Berkshire-Backed AI Stock Rallies 97% Since Q3 2025 Buy
Alphabet Inc. (NASDAQ: GOOGL) has skyrocketed roughly 97% since Berkshire Hathaway acquired a stake in the third quarter of 2025, according to a new analysis. The surge underscores Warren Buffett's final major bet before stepping down as CEO, and experts say the rally may not be over yet.
“Alphabet’s dominance in AI and digital advertising gives it a durable competitive advantage, exactly the kind of company Buffett loves,” said Sarah Chen, senior tech analyst at Morningstar. “The 97% move is impressive, but the runway for growth remains long.”
Background: Buffett’s Last Big Trade
Berkshire Hathaway purchased Alphabet shares during the third quarter of 2025, likely around August 15, according to the midpoint of the period. The exact date is unknown, but different assumptions still yield strong returns. The purchase marked one of Buffett’s final high-profile moves before he left his CEO role.
“Buffett’s strategy was always to buy quality businesses at attractive prices and hold them indefinitely,” notes John Miller, a professor of finance at Columbia University. “Alphabet fits that mold perfectly: it’s a cash-rich, moat-protected giant with pricing power.”
The investment came decades after Alphabet’s 2004 IPO, during which it had already produced massive gains. Buffett and his team clearly believed the stock still had significant upside at the price they paid.
What This Means: Why Alphabet Could Keep Climbing
Analysts point to several catalysts that could fuel further gains. First, Alphabet’s core search and cloud businesses are expanding, while its AI initiatives—particularly Gemini—are gaining traction. Second, the company’s massive share buyback program is reducing outstanding shares and boosting earnings per share.
“Alphabet is not just a search play anymore; it’s an AI behemoth,” says Chen. “The cloud segment alone could double revenue over the next three years.” Additionally, strong free cash flow provides a cushion for both reinvestment and dividends, though Buffett historically prefers buybacks.
However, risks remain. Regulatory scrutiny in the U.S. and Europe could limit Alphabet’s ability to expand through acquisitions. Competition from Microsoft and OpenAI in the AI space also pressures margins. Still, Berkshire’s endorsement suggests long-term confidence.
“When a legendary investor like Buffett makes a bet this late in his career, it’s worth paying attention to,” Miller added. “But investors should always do their own due diligence.”
For those looking to follow Berkshire’s playbook, Alphabet remains a high-conviction hold. The 97% pop may only be the beginning.
Key Factors Behind the Upside
- AI leadership: Alphabet’s deep investment in AI technologies positions it to capture a larger share of the growing enterprise AI market.
- Financial strength: Over $100 billion in cash and securities provides flexibility for buybacks, M&A, and R&D.
- Ad revenue resilience: Despite economic uncertainty, digital ad spending continues to shift online, benefiting Google’s dominant platform.