Here’s something that would’ve shocked investors five years ago: Warren Buffett, the guy who famously avoided tech stocks like they were penny stocks, just dropped $4.3 billion on Alphabet. And not just any amount—17.8 million shares worth. This is Buffett’s first major tech bet since Apple, and it’s got Wall Street buzzing.
For decades, Buffett said tech was outside his ‘circle of competence.’ He didn’t get it. He didn’t trust it. But then Apple happened in 2016, and it became Berkshire’s crown jewel. Now, Alphabet is getting the Buffett treatment.
What makes this move interesting isn’t just the money—it’s the timing and the valuation. Alphabet’s P/E ratio dipped below 20 at the start of Q3, which is genuinely cheap for a company with Google’s market dominance and AI potential. Since then, the stock has jumped 63%, but Buffett likely bought early when it was even cheaper. The stock is up 53% year-to-date, and it’s still the cheapest of the Magnificent 7 alongside Meta.
Alphabet checks all the Buffett boxes: it’s a ‘wonderful’ company with a durable competitive advantage (hello, search dominance), and he got it at a fair price. The company’s AI integration into search and its broader tech ecosystem gives it serious growth potential. Plus, unlike some AI darlings, Alphabet actually makes money—lots of it.
The real question: Is this a sign that Buffett’s successor, Greg Abel, is steering Berkshire toward more tech exposure? Or is this just Buffett recognizing that Alphabet is finally trading at a price that makes sense? Either way, when Buffett moves, the market listens. Alphabet stock surged 5% the day after the 13F filing dropped. That’s the Buffett effect in action.
