Berkshire Heavily Invests in Alphabet, Now Third-Largest Holding; Increases Stake in Delta Air Lines and Homebuilders

Berkshire Hathaway (BRK.B-US) significantly accelerated capital deployment in the second quarter, substantially increasing its holdings in Alphabet (GOOGL-US), the parent company of Google and YouTube. This move propelled Alphabet to become Berkshire's third-largest stock investment, ranking behind only Apple (AAPL-US) and American Express (AXP-US).

According to Berkshire's 13-F regulatory filing submitted Friday, the company held nearly 106 million shares of Alphabet as of June 30, up from 57.8 million shares at the end of March—an 83% increase in holdings during the quarter. Based on the stock price at the end of the quarter, this investment is valued at approximately $37.8 billion.

The filing primarily discloses Berkshire's U.S.-listed stock holdings as of the end of the second quarter, covering the majority of its equity investment portfolio. At the time, Berkshire's total stock assets were approximately $323.8 billion, meaning Alphabet now accounts for about 11.7% of the portfolio.

$10 Billion Private Investment Boosts Stake Size

The sharp rise in Berkshire's Alphabet holdings reflects a $10 billion private stock investment announced by the company in early June. Alphabet brought in Berkshire's capital to fund its massive artificial intelligence (AI) infrastructure development, drawing significant market attention to the partnership.

Warren Buffett, Berkshire's current chairman, said in a July interview with CNBC that the idea to invest in Alphabet was his own initiative and received support from CEO Greg Abel.

Expanding Aviation Exposure: Increased Stake in Delta Air Lines

In addition to Alphabet, Berkshire also expanded its presence in the aviation sector during Q2, increasing its stake in Delta Air Lines (DAL-US) by 44% to 57.3 million shares. Based on the stock price at the end of June, the value of this holding is approximately $5.4 billion.

Berkshire had completely sold off its airline stocks during the early stages of the COVID-19 pandemic but recently re-established a position in Delta Air Lines. This further increase signals a clear shift in the company's investment stance toward the aviation industry.

Increased Stake in Lennar, New Position in D.R. Horton

The housing market was another area where Berkshire increased its exposure in Q2.

Berkshire increased its stake in homebuilder Lennar (LEN-US) and disclosed for the first time that it holds shares in D.R. Horton (DHI-US), although the new position is extremely small, with only 3,600 shares held as of the end of June.

During the same quarter, Berkshire completed the acquisition of homebuilder Taylor Morrison, further expanding its residential construction and real estate business footprint.

End of 14 Consecutive Quarters of Net Selling; Cash Drops to $36.55 Billion

As Berkshire resumed aggressive stock investments, its net stock purchases in Q2 approached $20 billion, ending a 14-quarter streak of being a net seller of stocks.

As of the end of June, Berkshire's cash balance declined from a record $397.4 billion at the end of March to $365.5 billion. The reduction in cash reflects the company's increasing deployment of capital into the market through stock investments, share buybacks, and corporate acquisitions.