Key Points
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Warren Buffett confirmed he personally started Berkshire Hathaway’s investment in Alphabet.
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Unlike competitors relying on debt, Alphabet raised $80 billion in equity to fund its AI build-out (including a $10 billion investment by Berkshire).
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Buffett said Alphabet is “more likely to be a winner” than 90% to 95% of what Wall Street is selling.
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Warren Buffett has a confession: He missed the boat on Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL).
The 95-year-old chairman of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) told CNBC on Wednesday that he personally initiated his company’s investment in the Google parent. He also admitted he should have bought in years ago, back when Alphabet was “asset-light and a markets darling.”
So, Buffett is making up for lost time. Berkshire now holds roughly $31 billion in Alphabet stock: about $21 billion in public shares, plus a $10 billion private placement that was part of Alphabet’s $80 billion equity raise in June. At this point, it’s the fifth-largest holding in Berkshire’s portfolio, behind Apple, American Express, Coca-Cola, and Bank of America.
A trillion dollars here, a trillion dollars there
The timing is notable. Bond markets are getting nervous about artificial intelligence (AI) infrastructure spending. Tech titans spent roughly $1 trillion on data centers last year, and a Motley Fool research report shows construction plans totaling $4 trillion from now to 2030.
According to Apollo Global Management, coverage ratios for hyperscaler bonds dropped from nearly 5x in February to under 2x in July.
In other words, investor appetite for AI-related bonds has cooled significantly; back in February, buyers wanted 5 times as many bonds as were offered, but by July, that ratio had dropped to less than double. The mood is still bullish, but significantly less than before.
The “who holds the risk if AI returns are delayed” question is getting louder. It’s like a trillion-dollar game of hot potato.
Why Alphabet’s approach to funding AI is different
Buffett’s answer, apparently, is that Alphabet won’t be the one left holding the bag.
Unlike competitors leaning on bonds, private credit, and off-balance-sheet structures to fund data centers, Alphabet raised equity. That’s dilutive to shareholders, but it doesn’t saddle the company with debt service. Buffett isn’t lending money to the AI build-out. He’s buying an ownership stake in a company he thinks will outlast most of the competition as the AI boom plays out.
“They’re more likely to be a winner based on their record than probably 90% or 95% of what gets merchandised through Wall Street,” Buffett said.
That’s not exactly a ringing endorsement of the broader AI financing boom, but a clear vote of confidence for Alphabet.
Fifth place in Berkshire’s portfolio is still pretty good
Still, Buffett tempered expectations. “I would say that I don’t like it as well as at least four or five other businesses that we own,” he said.
Even so, the Google parent is in great company. Berkshire’s larger holdings are all world-class companies with long histories of wealth creation.
Alphabet’s fundamentals support Buffett’s confidence. Alphabet posted $110 billion in first-quarter 2026 revenue, up 22% year over year. Google Cloud grew 63%, and its backlog nearly doubled to more than $460 billion.
Buffett’s bet suggests he thinks Alphabet can spend more than $180 billion on data centers in 2026 and still come out ahead. Not everyone financing the AI race will be able to say the same. Warren Buffett is buying Alphabet in 2026, and you should consider following his lead.
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American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Anders Bylund has positions in Alphabet and American Express. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
