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Warren Buffett’s company, Berkshire Hathaway (BRK-B), recently added to its position in Alphabet (GOOGL) stock.
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Based in part on strong Google ad revenue, Alphabet’s Q3 2025 net income grew 33% year over year.
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GOOGL stock is a worthy buy, and not just because Berkshire Hathaway owns shares.
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A true living legend, Warren Buffett is known as the CEO of Berkshire Hathaway (NYSE:BRK-B) and a brilliant stock picker. He focuses on value and, other than Apple (NASDAQ:AAPL) stock and Amazon (NASDAQ:AMZN), Buffett doesn’t often buy many mega-cap technology stocks.
Hence, it’s of great interest that Buffett’s company recently sold some stock shares, and even trimmed his Apple stock position, but bought shares of a famous technology firm. This represents one of Buffett’s most intriguing moves as he prepares to retire as Berkshire Hathaway’s CEO at the end of the year.
Buffett generally doesn’t provide reasons why he chooses to buy specific stocks. Nevertheless, we can take a look at Berkshire Hathaway’s recent purchase and then consider why Buffett and his associates may have added shares of one particular technology stock. At the end of the day, you might want to buy a few shares, too.
You might notice something in Berkshire Hathaway’s Form 13-F filing for 2025’s third quarter. In particular, Berkshire’s position in Class A shares of Alphabet (NASDAQ:GOOGL) grew by the end of Q3.
Alphabet is, of course, the parent company of search engine giant Google. By purchasing Class A shares of Alphabet, Berkshire Hathaway gains voting rights in regard to Alphabet.
During Q3 2025, Berkshire Hathaway acquired a whopping 17.85 million Alphabet Class A shares shares, valued at around $4 billion. Berkshire’s average purchase price was $225 per share, and the company’s Alphabet stock addition was Berkshire Hathaway’s biggest stock buy of the quarter.
It’s certainly possible that incoming Berkshire Hathaway CEO Greg Abel influenced the company’s decision to buy those Alphabet shares. Nevertheless, it’s noteworthy that Berkshire made the purchase while Buffett was still in the CEO role.
Don’t get the wrong idea. Berkshire Hathaway’s current position of around 17.8 million GOOGL shares only represents 1.8% of Berkshire’s portfolio. Also, Berkshire Hathaway’s stake in Alphabet (in terms of GOOGL shares) is 0.3%, so it’s not as if Berkshire has a controlling stake in Alphabet.
Still, Buffett doesn’t often delve into Magnificent Seven technology stocks. Consequently, investors might wonder why Buffett’s company would boost its share position in Alphabet, of all companies.
The late, great Charlie Munger was a vice chairman at Berkshire Hathaway Berkshire Hathaway and Buffett’s longtime friend. During Berkshire’s 2019 annual shareholders’ meeting, Munger and Buffett made some revealing remarks about Alphabet/Google.
In his typically forthright speaking style, Munger admitted that he felt “like a horse’s ass for not identifying Google better.” Buffett acknowledged that he felt the same way.
After Munger declared that Berkshire Hathaway “screwed up,” Buffett explained that Berkshire used Google’s services at GEICO (which Buffett had invested in). Furthermore, Buffett noted the “results produced” and “saw” that Berkshire’s association with Google “was working for us.”
Munger then added, “We could see in our own operations how well that Google advertising was working.” Presumably referring to Berkshire Hathaway’s reluctance to directly invest in Alphabet/Google, Munger regretfully said, “[W]e just sat there sucking our thumbs.”
Munger’s point is duly noted. Alphabet stock has rocketed higher over the years, and this includes a 256% rally during the past five years.
In 2019, Munger commented that he and Buffett were “ashamed” and “trying to atone.” Perhaps Berkshire Hathaway is “atoning,” in a way, with its sizable Q3 2025 purchase of GOOGL shares.
The idea here isn’t to buy Alphabet stock just because Berkshire Hathaway did. Like Buffett, you should look for the value in a stock before considering a purchase.
So, does GOOGL stock offer a good value now? Alphabet’s trailing 12-month price-to-earnings (P/E) ratio is around 31x, which isn’t ultra-low but also isn’t very high for a Magnificent Seven company.
Ultimately, Alphabet’s true value comes from its revenue-generating potential. This circles back to Munger’s assertion that Google’s advertising was “working” for GEICO and Berkshire Hathaway.
Indeed, Google and Alphabet remain a revenue-generating powerhouse in 2025 with serious advertising-sales momentum. In the third quarter of 2025, Google advertising revenue grew to $74.182 billion, versus $65.854 billion in the year-earlier quarter.
Moreover, Alphabet’s Q3 2025 total revenue increased 16% year over year to $102.346 billion. In addition, Alphabet’s net income grew 33% to $34.979 billion.
Therefore, GOOGL stock is worth owning in 2025 and 2026 irrespective of whether Buffett bought shares or not. Buffett’s company conducted thorough research on Alphabet and you can do so, as well. Then, if you like Alphabet’s value proposition, consider purchasing a few shares today.
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