Buffett significantly reduces holdings in Apple, Berkshire shifts focus to Alphabet to bet on a new AI cycle

The latest regulatory documents show that Berkshire Hathaway, owned by Warren Buffett, significantly adjusted its technology stock holdings in the third quarter, drastically reducing its Apple shares while increasing its Alphabet stock, signaling a clear shift in investment focus toward artificial intelligence, cloud computing, and digital advertising.

The documents disclose that Berkshire sold approximately 41.7 million Apple shares during the quarter, reducing Apple’s proportion in its portfolio to about 21%. Compared to the peak of its holdings two years ago, Berkshire’s cumulative reduction in Apple shares has reached approximately 74%. Although Apple remains one of its key core holdings, this change is interpreted by the market as Buffett beginning a structural rebalancing within the tech sector.

From a fundamental perspective, Apple’s performance remains robust. The company achieved approximately $102 billion in revenue in the third quarter, an 8% year-over-year increase, primarily driven by iPhone, Mac, and services growth. Supported by improved profit margins and ongoing share buybacks, non-GAAP earnings per share increased by 13% year-over-year to $1.85. Currently, the global installed base of iPhones exceeds 2.35 billion units. Meanwhile, Apple is accelerating its generative AI strategy, launching Apple Intelligence, and plans to gradually introduce paid AI features in the coming years to expand new revenue streams.

In contrast to the reduction in Apple shares, Berkshire Hathaway bought approximately 17.8 million shares of Alphabet during the same period, accounting for about 2% of its overall portfolio. This marks Berkshire’s further increased allocation to AI-related assets. As a leading player in global digital advertising, cloud computing, and AI technology, Alphabet has achieved a cumulative return of 12,180% since its IPO in 2004, with a current market value of about $3.7 trillion, ranking among the top three globally.

The market generally believes that this move reflects a phase shift in Buffett’s investment approach. Historically, Berkshire Hathaway maintained a cautious stance toward tech stocks, but now it prefers to allocate to companies with long-term moats in AI, cloud services, and data-driven businesses. Alphabet’s ongoing investments in AI models, cloud infrastructure, and autonomous driving make it an important target for Berkshire’s next tech cycle deployment.

Overall, Berkshire Hathaway’s reduction of Apple and increase in Alphabet are not simply bearish views on Apple but proactive responses to the changing trends in the global tech industry. As AI becomes the core growth engine for the coming years, Buffett’s adjustment is also seen as a significant convergence between traditional value investing and the new wave of technology.