Warren Buffett’s Berkshire Hathaway has once again reduced its long-time Apple position, a stake that has dominated its portfolio for years. But the bigger story this quarter is what Berkshire is buying: a different Magnificent Seven tech giant that trades at a far cheaper valuation than Tesla.

Below is a breakdown of Berkshire’s latest portfolio shift, why the move matters, and what long-term investors can learn from it.

Berkshire Cuts Its Apple Stake Further

Berkshire Hathaway disclosed in its latest quarterly filing that it sold another 15% of its Apple holdings in Q3. The company now owns 238.2 million Apple shares, valued at $60.6 billion at quarter-end.
Despite the reduction, Apple still represents 21% of Berkshire’s massive $309 billion equity portfolio.

This continued selling fits Buffett’s long-stated philosophy. Back in 2020 he famously noted that Berkshire doesn’t typically “trim” positions, it often exits them entirely when conditions change. And with Berkshire’s sheer size, buying or selling billions worth of stock cannot happen overnight.

Since the start of 2023, Berkshire has now reduced its Apple stake by roughly 74%, signaling a slow but steady move toward a potential full exit.

Why The Shift Away From Apple?

Apple has navigated supply chain challenges, U.S.–China tariff pressures, and investor concerns about the company’s slower rollout of artificial intelligence features. The stock has rebounded this year, but Berkshire appears focused on new opportunities that offer stronger long-term value relative to price.

Berkshire’s Big New Bet: Alphabet

The headline move this quarter was Berkshire’s decision to open a major new position in Alphabet (GOOG/GOOGL).

Berkshire purchased 17.8 million Alphabet shares, worth more than $4.3 billion at the end of Q3. This new investment now represents 1.6% of Berkshire’s overall equity portfolio.

Why Alphabet? Why Now?

Alphabet has faced a dramatic year, including a high-profile antitrust ruling in 2023 where regulators accused Google of monopolistic behavior in search and advertising. At one point, the U.S. Department of Justice even proposed forcing Google to divest Chrome, a core part of its search ecosystem.

But the court ultimately did not require Google to break up its business. In fact, Google was allowed to continue paying partners like Apple billions annually to remain the default search engine on major platforms, a significant win for the company.

Meanwhile, concerns about AI competition have eased. Google’s new AI features, including AI Overviews and AI Mode have reassured investors that the company can protect its 90% dominance in global search.

Value Investing Logic: Alphabet Is Much Cheaper Than Tesla

Buffett’s team has always favored strong companies trading below their intrinsic value. Compared with other “Magnificent Seven” names especially AI-driven stocks, Alphabet is priced much more conservatively.

On a forward price-to-earnings (P/E) basis, Alphabet trades at a valuation far below Tesla’s, despite having:

• A global search monopoly
• A leading cloud business
• YouTube, one of the world’s most valuable digital platforms
• Waymo, a major player in autonomous vehicles
• Its own chip and AI infrastructure ecosystem

For a value-focused investor like Berkshire, Alphabet offers a rare combination of scale, diversified revenue, and attractive pricing.

What This Means for Investors

Buffett’s moves don’t guarantee future performance but they often highlight broader market trends:

• Apple: Berkshire appears to be winding down a legendary position as it reassesses long-term risk and reward.
• Alphabet: A long-term bet on AI, search dominance, cloud computing, and a more reasonable valuation compared to peers.

For investors seeking stability and growth, Alphabet’s combination of strong fundamentals and lower valuation relative to other tech giants makes Berkshire’s interest understandable.

Disclaimer

This article is for informational and educational purposes only and does not constitute financial advice, investment guidance, or a recommendation to buy or sell any securities. Always conduct your own research or consult a licensed financial professional before making investment decisions.