Berkshire Hathaway, now led by CEO Greg Abel, has gradually increased its holdings in technology companies. Recently, it made a substantial purchase of Alphabet shares, Google's parent company, during the second quarter, marking one of its largest stock acquisitions in several years.
Greg Abel, who succeeded Warren Buffett as CEO earlier this year, has overseen this investment. Berkshire Hathaway boosted its Alphabet shares by 83% to about 106 million shares, valued at nearly $38 billion as of the end of June.
Earlier in June, Berkshire had already acquired $10 billion worth of Alphabet shares through a private placement at a discount to market price, followed by an additional purchase of 19.6 million shares on the public market during the quarter.
By the end of June, Alphabet became Berkshire's third largest U.S. stock holding, after Apple at approximately $66 billion and American Express at about $51 billion in market value.
This investment in Alphabet attracted considerable market attention because under Warren Buffett's leadership, Berkshire rarely focused on technology stocks, with Apple being a notable exception.
It is well known that Buffett preferred investing in straightforward businesses with stable revenues, such as Coca-Cola and Geico, Berkshire's auto insurance subsidiary. However, after Buffett stepped down as CEO, decision-making shifted to Greg Abel.
Nevertheless, Buffett has revealed that he personally decided to invest in Alphabet in 2022. Now, with Abel as CEO and Buffett remaining chairman, it is likely both remain involved in investment decisions regarding Alphabet.
Alphabet's stock price has risen about 170% over the past three years, as investors remain confident that Google's parent company, with core businesses in search and online advertising, will be among the biggest beneficiaries of AI growth.
Besides Alphabet, Berkshire made significant portfolio changes in Q2, increasing its stake in Delta Air Lines by 44%, resulting in an investment valued at about $5.4 billion as of June 30.
Berkshire also invested in D.R. Horton for the first time and substantially increased holdings in Lennar and Macy's.
Conversely, Berkshire reduced its stakes in Capital One and Nucor by about half, cut back investments in Bank of America and Kroger, and fully exited a small position in Constellation Brands.
The detailed portfolio disclosure attracted strong investor interest, as it was previously known that Berkshire was aggressively buying shares. The Q2 earnings report released last week showed Berkshire made net purchases of roughly $20 billion, the largest quarterly stock buying since 2022.
During the quarter, Berkshire spent about $23.5 billion on stock buybacks and additional purchases, selling only $3.7 billion worth of shares, ending a 14-quarter streak of net stock sales.
This sizable return to stock buying caused Berkshire's cash holdings to decrease from a record high near $380 billion to $365 billion.
Previously, Berkshire's massive cash reserves had grown steadily in recent years before Buffett stepped down as CEO. One key reason was Buffett's view that attractive investment opportunities were becoming harder to find, whether in stocks, acquisitions, or share repurchases.
Source:Business Insider
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