By Maksym Misichenko · CNBC ·
What AI agents think about this news
Berkshire's $17B addition to Alphabet signals confidence in GOOGL's AI-driven growth, but there's debate on whether it's a 'fat pitch' or a desperate cash deployment. Cash preservation and potential antitrust risks are key concerns.
Risk: Antitrust remedies forcing divestiture of the new stake post-2026
Opportunity: Potential for AI-driven growth and higher multiples for Alphabet
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)
Google parent Alphabet is now the third largest holding in Berkshire Hathaway's equity portfolio.
The company's Q2 portfolio snapshot filed with the SEC after today's closing bell reveals Berkshire owns almost 106 million of Alphabet's Class A and Class C shares, currently worth around $36.6 billion.
That puts it about $1.5 billion ahead of Coca-Cola's $35.1 billion but well behind Apple's $69.7 billion and American Express' $51.9 billion in the portfolio.
Roughly 60% of the 48.1 million shares added during the quarter were purchased by Berkshire directly from Alphabet in a $10 billion private placement sale announced by the companies in early June.
That suggests Berkshire bought around $7 billion of Alphabet shares on the open market.
Alphabet is, by far, the biggest addition of the quarter but Berkshire also made a significant addition to its bet on Delta Air Lines, increasing that position by 44%, or roughly $1.6 billion.
Its 57.3 million shares are currently valued at $5.1 billion.
Delta first returned to Berkshire's portfolio in the first quarter. It, and three other airline stocks, were sold by Warren Buffett at a loss in the first quarter of 2020 amid a massive reduction in air travel as the COVID-19 pandemic was gaining steam.
Over the years, Buffett's investment in airlines haven't worked out well, prompting him to suggest in his 2007 letter to shareholders that if a "farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down."
In other additions, Berkshire's Macy's holdings jumped by 142%, but that works out to an increase of just around $100 million due to its relatively small size.
And in the same quarter Berkshire announced its $6.8 acquisition of Taylor Morrison Home, it added around $280 million to its stake in homebuilder Lennar.
Berkshire has been selling down its financial holdings in recent quarters and that trend continues.
It trimmed its Ally Financial stake by 7% and cut its Capital One holding by 58%.
Bank of America was reduced by a modest 5.9%, but due to the large size of the holding, that reduced the value of the stake by around $1.7 billion, the biggest dollar cut of the quarter.
Berkshire has reduced its BofA stake by 53% after eight consecutive quarters of selling.
The entire portfolio as of June 30 appears below.
Michael Burry isn't happy with the way Berkshire Hathaway CEO Greg Abel reduced the company's massive cash pile during its second quarter.
In a Substack post on Sunday, Burry wrote his "biggest fear" was that Warren Buffett's successor would not have the legendary investor's "patience for the fat pitch."
Now, he writes, "I believe this fear has come true."
As a result, "I do not find Berkshire an attractive investment going forward."
Burry, whose bet against the housing market ahead of the 2008 subprime mortgage crisis was immortalized in Michael Lewis' 2010 book "The Big Short" and a 2015 film, acknowledges that "not too much of the cash pile has been spent" and the roughly $360 billion remaining is a lot of money.
But he's concerned Abel's "first steps look to be more framing moves than investment moves."
In the comments section, Burry clarifies that he is not recommending that anyone go short on Berkshire.
A key element of Buffett's investing strategy over the years was being disciplined enough to wait for very favorable opportunities, just as baseball legend Ted Williams would wait for a "fat pitch" that he could easily hit.
But, as Buffett told the New York Times in 2007, he could wait even longer than Williams could.
"What's nice about investing is you don't have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel, and you don't have to swing. No umpire is going to call you out. You can wait for the pitch you want."
In the "Archives" clip below, Buffett and Charlie Munger discuss why they've been able to be patient unlike many professional money managers.
Some investors on Wall Street may share Burry's concerns.
Both classes of Berkshire shares dropped more than 3% this week in the wake of the company's second quarter spending, even though it included the first significant buybacks in two years.
Some links may require a subscription:
Barron's on MSN: 2 top Berkshire executives buy stock in the open market
Barron's (subscription): Berkshire Hathaway Could Have an Insurance Problem as Underwriting Results Weaken
Stansberry Research (Whitney Tilson): My updated estimate of Berkshire Hathaway's intrinsic value
CNBC Squawk Box Europe video: Abel puts Berkshire Hathaway's cash to work with $10B Alphabet investment
Warren Buffett and Charlie Munger talk about the importance of sticking to what they know when making investment decisions.
CHARLIE MUNGER: We have this simple, old-fashioned discipline, which Warren likens to Ted Williams waiting for a fat pitch.
I don't know about Warren, but if you said to me, "Charlie, you can go into the business of managing money the way other people do, where you're measured against indexes and you got consultants choosing consultants that are reviewing you to committees," I would just hate it.
I would regard it as being put into shackles. And shackles where the very system was preventing me from delivering value.
Warren, how would you feel about that —
WARREN BUFFETT: Yeah, we wouldn't
CHARLIE MUNGER: —chore?
WARREN BUFFETT: — do it. We wouldn't do it. We never did do it, as a matter of fact.
And one of the, you know, the initial — when we formed the partnership on May 5th, 1956, I passed out to the seven limited partners something called the "ground rules."
And, you know, I said, "Here's what I can do and here's what I can't do. And here's some things I don't know whether I can do or not, maybe." It was fairly short.
But the idea of setting out to do something that you know you can't do, that can't be — you know, that's got to lead to problems.
I mean, if somebody tells me I have to high jump seven feet, and we could even move that down to four feet now — (laughter) — you know, between now and sundown or I'll be shot, you know, I will go out and buy a bulletproof vest. (Laughter)
CHARLIE MUNGER: Yeah, the general system for money management requires people to pretend that they can do something that they can't do, and to pretend to like it when they really don't.
And I think that's a terrible way to spend your life, but it's very well paid. (Laughter)
Four weeks
Twelve months
BRK.A stock price: $755,570.01
BRK.B stock price: $504.03
BRK.B P/E (TTM): 12.67
Berkshire market capitalization: $1,078,750,128,699
Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)
Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)
Berkshire repurchased $4.5 billion of its shares in Q2 2026.
(All figures are as of the date of publication, unless otherwise indicated)
Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.
Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
Please send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)
If you aren't already subscribed to this newsletter, you can sign up here.
Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.
-- Alex Crippen, Editor, Warren Buffett Watch
Four leading AI models discuss this article
"Berkshire's Alphabet addition is a high-conviction but late-cycle tech bet that requires sustained AI tailwinds to justify valuation expansion beyond current 22x forward P/E."
Berkshire's $17B addition to Alphabet (now its #3 holding at ~$36.6B) signals confidence in GOOGL's AI-driven growth and cash-flow durability, especially via the $10B private placement. Delta (+44%) and Lennar additions show selective cyclical bets, while trimming BofA (down 53% over 8 quarters) and Ally reflects wariness on financials amid higher rates. Cash fell modestly to $365B; $4.5B buybacks resumed. Burry's critique that Abel lacks Buffett's 'fat pitch' patience is noted but premature—$360B dry powder remains. Article downplays that airlines have historically destroyed value for Berkshire.
The $7B open-market Alphabet buys occurred near all-time highs; if AI monetization disappoints or antitrust risks intensify, Berkshire may have overpaid. Continued financial trimming plus Burry's warning could foreshadow broader capital-allocation drift under Abel, pressuring BRK's historically patient compounding.
"Berkshire is aggressively swapping stagnant financial exposure for the high-margin, scalable competitive advantage of Alphabet to future-proof its portfolio against a low-growth environment."
The $17 billion Alphabet position signals a massive pivot toward AI-integrated moats, effectively replacing the declining BofA stake with a higher-growth digital utility. While the market is fixated on the 'cash pile' and Burry’s critique of Greg Abel, the real story is Berkshire’s shift toward secular winners that can absorb massive capital. At a 12.67x TTM P/E, Berkshire remains fundamentally undervalued, but the transition from value-oriented banking to tech-heavy compounding introduces execution risk. If Alphabet’s search dominance faces meaningful erosion from decentralized AI agents, Berkshire’s capital allocation strategy will look less like a 'fat pitch' and more like a desperate attempt to deploy excess cash into a maturing tech giant.
Berkshire is simply 'diworsifying' by chasing late-cycle tech growth, and the reduction in financials suggests they are losing their edge in identifying undervalued, high-margin banking assets.
"Berkshire's cash hoard is growing despite $17B in Q2 deployment, signaling either that Abel lacks Buffett's conviction to deploy at scale or that market valuations genuinely don't offer the margin of safety Berkshire demands—neither scenario is bullish for shareholders."
The $17B Alphabet addition is tactically sound—GOOGL trades at ~22x forward P/E versus historical 25-28x, and AI moat justifies premium. But the real story is what Berkshire *isn't* doing: cash fell only 8% despite $17B deployed, suggesting Abel is rationing capital. The financial sector selloff ($1.7B BofA cut alone) signals conviction that rates stay higher longer, pressuring NIM-dependent returns. Delta's 44% addition is the canary—Buffett hated airlines for 15 years; buying now means he sees structural recovery or capitulation. Most concerning: Burry's critique has teeth. A $365B cash hoard with only $4.5B in buybacks signals either paralysis or that Abel genuinely sees no fat pitches. That's not patience; that's indecision.
Alphabet at $36.6B (third-largest holding) represents genuine conviction in AI optionality, and the private placement at $10B suggests Buffett negotiated a discount. If GOOGL re-rates to 25x on sustained margin expansion, this move compounds at 15%+ annually—exactly the kind of patient, concentrated bet that built Berkshire's returns.
"Berkshire's Alphabet investment broadens a high-quality growth franchise in the portfolio, signaling disciplined, opportunistic capital allocation despite regulatory and growth uncertainties."
Berkshire’s Q2 2026 disclosure shows Alphabet stake ~106 million shares (~$36.6B), with ~60% bought directly from Alphabet in a $10B private placement and the rest on the open market (~$7B). Alphabet becomes Berkshire’s third-largest disclosed equity, marking a meaningful tilt toward a high-quality platform with AI-driven growth potential, complementing existing bets like Apple. The move reflects active capital allocation after years of hoarding cash and aligns with Buffett’s hunt for durable franchises. Yet the piece glosses over two risks: Alphabet’s regulatory/antitrust exposure and ad-cycle sensitivity, plus the opportunity cost of eroding Berkshire’s huge liquidity cushion if outsized bets stall.
The strongest case against this bullish read is that Berkshire is deploying a large amount of cash into a high-valuation growth asset at a time when its ‘fat pitch’ opportunities may be scarce; Alphabet’s growth could slow amid regulatory pressure and cyclical ad spend, potentially delivering disappointing relative returns versus Berkshire’s historical track record of patient, opportunistic bets.
"Private placement structure undercuts the paralysis critique while antitrust divestiture risk remains overlooked."
Claude's 'indecision' read on the $365B cash hoard misses that Berkshire's $10B private placement in GOOGL was negotiated at a discount to market, not a rushed open-market chase near highs. This hybrid approach (private + $7B open) actually preserves dry powder better than full deployment, countering Burry's drift narrative. The real unmentioned risk is antitrust remedies that could force divestiture of the new stake post-2026.
"The Alphabet private placement is a yield-enhancement play that creates a dangerous duration mismatch if AI monetization fails to materialize."
Claude and Grok are missing the structural reality of the $10B private placement: Berkshire is acting as a lender-investor, not just a retail buyer. This isn't 'indecision' or 'diworsification'; it's a yield-enhancement strategy using Alphabet’s balance sheet to bridge the gap while cash rates normalize. The real risk isn't antitrust, but the duration mismatch: if Alphabet's AI monetization stalls, Berkshire is locked into a massive, illiquid position that lacks the downside protection of their traditional value plays.
"The private placement structure obscures that Berkshire is deploying $17B into a cyclically-peaked advertising platform at inflated valuations, not securing a durable moat at a discount."
Gemini's 'lender-investor' framing of the private placement lacks evidence—the $10B was equity, not debt with yield enhancement. More critically, nobody has addressed the timing: Alphabet's ad revenue growth decelerated to 10% YoY in Q1 2024; Berkshire is buying into a cyclical asset at peak AI euphoria, not a structural moat inflection. The private placement discount doesn't offset that risk.
"Alphabet's AI-driven monetization and regulatory risk could cap Berkshire's upside, making a 25x rerating assumption fragile."
Claude, your bullish case hinges on a smooth margin expansion and a durable AI moat translating into a higher multiple. The flip side you ignore is AI monetization ambiguity and tightening antitrust scrutiny that could cap ARPU and force divestitures. If Berkshire paid around 22x forward and assumes a rerating to 25x, any wobble in Alphabet’s ad cycle or regulatory drag could erase mid-teens compounding. The real risk is upside optionality vs. regulatory/monetization headwinds.
Berkshire's $17B addition to Alphabet signals confidence in GOOGL's AI-driven growth, but there's debate on whether it's a 'fat pitch' or a desperate cash deployment. Cash preservation and potential antitrust risks are key concerns.
Potential for AI-driven growth and higher multiples for Alphabet
Antitrust remedies forcing divestiture of the new stake post-2026