The Motley Fool·2025-11-21 10:00Core Viewpoint - Alphabet is considered a better stock pick than Apple due to its stronger growth prospects and diversified business model [3][4][9]. Group 1: Berkshire Hathaway's Investment Moves - Berkshire Hathaway has reduced its Apple holdings by nearly 42 million shares, a decrease of about 15%, while Apple remains its largest position, constituting over 20% of its investment portfolio [2]. - The sale of Apple shares has allowed Berkshire to initiate a new position in Alphabet, which is viewed as a strategic move given Alphabet's ongoing growth [3][10]. Group 2: Comparison of Business Models - Apple's business primarily focuses on consumer hardware and has struggled to innovate, lacking new products that open additional markets [4][9]. - In contrast, Alphabet's business model is more diversified, encompassing advertising, cloud computing, self-driving vehicles, quantum computing, and generative AI, which positions it for continued growth [4][6]. Group 3: Financial Performance and Valuation - Alphabet's cloud computing revenue rose by 34% year over year, indicating strong performance despite market maturity [6]. - Alphabet's stock was previously trading at a lower valuation of about 19 times forward earnings, compared to its current valuation of 26 times forward earnings, which is still cheaper than Apple's [12]. - The market has become more bullish on Alphabet following the resolution of its monopoly court case, recognizing it as a leader in AI [13].