Warren Buffett Is Selling Apple and Buying This Brilliant Growth Stock Instead

Berkshire Hathaway trimmed its Apple stake in Q3, selling nearly 42 million shares (about a 15% reduction) while keeping Apple as its largest holding at just over 20% of the portfolio, and used proceeds to initiate a position in Alphabet. The piece highlights Alphabet’s stronger secular growth profile—advertising, Google Cloud (Q3 revenue up 34% YoY), Waymo and AI initiatives—and notes Berkshire’s Q3 purchase likely occurred when Alphabet traded near $200 (roughly 19x forward earnings) versus about 26x today, making the trade a value-for-growth substitution. The transaction signals Berkshire’s preference for Alphabet’s diversified, AI-enabled growth over Apple’s hardware-dependent, slower-growth outlook, though 13F reporting lags mean disclosed prices differ from current market levels.

Analysis

Berkshire Hathaway trimmed its Apple stake in Q3, selling nearly 42 million shares—about a 15% reduction—while Apple remains the largest holding at just over 20% of the investment portfolio; the firm also disclosed an initiated position in Alphabet amid Warren Buffett’s planned CEO handoff to Greg Abel and the 13F reporting lag that makes disclosed prices historical. Alphabet’s business mix and recent results underpin the move: Google Cloud revenue grew 34% year-over-year in Q3 and the company couples a dominant ad franchise with cloud, Waymo, quantum and generative AI investments. The article contrasts that with Apple’s predominantly hardware-driven model, limited product-driven market expansion and uneven AI progress, arguing Alphabet offers brighter secular growth. Valuation and timing are material caveats: Berkshire likely acquired Alphabet when the stock traded near $200 (~19x forward earnings) versus about 26x today, reducing the bargain margin even as market sentiment has turned more bullish after regulatory clarity and AI positioning.

Key Decisions for Investors

• Consider initiating or adding to Alphabet exposure on a staged basis to capture secular cloud and AI growth while acknowledging the higher current valuation relative to when Berkshire bought in
• Avoid wholesale liquidation of Apple positions solely because of Berkshire’s activity; instead assess Apple exposure relative to product catalyst risk and trim incrementally if growth metrics and new-product signals remain weak
• Monitor Google Cloud revenue and AI execution milestones as primary performance indicators and be mindful of 13F disclosure lag and valuation compression when sizing new positions