Berkshire made GOOG its biggest Q2 move, adding $17 billion at just 17x earnings despite 24% revenue growth and 82% Cloud acceleration. Since Q2 earnings, GOOG slipped 1% while SPY climbed 5%, a gap deep-pocketed buyers see as a rare entry point into a dominant franchise. A $514 billion Cloud backlog and 57 of 63 analyst Buy ratings support a consensus price target 23% above where Alphabet trades today.
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Berkshire Hathaway (NYSE:BRK.B) $17 billion add to its Alphabet stake was its biggest second-quarter move, vaulting Google's parent into Berkshire's third-largest holding. Alphabet dominates search, operates YouTube, and owns Google Cloud, one of three global hyperscaler platforms racing to build AI infrastructure. Under CEO Sundar Pichai, it has grown into a $4.20 trillion business while the market debated whether AI will erode Search or supercharge it.
The answer looks like the latter. The stock has run 69.03% over the past year yet trades at a valuation that would embarrass most hyperscaler peers, which is why Buffett's team stepped in. Alphabet trades at 17 times trailing earnings with a PEG ratio of 0.964, extraordinary for a business posting 24% revenue growth and 34% operating margins.
Q2 2026 revenue hit $119.80 billion, and Google Cloud accelerated to 82% growth with operating income more than tripling to $8.8 billion. Forward catalysts include a $514 billion Cloud backlog, nearly 90% of the Fortune 100 now on Gemini Enterprise, and Search revenue up 17% as AI Overviews scale without cannibalizing monetization. Of 63 covering analysts, 57 rate the stock a Buy or Strong Buy.
The bear case centers on cash flow. Q2 capital expenditures doubled year over year to $44.92 billion, pushing free cash flow to negative $5.86 billion. Long-term debt more than doubled from $46.5 billion to $98.2 billion, and the buyback program was suspended. 2026 capex guidance sits at $175 to $185 billion, and the market has flinched.
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