Warren Buffett's Successor, Greg Abel, Scooped Up Shares of These 4 Powerhouse Stocks in the Second Quarter

Berkshire Hathaway’s Greg Abel added large positions in Q2, led by Alphabet (36,403,656 Class A and 3,585,215 Class C shares) alongside Mitsubishi, Marubeni, and Sumitomo. Alphabet’s equity raise for AI data centers increased from $80B to $84.75B, with Berkshire agreeing to invest $10B ($5B per share class), likely closing before quarter-end. The article also highlights strong Alphabet Cloud growth (+63% in Q1) and Japan trading houses trading at low trailing P/E multiples (Mitsubishi ~21x, Marubeni ~15x, Sumitomo ~13x) with shareholder-friendly capital returns.

Analysis

The more important signal is not that a renowned allocator likes a platform monopoly; it is that he is willing to pay for AI capex risk when the balance sheet can absorb it. That argues the market may be over-penalizing “capex intensity” in the best-in-class winners, while underestimating how much the AI buildout will widen the gap between self-funding incumbents and smaller, financially constrained challengers. Near term, that supports multiple resilience in GOOG/GOOGL relative to the broader software/internet complex; the second-order loser is any ad/search competitor that must spend to defend share without comparable cash generation.

For the Japanese trading houses, the investment case is less about growth and more about capital efficiency plus sponsor validation. Berkshire’s continued interest should tighten discount-to-book math over 1-3 months, but the real upside driver is still foreign-flow momentum and buyback arithmetic; without that, these names are just cheap for a reason. The more durable effect is that a global, long-duration capital allocator is implicitly endorsing these as quasi-bond proxies with equity upside, which can pull in yield-seeking capital if Japanese rates stay contained.

Contrarian view: the market may be mistaking a style-consistent allocation for a high-conviction fundamental edge. For Alphabet, consensus likely already knows the AI story; what is less appreciated is that financing optionality can itself be a moat, but only if cloud margin expansion keeps pace with capex. For the trading houses, the thesis breaks if the yen strengthens sharply or commodity/trade earnings roll over; for Alphabet, it breaks if next earnings show cloud growth slowing while capex keeps expanding faster than operating cash flow.

Key Decisions for Investors

• Long GOOGL vs short QQQ for 1-3 months: express the view that balance-sheet-safe AI spend will outperform the broader tech basket; target 8-12% relative upside, stop if cloud growth or margin commentary disappoints on the next print.
• Use pullbacks to add GOOGL/GOOG via a 1-3 month call spread rather than outright stock: risk/reward is better if the market keeps rewarding AI capex discipline; invalidate if management signals materially higher capex with no cloud payback.
• Watchlist, not immediate trade: MTSUY and SSUMY as a basket only if FX stays stable and buyback/dividend messaging remains intact; otherwise the yen is the dominant risk and can erase the valuation case quickly.
• Maintain a modest long BRK.B as a low-vol compounder hedge over 6-18 months: it is a cleaner expression of capital-allocation quality than chasing the underlying names individually, but the move is likely already partially reflected in price.