Berkshire Bets on Alphabet: A Calculated Gamble or Buffett's Blind Spot?
Berkshire Hathaway's recent disclosure of a $4.3 billion stake in Alphabet (GOOGL) has tongues wagging across Wall Street. The move, revealed in a November 2025 SEC filing, positions GOOGL as a top tech holding for the traditionally value-focused firm. It's a noteworthy departure from Warren Buffett's well-documented aversion to high-flying tech stocks, save for Apple (AAPL)—and to a lesser extent, Amazon (AMZN).
Decoding the Investment
The immediate question is: why Alphabet? The official narrative points to Alphabet's "strong fundamentals, consistent cash flow, and wide economic moats." And sure, Google dominates search. But that dominance is increasingly challenged, and Alphabet's ventures beyond search are a mixed bag at best. The investment represents nearly double Berkshire's position in Amazon.
Furthermore, the timing is interesting. Alphabet's stock has been volatile, facing regulatory scrutiny and broader economic headwinds. The stock of Alphabet has a consensus Strong Buy rating among 37 Wall Street analysts. That rating is based on 30 Buy and seven Hold recommendations issued in the last three months. The average GOOGL price target of $312.29 implies 12.98% upside from current levels. So, the "wisdom of Buffett" is aligning with the Street's average expectations.
It's widely speculated that one of Buffett's lieutenants, Ted Weschler or Todd Combs, initiated the GOOGL position, just as one of them reportedly spearheaded the Amazon investment back in 2019. Buffett himself has historically favored financials and consumer staples. I've looked at hundreds of these filings, and the degree to which Buffett delegates key investment decisions is often glossed over. The cult of personality obscures the actual decision-making process.
The Cloud Complication
The argument for Alphabet often hinges on Google Cloud's potential. It's touted as a formidable competitor to Amazon Web Services (AWS) and Microsoft Azure. But let's dig into the numbers. While Google Cloud's revenue is growing, its market share still lags significantly behind AWS and Azure. In 2025, AWS holds roughly 31% of the cloud market, Azure around 24%, and Google Cloud trails at approximately 10% (the exact figures fluctuate slightly depending on the source). That's a considerable gap to close. The narrative is compelling, but the data tells a different story. Is Alphabet's cloud business truly a "moat," or just a well-funded ambition?
This is the part of the report that I find genuinely puzzling. Berkshire is known for its rigorous value-based approach, favoring businesses with strong fundamentals, consistent cash flow, and wide economic moats. Alphabet fits this bill. With its dominance in online search, advertising, cloud computing, and a sprawling ecosystem of products, Alphabet continues to demonstrate resilience and adaptability in a rapidly evolving digital economy. Google: Holding A High Market Share In Search (GOOGL)
