Norman Simpson
Berkshire Hathaway's stake in Alphabet has grown to more than $30 billion, making Google's parent company one of the conglomerate's largest positions. New CEO Greg Abel recently locked in an additional $10 billion purchase through a private offering — a move that signals Berkshire's conviction in Alphabet hasn't cooled since Warren Buffett stepped back from day-to-day leadership.
At a Glance
- Berkshire bought into Alphabet in late 2025; the position now exceeds $30 billion at current prices
- Alphabet generated $160 billion in trailing-12-month net income on $423 billion of revenue as of March 31, 2026
- Google Cloud revenue jumped 63% year over year in Q1 2026, now 18% of total revenue
- Total revenue grew 22% year over year in Q1 2026, up sharply from 12% in Q1 2025
- The stock trades at roughly 26 times forward earnings
Why Google's Advertising Business Is Hard to Displace
Alphabet's core ad engine is bigger than most people appreciate. Advertising accounted for over 70% of total revenue in 2025, and the company now has seven products — Search, YouTube, Gmail, Android, and Maps among them — each with at least 2 billion monthly active users. That scale is self-reinforcing: more users attract more advertisers, which generates the capital Alphabet needs to stay ahead technically.
Paid subscriptions add another layer of resilience. Google One and YouTube Premium combined have 350 million paying subscribers, providing high-margin recurring revenue that buffers against any softness in ad spending cycles. Net income of $160 billion over the past twelve months confirms those margins are real, not theoretical.
Gemini and the Data Advantage Competitors Can't Buy
The advertising moat is well understood. Less appreciated is what sitting at the center of the internet does for Alphabet's AI development. Billions of daily searches, video views, and map queries feed directly into Gemini, the AI model powering Google's product suite. Every interaction teaches the model what answers users actually find useful — a feedback loop that no startup or rival can replicate quickly, because the underlying data took decades to accumulate.
That improving model then does double duty. Better Gemini outputs make consumer products stickier and simultaneously drive enterprise demand through Google Cloud. Cloud revenue was up 63% year over year in Q1 2026, a pace that reflects genuine adoption, not just easy comparisons. The segment now accounts for 18% of Alphabet's revenue and is the company's fastest-growing business. As one analyst framed it, Google is essentially a large AI factory converting raw data into profit.
Improving Revenue Growth and the Capital Spending Question
Alphabet's top-line momentum has accelerated as AI features reshape its products. Q1 2026 revenue grew 22% year over year. Compare that to 15% in Q1 2024 and 12% in Q1 2025 — the trend line is clearly moving in the right direction.
The honest counterpoint is capital intensity. Data centers and custom chips demand heavy upfront spending, and Alphabet has committed to maintaining that pace. But infrastructure built today carries a multiyear useful life, so as revenue scales against those fixed costs, returns should improve. The forward price-to-earnings multiple of about 26 reflects a market that already prices in solid growth — yet Abel's $10 billion private purchase suggests insiders still see room.
| Metric | Q1 2024 | Q1 2025 | Q1 2026 |
|---|---|---|---|
| Revenue growth (YoY) | 15% | 12% | 22% |
| Cloud share of revenue | — | — | 18% |
| Cloud revenue growth (YoY) | — | — | 63% |
Frequently Asked Questions
Why did Berkshire Hathaway buy Alphabet stock?
Berkshire began building its Alphabet position in late 2025, drawn to the company's dominant advertising business, expanding cloud segment, and AI capabilities. The recent $10 billion private purchase by CEO Greg Abel suggests the investment thesis remains intact under new leadership.
What is Alphabet's Gemini AI, and why does it matter?
Gemini is the AI model integrated across Google's products, from Search to Cloud services. It improves through billions of user interactions, giving Alphabet a data advantage that's difficult for newer AI competitors to match.
Is Alphabet stock expensive at a 26x forward P/E?
A forward earnings multiple of 26 is moderate for a company posting 22% revenue growth and generating $160 billion in annual net income. Whether it's cheap or costly depends on how Cloud and AI revenue scale over the next few years — a question without a certain answer.
How large is Berkshire's position in Alphabet?
At current share prices, Berkshire's Alphabet holding is valued at over $30 billion, following the most recent $10 billion private offering purchase made by Greg Abel in 2026.
What Comes Next for Alphabet and Berkshire
Alphabet's revenue acceleration, cloud growth, and AI flywheel present a compelling long-term picture. Berkshire's willingness to keep adding at current prices — through a structured private deal, no less — is a meaningful signal from one of the most disciplined capital allocators in the market. The key risk to watch is whether AI infrastructure spending stays ahead of the revenue it ultimately generates. So far, the numbers suggest it is.
