Warren Buffett's Successor, Greg Abel, Just Unloaded Amazon Shares and Tripled His Position in This Magnificent Seven AI Stock That's Climbed 100% Over the Past Year

Greg Abel’s first-quarter 13F shows Berkshire Hathaway fully exited Amazon, a position that had been just under 0.2% of the portfolio, and more than tripled Alphabet Class A holdings to 54,249,798 shares, or 5.9% of the portfolio. Berkshire also initiated Alphabet Class C shares, adding 3,585,215 shares, equal to 0.4% of the portfolio. The move suggests a shift toward a cheaper AI-linked mega-cap with a strong moat, but the article is primarily commentary on portfolio positioning rather than a direct operating catalyst.

Analysis

This looks less like a wholesale style shift and more like a governance-driven reweighting toward the cleaner compounder. The key second-order effect is that a larger Alphabet stake from Berkshire can act as a valuation anchor for the rest of the market: if a historically tech-skeptical allocator is willing to size it meaningfully, it implicitly raises the bar for why investors should own lower-quality AI beneficiaries with weaker moats and more dilution risk. In contrast, the AMZN exit suggests the market may be underestimating how quickly Berkshire’s new regime will prune positions where expected upside is increasingly tied to capex intensity and execution rather than pure franchise durability.

The more interesting read-through is not “Alphabet over Amazon,” but “ads/search plus AI monetization over retail/cloud infrastructure.” Alphabet’s core cash engine is still highly defensive, while incremental AI spend is being funded by an already massive margin pool; that makes the stock more resilient if AI monetization takes longer than the market expects. If AI spend normalizes across the sector, Alphabet is one of the few mega-cap names that can absorb the investment cycle without needing a step-down in buybacks or balance-sheet flexibility.

Near term, the trade is likely to be driven by sentiment and multiple expansion rather than fundamentals. The main risk to the bull case is not competition in search over a 1-2 quarter window, but a sustained rise in capex intensity or regulatory pressure that compresses the free-cash-flow yield before AI revenues ramp. Conversely, if the market continues rewarding AI exposure, Alphabet can still rerate because it offers a rare combination of defensibility and upside participation, while many other AI-adjacent names are effectively momentum trades with inferior downside protection.

Key Decisions for Investors

• Go long GOOGL vs. short AMZN as a 3-6 month relative-value pair: Alphabet offers better moat durability and lower execution risk, while Amazon remains more exposed to margin volatility and higher reinvestment needs.
• Add GOOGL on any 3-5% pullback over the next 2-4 weeks; downside should be better contained than the average mega-cap AI name, with a favorable setup for multiple expansion if ad growth and cloud AI revenue stay intact.
• Avoid chasing NVDA at current levels if using Berkshire’s move as an AI signal; prefer a basket hedge with long GOOGL / short a high-multiple AI proxy to isolate monetization quality versus AI enthusiasm.
• For event-driven accounts, sell downside puts on GOOGL with 6-9 month tenor only if willing to own the stock; implied volatility should remain supported, but the fundamental downside is more contained than peers with heavier capex burdens.
• Use AMZN weakness to re-underwrite rather than automatically buy: if free cash flow guidance fails to inflect over the next 1-2 quarters, the stock may underperform GOOGL on a risk-adjusted basis despite similar AI narrative exposure.