Warren Buffett, the legendary investor known for shunning tech stocks, has made a stunning pivot. Berkshire Hathaway’s latest regulatory filing reveals a new $4.9 billion stake in Alphabet Inc., Google’s parent company, marking one of the Oracle of Omaha’s rare forays into the technology sector beyond Apple. The investment, disclosed late Friday, sent Alphabet shares surging nearly 6% to a record high on Monday, providing a vote of confidence in the tech giant’s artificial intelligence ambitions amid growing concerns over an AI bubble.

This move comes as Buffett, now 95, approaches what many see as the twilight of his tenure at Berkshire. The conglomerate purchased 17.85 million shares of Alphabet during the third quarter, valued at approximately $4.93 billion as of Friday’s close, according to a filing with the Securities and Exchange Commission. It’s a significant endorsement from an investor who has long compared tech valuations to speculative bubbles, yet sees enduring value in Alphabet’s AI-driven growth.

A Rare Tech Endorsement from the Value Investing Icon

Buffett’s aversion to technology is well-documented. For decades, he avoided the sector, famously missing out on early opportunities in companies like Google despite its founders citing Berkshire as a model in their 2004 IPO prospectus. As reported by CNBC, Larry Page and Sergey Brin were inspired by Buffett’s annual letters, yet Berkshire sat on the sidelines as Alphabet grew into a $2 trillion behemoth.

That changed last quarter. Berkshire’s stake positions Alphabet as its 10th-largest equity holding, per CNBC. Analysts speculate this isn’t just a value play but a bet on Alphabet’s dominance in AI and cloud computing. “Despite the stellar rally in 2025, Alphabet’s valuation remains lower than many of its AI-driven megacap peers,” noted CNBC in a recent analysis.

The timing is intriguing. Alphabet has been pouring billions into AI infrastructure, including data centers and custom chips, amid a broader industry race. Berkshire’s investment aligns with a $1.8 trillion wave of corporate bond issuances for AI projects, as markets digest the costs of this buildout.

Market Reaction and AI Bubble Fears

Alphabet’s shares jumped 5.8% in Monday trading, closing at a record, as investors interpreted Berkshire’s move as a counter to AI skepticism. “The purchase…provided an endorsement of the tech giant’s artificial intelligence efforts amid heightened worries over a looming bubble,” stated Reuters. This rally boosted Nasdaq futures by 0.3% pre-market, signaling broader tech optimism.

On social media platform X, sentiment echoed the excitement. Posts highlighted Buffett’s confidence in Alphabet’s AI cash flows, with one user noting, “Berkshire Hathaway just disclosed a brand-new multi-billion $GOOGL stake…Message from Warren: AI + cloud cash flows are now ‘inevitable compounders.'” Another post from an investment account celebrated the move as saving the AI industry from bubble fears.

Yet, concerns linger. Alphabet’s AI investments have driven up capital expenditures, raising questions about profitability. Despite this, Buffett’s track record—turning Berkshire into a $900 billion empire—lends credibility. As Yahoo Finance reported, the stake marks “a rare foray into the industry by tech-averse Berkshire.”

Inside Alphabet’s AI Strategy and Valuation Appeal

At the heart of Berkshire’s interest likely lies Alphabet’s AI prowess. Google Cloud, powered by AI, has seen revenue soar, competing with Amazon and Microsoft. The company unveiled new AI chips and partnerships, boosting shares in recent months, as per posts on X referencing Google’s AI supercomputer advancements.

Valuation plays a key role. Trading at a forward price-to-earnings ratio lower than peers like Nvidia or Meta, Alphabet offers Buffett-style value. “Warren Buffett finally bought the Search giant, and it’s likely due to this one specific reason,” suggested The Motley Fool, pointing to Alphabet’s moat in search and advertising.

Berkshire’s portfolio shift also includes trimming other holdings, but this addition stands out. With $277 billion in cash, per recent filings, Buffett could be signaling more tech bets ahead, especially as AI transforms industries from healthcare to autonomous vehicles.

Broader Implications for Tech Investing

The investment ties into a larger narrative. Amid a 2025 AI rally, megacaps have dominated, but bubble fears have mounted. Berkshire’s move, revealed in its 13F filing, could encourage institutional inflows. ETFs like those tracking communication services, mentioned in Yahoo Finance, stand to benefit.

Historically, Buffett’s picks influence markets. His Apple stake, now Berkshire’s largest, has delivered massive returns. Alphabet could follow suit, especially with its 14% ownership in AI startup Anthropic and acquisitions like YouTube, as highlighted in X posts praising Google’s ‘Berkshire-like’ structure.

Critics argue Buffett, or his deputies Todd Combs and Ted Weschler, may be late to the AI party. Yet, the conglomerate’s long-term horizon aligns with Alphabet’s moonshot projects, from Waymo self-driving cars to quantum computing.

Buffett’s Evolving Legacy in a Tech-Driven World

As Buffett nears retirement—Berkshire announced succession plans— this stake underscores an evolution. “Warren Buffett’s Berkshire Hathaway reveals $4.3 billion Alphabet stake in his final weeks as CEO,” headlined Business Insider, noting his famous tech aversion.

Industry insiders see it as validation. “Despite AI bubble fears, Warren Buffett’s Berkshire Hathaway loads up on shares of hyperscaler Alphabet amid huge rally,” reported Fortune. This could spark a reevaluation of AI valuations, with Alphabet’s cloud business projected to hit $100 billion in annual revenue soon.

Looking ahead, the stake positions Berkshire for AI’s next phase. As global data demands explode, Alphabet’s infrastructure investments, backed by Buffett’s capital, may prove prescient. For now, the market’s reaction affirms: even skeptics like Buffett are buying into AI’s promise.

Navigating Risks in the AI Investment Landscape

Challenges remain. Regulatory scrutiny on Big Tech, antitrust cases against Google, and geopolitical tensions could impact growth. X posts from investors like Bill Ackman, who built a position in Alphabet echoing Buffett’s style, highlight the risks and rewards.

Still, Berkshire’s disciplined approach—focusing on cash flows and competitive advantages—suggests confidence. With Alphabet’s shares up over 30% year-to-date, the rally may have legs, especially if AI delivers on productivity gains.

In an era of rapid innovation, Buffett’s bet bridges value investing with tech disruption, potentially reshaping portfolios for years to come.