Google parent Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) remained in focus Wednesday after Berkshire Hathaway Inc. (NYSE: BRK.A) CEO Greg Abel backed the company's artificial intelligence position and revealed a sharp increase in the conglomerate's stake. The vote of confidence comes as investors assess Alphabet's heavy AI infrastructure spending and its potential returns.
Berkshire Sees Alphabet As A Major AI Player
Abel said that the conglomerate views Alphabet as a significant artificial intelligence player, pointing to Berkshire's firsthand experience using AI across its portfolio companies.
He told CNBC on Wednesday that Berkshire has visibility into how its businesses use AI and the benefits the technology delivers, which increased the firm's interest in the sector.
"We have a lot of visibility from within our companies as to how we're using AI, what type of benefits it's delivering, so that brought incremental interest, and then we saw Google as a significant player," Abel said.
Berkshire initially invested $10 billion in Alphabet about 15 months ago at a 6.5% discount. Abel said he and Warren Buffett discussed both the size of the investment and the discount before completing the transaction.
Berkshire Builds Its Alphabet Position
Berkshire added $17 billion of Alphabet shares during the second quarter, making the Google parent the third-largest holding in its equity portfolio.
According to Berkshire's latest filing, the conglomerate owned about 106 million Alphabet Class A and Class C shares, valued at roughly $36.6 billion. Alphabet was Berkshire's largest portfolio addition during the quarter.
Alphabet's Google is also among the major technology companies spending heavily to expand computing capacity for AI workloads.
Abel's comments highlight Berkshire's confidence in Alphabet's AI position as the conglomerate increases its exposure to the Google parent while observing AI benefits across its own businesses.
Alphabet carries a consensus Buy rating. Its average price forecast is $429.15. Recent analyst actions include:
- Rosenblatt maintained a Buy rating with a $410 price forecast on Aug. 20.
- UBS maintained a Neutral rating and cut its price forecast to $379 on July 23.
- Morgan Stanley maintained an Overweight rating and lowered its price forecast to $400 on July 23.
Alphabet has a large weighting in several growth-focused exchange-traded funds:
- Franklin Focused Dynamic Growth ETF (NASDAQ: FFOG): 9.22%
- CastleArk Large Growth ETF (NYSE: CARK): 9.91%
- Hartford Large Cap Growth ETF (NASDAQ: HFGO): 9.83%
Technical Analysis
Alphabet is trading below several key short-term averages. The stock sits 2.9% below its 20-day simple moving average of $346.43. It is also 3.6% below its 50-day average of $348.91 and 6.2% below its 100-day average of $358.45.
However, shares remain 0.4% above the 200-day average of $335.05. That keeps the longer-term trend intact for now.
The 20-day average is below the 50-day average, which signals weaker short-term momentum. Still, the 50-day average remains above the 200-day average. Therefore, the broader technical structure remains constructive.
The MACD sits below its signal line, while the histogram is negative. Both readings suggest buying pressure has faded.
Alphabet shares have gained 58.51% over the past 12 months. However, the recent price action points to a period of consolidation rather than a fresh breakout.
- Resistance stands near $375.50. A move above that level could strengthen the bullish case.
- Support sits near $315. A break below the 200-day average could put that level in focus.
GOOG Stock Price Activity: Alphabet shares were up 0.31% at $333.07 during premarket trading on Wednesday, according to Benzinga Pro data.