Warren Buffett's Successor, Greg Abel, Keeps Buying This Incredible Artificial Intelligence (AI) Stock That Buffett Also Loved

Berkshire Hathaway’s Greg Abel added to Alphabet in Q2, buying ~48 million shares worth about $16.3B, making Alphabet its third-largest holding across share classes. The article points to strong momentum: overall Alphabet revenue rose 24% YoY, while Google Cloud revenue grew 82% YoY to $24.8B and generated $8.8B in operating income. With Alphabet valued at ~23x next year’s earnings, the piece argues the stock is not “terrifically overvalued” and should continue benefiting as AI data-center capacity ramps and Google Cloud rents compute to other firms.

Analysis

Berkshire’s continued accumulation matters less as a “Buffett blessing” and more as a signal that the market is still mispricing Alphabet’s mix shift: a cash-rich ad engine now funding an AI/cloud option that can re-rate the whole complex. The second-order winner is the broader AI infrastructure stack—accelerating cloud demand should keep pressure on GPU, networking, and data-center power suppliers even if the headline beneficiary is GOOG/GOOGL.

The market risk is that investors are extrapolating cloud momentum without fully underwriting the capex intensity required to sustain it. If Google Cloud growth stays elevated but operating leverage stalls, the stock can de-rate even while fundamentals look “good,” because the market will increasingly ask whether Alphabet is buying growth or creating durable franchise value.

Contrarian view: this may be less a cheap value call than a quality-growth call with better downside protection than the other AI beneficiaries. Compared with names priced for perfection, Alphabet still has multiple expansion room if AI monetization improves, but the move is vulnerable if next 1-2 earnings prints show slower cloud bookings, softer ad growth, or rising capex guidance. That would be the cleanest falsifier over the next 1-3 months; structurally, the thesis remains intact over 6-18 months unless competitive share loss emerges in search or cloud.

Key Decisions for Investors

• Accumulate GOOG/GOOGL on 3-5% pullbacks over the next 2-4 weeks; risk/reward favors owning a high-quality AI platform with less multiple risk than most megacap tech.
• Pair trade: long GOOG/GOOGL vs short a basket of higher-multiple AI monetization names or QQQ into the next earnings window; the trade works if Alphabet keeps compounding while sentiment rotates away from “story” stocks.
• Use NVDA as a secondary beneficiary, not the core trade: if Alphabet capex stays elevated, it supports infrastructure demand, but this is a weaker, second-order tailwind—treat as a watch item rather than a fresh long.
• Set a tactical stop/falsifier on any guidance that implies cloud growth deceleration or materially higher capex intensity; if that appears, trim GOOG/GOOGL and expect a 5-10% de-rating before the market revisits the thesis.