When Berkshire Hathaway showed up with a new position in Alphabet, more than a few eyebrows went up. Alphabet, after all, is pursuing everything from autonomous driving to quantum computing, hardly the plain-vanilla playbook Buffett made famous.
But once you dig in, the move becomes far less mysterious. Alphabet is still, above all else, a cash-gushing advertising machine. And Berkshire bought Google because the core business remains one of the most profitable enterprises on Earth.
Key Points
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Berkshire bought Alphabet for its powerful, reliable advertising and cloud cash flows — not for quantum computing.
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Google’s quantum work is impressive but still early-stage, making it optional upside rather than the core thesis.
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The stock was purchased at a classic value multiple and still has strong long-term upside as AI boosts Search, YouTube, and Cloud.
Alphabet Still Prints Cash Like Few Other Companies on Earth
What almost certainly did matter was the resilience of Alphabet’s main engine, advertising.
Despite its enormous size, Google Search grew revenue 15% in the latest quarter, an astonishing feat for a product that’s been a household verb for two decades.
What many investors don’t realize is that AI is making Search more valuable. Google has been weaving generative AI into query understanding, ranking, and ad relevance, boosting monetization without disrupting user behavior.
Combine that with Google Cloud finally swinging to profitability, something Alphabet investors waited years to see, and you have a business firing on multiple cylinders simultaneously.
This is exactly the kind of setup Berkshire loves, a core cash flow machine, multiple adjacent engines accelerating growth, and a balance sheet so strong it borders on absurd.
Alphabet generated over $110 billion in operating cash flow in its latest fiscal year. Few companies in market history have ever thrown off that much cash.
The Purchase Price Looked Like Classic Berkshire Timing
Based on Berkshire’s required disclosures, it appears the purchase took place around $200 a share, almost 20x forward earnings at the time. For a company with Alphabet’s cash flow durability, that’s almost a textbook “Buffett multiple.”
Alphabet has run significantly since Berkshire bought in, yet the long-term setup is still appealing. Search continues to expand, YouTube is strengthening, Cloud is scaling, and the company’s AI capabilities arguably place it in the strongest competitive position since the early 2010s.
Investors sometimes get distracted by moonshots, but Alphabet’s core is as predictable as any business Berkshire has ever owned. Massive cash flow. A fortress balance sheet. Low relative valuation. And several long-shot “call options” that could unlock value later, quantum computing among them.
Whether or not Buffett personally pulled the trigger, Alphabet fits the Berkshire playbook far better than it first appears. And looking ahead to 2026 and beyond, the stock still looks positioned for meaningful upside.