Berkshire Hathaway's $4.3B Alphabet (GOOGL) Investment Amid AI Valuation Sell-Off

Berkshire Hathaway’s Q3 2025 13F filing revealed a new $4.3B stake in Alphabet (GOOGL), consisting of 17.85M shares, marking their first investment in Google [0]. Concurrently, Berkshire reduced its Apple stake, reallocating capital to this AI-focused bet amid a global sell-off in AI-related stocks [0]. GOOGL’s stock rallied 3% immediately post-announcement, outperforming the Technology sector which was down -0.55% on September 30, 2025 [1][2]. The stock has gained +61.76% from July to November 2025, with a 39.7% increase in the three months post-Q3 [1].

1. Value vs. AI Valuation
   : Berkshire’s investment signals confidence in GOOGL’s AI strategy despite broader AI valuation concerns, as the company’s 27.65x P/E ratio is below peers like NVIDIA (~40x) and Microsoft (~35x) [3].
2. Portfolio Shift
   : The reduction in Apple and addition of GOOGL suggests Berkshire is prioritizing AI growth opportunities over mature tech holdings [0].
3. Institutional Impact
   : Berkshire’s endorsement may attract value-focused institutional investors to GOOGL [0].

• AI Valuation Correction
  : The global AI sell-off risk remains, which could pressure GOOGL’s price despite Berkshire’s stake [0][2].
• Limited Upside
  : Analyst consensus target of $300 implies only 5.5% upside from current levels [3].
• Sector Headwinds
  : Technology sector underperformance (-0.55% on Sept 30) indicates ongoing macro risks [2].

• Institutional Flow
  : Berkshire’s stake may draw additional institutional investment [0].
• AI Growth
  : GOOGL’s AI initiatives (e.g., Gemini, Cloud AI) could drive future growth [3].

• Berkshire’s stake: $4.3B (17.85M shares) in Q3 2025 [0].
• GOOGL’s performance: +61.76% (July-Nov 2025), +39.7% (Q3-Q4) [1].
• Financial metrics: Market cap $3.43T, P/E 27.65x, ROE 35% [3].
• AI valuation context: Berkshire invested amid global sell-off concerns [0].