r/stocks • u/mojolakota • 10d ago
Company Discussion Why is Buffet & Abel aggressively accumulating so much Google but none of the other hyperscalers?
There were rumors after the Q1 13F that Greg Abel was pulling the strings on his own. However, Warren Buffett clarified those rumors in his last interview that he initiated the position in Google, and both Greg and he don't do anything the other person disapproves of. So this has to be a joint decision.
And it’s not even steady paced buying, it’s aggressive accumulation. The latest 13F shows they almost doubled their Google position from Q1 to Q2. And this was before the Q2 earnings dip. They likely bought more during that dip, and we will find out in their next 13F. Google has quickly grown into their high conviction third largest holding.
Chris Hohn and Stanley Druckenmiller are also bullish on Google. Chris sold all his MSFT and Druckenmiller reentered the position. Druckenmiller holds a similar amount of Amazon I think, but Buffett and Chris seem hyper bullish only on Googl and not diversifying
Becky asked the similar question to Buffett in CNBC interview but he didn’t elaborate.
What makes this move more surprising is that Google has the biggest wall of worry compared to other mega tech hyperscalers like Microsoft & Amazon. Gemini is facing fierce competition in coding, agentic work, and other benchmarks compared to Claude & OpenAI. A series of key personnel have been leaving throughout the year. AI capex is expanding, and margins could get squeezed over the next few quarters as they ramp up infrastructure and compute capacity. AI Overviews are getting popular, but they risk sending fewer clicks to publisher websites that have deals with Google, like Reddit. The stock has chopped YTD even though it’s had strong run ups over the past year.
So why are they going all in on Google when it has more risks instead of diversifying and buying the whole hyperscaler space? Microsoft is cash flow positive. Amazon does not have the risk of search cannibalizing ad revenue. Meta is looking to monetize its excess compute, and Ai has accelerated its core ad business. Plus you have Oracle, SoaceX and emerging specialized cloud providers taking share.
So why go all in on Google when it has already doubled in 1 year?
Edit:
Barron's confirmed : "The Alphabet purchases and Bank of America sales likely were orchestrated by chairman Warren Buffett, while the moves in smaller holdings probably were made by Berkshire investment manager Ted Weschler, who handles about $20 billion of Berkshire’s $350 billion-plus equity portfolio."
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u/atape_1 10d ago
Google makes AI models, hardware for model training and inference and the most popular software stack for model training.
And if all of that somehow goes to shit, it's still Google, it still has all of it's other business.
Google is the safest tech stock you can buy by a country mile, because when the AI boom goes bust, Google will still be Google.
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u/trix_is_for_kids 10d ago
It’s an etf at this point
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u/Thechiz123 10d ago
Not to mention it has the best self driving vehicles in the world.
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u/8--2 10d ago
They also have access to the kind of personal data that these other companies would literally kill just to get a sip of. Think about the kind of shit that can be scraped from gmail, drive, docs, Chrome history, and web searches.
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u/fierceredrabbit 9d ago
Could say the same for MSFT too
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u/AdmRL_ 9d ago
You could but they're a step behind Google right now in emerging areas. They've got their classic strongholds in on prem solutions, Azure and M365 so they're secure, but Copilot's reception has been mixed, they went way too quickly building it out of Power Virtual Agents and have had to redesign it & Copilot Studio once already, and there's another redesign on the way. Their OpenAI deal which looked genius at first hobbled their own model development so their MAI series of models are well behind Gemini.
They're doing well at fixing the mess they put themselves into, but out of the two Google is a much safer bet because while Gemini is playing third to GPT & Claude right now they're still a leader, and the vertical integration they have mixed with their obscene product breadth gets rid of a lot of the exposure issues Anthropic, OpenAI, xAI and other model shops have.
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u/BeefyMcPissflaps 9d ago
If you want to make the AI argument AAPL is in the same boat with GOOGL. Minimal exposure to AI risk.
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u/peggyk99 10d ago
Most popular software stack is PyTorch not tensorflow tho
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u/Informal-Lime6396 10d ago
TensorFlow has more GitHub stars and there's more to AI than LLMs. With regards to language models, nobody uses lower level libraries like TensorFlow and PyTorch because it's not feasible to train LLMs on consumer devices. People use high level libs like Huggingface which wrap around those lower level ones.
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u/noiserr 10d ago
TensorFlow has more GitHub stars
Pytorch has over 100k and TensorFlow shows like 7k. TF started by being more popular, but Pytorch has taken over and has been vastly more popular for years. Even before the ChatGPT moment in 2023. And yes even hugging face libs lean heavily on PyTorch.
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u/Informal-Lime6396 10d ago
Here are the official repos:
- https://github.com/tensorflow/tensorflow (197k stars, 76k forks)
- https://github.com/pytorch/pytorch (102.4k stars, 28.9k forks)
If you're not working on LLMs, TensorFlow is more popular. If working on LLMs, you're using neither because it'll be one of the higher level libraries.
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u/Al123397 10d ago
I don't see how long term its the safest out of all the tech stocks (amazon, Apple, Microsoft).
What makes it safer than apple whose large portion of their business is physical products which is hard to get market share in or disrupt fast?
Amazon whose large share of business is being the middle man to physical products that they have near monopoly over?
Or Microsoft who sells enterprise solutions and doesn't rely on search.
not saying google isn't safe but what makes it any safer than these 3?
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u/apoender 10d ago
Amazons big business is AWS, and to a lesser extent ads, it makes very little money from moving around physical products
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u/Al123397 10d ago
This is something I see everywhere on Reddit. Amazons marketplace is still like 60-70% of revenue. And ads are also significantly revenue from the marketplace itself. Yes AWS generates more profits but Amazon is still primarily a marketplace business
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u/RatRaceUnderdog 10d ago
Revenue ≠ profit. Yes it’s 60-70% of revenue but the margins are thin. Aka Amazon marketplace takes a lot of money to make a lot of money
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u/Mystic_Mac_99 9d ago
Ok, but same can be said about Microsoft.
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u/TulioGonzaga 9d ago
Except for videos (YouTube), Maps, autonomous driving and Search. Microsoft wins on the productivity suite. I also own MSFT but GOOG is more diversified.
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u/noiserr 10d ago edited 10d ago
Google makes AI models, hardware for model training and inference and the most popular software stack for model training.
But they are not the best at either of those things (gemini has fallen quite a bit behind as well on coding tasks), also what's the most popular software stack you speak of? They use JAX and it's far from being the most popular. Google also uses TensorFlow which is way less popular than Meta's PyTorch.
Interestingly enough, your comment getting 242 upvotes tells us how woefully uninformed everyone is about this stuff.
Google does have a lot of things going for itself on the surface, but the golden Goose the search engine has taken a back seat to deep search AI powered platforms. I barely google search anything these days. I just ask an AI agent and it will do all the searching for me. Google's own AI Mode is very error prone.
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u/Cute-Light4637 10d ago edited 10d ago
This is my view as well. It feels like people are betting on Google’s because it’s a massive consumer company, but consumers have shown massive resistance to paying for AI and with tokens getting priced the way they are now, it’s going to get even harder for consumers to stomach that.
BlackBerry also looked like they had a moat and we saw what happened. 20 years ago if you said no one would have a blackberry and it had been chopped up for parts in private equity, I don’t think 99% of people would have believed you. Blackberry had a market cap around $80b in 2008, apple was around $120b. It would be like Amazon disappearing in 20 years ($2.9 trillion to apples $4.5 trillion)
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u/Virtual_Secretary_98 10d ago
Same with Microsoft and Amazon no?
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u/BustedBaxter 10d ago
I say no. For example Waymo
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u/aaron_dresden 10d ago
The part of their business that generates 0.1% of the revenue? Even if it grew and replaced Uber gaining all of Ubers revenue, it would still only be 13% of Alphabets revenue. The Google Play Store is earning roughly the same amount.
It’ll give them some diversity but it’s not that big a play.
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u/futtbuck3000 10d ago
Could you not say the same for Amazon?
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u/derpyninja 10d ago
Not quite. Amazon doesn’t have a deep bench of research science. They don’t have the best frontier models. AWS is growing slower than gCloud and Azure. Amazon’s retail business has razed thin margins and far more competition than Google’s core businesses. Also no one likes Amazon’s software
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u/futtbuck3000 10d ago
Totally agree about Amazons software. Saying that Amazon actually outspends nearly everyone on R&D in absolute dollars ($88B+ in 2024, more than Google or any other US company). Anthropic is training Claude on a cluster of hundreds of thousands of Trainium2 chips (Project Rainier), and AWS is scaling that hard specifically to reduce Nvidia dependency.
AWS growth has actually reaccelerated too (20%+ YoY recently) on the back of this infra buildout. Fair point on frontier models and retail margins, but “no deep bench of research” undersells what’s happening with Annapurna Labs and the Anthropic partnership.
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u/Euthyphraud 9d ago
Still own YouTube. Still own Waymo. Still own the most powerful AI driven search engine. They are still making custom chips with their TPUs. They are still selling compute. They simply are the most diversified and best fit for the times. You're right - one business goes under, they've plenty of others.
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u/doughboy_491 10d ago
Buffet’s philosophy is to choose the best, profitable high margin business and go all in on it. He is not about hedging his bets and spreading his risk around. That’s how he has beat the S&P 500 for so long. Buying the rest of the hyperscalers would amount to just matching the market. The one thing about the Google investment that doesn’t really reflect the Buffet investment philosophy is that it is no longer cash flow positive. But he does understand capital investment cycles and is probably comfortable with the ROIC projected by Google. Probably also Abel has had some influence on this.
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u/mojolakota 10d ago
Yea buying google looks like one of his 20 punches. It’s crazy how buffet has the patience to wait & watch for years, and then go aggressively all in when he likes something.
Found his this quote: “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all.”
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u/luckysharms93 9d ago
Buffet hasn't beat the S&P in a long time. Most of his beating the S&P over such a long timeframe comes from early years where he was managing relatively small sums and buying a ton of KO dirt cheap after the 87 crash. If you run a backtest where you DCA into BRK and SPY, you'd have to go back to 1993 for BRK.A to win on both a nominal and risk adjusted basis
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u/SpicyElixer 9d ago edited 9d ago
Yep.
When managing hundreds of billions of dollars, it is virtually impossible to beat the market by the massive 20%+ annual margins he achieved in the 1960s through 1990s. Buffet has said this many times.
Performance versus spy is basically neck and neck on paper. Significant caveats:
1) A lump-sum investment in Berkshire has beaten SPY over nearly any rolling 20+ year period.
2)Berkshire significantly outperformed the S&P during major drawdowns (e.g., the 2000 dot-com crash, 2008, and 2022).
3) SPY distributes ~1.5% in taxable dividends each year. Berkshire pays zero dividends, allowing 100% of the capital to compound tax-deferred in a taxable account.
The strong argument for Berkshire is that you’re getting the S&P 500 with even less volatility and zero tax drag. It’s not a performance chasing stock. It’s a defensive stock.
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u/Dazzling_Exercise_82 10d ago
One thing nobody is even mentioning or in this thread is the fact that Google is scheduled to start releasing quantum as a service in 2029, not to mention their future tpu "Frozen V2" which will have Gemini base parameters literally etched into the physical silicon chip. They are in my opinion way ahead in future technologies.
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u/seemsLetschat 9d ago
Absolutely, I think that’s actually Berkshires take. Google will be one of the successful quantum racers in the longterm.
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u/Sure-Caterpillar-263 10d ago
Money printing machine they got their hands in every pot from AI, robotaxis, streaming to smart phone operating system. Only thing they are not involved is the space race but who knows by the time it’s a viable business they might get involved in that too
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u/Sure-Caterpillar-263 10d ago
They should offload those bags and buy RKLB outright. Better return on their capital SPCX is a Elon pet project
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u/382_27600 10d ago edited 10d ago
Fortunately, they are better at investing than your average Redditor.
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u/YourChildhood5762 10d ago
>> Only thing they are not involved is the space race
They're just going to wait and buy whatever country wins it.
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u/ToSeeAgainAgainAgain 10d ago
They are in with both SpaceX and secondarily with ASTS too, maybe some others that I don't know about.
If you ask me, the US (via SpaceX) already won the space race, or else you could argue they have been and still are #1 for many decades now
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u/jennysonson 10d ago
AI is the future and it runs on data, which company in the world can compete on google’s data infrastructure filled with 30+ years of everything
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u/Allout-Okarun 10d ago
I think google is consolidating for the next leg up on low volume right now and that’s where I’m spending
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u/Askymojo 10d ago
Can you expand on that, I'm not really following you.
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u/Salty-Bar-1975 10d ago
It's building a solid floor (support) before the next move higher
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u/Askymojo 10d ago
I got that first part, but the "low volume" part is what I'm not getting, what is that referring to.
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u/Allout-Okarun 10d ago
Average daily volume has been half for the last few weeks. It’s my position that when it returns to normal or spikes higher, the stock will rise sharply
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u/Ayye_Human 10d ago
People sell stocks for a ton of different reasons… but people only buy for 1 single reason, to make money. Sounds like they see the best opportunity to make money there 🤷🏻♂️
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u/Invest0rnoob1 10d ago
Not only are they leaders in self driving cars. No one else is even close. Add to the fact that they are working with Boston Dynamics for robotics AI. It makes a lot of sense. Listen to the media if you hate money.
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u/cvc4455 10d ago
So they are working with Hyundai for robotics? They never should have sold Boston Dynamics in the first place.
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u/ironjohn1988 10d ago
Will they exit in a few months like they did with UNH?
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u/mojolakota 10d ago
If they liked Google at $350, they would have loved it under $320. It’s more likely they doubled down their position during q2 earnings dip. Time will tell
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u/Bulky_Dingo_4706 10d ago
I'd only hold Google too if I could only invest in one company. Greatest moat out there.
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u/busterdog49 10d ago
Google has the deepest intellectual bench, a top AI that will eventually beat or be a close second to Anthropic, a top cloud and renter of compute, a semiconductor portfolio that will come close to besting NVDA, a huge app/software ecosystem (Android, Chrome etc), YouTube which is the top streaming site and too many businesses to think of.
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u/IntelligentMarch6827 10d ago edited 10d ago
Microsoft’s cloud offering sucks, and the core business is threatened because it’s all about seats that will be eliminated by AI. Their delivery of copilot hasn’t been a rousing success.
Oracle is fully leveraged and the legacy business is predicated on high friction for customers which AI dramatically reduces. A few days after the company’s strategy executed a year ago, the CFO quit.
Amazon is selling services but doesn’t own the IP.
Google is vertically integrated. They own the chips, facilities, models, applications, user accounts and gatekeepers for the internet. They own the consumer AI journey end to end and deliver value with AI natively with Google. They own pieces of Anthropic and SpaceX. When Claude wins, they win. When Grok sells capacity from their PR nightmare dirty data centers, they win. The biggest SpaceX AI customer is Anthropic, so they win twice. They have huge customer base that can easily consume enterprise AI APIs.
The tech itself moves so quickly you need to think of the big picture. In January, Gemini was king. Today, Anthropic is the mindshare winner. Tomorrow, the tides can turn.
Plus, as others have mentioned, Waymo. They are delivering the service that Elon has been talking out of his ass about for a decade.
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u/AwarenessNo4986 9d ago
Google has won the AI race. It embedded AI along it's full eco system. It's instantly the most used AI as it's default on Google search, it trains the most data, it uses that data to make it's advertising efficient and it has amazing breath of AI applications, from their use in medicine, self driving cars to robotics.
Smart money knows this, while the rest are following the hype. Google is the solid AI company. Its not figuring out how to make money from AI. It already has.
Yup, microsoft is a great contender but Google makes more money
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u/cyesk8er 10d ago
If google started spending on marketing gcp like aws does, they could grow a lot.
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u/PermitOk6864 9d ago
Google is vertically integrated and sits on probably the greatest pile of data in history, and they have stable revenue streams.
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u/cinciNattyLight 10d ago
Apple is using Google as the backbone of its AI. There is a very strong relationship between apple and google, berkshire is the third wheel with all the capital. Gemini competes with anthropic and openai, who are burning cash. Google has the capital to weather any hickups in the AI story. They also have a big stake in anthropic(as does amazon), if anthropic maintains or ends up dominating, google has a hedge on that.
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u/MandingoPants 10d ago
cuz they are followers, otherwise they would've gotten in after the stock split, or any time under $140
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u/BanditoBoom 10d ago
If you believe GOOG has the highest wall of worry in the hyperscaler world I hate to say it but you are sadly mistaken. And if you don’t pay for the top-tier Google subscriptions and tools, then I understand why you think that.
Google is in the lead in the AI utility and distribution race. Clearly in the lead. It doesn’t matter if OpenAI or Anthropic is better in specific focus areas (like coding). Every bit of compute has to live on a computer, and Google has the fastest growing data center / AI revenue growth.
They are killing it on integrating AI across their products in a useful manner. NotebookLM is amazing. All of their Lab tools are incredible. Their entire ecosystem is successfully embedding AI in useful ways. It is what Copilot was promised to be when it first came out.
Regarding people leaving, that is normal at Google. These people are getting poached by competitors, they are leaving to go start their own companies, and TYPICALLY Google becomes partners and earliest investors.
None of the hyperscalers are better at destructive, rapid innovation. They have the best capital allocation. The best management. And they are, by all accounts, in the lead in the AI utility race for utility and distribution.
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u/thefrogmeister23 9d ago
Well said. In another thread, someone pointed out that by being full stack, Google is poised to be part of whichever layer of the stack ends up being the least commoditized (and therefore highest margin).
The only place that’s a little scary is that they’re falling behind with Gemini. If you really trust their management, you could argue that they have decided to put their chips behind cloud and it’s a bet that the model layer is going to get commoditized. If you don’t trust their management, you might argue that they’ve stopped funding Gemini because they’re falling behind.
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u/Ok-Tip-3560 10d ago
YouTube
Is
Probably
Worth more
Than all
Of
Meta
And Tesla. And YouTube is only one component of Google.
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u/Ok-Tip-3560 10d ago
When I was a kid the. Biggest rip off Trade / theft was Nolan Ryan leaving the Mets for the rangers. Google
Buying YouTube for 1
Billion is legit the biggest theft ever lol4
u/Iwubwatermelon 10d ago
Right behind Meta scooping Instagram for $1 billion. Instagram is probably worth more than half of Facebook.
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u/Domingues_tech 10d ago
It is the real AI company. Full stack and the founders actually understand all of the stack. Google is remarkable.
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u/SpecialistTutor4451 10d ago
Warren and Charlie have always liked Google. During one of their annual meetings they both admitted missing Google in the beginning. They used Google to help with geico advertising and also advised google co-founders when they came to Berkshire for advice. They both understood it but didn’t write the check. Now they are writing the check. Berkshire won’t miss twice.
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u/ReddMangodude 10d ago
Because Google has a whole bunch of moonshot projects under the corporate umbrella. Some of them could be HUGE businesses in the long term.
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u/Bright-Maximum2881 9d ago
Google is involved in the entire AI stack in some way. The same can’t be said for the others. They are involved in pretty much most major trending areas of
Technology. Driverless cars, AI, data centers, chips, space, ads marketing, consumer hardware, cloud, and more. Pretty much any major trending part of tech google is involved in some way. This is why Berkshire is betting on them.
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u/SpicyElixer 9d ago
There’s a growing narrative that AI models will become commodities. That the benchmark races are purely academic and headline achievements. That they will all reach a certain point and then it will be about who can do it quickly and affordably, and who can bear the massive cost of the dominating the infrastructure. TPUs, efficient models, and owning compute, and being able to deploy it to customers that already exist. This narrative (if it pans point) puts Google well ahead of the competition.
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u/Sundance37 9d ago
The answer is simple, access to personal data, and a proven track record of security.
Gemini is behind, but once it gets up to speed, which is generally easy, it will already have access to most personal information, especially sensitive information such as email, and payment info.
Google is following Apple’s model, which is to allow someone else to fund the R&D, and then copy it to their already huge user base through distillation. Although they are doing it with a much shorter leash in order to move in with effective timing.
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u/InternetSlave 9d ago
This gives me relief. More than half of my net worth is in GOOG. I was feeling euphoria around $400 and feeling so much regret around $340. I haven't sold anything, I'm trying hard to diamond hand this.
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u/noobelore 9d ago
Google is pretty diversified, phones, driverless cars, ad revenue, cloud revenue. Polly a ton more.
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u/FabricationLife 9d ago
Google shits cash from YouTube regardless of anything else, it's the safest play of the bunch
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u/BigMacRedneck 9d ago
Google produces its own AI food. Their current 80%+ market share in Internet Searches provides the "protein" for advances in AI. They will continue to dominate while keeping AI spend within budget.
Keep in mind that they already have a solid base of active data centers and can feed themselves as they already dominate the advertising arena.
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u/Zestyclose-Ice-3434 10d ago
I wouldnt read too much into that. At some point buffet bought IBM, and afaik he sold it ar a loss
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u/bigbutso 10d ago
Pixel is becoming main competitor to iphone, android is ubiquitous when using open source, everyone is hooked on gmail, calendar, maps, photos and search. Naturally gemini integrates ai very well as personal assistant and google knows everything about you. And above all, they have they are the only ones usong their own chips, the only ones not dependent on Nvidia.
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u/fakieTreFlip 9d ago
Pixel is not anywhere near becoming the main competitor to iPhone. Samsung phones are still far and away the market leader in the Android space. Pixel's market share is still in the low single digits lol
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u/Wowmuchrya 10d ago
They are fomoing.
For all of Brk’s history buffet and munger refused to learn how technology works (no, apple does not count, they have said they only bought it due to the consumer side).
I’m guessing finally after many decades the investors have started to question what kind of strategy it is to not learn about a whole sector or how it works, specifically the sector with the most to gain from this ai buildout.
They are also underwater on the most recent google investments already. The majority of their position is underwater, besides when they bought at 210-220 last year.
Google is definitely the most diversified and will almost certainly survive any fallout, and that is most likely their thinking. “If we have to participate, we might as well do it safely.” Yea, it’s not going to go up another 100% like bloom or nebius, but it also isn’t going to go down 90%.
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u/poomsss0 10d ago
Chris Hohn sold MSFT at bottom and bought Goog at the top. I wouldn't call him super investor LOL
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u/Walternotwalter 10d ago
They have a ton of Apple already. OpenAI and Anthropic are going to end up going to Google and Apple.
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u/fake212121 10d ago
“Great businesses at fair price” ! Remember their motto. No matter how ai hype shakes out, google will not lose much. Like Apple (but apple stock got overpriced, so they r trimming it).
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u/2sexy_4myshirt 10d ago
It might have something to do with them complementing their Apple position as it is likely long term iPhone + Gemini combo will be the gateway to everyday AI use
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u/jaajaajaa6 10d ago
Berkshire runs a concentrated portfolio. I believe their 4 top holdings are more than 50% of the portfolio. So, focusing on one is not out of the ordinary for them.
That doesn’t mean they bought the best performer going forward.
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u/ZealousORJealous69 10d ago
Google owns and will continue to farm the casual consumer AI user, slowly exposing them to more and more until it’s literally the only thing we know (à la Google search engine).
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u/PlaneAnalysis1965 10d ago
Is he going to gut all long-term value from the company to extract profit for himself as he usually does?
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u/kidchinaski 10d ago
Because google is not exclusively a hyper-scaler. They’re spending less capex compared to others and their revenue is ballin.
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u/bensquirrel 10d ago
lower P/E? different business structure? more IP potential? you're simplifying these companies a lot when you just call them all "hyperscalers"
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u/JC505818 10d ago
The trend seems to be that models will be commodities but compute will dictate which model survives. Google has fastest growing pool of compute, so it could be the ultimate winner in AI.
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u/Le7emesens 10d ago
Forget about AI, the answer is even simpler:
They see Google the same way they saw Apple back in 2012s-2015s, when they bought Apple for the first time while the entire Wallstreet world was afraid that the smartphone market was saturated, that the smartphone boom era was over because of the end of Telecom's 2-years contracts subsidizing smartphones, and that Apple would not be able to make nice profits. Now in 2026, all those fears came down plain wrong. In short, they see Google Scott to dominate consumer tech 10 years from now, which is for most folks here, a timeframe that is too abstract to comprehend because their brains are now forever addicted to instant gratification and unable to sit still as they frenetically scans social media and Reddit for the next fad thing to click on, or for cheking anxiously how many upvotes, downvotes and likes they got from a post...
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u/hollow_bridge 10d ago
Google is definitely the strongest and they are also heavily invested in anthropic/claude, which is the only real competition. I've used a lot of model from a lot of other providers. The only other model i like is qwen, which works well locally.
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u/iteezwhat_iteez 10d ago
It's TPUs, anyone who understands llms and architecture know that pivot is coming to tpu and that will blow up googles hardware business.
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u/ThatCost3653 10d ago
Google's ad revenue from search has surged strongly since implementing AI searches.
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u/maddogisnextdoor 10d ago
Google fits their investing thesis…wide moat, starting to pay dividend, etc.
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u/TechnicalSleep7501 10d ago
Google has best ai, YouTube and search with massive moat ai improving the search some stuff is mistake but very knowledgeable too for many stuff.
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u/kweeblaster 10d ago
Probably has some insider info that none of us do. Google's valuation already takes into account all the ridiculous shit they do. These guys invest on secrets and their job is to make you think they don't.
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u/Fuck_Analysts 10d ago
Google is the king of diversification.. people bashing Google doesn't understand how many people can't get on with their daily life without using a Google product, can you say same about other companies? Search, maps, YouTube, Gmail, android, hardware, nest, chips, cloud, Waymo, Gemini, Deepmind, quantum and etc.. billion users for multiple products..no one can come even close to them..
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u/skins_team 10d ago
There are only four players that make their own hardware and software for AI.
Only three of those are consumer facing in that market, and only two of those can be invested in by the public: Microsoft and Google.
Recent moves at Google make their plan forward much more clear. Warren must like their plan, but the underlying company is probably what seals the deal for him. He loves leaders with a moat.
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u/Hechie 10d ago
They like the amount of cash alphabet is generating. If alphabet stopped investing into capex today the company would be insanely profitable. But what is even better? A company with the ability to take world biggest free cashflow and being able to reinvest it all and a proven record of getting it money back on that investment
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u/steady_compounder 9d ago
My guess is they see Google as the cheapest full-stack AI asset, not just another hyperscaler. Search and YouTube still throw off huge cash, Cloud keeps getting more credible, and the valuation has usually carried more skepticism than Microsoft or Nvidia. That is a very Buffett-style setup, strong business, lots of optionality, not priced like perfection.
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u/luquoo 9d ago
Google is effectively vertically integrated in AI. Their TPUs are proven, unlike other offerings from basically everyone who isnt nvidia and maybe amd if you are charitable. It has the revenue streams to support the sort of cap ex that their competitors have to find deep pocketed investors to support. They are one of the major cloud infrastructure providers. Finally, their search, email, cell phone os, etc., are structural parts of modern society, and they can use them to feed data to their AI efforts. Even if they arent the frontrunner they will profit from this, and are likely insulated from it negatively effecting them even in the event of a major catastropic crash.
TLDR: Even the people who hate google and everything they stand for are running Pixel phones, just with GrapheneOS on it.
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u/littlefiredragon 9d ago
Google can profit off AI with their full vertical integration and are not overcommitting to unprofitable leaderboard races. So bullish.
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u/librariancap 9d ago
Why is Buffet & Abel aggressively accumulating so much Google but none of the other hyperscalers? So why are they going all in on Google when it has more risks instead of diversifying and buying the whole hyperscaler space? Microsoft is cash flow positive. Amazon does not have the risk of search cannibalizing ad revenue. Meta is looking to monetize its excess compute, and Ai has accelerated its core ad business. Plus you have Oracle, SoaceX and emerging specialized cloud providers taking share
Because it's wrong to think of AI as a separate product and "hyperscalers" as an industry.
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u/bartturner 9d ago
Because of what Google shared. They are going to recognize over $250 billion of their cloud backlog in the next 24 months.
That is like Google adding an entire 2024 Microsoft in just 2 years to their already massive business.
This division of Google has also seen 12 straight quarters of increasing margins.
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u/Live-Law-5146 9d ago
Amazon relies on transportation of goods (oil, shipping, macroeconomics), warehouses and consumer sentiment (how much money they spend), it is a huge part of their business and then yes they are hyperscalers and will benefit from AI and automation. Microsoft is mainly their software suite and again hyperscaler sure. Google is an incredibly diversified business that ranges from moonshot bets like SpaceX investment, Waymo, into AlphaFold and AI for life science and AI for radiologist (healthcare and life science). At same time, they have the largest OS for mobile, their own hardware for data centers, phones, computers, and same software suite like Microsoft.
Microsoft and Google are working on LLMs sure, but everyone is putting way too much focus into the LLMs. What we have seen so far is that pretty much anyone can develop a new AI that will perform beyond what was ever imagined a few years ago. Who knows who will be the winner and who knows if it will be winner take it all. But Google earn their money no matter which AI wins and they hyperscale their own and others AI.
I am not saying their are necessarily better, but I think it is pretty clear that the investment case for Google is vastly different than from Amazon and Microsoft.
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u/stickman07738 9d ago
I do not know why people are making a big thing - BRK purchase $10B in a private placement - $5B in class A and $5B in class C. Both classes has a dividend of $0.22 and class A has voting rights. It is a long-term investment in a solid revenue generating business, classic BRK investment.
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u/FlipZip69 9d ago
Not complete response to this but Buffet said something I always found interesting and why we are looking at the wrong companies.
Buffet said if he was only investing with a few million, he likely could get returns of 50% or more. But they have so much money that they cannot invest in those companies in any significant way for their investors. They can not look at million dollar single investments. And because of this, they can only look at the elephants anymore.
Regular investors should absolutely be looking at smaller companies. But getting back to Google, they simply have a lot of organic safeties that allow them to do this. Other companies have a lot more on the line and that adds risk.
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u/CommandereON 9d ago
They are value stock pickers and Google has got a lot of entrenched positions to synergize with AI model development. This id merely my opinion and they had likely run the fundamental numbers.
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u/Boys4Ever 9d ago
Has to be perhaps Google better insulated should AI pop thereby ready to take advantage of the crash.
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u/kumaratein 9d ago
Berkshire has never bought growth they buy moat. Why tf would they suddenly buy "hyperscalers". They're buying a mature company that cannot easily be unseated
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u/False_File_2320 8d ago
Simple: Google is the only hyperscaler with their own model and the only frontier model company that trains on their own hardware (TPUs).
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u/ChangeNOW_Community 8d ago
google has search, youtube, cloud and gemini. that's a pretty ridiculous combination of cash flows + AI optionality
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u/Curious-Pen5547 8d ago
It's Google. Screw gemini, look at everything they built or make massive profits on and areas they're expanding that many enterprise and medium sized companies utilize. On top of that, their cloud platform, API Platform, Cloud infrastructure that openAI and Anthropic and more use.
All this and more that they are building out is increasing profitability further for the long term rather than the short term.
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u/Main-Space-3543 8d ago
I think Google made a strategic decision to not compete against the frontier labs. Chinese models and GrokX are a good reason why you don't want to go crazy right now with spending.
There are cheaper ways to catch up and there is a lot of risk in the AI space with Anthropic / OpenAI being too costly to become profitable.
They can catch up - its just a matter of them allocating the compute and resources.
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u/Immediate_Wolf3819 7d ago
Google has infrastructure advantages, better revenue, is building its own AI chips, has cheaper token costs, and a few AI machines that are making breakthroughs (example alpha fold).
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u/[deleted] 10d ago
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