Berkshire Hathaway Bought $10 Billion of Alphabet Straight From the Company, Bypassing the Open Market

Former Warren Buffett watchers are now following CEO Greg Abel's moves as he leads Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) into a new era. So far, the playbook hasn't changed too much, although Abel is definitely making his own stamp on the company.

Buffett himself initiated the holding company's relatively new position in Google parent company Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and he attributed the recent aggressive confidence in that position, indicated by a large addition of the stock in the second quarter, to his own influence.

Beyond expanding its stake through public shares, it also bought $10 billion worth of the stock in a private placement. Let's look more closely at this recent purchase.

Image source: Google.

Is Berkshire Hathaway embracing AI?

Buffett was notable for his lack of interest in technology stocks when he was CEO of Berkshire Hathaway. He avoided stocks like Amazon and Alphabet for years, telling investors that he stayed away from categories that he didn't really understand.

Technology and artificial intelligence (AI) aren't exactly in his wheelhouse, since he prefers consumer technology and financial companies that have reliable cash flow and proven models. He did eventually say that he missed out on some of the great tech stocks when he should have recognized their excellence.

At the 2018 annual shareholders' meeting, he said that he's seen Google skip past the competition, and he "wondered if anybody could skip past Google." He added that he "saw at GEICO that we were paying a lot of money for something that cost them [Google] nothing incrementally." He eventually bought Apple stock, which he considers a consumer company, and it remains the portfolio's largest position.

Berkshire finally took a position in Alphabet in the 2025 third quarter, and it expanded its stake in the 2026 first and second quarter. The second-quarter purchase was partially in the public markets and partially from the private placement, and the $10 billion private purchase was split between $5 billion of A shares at $351.81 per share and $5 billion of Class C shares at $348.20 apiece.

As of this writing, the Alphabet stake is tied with the Coca-Cola position for the third largest stock in the portfolio, with each one accounting for 10.2% of the total. That's a quick increase and a strong show of confidence in Google.

New ways to spend money

Investors eagerly anticipate Berkshire Hathaway's 13F filing, which details all of the company's trades in a given quarter. The second-quarter filing wasn't particularly dramatic; Abel sold out of only one position, Constellation Brands, and bought one new stock, DR Horton. Otherwise, he sold parts of and added to other positions.

The most notable part of the update was that Abel is finally starting to use the company's cash pile. It was nearing $400 billion before the second quarter, a record high but shrank to $365.5 billion. Abel's purchase of Alphabet stock outside of the public markets was not only a departure in terms of it being a tech stock, but also in how the company uses its cash.

Abel is demonstrating the decisive action Buffett noted about why he picked him for the job, and this could signal further changes in style in the coming years.

Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, and D.R. Horton. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.