Berkshire Hathaway added $17 billion to its Alphabet position in the second quarter, expanding one of its largest holdings. The move deepens Warren Buffett's bet on Google's parent company at a time when the tech giant faces intensifying competition in artificial intelligence and regulatory scrutiny globally.
Michael Burry, the investor famous for shorting the 2008 housing market, raised concerns about the acquisition strategy. Burry argues that Greg Abel, Buffett's successor as Berkshire CEO, lacks the disciplined capital allocation that defined Buffett's tenure. Abel has shown a more aggressive posture toward deploying cash compared to Buffett's historically cautious approach during uncertain periods.
The $17 billion injection signals confidence in Alphabet's long-term prospects despite recent headwinds. Google faces mounting pressure from OpenAI and other AI competitors, while antitrust regulators in the US and Europe scrutinize its search dominance and digital ad practices. The Justice Department has pursued antitrust action against Alphabet, raising questions about potential forced divestitures or operational constraints.
Burry's warning centers on timing and valuation. Tech stocks have rallied sharply in 2024, and large positions like Alphabet trade at elevated multiples relative to historical averages. A market correction would expose concentrated bets made at peak valuations. His concern reflects broader skepticism about whether Berkshire's newest leadership will maintain the patience required to weather volatility.
Buffett historically deployed capital selectively, sitting on cash for extended periods during rallies before striking when opportunities emerged at discounted prices. Abel's willingness to deploy capital more consistently suggests a philosophical shift in how Berkshire approaches portfolio management. Whether this represents necessary modernization or reckless acceleration remains contested among observers tracking the conglomerate's strategic direction.