Warren Buffett believes Alphabet stocks have the potential to outperform 90% to 95% of stocks commonly recommended by Wall Street analysts. Berkshire Hathaway’s chairman shared his views during an appearance on the show. CNBC “Squawk Box”
After being interviewed, Alphabet (GOOGL) stock rises 3.65% At $370.82, Berkshire’s stock value increased to more than $31 billion. Alphabet is now one of Berkshire’s largest holdings in its portfolio, behind Apple and American Express.
Buffett admits he started Alphabet investing
Investors previously attributed Berkshire’s acquisition of Alphabet to the company’s new CEO, Greg Abel. When CNBC host Becky Quick asked who made the decision, Buffett dismissed the speculation.
“I started it,” Buffett said.
He added that Mr. Abel currently has final say on major investment decisions. According to media reports, the two men speak daily and continue to coordinate Berkshire’s strategy. Abel also discussed the company’s approach to artificial intelligence at Berkshire’s May shareholder meeting.
Berkshire reportedly began building its position in Alphabet in the third quarter of 2025 and continued adding stakes through early 2026. In June, the company invested an additional $10 billion through a private transaction related to Alphabet’s $80 billion AI fundraising effort.
Berkshire paid $351.81 per Class A share and $348.20 per Class C share, according to Alphabet’s SEC filings.
Buffett also admitted that he had underestimated Google for many years. He said he regrets not investing sooner when the search business was smaller and the company’s valuation was much lower.
Alphabet’s AI spending is “real money”
Buffett also highlighted the scale of Alphabet’s investment in artificial intelligence.
The company plans to spend about $180 billion to $190 billion on capital expenditures this year, and analysts expect spending to rise further in 2027. Buffett pointed out that these numbers exceed the capital requirements of even the largest railroad businesses.
He described the amounts involved as “real money”.
Alphabet’s latest financial results highlight the strength of its business. First-quarter revenue increased 22% to $110 billion, and Google Cloud’s revenue increased 63%. The company generated approximately $174 billion in operating cash flow over the past 12 months.
“The odds of a company like this being a winner are probably better than 90%, even 95% of everything that Wall Street puts out,” Buffett said. “Wall Street is interested in what sells.”
Buffett warns against short-term thinking on Wall Street
Despite the positive outlook, Buffett said Berkshire owns four or five businesses that he considers even more attractive than Alphabet.
He also criticized analysts and speculators for focusing too much on quarterly results rather than companies’ long-term earnings potential.
Buffett’s comments carry weight. This is because of Mr. Buffett’s track record in capital allocation. Berkshire began buying Apple stock in 2016, a position that later became one of the most profitable investments in the company’s history.
Alphabet was also recently added to the Dow Jones Industrial Average, and big funds continue to increase their exposure to big technology companies as the crypto market slumps.
Other prominent investors also point to big tech companies, including Amazon, as key beneficiaries of the AI investment cycle.
