When the Oracle of Omaha — a man who spent decades avoiding tech stocks like they were radioactive — quietly adds Alphabet to the Berkshire Hathaway portfolio, you pay attention. It’s the kind of move that makes you ask: what does Buffett see that the rest of the market is sleeping on?
The answer is hiding in plain sight. Alphabet just crossed $400 billion in annual revenue for the first time. Operating profit hit nearly $100 billion — not a typo — with margins pushing toward 25%. The company is a cash-printing machine that also happens to be building some of the most important AI infrastructure on the planet. And after the recent market selloff, it’s trading at a valuation that would make value investors blush.
The AI angle here isn’t theoretical — it’s already showing up in the numbers. Google Cloud is exploding, powered by Gemini, which now boasts over 750 million monthly users, up from 400 million just nine months ago. That’s not hype. That’s enterprise adoption at a pace that should terrify every competitor in the cloud space. Meanwhile, Waymo just raised another $16 billion to scale autonomous rides, and DeepMind keeps delivering breakthroughs that expand Alphabet’s already-massive technology moat.
Then there’s the Apple deal. Alphabet landed a multibillion-dollar agreement to supercharge Siri with Gemini — effectively embedding its AI directly into the world’s most profitable hardware ecosystem. That’s not just a revenue win. It’s a distribution win that cements Google’s position at the center of the AI stack for billions of users.
Operating earnings climbed nearly 29% year-over-year last quarter. The balance sheet is pristine. And while other Magnificent Seven stocks are getting crushed on fears that AI spending won’t pay off, Alphabet is actually proving it with revenue growth and margin expansion. It’s the rare mega-cap tech stock where the AI thesis is already translating into cold, hard profits.
With the S&P 500 down 1.5% year-to-date and tech stocks under heavy selling pressure from the oil spike and jobs miss, the rotation into value has hit even the best names. Alphabet has pulled back from recent highs, creating exactly the kind of entry point that Buffett-style investors wait years for. The fundamentals haven’t changed — just the price tag. And when you can buy the world’s dominant advertising, cloud, and AI platform at a discount, the math speaks for itself.