Alphabet (GOOGL) Stock Drops 3% as Berkshire Buys $10B at a 6% Discount

TLDR

• Berkshire Hathaway agreed to buy $10 billion in Alphabet stock via private placement at a 6%-plus discount to Monday’s closing price
• The deal is part of a larger $80 billion equity raise by Alphabet, which surprised investors
• Alphabet’s Class A (GOOGL) and Class C (GOOG) stock fell over 3% on the news
• Berkshire now holds roughly $31 billion in Alphabet, making it roughly tied with Coca-Cola as its third-largest position
• CEO Greg Abel’s move has sparked debate — some praise it, others say Berkshire is buying at a stretched valuation of ~25x 2026 earnings

Berkshire Hathaway is putting another $10 billion into Alphabet, deepening a bet that started just three quarters ago.

Alphabet agreed to sell Berkshire $5 billion of Class A stock at $351.81 per share and $5 billion of Class C stock at $348.20. Both prices represent a 6%-plus discount to Monday’s closing price.

Alphabet Inc., GOOGL

The deal is part of a wider $80 billion stock sale Alphabet announced after Monday’s market close. The company said it plans to use the money for capital expenditures, including expanding its AI computing infrastructure.

Alphabet’s stock dropped on the news. By midday Tuesday, GOOGL was down around 2% to $368.93 and GOOG was off about 1.9% to $365.35.

The equity raise caught investors off guard. Alphabet hadn’t flagged the possibility on its April earnings call, where most assumed it would continue funding its $180–$190 billion in annual capex from earnings and debt.

A Growing Position

Berkshire first disclosed a stake in Alphabet in Q3 2025, picking up roughly 17.8 million shares. It has added to that position for two straight quarters since. After this deal, Berkshire will hold around $31 billion in Alphabet stock — about 58 million shares bought since 2025, plus roughly 28 million newly issued shares.

That puts the Alphabet holding roughly on par with Berkshire’s Coca-Cola stake, which sits at third in the portfolio. Apple leads at over $60 billion, followed by American Express at around $47 billion.

CEO Greg Abel is still relatively new to running Berkshire’s capital allocation, and this deal is drawing attention as a signal of his approach. The Alphabet buy came just days after Berkshire agreed to acquire homebuilder Taylor Morrison for $6.8 billion in cash.

Berkshire still held nearly $380 billion in cash at the end of March, so the $10 billion outlay barely dents the pile.

The Valuation Debate

Not everyone is cheering. Alphabet currently trades at about 25 times projected 2026 earnings — well above the roughly 15x multiple Berkshire has historically preferred.

Alphabet’s stock has roughly doubled over the past year, meaning Berkshire is buying in after a big run-up — not exactly the bargain-hunting approach Buffett made famous.

At Tuesday’s midday prices, Berkshire’s $10 billion purchase at the private placement price still represents a meaningful discount to where the stock was trading.

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