Legendary billionaire investor yet again bets against industry’s latest sweetheart

Investment legend Warren Buffett’s major investment in Google — despite US microchip maker Nvidia dominating headlines in recent months with record valuation levels — appears to reflect his assessment of which companies will come out strong from a much-speculated AI bubble burst.

The world’s most valuable publicly listed company, Nvidia, recently reported a record $57 billion in revenue for the third quarter of 2025, surpassing Wall Street expectations.

Only weeks earlier, Nvidia became the first company to reach a valuation above $5 trillion, overtaking the other members of the “magnificent seven” tech group: Alphabet (Google’s parent), Amazon, Apple, Tesla, Meta (owner of Facebook, Instagram and WhatsApp) and Microsoft.

Even as global attention focuses heavily on Nvidia, Buffett’s firm has made a surprising move toward Alphabet, signalling strong confidence in Google’s capacity to profit in the AI era.

Based in Omaha, Nebraska, Berkshire Hathaway has been led for decades by 95-year-old investment veteran Warren Buffett. The company’s latest quarterly filing shows it accumulated a $4.3 billion stake in Alphabet over the September quarter.

This appears to be a deliberate strategic shift, especially since the same filing reveals Berkshire significantly reduced its massive Apple holdings, as reported by Yahoo Finance. Buffett’s firm still holds more Apple stock than any other company, with the position valued at around $64 billion.

Analysts are interpreting the move as a possible pre-retirement signal about where Buffett believes long-term digital economy profits will emerge, amid rumours he may soon step down as CEO.

Buffett has earned a reputation for choosing winning companies over the decades — from American Express to Coca-Cola — even while maintaining a long-standing scepticism toward technology firms.

The backdrop to Berkshire’s move includes recent news that tech billionaire Peter Thiel’s hedge fund sold its entire Nvidia stake in the third quarter of 2025 — more than half a million shares worth roughly $100 million. Japan’s richest man, Masayoshi Son, also recently exited Nvidia.

As noted by The Conversation, this might tempt observers to assume the “Oracle of Omaha” is arriving just as the party is ending.

However, the publication cautions against this interpretation, arguing that it misreads both Buffett’s investment philosophy and the nature of Google’s business.

Instead, it contends that Buffett is simply doing what he has always done: investing in a company with an “economic moat” — a built-in advantage that keeps competitors out.

Google won the search engine battle of the late 1990s by excelling in two crucial areas: lowering search cost and navigating legal challenges. Over time, those strengths have served as alligators in Google’s moat, preventing rivals from advancing. Google recognised earlier than anyone that reducing search cost — the time and effort required to find trustworthy information — was the internet’s core economic opportunity.

The publication also highlights the industry view that Google’s true breakthrough lay in its business model: providing search for free while auctioning highly targeted advertising next to the results. Google Ads now generates tens of billions of dollars annually for Alphabet.

"Perhaps the genius of Berkshire’s investment is recognising that if the AI bubble bursts, it could bring down some of the 'magnificent seven' tech leaders – but perhaps not its most durable members," the article suggests.

It goes on to argue that consumer-facing giants like Google and Apple are likely to withstand an AI market downturn, while newer “megacaps” such as Nvidia could face greater difficulty.

By Nazrin Sadigova