Warren Buffett’s market move: Berkshire takes $4.3 billion stake in Google parent Alphabet; scales back Apple holding
Berkshire Hathaway has unveiled a new multibillion-dollar investment in Alphabet while continuing to scale back its long-running position in Apple, marking the final update of its portfolio before Warren Buffett steps down after 60 years as the chief executive. In a filing submitted to the US Securities and Exchange Commission on Friday, the company reported owning 17.85 million shares of Alphabet as of September 30, an investment worth $4.3 billion. During the same quarter, Berkshire reduced its Apple stake from 280 million shares to 238.2 million, as per a Reuters report. Over the years, it has sold nearly three-quarters of the more than 900 million Apple shares it once held. Apple, however, still represented Berkshire’s largest holding at $60.7 billion. The filing detailed the conglomerate’s US-listed equity positions as of the end of September, which together made up most of its $283.2 billion stock portfolio. Alphabet’s arrival as Berkshire’s tenth-largest US holding stood out because of Buffett’s long-held preference for value-focused investments and his general reluctance toward technology companies. He has previously described Apple, the maker of the iPhone, as more of a consumer products business. It was not disclosed whether Buffett, investment managers Todd Combs and Ted Weschler, or CEO-designate Greg Abel made the individual stock selections, though Buffett is usually responsible for larger transactions. At Berkshire’s 2019 shareholder meeting, Buffett and the late Charlie Munger acknowledged missing the opportunity to buy into Google earlier. Buffett pointed to similarities between Google’s advertising model and what worked for Berkshire’s Geico business. “We screwed up,” Munger said. “He’s saying we blew it,” Buffett replied. Alphabet shares rose 1.7% in after-hours trading, a reaction that often follows Berkshire’s disclosure of new stakes, which many investors treat as a sign of confidence.Further reductions in Bank of America The quarterly update also showed that Berkshire bought $6.4 billion worth of stocks and sold $12.5 billion between July and September, marking its twelfth consecutive quarter as a net seller. The company’s cash holdings climbed to a record $381.7 billion. A significant portion of the sales is believed to have come from Apple. Berkshire also reduced its stake in Bank of America by 6%, extending a selling trend that began in the third quarter of last year. The bank remains the conglomerate’s third-largest stock position. The update further confirmed that Berkshire exited its holding in homebuilder DR Horton, while increasing its stakes in several other companies including Chubb and Domino’s Pizza, Reuters reported. The growing cash reserves come as Buffett prepares to hand leadership of Berkshire’s $1.1 trillion empire to Abel on 1 January. Analysts have noted that Berkshire has been cautious on valuations, avoiding any major acquisition for nearly a decade and not buying back its own shares for more than a year. Beyond its stock market investments, Berkshire controls close to 200 businesses, including the BNSF railway, energy and manufacturing companies, and well-known retail brands such as Dairy Queen, Fruit of the Loom and See’s Candies.
