There is a long trail connecting Warren Buffett and Alphabet/Google, and the story starts with what Larry Page and Sergey Brin publicly wrote 21 years ago in Google’s IPO prospectus.
In that filing, Larry and Sergey told investors who shaped their thinking, where their ideas came from, when they learned from them, why they used that model, and which document guided their structure.
The two men titled their founders’ letter “An Owner’s Manual for Google’s Shareholders,” and added a footnote saying much of the letter was inspired by Warren’s essays in Berkshire Hathaway’s annual reports and Berkshire’s own manual.
Buffett shows his admiration with a major Alphabet stake
The story circled back more than two decades later, when Berkshire Hathaway disclosed late Friday who made a new investment, where the money went, when the filing was completed, why it matters for the company’s strategy, and which filing confirmed it.
The document revealed that Berkshire now owns a stake worth about $4.3 billion in Alphabet, making it the firm’s 10th biggest equity holding. That news pushed Alphabet shares up 3% on Monday, as trading desks reacted to a rare tech position from a company that usually stays far away from fast‑growth names.
This is the first time Berkshire is known to hold a position in Google, which is unusual because Warren has avoided the sector for most of his investing life.
The timing stands out too: Warren, now 95, is stepping down as CEO at the end of this year, with Greg Abel preparing to take over. This means the Alphabet stake will be part of Berkshire’s portfolio as leadership shifts.
The regret has been on record for years. In 2017, Warren said he should have bought Google long before, especially because Geico, the Berkshire‑owned insurer, was paying large advertising bills to Google’s network. He also said he missed Amazon, which Berkshire finally bought in 2019 and still holds roughly $2.2 billion of.
Google’s financial strength forces Berkshire to pay attention
The buying interest came during a year when Alphabet shares rose 50%, sitting just below their all‑time high reached last week.
The company reported its first $100 billion quarter in the third period, driven by Google Cloud, which handles the firm’s artificial intelligence tools.The cloud unit holds a $155 billion backlog, showing long‑term customer commitments.
Alphabet also rolled out new chips for its AI services, which puts it in the same field as companies racing to build advanced hardware for AI workloads.
Even with strong results, Alphabet trades cheaper than most AI‑focused giants. The stock sits at 26 times next year’s earnings, while Microsoft trades at 32, Broadcom at 51 and Nvidia at 42. Those numbers explain why investors say Alphabet still looks less expensive than its competitors.
The financial rise of Larry and Sergey reflects Google’s growth. Forbes lists them seventh and eighth on its billionaires ranking. Warren sits at sixth, putting all three close together on the global wealth list.
The IPO prospectus showed how deeply Warren influenced Google’s foundation. Larry and Sergey wrote that outside pressure often pushes companies to give up long‑term plans for short‑term numbers.
They quoted Warren directly: “We won’t ‘smooth’ quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you.’”
Sharpen your strategy with mentorship + daily ideas – 30 days free access to our trading program
Source: https://www.cryptopolitan.com/history-between-warren-buffett-and-alphabet/
