1 Monster AI Stock Greg Abel and Warren Buffett Are Extremely Bullish On

The Motley Fool · 14h ago

Key Points

  • Between its Class A and Class C shares, Alphabet makes up 10% of the conglomerate’s total holdings.

  • Abel and Buffett must have confidence that the AI stock will generate substantial returns on its huge capital expenditures.

Warren Buffett, who recently stepped down as chairman of Berkshire Hathaway, doesn't have a history of owning technology businesses. While the conglomerate's investment in Apple can be viewed as a bet on a strong consumer brand, the Omaha company's sizable bet on Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) signals an evolution.

The legendary investor and his successor, Greg Abel, are extremely bullish on this monster artificial intelligence (AI) stock.

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Alphabet company name on red filter with office in background.

Image source: The Motley Fool.

It came as a surprise when it was revealed in July that Warren Buffett was the one who initiated Berkshire Hathaway's first purchase of Alphabet shares in the third quarter of 2025. He clearly understands how dominant a business the internet giant is, with widely adopted and irreplaceable platforms, network effects, first-rate technical expertise, and sizable profits.

Berkshire Hathaway added to its stake in 2026. And as of Sept. 25, Alphabet makes up 10% of its entire portfolio. Between Class A and Class C shares, this business is its third-largest holding.

Abel and Buffett are clearly bullish on the leading AI enterprise, which currently trades at a reasonable 22.8 times consensus earnings estimates. They are showcasing their confidence in Alphabet at a time when it has raised tremendous amounts of capital to invest aggressively in the development of data centers.

The two executives must have a firm belief that the company will generate satisfactory returns on its massive capital expenditures. Time will tell if this is the right call.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.