Berkshire Hathaway’s (BRK.B) first year without Warren Buffett as CEO began with a sharp turn.
New chief Greg Abel invested $10 billion in Alphabet and another $930 million in Italy’s Bending Spoons.
This was effectively the company’s first notable bet on AI, which it had avoided for years.
So far, the bets haven’t paid off. Alphabet shares have fallen more than 24% since June and dropped below the price Berkshire paid. Bending Spoons has also given back its initial gains.
Analysts are comparing this to Apple in 2016. That purchase also raised doubts at the time, but later became one of Buffett’s most profitable deals. Berkshire has plenty of cash to be patient: at the end of the second quarter, it had $365.5 billion on hand. So Abel can simply buy more shares at a lower price.
The third-quarter report added more details. Berkshire repurchased a record $9.6 billion of its own shares. Operating profit fell 5.8% to $12.7 billion due to weakness at Geico. Meanwhile, its railroad, energy, and industrial businesses grew.
We’ll know more from the 13F in mid-November. It will show whether Berkshire bought more Alphabet shares during the dip.
New chief Greg Abel invested $10 billion in Alphabet and another $930 million in Italy’s Bending Spoons.
This was effectively the company’s first notable bet on AI, which it had avoided for years.
So far, the bets haven’t paid off. Alphabet shares have fallen more than 24% since June and dropped below the price Berkshire paid. Bending Spoons has also given back its initial gains.
Analysts are comparing this to Apple in 2016. That purchase also raised doubts at the time, but later became one of Buffett’s most profitable deals. Berkshire has plenty of cash to be patient: at the end of the second quarter, it had $365.5 billion on hand. So Abel can simply buy more shares at a lower price.
The third-quarter report added more details. Berkshire repurchased a record $9.6 billion of its own shares. Operating profit fell 5.8% to $12.7 billion due to weakness at Geico. Meanwhile, its railroad, energy, and industrial businesses grew.
We’ll know more from the 13F in mid-November. It will show whether Berkshire bought more Alphabet shares during the dip.
