Alpahbet stock surges 7% as Buffett buys $4.3B stake
Alpahbet stock surges 7% as Buffett buys $4.3B stake
Warren Buffett's Berkshire Hathaway has announced a new $4.3 billion investment in Alphabet, Google's parent company.
The news sent Alphabet's shares soaring by nearly 7% to $293.4 in after-hours trading on Monday.
The investment now makes Alphabet Berkshire's 10th largest US stock holding.
This comes just before Buffett is set to retire as CEO at the end of this year after a remarkable 60-year tenure at the helm of the conglomerate he built from scratch.
Berkshire Hathaway's SEC filing reveals stock changes
Berkshire Hathaway's recent filing with the US Securities and Exchange Commission (SEC) revealed that it owned 17.85 million Alphabet shares as of September 30.
The firm also reduced its Apple stake to 238.2 million shares, down from 280 million last quarter.
Despite this, Apple still remains Berkshire's largest investment at $60.7 billion as of September-end.
Buffett's investment strategy and Berkshire's cash reserves
Buffett is known for his value-focused investing style and has often shied away from tech stocks. However, he had previously praised Alphabet's advertising business.
The latest investment comes as Berkshire Hathaway's cash reserves hit a record $381.7 billion under Buffett's leadership.
The company has been cautious about stock prices, refraining from buying back its own shares for over a year and avoiding major acquisitions in nearly a decade.
Berkshire's portfolio adjustments and future leadership
Along with the Alphabet investment, Berkshire Hathaway also sold about 6% of its Bank of America shares and its stake in homebuilder D.R. Horton. The bank is still Berkshire's third-largest holding.
Buffett also bought more shares in companies such as Chubb and Domino's Pizza.
As he prepares to hand over the reins of his $1.1 trillion conglomerate to Greg Abel on January 1, these changes mark a significant transition in both their investment strategy and leadership succession plan at Berkshire.