You have probably bought something on sale and watched the sale price turn into the regular price a month later.
It stings in a particular way. The discount was real. You did the work, you got the better number, and none of it protected you, because the thing you bought just kept getting cheaper.
That is close to where the most closely watched investor in America sits this morning, and the paperwork proving it landed on the afternoon of Aug. 14.
Every quarter, large money managers file a Form 13F with the Securities and Exchange Commission listing what they owned on the final day of the quarter. Wall Street treats the Berkshire Hathaway (BRK.A) (BRK.B) version of that form as a shopping list. Millions of ordinary investors do too, either directly or through an index fund that owns the stock on their behalf.
This one hit after the closing bell on Aug. 14, and the headline number was easy to spot.
Berkshire’s stake in Alphabet (GOOGL) (GOOG), parent of Google and YouTube, jumped 83% during the second quarter to roughly 106 million shares worth about $37 billion, making it the firm’s third-largest stock position behind only Apple (AAPL) and American Express (AXP), reported Reuters.
That is the number every outlet ran. The more useful one never made a headline.
What Berkshire actually paid for its Google shares
About 60% of the shares Berkshire added last quarter did not come from the open market at all.
They came straight from Alphabet, in a $10 billion private placement tied to the company’s June equity raise. Berkshire took $5 billion of Class A stock at $351.81 per share and $5 billion of Class C at $348.20, according to a filing with the Securities and Exchange Commission.
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Alphabet shares had closed the previous session at $376.37 and $372.58.
I ran those numbers against the June 1 close, and the gap works out to roughly 6.5%, or about $650 million of value handed to Berkshire for showing up with certainty at a moment when Alphabet wanted a marquee name on its cap table. That is the same service Berkshire sold Goldman Sachs in 2008, priced differently.
Related: Buffett’s AI concerns clash with Berkshire’s Alphabet buy
Here is Friday’s problem. Alphabet’s Class A shares closed at $345.90 and Class C at $343.54, below both placement prices.
By my math, the largest single chunk of Berkshire’s Google position now sits roughly $150 million underwater. The discount did not just shrink. It inverted.
Why Alphabet needed Warren Buffett’s money in the first place
Companies with $200 billion sitting in cash and securities do not usually sell stock at a discount to a single buyer.
Alphabet did, and its own numbers explain why. Capital expenditure hit $44.9 billion in the second quarter, full-year spending guidance climbed to a range of $195 billion to $205 billion, and free cash flow came in at negative $5.9 billion, according to Alphabet’s second-quarter earnings call. Chief Financial Officer Anat Ashkenazi told analysts free cash flow “will remain under pressure.”
The June raise was pitched as funding for what Alphabet called “world-class AI compute infrastructure” in its announcement of the offering.
Translated for your household budget, a company earning enormous profits was still spending faster than the cash came in, so it went outside for money. Berkshire was the outside.
Here is how the position was built:
- Berkshire first disclosed 17.85 million Alphabet shares worth roughly $4.3 billion, according to its third-quarter 2025 filing with the Securities and Exchange Commission.
- The stake reached nearly 58 million shares by the end of March, said Morningstar.
- The June private placement added about $10 billion at fixed prices, according to Alphabet’s offering announcement.
- The position finished the second quarter near 106 million shares and about $37 billion, reported Reuters.
Warren Buffett, now chairman rather than chief executive, said in July that the idea was his. “I initiated it,” he told CNBC, adding that new CEO Greg Abel makes the final call.
What struck me when I lined the holdings up by size is what Alphabet passed on the way up. Coca-Cola has been a Berkshire fixture since 1988, the position Buffett has spent nearly four decades holding up as proof that patience beats cleverness. Alphabet went from nothing to larger than Coca-Cola in three quarters, after Berkshire tripled the position in the first quarter.
That is the fastest a company has ever climbed into the top of this portfolio, and it happened under a chief executive who has run the firm for less than eight months.
What this means for your own portfolio
Copying a 13F filing has always carried one flaw that nobody advertises.
The form shows what a firm owned on June 30. You are reading it on Aug. 17. Alphabet has fallen roughly 15% from its May peak in the weeks between, hit by an artificial intelligence leadership exodus that included chief scientist Jeff Dean and by growing unease about what the spending is doing to cash flow.
So the filing tells you Berkshire was buying. It does not tell you whether Berkshire is buying now, or at what price, or whether the thesis survived July.
What makes this case unusual is that you can see the cost basis. Private placements print the price in a public document. Almost no other 13F line item works that way, which is exactly why the position is worth watching rather than copying.
Three practical takeaways for anyone tempted to follow along:
Berkshire’s holding period is measured in decades and yours probably is not. A position that is 1.7% underwater in August is noise to a firm with $365 billion in cash and a permanent time horizon. It is not noise in a taxable account you might need in four years.
Discounts do not create margin of safety by themselves. Berkshire got a better price than you could and is still below water on it. Price is one input. Valuation is the other, and the second one has not been settled.
And the AI buildout is now a cash flow story, not a growth story. When the largest advertising business on earth goes cash flow negative to buy chips and data centers, that pressure reaches every fund that owns the stock, including the index fund inside your 401(k).
What to watch next from Berkshire and Alphabet
The next 13F filing, due in November, will answer the question this one raised.
If Berkshire kept buying through the summer slide, the June placement looks like the opening move of a much larger position, and the current dip becomes a footnote. If the share count sits still, then Buffett’s last big idea got expensive faster than anyone expected.
Berkshire ended a 14-quarter stretch of net selling last quarter, buying $23.5 billion of stock against $3.7 billion sold. That is a genuine change in posture.
The Alphabet trade will decide how that posture gets remembered. For now, the most instructive thing in the filing is not that Warren Buffett bought Google.
It is that he got a deal on it, and the deal was not enough.
Related: Alphabet’s biggest AI fear may be fading
More on Alphabet & its stock:
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