This has been a year of historic change for the trillion-dollar conglomerate that Warren Buffett built. Following the Oracle of Omaha’s retirement as Berkshire Hathaway‘s (NYSE:BRKA)(NYSE:BRKB) CEO on Dec. 31, the oversight of the company’s day-to-day operations and its $363 billion portfolio passed to Greg Abel.
It took Buffett’s understudy just one quarter to really shake things up. When the dust cleared after March, Berkshire’s new boss had sent 16 stocks to the chopping block and pared down six others. Perhaps even more eye-opening, Abel put tech stocks on the menu. Following aggressive purchases of Google parent Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) in the first half of the year, Warren Buffett’s successor has now turned his attention to tech-driven acquisition platform Bending Spoons (NASDAQ:BSP).
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The oversight of Berkshire’s $363 billion portfolio passed to Greg Abel after Warren Buffett’s Dec. 31 retirement. Image source: Getty Images.
Alphabet is the new “Apple” of Abel’s eye
During the Oracle of Omaha’s more than half-century as CEO, arguably no company became more of a pillar for Berkshire’s investment portfolio than Apple (NASDAQ:AAPL). Just three years ago, it accounted for nearly 45% of Berkshire’s invested assets.
However, Buffett was never particularly adept at investing in tech stocks. His attraction to Apple had less to do with its tech innovations and everything to do with its customers’ loyalty and willingness to pay hefty premiums for Apple’s physical devices (iPhone, Mac, and iPad).
It took just a few months for Alphabet to become for Abel what Apple was for Warren Buffett.
While Berkshire’s current and former bosses appreciate Alphabet’s virtual monopoly — Google accounted for approximately 90% of global internet search traffic in September — it’s the company’s artificial intelligence (AI) ambitions that intrigue them.
Since Alphabet integrated generative AI and large language model solutions into the world’s No. 3 cloud infrastructure services platform, Google Cloud, sales for this high-margin segment have gone parabolic.
Image source: Getty Images.
Berkshire’s new boss just went shopping in the tech space again
But it’s not just Alphabet that has Abel’s attention in the tech space.
According to an Oct. 14 filing with the Securities and Exchange Commission, Berkshire is acquiring 10 million shares of Bending Spoons via private placement at $33 per share. This $330 million investment follows a $600 million investment at the company’s initial public offering in July.
