<p>Over the last three years, artificial intelligence (AI) has become a theme so influential that the broader market seems to ebb and flow based on this singular narrative. The <strong>S&amp;P 500</strong> and <strong>Nasdaq Composite</strong> indices are both hovering near record highs, with megacap technology stocks being some of the largest contributors to the market's ongoing rally.</p>
<p>While just about every major investment fund on Wall Street can't seem to get enough of AI, <strong>Berkshire Hathaway</strong>'s Warren Buffett -- who just retired as CEO -- has primarily stuck to his contrarian methods. Throughout the AI revolution, Berkshire has been a net seller of stocks -- hoarding cash on its balance sheet and collecting passive income through Treasury bills.</p>
<p>Last quarter, Berkshire finally put some of its excess capital to use and made a significant addition to its portfolio. Let's dig into some of the fund's moves in recent years and try to make sense of what drove these decisions. From there, we'll take a look at valuation and assess if now is a good opportunity to follow in Buffett's footsteps.</p>
<div><img alt="Warren Buffett smiling." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MzcvYnVmZmV0dDEtdG1mLTIuanBnJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MzcvYnVmZmV0dDEtdG1mLTIuanBnJnc9Mzg0MA"/>
<p>Image source: The Motley Fool.</p>
</div>
<h2>No longer the apple of Buffett's eye</h2>
<p>Berkshire Hathaway has long been a fan of consumer businesses and financial services. For decades, many of the firm's largest positions have included insurance companies and banks, as well as a mix of consumer staples and discretionary brands.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>Back in 2016, Buffett made headlines following Berkshire's purchase of <strong>Apple</strong> <span class="ticker-mention inline-flex items-center font-bold">(AAPL <span class="ml-1 text-red-900">0.45%</span>)</span> stock. Many investors viewed this as a rare instance of Buffett investing in the technology sector. However, given Apple's brand moat, consumer loyalty, robust hardware ecosystem, and steady cash flow generation, the company actually checks off many of Buffett's investment criteria.</p><div><div><div>Advertisement</div><div><div></div></div></div></div>
<p>A combination of meaningful price appreciation and subsequent buying over the last decade ultimately turned Apple into Berkshire's largest position. Throughout the AI revolution, however, Buffett has been trimming exposure to the iPhone maker.</p><div><div id="in_line_article_pitch_container"></div></div>
<div><table><tbody><tr><th>Position</th><th>Q4 2023</th><th>Q1 2024</th><th>Q2 2024</th><th>Q3 2024</th><th>Q4 2024</th><th>Q1 2025</th><th>Q2 2025</th><th>Q3 2025</th></tr><tr><td>Apple shares (in millions)</td><td>906</td><td>789</td><td>400</td><td>300</td><td>300</td><td>300</td><td>280</td><td>238</td></tr></tbody></table></div>
<p>Data Source: 13f.info</p>
<p>Since the end of 2023, Berkshire has reduced its exposure to Apple by roughly 73%. Many pundits on Wall Street have criticized Apple for being late to the AI market. While I personally agree, I do not think this necessarily played much of a role in Buffett's decision to sell the stock.</p>
<p>To me, the rationale behind these sales was more macro-oriented. Since October 2023, both the S&amp;P 500 and Apple stock have risen by about 60% -- an abnormally high return in a rather short period. Buffett has always exercised prudent judgment. I think taking advantage of a frothy market and rotating capital into more passive vehicles seemed like a better deal in the eyes of Buffett.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Apple Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FBUEwucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FBUEwucG5nJnc9MTI4"/></div><div><h2>NASDAQ: AAPL</h2><div>Apple</div></div></div><div><div><div>Today's Change</div><div>(-0.45%) $-1.22</div><div>Current Price</div><div>$271.86</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$4.0T</div><div>Day's Range</div><div>$271.75 - $273.68</div><div>52wk Range</div><div>$169.21 - $288.62</div><div>Volume</div><div>27M</div><div>Avg Vol</div><div>45M</div><div>Gross Margin</div><div>46.91%</div><div>Dividend Yield</div><div>0.38%</div></div></div></div></section>
<h2>Billionaires are plowing into Alphabet stock</h2>
<p>For much of the AI revolution, companies such as <strong>Nvidia</strong> and <strong>Palantir Technologies</strong> have been the main attractions. When it comes to legacy internet companies, both <strong>Amazon</strong> and <strong>Microsoft</strong> have also become heavily featured in the broader AI discussion.</p>
<p>One company that has been relatively quiet for the last few years, however, is <strong>Alphabet</strong> <span class="ticker-mention inline-flex items-center font-bold">(GOOGL <span class="ml-1 text-red-900">0.16%</span>)</span> <span class="ticker-mention inline-flex items-center font-bold">(GOOG <span class="ml-1 text-red-900">0.24%</span>)</span>. For a while, the rise of large language models (LLMs) such as ChatGPT were viewed as a knockout punch for traditional search engines -- namely, Google.</p>
<p>But over the last few years, Alphabet quietly trudged along and built out its AI roadmap. Now, billionaires are finally catching on. During the third quarter, notable investors, including Stanley Druckenmiller, Israel Englander, Ken Griffin, Philippe Laffont, and now Warren Buffett, all poured into Alphabet stock.</p>
<div><img alt="Google logo on a cell phone's wallpaper." width="880" height="642" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MzcvZ29vZy0xMy5qcGcmdz0zODQw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MzcvZ29vZy0xMy5qcGcmdz0zODQw"/>
<p>Image source: Getty Images.</p>
</div>
<h2>Is Alphabet stock a good buy right now?</h2>
<p>Alphabet currently boasts a forward price-to-earnings (P/E) multiple of 29. While the time to buy the stock at bargain prices may have passed, there are still plenty of upsides.</p>
<p></p>
<p>GOOGL PE Ratio (Forward) data by YCharts</p>
<p>Today, Alphabet has integrated its own LLM, Gemini, into core aspects of its business -- from an overhauled Google search landing page to the company's Android consumer electronics devices.</p>
<p>In addition, Alphabet has also invested heavily into its own hardware in the form of custom application-specific integrated circuits (ASICs) called Tensor Processing Units (TPUs) -- integrating this technology into its budding cloud computing platform. Most recently, Alphabet announced a $4.7 billion acquisition of Intersect -- a provider of clean energy power sources for data centers.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Alphabet Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0dPT0cucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0dPT0cucG5nJnc9MTI4"/></div><div><h2>NASDAQ: GOOG</h2><div>Alphabet</div></div></div><div><div><div>Today's Change</div><div>(-0.24%) $-0.75</div><div>Current Price</div><div>$313.80</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$3.8T</div><div>Day's Range</div><div>$312.20 - $315.39</div><div>52wk Range</div><div>$142.66 - $328.67</div><div>Volume</div><div>11M</div><div>Avg Vol</div><div>23M</div><div>Gross Margin</div><div>59.18%</div><div>Dividend Yield</div><div>0.26%</div></div></div></div></section>
<p>By vertically integrating all aspects of the AI value chain across its ecosystem, Alphabet is positioning itself to emerge as a durable leader of the next technological supercycle. Against this backdrop, I think Alphabet is poised for meaningful valuation expansion over the next several years and see the company as a compelling opportunity to buy and hold for patient investors with a long-term time horizon -- just like Berkshire Hathaway.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

BRK.B

GOOGL

GOOG

BRK.A

GGLS

GGLL

07777

<p>Berkshire Hathaway, led by Warren Buffett, is selling its Apple stock, reducing its position by 73% since late 2023, and reallocating funds into Alphabet (Google) stock. This shift comes as the AI sector gains momentum, with Buffett's strategy reflecting a cautious approach to the frothy market. Alphabet has been enhancing its AI capabilities, integrating its LLM, Gemini, and investing in hardware for cloud computing. Notable investors are increasingly backing Alphabet, indicating potential for significant valuation growth in the coming years.</p>

- Artificial intelligence (AI) has significantly influenced market trends, with major indices like the S&P 500 and Nasdaq at record highs, largely driven by tech stocks.  
- Berkshire Hathaway, under Warren Buffett, has been a net seller of stocks, notably reducing its investment in Apple by 73%, due to macroeconomic factors rather than the company's AI lag.  
- Meanwhile, Alphabet has drawn attention from notable investors, positioning itself for substantial growth in the AI sector through strategic integrations and acquisitions, indicating it could be a favorable investment opportunity.

Motley Fool

Berkshire Hathaway B

Alphabet

Alphabet - C

Berkshire Hathaway

Direxion Daily Googl Bear 1x Shares

Direxion Daily GOOGL Bull 2X Shares

XL2CSOPBRKB

Berkshire Is Selling Apple Stock and Buying This Other Magnificent Artificial Intelligence (AI) Stock Instead