Alphabet Shares Surge as Buffett Takes Major Position

Warren Buffett's Berkshire Hathaway has made a substantial move into the technology sector, establishing a $4.3 billion stake in Alphabet during the third quarter of 2025. The legendary value investor, who has historically avoided technology investments, acquired 17.85 million shares, making Google the tenth-largest holding in Berkshire's portfolio. This strategic shift comes as Buffett prepares to transition the CEO role to Greg Abel on January 1, 2026.

The Alphabet investment occurred within a broader portfolio restructuring at Berkshire Hathaway. The company sold $12.5 billion worth of equity positions while making purchases totaling $6.4 billion during the same period. This marks the twelfth consecutive quarter where Berkshire has been a net seller of stocks. Notably, the firm continued reducing its Apple holdings while establishing the new position in Google, suggesting a strategic rebalancing within the technology sector.

The move carries particular significance given Buffett's previous public statements. During Berkshire's 2019 annual meeting, both Buffett and his longtime partner Charlie Munger expressed regret about missing early investment opportunities in Google. Munger famously stated he felt "like the horse's rear end" for failing to recognize Google's potential earlier.

Google's Massive Infrastructure Commitment

Just two days after Berkshire's investment became public, Alphabet announced its own historic commitment—a $40 billion investment in Texas data center infrastructure through 2027. This represents the company's largest single investment in any U.S. state. The project will establish two new locations: Armstrong County in the Texas Panhandle and Haskell County near Abilene.

Alphabet CEO Sundar Pichai emphasized the broader impact, stating, "This investment will create thousands of employment opportunities and accelerate energy initiatives across Texas." Texas Governor Greg Abbott highlighted the project's significance, noting that "Google's $40 billion investment makes Texas the company's largest operational hub nationwide."

This massive infrastructure push comes amid intensifying competition in artificial intelligence capabilities. Advanced AI models require enormous computational resources, prompting Google to respond to competitive pressure from Microsoft, Amazon, and other cloud service providers.

Should investors sell immediately? Or is it worth buying Alphabet?

Regulatory Challenges and Financial Performance

Despite these positive developments, Alphabet faces ongoing regulatory scrutiny. On November 14, 2025, the company submitted its response to antitrust allegations from the European Commission. Rather than accepting demands to break up its advertising business, Google proposed operational concessions including greater flexibility for publishers regarding minimum pricing and improved interoperability of its advertising tools.

The company has already been fined €3.5 billion for allegedly favoring its own display technologies. However, Alphabet's operational performance remains strong, with recent quarterly results showing consolidated revenue of $102.3 billion—a 16 percent year-over-year increase. Google Cloud revenue grew 34 percent to $15.2 billion, while net income climbed 33 percent to $34.9 billion.

Operating margins reached 30.5 percent, or 33.9 percent excluding the EU penalty—figures likely to reassure investors concerned about the company's financial health amid regulatory challenges.

Institutional Validation Meets Strategic Vision

Buffett's investment serves as powerful institutional validation of Alphabet's AI strategy, particularly noteworthy given his traditional avoidance of fast-moving technology sectors. The simultaneous $40 billion Texas commitment underscores Google's conviction that AI demand will remain sustainable and justify massive infrastructure investments.

With total 2025 investments projected between $91 and $93 billion, Alphabet is placing substantial resources behind its AI initiatives. The combination of Buffett's confidence and Google's own expansion offensive sends a clear market signal: major institutional players believe in Alphabet's ability to translate AI dominance into market share and profitability.