Key Takeaways
- Warren Buffett’s Berkshire Hathaway expanded its Alphabet holdings to approximately 58 million shares, valued at roughly $16.6 billion, elevating it to a top-five position.
- This significant purchase came after Alphabet stock experienced a 6% decline, with shares currently priced at a forward P/E ratio of 25x — beneath the S&P 500 benchmark.
- During Q1 2026, Alphabet reported revenues of $109.9 billion, representing a 21.8% annual increase, while Google Cloud’s contracted backlog surged to nearly $460 billion.
- Pershing Square’s Bill Ackman executed a dramatic shift, liquidating over 95% of his Alphabet holdings to concentrate on Microsoft stock, which has declined approximately 20% this year.
- Bridgewater’s Ray Dalio joined Berkshire in accumulating Alphabet shares, while both Donald Trump and Nancy Pelosi revealed purchases made in early 2026.
Warren Buffett’s investment vehicle has executed one of its most substantial portfolio adjustments in recent memory — targeting the tech giant behind the world’s dominant search engine.
Recently filed Q1 2026 13F documents revealed that Berkshire Hathaway expanded its Alphabet stake to approximately 57.8 million shares, representing a market value near $16.6 billion. This aggressive accumulation pushed Alphabet into Berkshire’s elite top-five holdings — a notable development for an organization renowned for its measured, deliberate approach.
Over the trailing twelve months, Alphabet stock has surged 115% and maintains a 15% gain year-to-date. However, a recent 6% monthly correction created an attractive entry point for Berkshire’s purchase. With Alphabet trading at a forward P/E multiple of 25x — notably beneath the S&P 500’s average valuation — the opportunity likely resonated with value-focused investors.
Berkshire CEO Greg Abel’s investment team appears to have based their conviction on Alphabet’s impressive Q1 performance. The company delivered $109.9 billion in revenue, marking a 21.8% year-over-year expansion. Earnings per share reached $5.11, crushing the consensus forecast of $2.63. Google Cloud posted 63% growth, while its contracted backlog nearly doubled from the previous quarter to exceed $460 billion.
This backlog metric deserves special attention. Unlike projections or guidance, these represent binding contractual commitments for future services. For an investment philosophy centered on reliable cash generation like Berkshire’s, such concrete revenue visibility holds substantial appeal.
Bridgewater Associates, led by Ray Dalio, similarly increased its Alphabet exposure during this timeframe. Additionally, former President Donald Trump and Congresswoman Nancy Pelosi both filed disclosures showing Alphabet purchases executed in early 2026.
Ackman’s Strategic Shift Toward Microsoft
While Berkshire accumulated shares, Bill Ackman executed the opposite strategy.
Pershing Square liquidated over 95% of its Alphabet stake, reallocating those proceeds into Microsoft. Microsoft shares have tumbled approximately 20% year-to-date, currently trading near $378.90 compared to a Wall Street consensus target of $565.90.
Ackman’s investment thesis centers on Microsoft’s artificial intelligence acceleration. The tech giant’s AI-related business now operates at a $37 billion annual run rate, representing 123% year-over-year expansion. Azure cloud services posted 40% growth in the latest reporting period. Microsoft’s commercial remaining performance obligation totaled $627 billion, reflecting 99% growth.
Microsoft also maintains a restructured ownership position in OpenAI — approximately 27% valued near $135 billion — accompanied by intellectual property licensing extending through 2032. Ackman is establishing this position at a forward P/E below 20x following substantial price depreciation.
Contrasting Approaches to AI Investment
Both portfolio adjustments fundamentally represent artificial intelligence investments, executed through divergent strategic channels.
Berkshire is positioning behind Google Cloud’s infrastructure capabilities and the substantial contracted demand underpinning future growth. Ackman is backing Microsoft’s enterprise software dominance and its strategic OpenAI alliance.
Analyst price targets highlight the divergence in market sentiment. Alphabet carries a consensus price objective of $417. Microsoft’s consensus target sits at $565.90 — significantly above current trading levels.
Sundar Pichai commented on Q1 results, saying: “Our AI investments and full stack approach are lighting up every part of the business.”
Alphabet has delivered 115% returns over the past year. Microsoft has declined roughly 20% during the identical timeframe.
