Warren Buffett Watched Alphabet's Stock Price Climb 9,000% Before He Decided to Invest. Here's Why He and Greg Abel Are Making It One of Berkshire Hathaway's Biggest Investments Now.

Warren Buffett and Berkshire Hathaway CEO Greg Abel initiated a position in GOOGL during Q3 2025, turning Alphabet into one of Berkshire's largest holdings despite Buffett's admission that he missed a 9,000% gain by avoiding the stock earlier. The shift marks a reversal of Buffett's historical aversion to IPOs and technology companies.

The investment thesis centers on Alphabet's $200 billion capital expenditure program focused on AI data centers. Google Cloud CEO Thomas Kurian disclosed that these facilities deliver payback periods under two years, equivalent to approximately 20% annualized returns on deployed capital.

GOOGL currently trades at less than 17 times forward earnings, a valuation multiple that suggests Berkshire may continue accumulating shares. The combination of disciplined capital returns on AI infrastructure and compressed valuation appears to have overcome Buffett's longstanding reluctance to invest in technology stocks at scale.