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Buffett's Alphabet Stake Gives Retirees a Reason to Watch Greg Abel's Next Move

A $38 billion position and negative free cash flow demand attention

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Oct. 17, 2026

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Warren Buffett started Berkshire Hathaway's (NYSE: BRK.A) stake in Alphabet in the third quarter of 2025, and if you hold Berkshire shares in a retirement account, the decisions his successor, Greg Abel, makes with that position could shape your returns.

Berkshire lifted the stake 83% in the second quarter of 2026 to nearly 106 million shares worth about $37.8 billion, making Alphabet (NASDAQ: GOOGL) its third-largest equity holding by dollar value, and the scale of the bet may influence whether you end up doing better financially through Berkshire or a broader index fund.

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Berkshire raised its Alphabet holdings 83% in a single quarter

The stake grew from 57.8 million shares to nearly 106 million between March and June 2026, vaulting Alphabet past several longtime holdings, Investing.com noted. A $10 billion private placement, negotiated directly with Alphabet, gave Berkshire shares at a 6.5% discount, TheStreet showed.

Alphabet shares rose 49% over the 12 months ending October 13 at a forward price-to-earnings (P/E) ratio of 22.8, a measure of price to expected profits, and the position amounts to 3.4% of Berkshire's $1.13 trillion market value, the Motley Fool outlined.

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Abel faces greater scrutiny than Buffett received on portfolio decisions

Morningstar analyst Greggory Warren said Abel faces a different standard than Buffett, with greater scrutiny on every performance decision, and each change to the Alphabet stake could ripple through retirement accounts holding Berkshire, Vested Finance reported.

Abel oversees 94% of Berkshire's stock holdings while portfolio manager Ted Weschler handles 6%, and Buffett, who remains chairman, said the two consult on capital allocation, meaning the final call on Alphabet rests largely with Abel, Investing.com documented.

Alphabet spent $44.9 billion on AI in one quarter and posted negative cash flow

Alphabet spent $44.9 billion on data centers and artificial intelligence (AI) equipment in the second quarter, roughly double a year earlier, and free cash flow, the cash left after all spending, fell to negative $5.9 billion. Alphabet's free cash flow turned negative as AI infrastructure investment surged, with capital expenditures set to total $200 billion in 2026, creating what the Motley Fool described as "heightened risk… especially compared to its capital-light history."

Alphabet raised 2026 capital spending guidance to as much as $205 billion, and Google Cloud revenue reached $24.8 billion, up 82%, a return that could justify the spending if growth holds, The Next Web outlined.

Abel deployed $23.5 billion in stock purchases during the second quarter

Berkshire bought $23.5 billion in stocks during the second quarter and sold $3.7 billion, ending 14 consecutive quarters where Buffett sold more than he bought and signaling a shift, Investing.com outlined.

The Delta Air Lines stake grew 44% to 57.3 million shares worth nearly $5.4 billion.
Share buybacks reached $4.5 billion, the highest in five years.
Berkshire eliminated Constellation Brands and trimmed Ally Financial, Bank of America, and Capital One.

The cash pile dropped from $380 billion to $365 billion in three months

Cash fell to $364.7 billion by June 30 from $380.2 billion at the end of March, and the $15.5 billion drawdown suggests Abel may continue deploying capital into stocks rather than Treasury bills, Investing.com showed.

Berkshire delivered 19.7% annualized returns from 1965 through 2025, nearly doubling the S&P 500's 10.5%, though the past decade's 260% climb trailed the broader market, a gap worth watching if your retirement plan leans on Berkshire, the Motley Fool reported.

Apple and American Express still tower above Alphabet in the portfolio

Apple remained the largest position at $66 billion, followed by American Express at $51.3 billion, and the $37.8 billion Alphabet stake sits behind both, meaning your Berkshire exposure leans more on consumer and financial stocks than technology, Investing.com documented.

Operating earnings, the profit from businesses Berkshire owns outright, rose 16% to $12.98 billion in the second quarter, and the company's railroad arm BNSF contributed $1.56 billion, up 6%, adding income independent of any single stock holding, Vested Finance noted.

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Google Cloud backlog reached $514 billion and could support future earnings

Google Cloud's backlog, the total value of unfulfilled customer contracts, reached $514 billion by quarter's end, and cloud operating income tripled to $8.8 billion at a 36% margin.

Google Search revenue reached $63.3 billion, up 17%, and YouTube advertising brought in $11.1 billion, up 13%, though Alphabet shares fell about 5% in extended trading as investors weighed spending against growth, The Next Web reported.

Key takeaway for Berkshire holders

The quarterly 13F filing, a public regulatory disclosure, will show whether Abel continues adding to the Alphabet stake, holds steady, or trims it, and each outcome could shift the risk profile of your Berkshire holding depending on how Alphabet's AI spending translates into earnings over the next several quarters, Vested Finance showed.

Tracking how Alphabet's free cash flow recovers in the coming quarters alongside any moves Abel makes could help you assess whether the post-Buffett portfolio still fits the role you assigned Berkshire in your retirement plan, the Motley Fool outlined.

Bottom line

Berkshire's Class B shares traded at roughly 1.4 times book value with an 8.51% one-year return versus the S&P 500's 19.51%. Class A shares closed at $789,486 on October 15, and the gap may factor into the must-have investing apps you use to track whether your Berkshire stake keeps pace with a simpler index approach, the Motley Fool documented.

Alphabet's quarterly revenue hit $119.8 billion, up 24%, and its Gemini AI assistant reached 950 million monthly active users, metrics that could determine whether the heavy spending generates the growth your retirement portfolio needs, The Next Web noted.

This article is for informational purposes only and should not be considered investment advice.

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