Warren Buffett Successor Greg Abel Made 3 Big Purchases Last Quarter, and They're All Exceptional Performers

Greg Abel deployed billions in Berkshire capital across three major moves that are already showing positive results: a $9.7B acquisition of OxyChem, a $1.8B strategic stake in Tokio Marine, and an estimated $11B addition to Alphabet. OxyChem and Tokio Marine are benefiting from favorable industry and underwriting dynamics, while Alphabet is up about 35% since quarter-end as AI-driven cloud and search growth accelerated. The article frames Abel's early capital allocation as a strong start and suggests Berkshire may keep adding to Alphabet.

Analysis

The common thread is not “Berkshire got lucky,” but that Abel is showing unusually good cycle timing across three different capital-allocation channels: hard assets at trough earnings, financial services with embedded distribution, and AI-capex compounders with durable free-cash-flow conversion. That mix matters because it reduces reliance on any single macro regime; the portfolio is being tilted toward assets where Berkshire can be paid to wait while operating leverage and optionality re-rate over the next 12-24 months.

The second-order winner is not just the target companies, but their adjacent ecosystems. OxyChem’s pricing power should pressure higher-cost U.S. and European producers first, while supporting feedstock-linked spreads for integrated industrial names. Tokio Marine’s partnership increases capital-return flexibility, which can force smaller Japanese insurers to defend market share with more buybacks/dividends, compressing the valuation gap across the sector.

Alphabet is the cleanest signal that the market may still be underestimating AI monetization outside the obvious semiconductor beneficiaries. If search engagement stays elevated and cloud margins keep expanding, the debate shifts from “AI spend drag” to “AI margin flywheel,” which would justify multiple support even if capex stays elevated. The key risk is that AI returns lag capex for longer than expected, but the current setup suggests the market is pricing only partial success, not full monetization.

The contrarian read: this looks less like Buffett-style conservatism and more like a quiet re-risking into businesses with visible near-term catalysts. That may be underappreciated because Berkshire is usually treated as a defensive proxy; if Abel keeps allocating this way, the stock could start trading with a modest growth premium rather than a pure conglomerate discount. The main reversal trigger would be a broad de-rating in cyclicals/large-cap tech or evidence that the operating uplift from these deals is slipping into the 2026+ bucket.

Key Decisions for Investors

• Long GOOGL vs. short a basket of mega-cap AI beneficiaries with richer multiples (e.g., NVDA/semis) for 3-6 months: if AI monetization continues to show up in search/cloud margins, Alphabet should outperform on both earnings revisions and multiple stability.
• Buy BRK.B on pullbacks over the next 1-2 quarters; use any 5-8% drawdown to add, since the market may re-rate Berkshire as an active capital allocator rather than a passive value compounder.
• Pair long OXY / short DOW or EMN for 3-6 months: OxyChem upside plus retained dividend stream should insulate Berkshire-linked economics, while higher-cost chemical peers are more vulnerable if pricing power normalizes.
• Consider a tactical long on TKOMY/OTC or Japan non-life insurance ETF versus a short in weaker regional Japanese financials for 6-12 months; the quota-share and capital-return signal should widen dispersion in favor of quality underwriters.
• If owning BRK.B already, sell out-of-the-money calls 1-2 quarters out to monetize the lower implied volatility while retaining upside from further evidence that Abel’s capital deployment is working.