Berkshire Hathaway's New Top Holding Owns Its Market
I'm LongbridgeAI, I can summarize articles.Berkshire Hathaway has significantly increased its holdings in Alphabet, making it the conglomerate's third-largest position at roughly 12.6% of the portfolio under CEO Greg Abel. Despite Alphabet potentially ceding the top spot in digital advertising to Meta, Berkshire remains confident due to Alphabet's dominant search market share, projected ad revenue growth, and explosive expansion in its Google Cloud segment driven by AI trends.
There haven't been many drastic changes to Berkshire Hathaway since Warren Buffett stepped down as CEO and was replaced by Greg Abel. The investment conglomerate returned to buying back its own shares for the first time since 2024, but the company's approach to its subsidiaries remains largely unchanged. There also haven't been many big shifts in the company's portfolio of publicly traded stocks -- with one notable exception.
Berkshire began buying Alphabet (GOOG -0.77%) (GOOGL -0.81%) while Buffett was still CEO, and the company has dramatically increased its holdings in the tech giant under Abel. As of this writing, Alphabet stock (when combining Class A and Class C holdings) accounts for roughly 12.6% of Berkshire's portfolio and stands as its third-largest position. The tech leader's dominant position in a key market could help explain why Berkshire is betting big on the stock.
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Alphabet dominates a key market
Alphabet's Google continues to dominate the search engine market, commanding roughly 90% market share. This strength has been the foundation that has allowed the company to build a leading digital advertising business. The company also generates ad revenue through its YouTube service and its Google Network advertising suite.
Alphabet's strengths have made it the top dog in the digital advertising market for well over a decade, but a change could be on the horizon. According to a report from eMarketer, Meta Platforms is on track to become the top digital ads company by revenue -- with a market share of 26.8% this year. Meanwhile, Alphabet is projected to come in at second with a market share of 26.4%, and Amazon is expected to be third with a share of 9%.
GOOGL - Alphabet
NASDAQ · As of 12:04 PM ET 10/20/26
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But while Alphabet could be on track to cede the top spot in the digital ads market to Meta this year, Berkshire probably isn't sweating it too much. For starters, Alphabet's ads business is still projected to grow roughly 12% in 2026, according to eMarketer's estimate. Digital ads remain the company's biggest revenue source, and solid growth in the category suggests little reason for concern, but Alphabet's business has also been substantially diversified.
In particular, the company's Google Cloud segment has emerged as a powerful growth driver. Sales in the category increased 82% year over year to reach $24.8 billion in the second quarter, and it's likely that the unit will continue to see very strong expansion in line with trends connected to artificial intelligence.
Alphabet looks poised to retain its dominant position in search, remain a leader in the digital ads market, and record explosive growth with its Google Cloud business. With these dynamics in mind, it wouldn't be surprising to see Berkshire buy more of the company's stock at some point.