Berkshire portfolio adds $20 billion in Q3 as Apple cut lingers

Berkshire Hathaway's equity portfolio added more than $20 billion in value in Q3, as gains in Alphabet and other holdings offset the drag from Warren Buffett's decision to slash the Apple stake.

"I initiated" Berkshire's first bet in Alphabet last year and "made a mistake" by not investing earlier, Buffett, 95, said in a CNBC interview Tuesday. He pointed to growing competition in AI but said Apple's "future is as bright as the past."

Berkshire's equity portfolio stood at $351 billion as of mid-July, with Apple and Alphabet together representing roughly 30% of invested capital. Apple remains the largest holding despite the reductions, while Alphabet has surged to become the second-largest position after Berkshire acquired about 58 million shares worth roughly $21 billion. The company also held $397.4 billion in cash as of March 31, up 6.5% from December.

The portfolio's performance reflects a transition period for Berkshire as CEO Greg Abel asserts his investment strategy. The concentrated bets on Apple and Alphabet — two of the largest AI beneficiaries — signal a shift toward technology exposure that Buffett had long resisted. With Alphabet shares up nearly 18% this year and Apple rising 4% in recent sessions, the portfolio's trajectory will depend on whether these positions can sustain their momentum through the second half.

The $20 billion quarterly gain masks a more complex picture beneath the surface. Berkshire's B shares are down 1.8% year-to-date, trailing the S&P 500's 10.7% gain by a wide margin. The underperformance stems largely from Buffett's decision to reduce Apple — a position that had been the portfolio's cornerstone for years. Apple trades at a forward price-to-earnings ratio of about 36, while Alphabet's multiple is near 25, making both relatively expensive by historical standards but cheaper than many AI-related peers.

The portfolio restructuring under Abel has been decisive. In the first quarter, Berkshire fully exited its stakes in Amazon and Domino's Pizza while pouring capital into Alphabet. The $10 billion private placement, part of Alphabet's broader $80 billion equity raise, allocated $5 billion each to Class A and Class C shares. Berkshire also repurchased $234 million of its own shares in Q1, a modest amount relative to its cash pile.

The S&P 500 has gained 10.7% this year through mid-July, driven by technology and AI-related names. The Nasdaq Composite has outpaced the broader index with a 12% advance. The U.S. 10-year Treasury yield has fluctuated between 4.2 percent and 4.5 percent as the Federal Reserve maintains its restrictive stance, creating a mixed backdrop for value-oriented portfolios like Berkshire's.

The Alphabet bet has paid off handsomely. Shares of the Google parent jumped 3.9 percent to around $373 on Wednesday, adding $8 billion to cofounder Larry Page's net worth and $7.3 billion to Sergey Brin's. Alphabet reported annual revenue above $400 billion for the first time, with cloud revenue surging 48 percent. The company expects capital expenditures to reach as high as $185 billion for fiscal 2026 as it expands AI infrastructure.

This article is for informational purposes only and does not constitute investment advice.