Is 94-year-old Buffett changing? Before stepping down, he spent 6 billion to buy Google, revealing the ultimate AI winner

Buffett’s pre-retirement layout exposure revealed: in the third quarter, he built a position of 17 million shares of Alphabet, worth $6 billion. This “value investing” old-school investor has finally increased his AI holdings, signaling: Alphabet is the ultimate winner. Google’s stock price has risen from $175 to $322, with the P/E ratio climbing from 20 to 30.

Buffett’s $6 Billion Heavy Bet on Google Before Retirement

Even at the “final act,” Warren Buffett’s every move still commands the entire investment community’s attention. Although Buffett has stepped down as CEO of Berkshire Hathaway, the last strategic move he left for this giant company is being peeled back layer by layer like an onion by investors. We all know that Berkshire’s holdings are only disclosed to the SEC 45 days after the quarter ends (commonly known as the 13F report). So, to see Buffett’s precise maneuvers in his final days in office, we have to wait until around February 15.

Based on the data we have for the third quarter, Buffett left a “big news” worth billions—Berkshire finally made a move, heavily accumulating a company with strong AI capabilities. Buffett and Berkshire’s style has always been “simple and understandable” and “value investing.” Most AI concept stocks, however, are either inscrutable or prohibitively expensive, hardly aligning with these principles.

Therefore, when everyone discovered Berkshire built a position in Alphabet (Google’s parent company) in Q3, it was quite surprising. But in my view, this was a masterstroke. Better late than never: Buffett has been paying attention to Google for a long time, but only truly took action in 2025. Berkshire purchased nearly 17 million shares of Alphabet in Q3. At current market prices, this investment is valued at about $6 billion, accounting for 1.9% of its portfolio. This is not a test of the waters but a heavyweight statement.

This $6 billion investment is significant in Buffett’s career. As an investor known for traditional industries and value stocks, Buffett has long been cautious about tech stocks. He missed early investment opportunities in Microsoft and Amazon, which became classic regrets in investment history. Although Berkshire later made a huge success with Apple, mainly because Buffett viewed Apple as a consumer goods company rather than a tech company. This time, the investment in Google is Buffett’s first clear bet on a pure tech and AI company.

AI’s Second Half: Google Transforms from Laggard to Top Student

Berkshire’s investment sends a clear signal: Alphabet will be the ultimate winner in the AI race. Looking back to early 2025, this was not so certain. At that time, Google was a bit slow in the generative AI competition, with OpenAI’s ChatGPT sweeping the globe, and Google’s Bard performing mediocrely. The market was worried that Google might lose its leadership in the AI revolution.

But now, Google has not only caught up but also demonstrated leadership across multiple domains. Google’s Gemini model performs excellently on various benchmarks, even surpassing OpenAI’s GPT-4 on some tasks. More importantly, Google has a complete AI industry chain: from the underlying TPU chips, the TensorFlow framework, to upper-layer products like YouTube, search engines, and cloud services, enabling seamless integration of AI technology into existing products.

From a commercial perspective, Google’s AI monetization path is the clearest. It can embed AI-generated summaries in search results, use AI recommendation algorithms on YouTube, and offer AI infrastructure services via Google Cloud. These are proven business models; simply upgrading with AI technology can generate incremental revenue. In contrast, OpenAI, though technically advanced, is still exploring its business model, relying mainly on subscriptions and API calls.

Proof that Buffett’s vision remains sharp. He built positions during market panic and regulatory uncertainty, then sat back to enjoy the gains after positive news was exhausted. This classic Buffett approach of “being greedy when others are fearful” is once again validated in the AI era.

Buffett’s Precise Timing in Navigating Regulatory Risks

Looking at the third quarter, Google’s stock price fluctuated between $175 and $243. At that time, Google was embroiled in antitrust lawsuits, market sentiment was fragile, and the P/E ratio was only about 20. If Buffett built his position before the favorable ruling (which only required minor business adjustments), he indeed caught the bottom. Now, with the favorable news out, Google’s stock has rebounded to around $322, with the P/E rising to 30.

From $175 to $322, an 84% increase, meaning Buffett realized substantial paper gains within just a few months. With a $6 billion investment, the paper profit could already exceed $2 billion. Such a return is extremely rare for a large institutional investor like Buffett, as the larger the capital, the harder it is to find investments that can accommodate and deliver high returns.

Buffett’s timing demonstrates a deep understanding of risk. The antitrust case was the biggest uncertainty for Google at the time, with widespread fears of breakup or hefty fines. But Buffett judged that the probability of such extreme scenarios was low, and the market’s overreaction created an excellent buying opportunity. This ability to “find certainty amid uncertainty” is core to Buffett’s investment philosophy.

Can You Still Buy Google Now?

This is probably everyone’s most pressing question. Honestly, the current price is indeed higher than when Buffett bought in. It has become more expensive, but also more stable. A P/E of 30 is now the “standard” for tech giants. While no longer at the “bargain” level of Q3, considering Google’s leadership in AI and strong growth momentum, it remains a very attractive choice.

From a valuation perspective, a P/E of 30 is not expensive for a company with an expected annual growth rate of 15%-20%. Google’s PEG ratio (P/E divided by growth rate) is about 1.5-2.0, which is reasonable among tech giants. In comparison, Nvidia’s PEG might exceed 3.0, indicating Google’s valuation is relatively more attractive.

More importantly, Google’s moat is extremely deep. Search engine market share exceeds 90%, YouTube is the second-largest website globally, Android dominates the mobile market, and Google Cloud ranks third worldwide. These businesses not only provide stable cash flow but also offer excellent application scenarios and data sources for AI.

From a risk perspective, Google’s main risks have been significantly reduced. The antitrust case’s outcome was relatively mild, and regulatory pressure has eased. Although AI competition is fierce, Google has already demonstrated its technical strength. Its financial health is robust, with ample cash flow and no significant debt burden. These factors make Google a relatively stable long-term investment.

While we may not be able to buy at the absolute bottom like the “stock god,” following the logic of wise investors might be a prudent approach. Buffett’s investment philosophy is: find undervalued but fundamentally excellent companies, buy during market panic, and hold long-term. This approach remains effective in the AI era.