1 Unstoppable Artificial Intelligence (AI) Stock That Berkshire Hathaway Bought When Warren Buffett Was Still CEO
https://www.aol.com/articles/1-unstoppable-artificial-intelligence-ai-125600964.html
Publish Date: 2026-02-22 08:01:00
Source Domain: www.aol.com
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Berkshire Hathaway’s Investment in Alphabet: Berkshire Hathaway made a significant investment in Alphabet, acquiring a $5.4 billion stake, which became the conglomerate’s 14th-largest position in its public equity portfolio.
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Strong Financials and Economic Moat: Alphabet has strong financials, including a 32% operating margin in 2025, $73 billion in free cash, and a wide economic moat backed by robust network effects and intangible assets.
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Leadership in AI: Alphabet is a leader in AI, with key products like the Gemini app and Google Cloud experiencing unprecedented growth, contributing to more than 72% of its ad revenue.
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Company’s Strategic Direction: Alphabet is investing heavily in AI infrastructure, with capital expenditures projected to reach approximately $180 billion in 2026, indicating a commitment to continued innovation and expansion of AI-related capabilities.
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Valuation Consideration: Despite Alphabet’s impressive growth and performance, its valuation at a P/E ratio of 27.8 may be moderately attractive compared to its market peers, although not endorsed by The Motley Fool Stock Advisor at the moment.
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Berkshire’s Traditional Aversion to Tech: The investment in Alphabet marks a notable departure from Warren Buffett’s traditional aversion to technology stocks, though it highlights the company’s exceptional attributes.
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Historical Stock Performance: Alphabet’s shares have increased by 62% over the past year, reflecting investor enthusiasm and market confidence in the company’s position and future prospects.
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Potential Risk and Alternative Investments: Investors are advised to consider the recent pick of Alphabet by The Motley Fool Stock Advisor, where they have identified 10 top stocks (excluding Alphabet) that may offer even better long-term returns based on historical performance and market trends.
