Alphabet Is Berkshire Hathaway’s New Favorite Stock After Buying 48 Million Shares

Greg Abel broke Berkshire's 14-quarter net-selling streak by buying 48 million Alphabet shares worth $37.8 billion in Q2.

The purchase vaults Alphabet to Berkshire's third-largest holding at 10% of the portfolio, behind only Apple and American Express.

Alphabet's search monopoly, 2.7 billion YouTube monthly users, and $53 billion trailing free cash flow underpin Berkshire's decade-long value thesis.

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Cash has been the story at Berkshire Hathaway ( NYSE:BRK-A )( NYSE:BRK-B ) for three years running. Warren Buffett spent that stretch selling more stock than he bought, quarter after quarter, while the company's cash and Treasury bill pile swelled toward record territory. Investors got used to reading Berkshire's 13F filings as a lesson in patience rather than a shopping list.

That changed this quarter. New CEO Greg Abel broke a 14-quarter streak of net selling, and the filing he submitted on Friday shows exactly where he's putting the money instead. The headline name isn't a surprise industry pick or a value-stock retread -- it's Alphabet ( NASDAQ:GOOG )( NASDAQ:GOOGL ), and it was bought in a size that's hard to ignore.

Berkshire added several positions in the second quarter: 17.5 million shares of Delta Air Lines ( NYSE:DAL ), 4.3 million shares of Macy's ( NYSE:M ), 3.1 million shares of homebuilder Lennar ( NYSE:LEN ), and 553,000 shares of The New York Times ( NYSE:NYT ). None of those come close to the main event: Abel bought 24.5 million shares of Alphabet's Class A stock GOOGL and 23.6 million shares of the Class C stock GOOG -- 48.1 million shares combined, worth $37.8 billion at quarter-end.

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