Warren Buffett believes Alphabet shares could outperform 90% to 95% of the stocks commonly recommended by Wall Street analysts. The Berkshire Hathaway chairman shared his view during an appearance on CNBC’s “Squawk Box.”
Following the interview, Alphabet (GOOGL) shares rose 3.65% to $370.82, increasing the value of Berkshire’s stake to more than $31 billion. Alphabet is now one of the largest holdings in Berkshire’s portfolio, behind only Apple and American Express.
Buffett Confirms He Initiated the Alphabet Investment
Investors had previously linked Berkshire’s Alphabet purchase to Greg Abel, the company’s new CEO. Buffett dismissed that speculation when CNBC host Becky Quick asked who made the decision.
“I initiated it,” Buffett said.
He added that Abel now has the final say on major investment decisions. According to media reports, the two speak daily and continue to coordinate Berkshire’s strategy. Abel also discussed the company’s approach to artificial intelligence during Berkshire’s May shareholder meeting.
Berkshire reportedly began building its Alphabet position in the third quarter of 2025 and continued adding shares into early 2026. In June, the company invested another $10 billion through a private deal connected to Alphabet’s $80 billion AI fundraising effort.
According to Alphabet’s SEC filing, Berkshire paid $351.81 per Class A share and $348.20 per Class C share.
Buffett also admitted that he had underestimated Google for years. He said he regretted not investing earlier, when the search business was smaller and the company traded at a much lower valuation.
Alphabet’s AI Spending Is “Real Money”
Buffett also highlighted the scale of Alphabet’s artificial intelligence investments.
The company plans to spend around $180 billion to $190 billion on capital expenditures this year, with analysts expecting spending to rise further in 2027. Buffett noted that these figures exceed the capital requirements of even the largest railroad businesses.
He described the sums involved as “real money.”
Alphabet’s latest financial results underline the strength of its business. First-quarter revenue increased 22% to $110 billion, while Google Cloud revenue surged 63%. The company generated approximately $174 billion in operating cash flow over the past 12 months.
“The chances of a company like this being a winner are higher than probably 90% or even 95% of everything Wall Street puts out there,” Buffett said. “Wall Street is interested in things they can sell.”
Buffett Warns Against Wall Street’s Short-Term Thinking
Despite his positive outlook, Buffett said Berkshire owns four or five operating businesses that he considers even more attractive than Alphabet.
He also criticized analysts and speculators for focusing too heavily on quarterly results instead of a company’s long-term earning potential.
Buffett’s comments carry weight because of his record in capital allocation. Berkshire began buying Apple shares in 2016, and the position later became one of the most profitable investments in the company’s history.
Alphabet was also recently added to the Dow Jones Industrial Average, while major funds have continued increasing exposure to large technology companies amid weakness in the cryptocurrency market.
Other prominent investors have also identified major technology firms, including Amazon, as leading beneficiaries of the AI investment cycle.
