Berkshire Hathaway (BRK.B) Acquires New Stake in Alphabet (GOOG)

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GuruFocus News

11/14/2025 15:56

Key Takeaways:

Berkshire Hathaway's strategic acquisition of 25.5 million shares of Alphabet (GOOGL) highlights a significant shift in its investment portfolio. Alphabet Inc., a leader in the Communication Services sector, continues to demonstrate robust financial health with strong revenue growth and profitability metrics. Despite high valuation ratios, Alphabet's financial strength and growth prospects remain compelling.

Berkshire Hathaway (BRK.B), led by Warren Buffett (Trades, Portfolio), revealed significant portfolio changes in its latest 13F filing for the third quarter of 2025. The conglomerate acquired 25.5 million shares of Alphabet's A stock (GOOGL), valued at approximately $6.03 billion. Additionally, Berkshire increased its stakes in Sirius XM (SIRI) and Chubb (CB), while reducing its holdings in Apple (AAPL), Bank of America (BAC), and Verisign (VRSN). The company also exited its position in homebuilder D.R. Horton (DHI).

Alphabet Inc. is a holding company that wholly owns internet giant Google. The California-based company derives slightly less than 90% of its revenue from Google services, the vast majority of which is advertising sales. Alongside online ads, Google services houses sales stemming from Google's subscription services (YouTube TV and YouTube Music, among others), platforms (sales and in-app purchases on Play Store), and devices (Chromebooks, Pixel smartphones, and smart home products such as Chromecast). Google's cloud computing platform accounts for roughly 10% of Alphabet's revenue. The firm's investments in up-and-coming technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) make up the rest.

With a market capitalization of approximately $3.34 trillion, Alphabet is a dominant player in the Communication Services sector, specifically within the Interactive Media industry. The company's strategic positioning and diversified revenue streams underscore its resilience and growth potential.

Financial Health Analysis

Alphabet's financial performance is characterized by robust growth and profitability:

Revenue growth over the past three years stands at 13.9%, reflecting the company's ability to expand its market presence. Profitability metrics are strong, with an operating margin of 32.19% and a net margin of 32.23%. The EBITDA margin is 44.55%, indicating efficient operational management.

Alphabet's balance sheet is robust, with a current ratio of 1.75 and a debt-to-equity ratio of 0.09, highlighting its financial stability and low leverage. The Altman Z-Score of 16.09 further underscores its strong financial health, while insider selling activity raises some cautionary flags.

Valuation & Market Sentiment

Alphabet's valuation metrics indicate a premium market position:

The P/E ratio is 27.32, close to its three-year high, suggesting high investor expectations. The P/S ratio of 8.8 and P/B ratio of 8.63 are also near historical highs.

Analyst sentiment remains positive, with a target price of $300.53 and a recommendation score of 1.7, indicating a strong buy consensus. Technical indicators such as the RSI of 58.07 suggest a neutral market sentiment, while institutional ownership stands at 26.35%.

Risk Assessment

Alphabet's financial health is reinforced by strong grades in various metrics:

The Piotroski F-Score of 7 indicates a very healthy situation. The Beneish M-Score of -2.79 suggests the company is unlikely to be a manipulator.

Sector-specific risks include regulatory challenges and competitive pressures in the technology space. Alphabet's beta of 0.95 indicates moderate volatility, aligning with its aggressive growth stock classification. While insider selling activity is noted, the company's strong financial foundation and growth trajectory provide a buffer against potential market fluctuations.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

网址：Berkshire Hathaway (BRK.B) Acquires New Stake in Alphabet (GOOG) https://c.klqsh.com/news/view/281268

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