Berkshire Hathaway Concentrates AI Exposure in Apple and Alphabet

Berkshire Hathaway has departed from its historical preference for predictable consumer and financial sectors by concentrating significant capital in technology. As of September 16, 30.7% of the conglomerate's $365 billion public equities portfolio is invested in Apple and Alphabet. This allocation reflects a deliberate bet by incoming CEO Greg Abel on businesses that are central to the ongoing artificial intelligence expansion.

The investment thesis centers on two distinct advantages: Apple's dominance in consumer hardware distribution and Alphabet's control over cloud computing and AI research. Together, these two holdings represent the bulk of Berkshire's exposure to the tech sector, a notable change for an entity that previously avoided high-growth, high-volatility technology stocks.

Apple Leverages Device Ecosystem for AI Adoption

Apple remains the largest single holding in Berkshire's portfolio, a position built since 2016 that has appreciated by more than 1,000% over the past decade. The company's primary asset in the AI era is its physical distribution network, with over 2.5 billion active devices globally. This scale provides a direct channel for deploying AI features, such as the recently launched Siri AI and the broader Apple Intelligence suite.

Financial performance underscores the strength of this hardware base. In the quarter ended June 27, iPhone sales grew 21.7% year-over-year to $54.3 billion, accounting for nearly half of total revenue. This robust demand indicates that consumers are retaining and upgrading their devices, creating a ready-made platform for the integration of new AI capabilities without requiring massive new data center capital expenditures.

Alphabet Drives Growth Through Cloud and Chips

Alphabet constitutes 10% of Berkshire's portfolio, a stake increased since the initial purchase in the third quarter of last year. Unlike Apple, Alphabet is directly involved in the infrastructure layer of AI, operating Google DeepMind, designing internal Tensor Processing Units, and providing enterprise cloud services. This vertical integration allows the company to capture value across the entire AI supply chain.

The cloud segment has seen accelerated growth, with revenue surging 82% in the second quarter compared to the same period in 2025. This increase is driven by strong enterprise demand for compute resources to train and run AI models. Shares have risen 37% over the past 12 months, though they remain 14% below their May peak, trading at a forward price-to-earnings ratio of 22.4.

Valuation Differentials Between the Two Giants

While both companies are central to the AI narrative, their valuation profiles differ significantly. Apple trades at a forward multiple of 34.6, reflecting its premium status in consumer electronics and software services. Alphabet, at 22.4, offers a lower entry point relative to its earnings, which may appeal to investors seeking exposure to AI infrastructure with a lower cost basis.

Berkshire's concentration in these two names suggests a strategy that balances consumer-facing application with backend infrastructure. By holding both, the conglomerate hedges against uncertainty in which segment will drive the next phase of profitability, ensuring exposure to both the user interface and the computational power required for modern AI systems.