Key Points
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Berkshire Hathaway has bought Alphabet’s shares on several occasions over the past year.
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Given the tech leader’s robust business and strong competitive edge, it could be a great long-term winner.
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Last month, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) announced an $80 billion equity capital raise to fund its aggressive artificial intelligence (AI)-related ambition. Part of that was a $10 billion private placement with Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB). This comes after the conglomerate initiated a position in Alphabet in the third quarter of 2025 and added even more shares in the first quarter of 2026, making the tech leader one of its largest holdings.
Greg Abel, the successor to Warren Buffett at the helm of Berkshire Hathaway, is clearly very bullish on Alphabet’s future, and so far, it has paid off. Alphabet’s shares have roughly doubled over the past 12 months (since the start of the third quarter of 2025, when Berkshire Hathaway first bought the company’s shares).
GOOGL data by YCharts
But in line with Buffett’s philosophy, Abel and his team likely intend to hold the stock for a long time. Is that a good idea?
Multiple long-term growth avenues
Alphabet is a leader across several industries. It dominates digital advertising thanks to its famous search engine, Google, and its video-sharing platform, YouTube, which has also made it one of the top players in the streaming industry. The company’s Google Cloud division is also one of the Big Three in that market. The good thing about Alphabet’s business is that every major industry where it operates arguably still has miles of growth left — these aren’t niches that are slowing down and will eventually become irrelevant. Digital advertising, for instance, is on a solid northward trajectory driven by several factors, including the ongoing shift to online commerce.
It’s worth pointing out that in the U.S., e-commerce accounted for just 16.9% of retail transactions in the first quarter. This number will almost certainly grow by leaps and bounds over the next decade and beyond — leading to an increased demand for digital ads. Also, Alphabet is unlikely to lose its lead. Its search engine benefits from a wide moat due to network effects: increased usage provides it with more data to refine and improve, which, in turn, boosts search volume. And while some thought the rise of AI chatbots would disrupt Alphabet’s search dominance, the company has actually improved its search engine with AI.
Alphabet’s cloud segment also looks incredibly strong and is growing much faster than the rest of the business. AI is providing a boost in this side of the company’s operations as well. Beyond Alphabet’s current growth drivers, one of the company’s biggest strengths is its innovative abilities that should allow it to tap into more attractive opportunities in the future. The company has been working for years on its self-driving vehicle ambitions, and its “other bets” segment features other potentially transformative initiatives.
Alphabet has many of the traits the best “forever stocks” do, including a robust underlying business that performs well, a strong competitive advantage, and multiple growth paths. The stock does look like a great long-term pick for investors. It’s not surprising, then, that Berkshire Hathaway is doubling down.
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Prosper Junior Bakiny has positions in Alphabet and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet and Berkshire Hathaway. The Motley Fool has a disclosure policy.
