambitious bets in AI and autonomous driving. This breadth provides multiple growth drivers while reducing reliance on any single revenue stream.

Indeed, Alphabet maintains a near-monopoly position in online search supported by sticky user habits, proprietary data advantages, and unmatched brand recognition. These moats bring unprecedented scale and profitability to the company's core advertising business.

Furthermore, Alphabet has meaningful footholds in both consumer and enterprise markets. In particular, Google Cloud has emerged as a fast-growing, high-margin segment serving businesses and individuals worldwide. Lastly, Alphabet also pays a modest dividend -- a feature Berkshire has long favored because it demonstrates both financial strength and a willingness to return capital to shareholders.

The combination of a solid core advertising business, expanding high-return opportunities in the AI ecosystem, and a shareholder-friendly capital allocation program makes Alphabet a natural extension of the forever-holding template.

Like Coca-Cola from decades earlier, Alphabet now represents the type of high-quality compounder that rewards investors willing to hold through periods of volatility and focus more on the underlying business performance. Berkshire's growing commitment to Alphabet underscores this enduring appeal, making it a compelling stock to buy and hold over a multiyear horizon.

American Express is an advertising partner of Motley Fool Money. Adam Spatacco has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, American Express, and Berkshire Hathaway. The Motley Fool has a disclosure policy.