Greg Abel has officially taken over the leadership of Berkshire Hathaway amid Warren Buffett's departure, marking a major change in management. The trillion-dollar giant is now defining its future without the 'Oracle of Omaha,' and the new CEO is already changing the established order.
Abel did not delay in reorganizing the extensive $359 billion portfolio. In the first quarter, he reduced positions in 16 assets to focus on Google's parent company—Alphabet. By the end of the second quarter, he authorized the purchase of Class A and Class C Alphabet shares worth $17 billion, including a private placement of $10 billion. By the end of August, Alphabet's stake in Berkshire officially surpassed the long-held position in Coca-Cola.
Alphabet secured the third spot due to its dominance in search engine traffic, which consistently accounts for 89% to 93% of the global market. Beyond search, the company's aggressive push into artificial intelligence has been a decisive factor. Google Cloud revenue grew by 82% last quarter, demonstrating that Alphabet has become a leading player in the global hardware infrastructure race.
Despite losing a spot in the top three, Coca-Cola remains a constant element in Berkshire's holdings. Buffett always viewed Coke as a long-term investment, and Abel adheres to this strategy. The initial purchase in 1988 at $3.25 per share continues to generate profit, providing an incredible return of 65% on cost with a current annual dividend of $2.12.
Bank of America is treated differently. The firm has quietly reduced its stake in the bank for two consecutive years. Buffett initially invested in BofA in 2011 when it was acquired at a 62% discount to book value, but at the current trading price with a 59% premium, it no longer fits Berkshire's preferred value investing profile.
Apple was long a central element of Buffett's strategy. However, Alphabet appears to be the new key asset for Abel's vision. As billions are directed toward cloud infrastructure and AI, Berkshire is strengthening its position in the digital foundation of the modern economy.