Warren Buffett's Latest Artificial Intelligence (AI) Stock Pick Is Already Up at Least 25% Since Berkshire Hathaway Bought It -- and It's Not Too Late to Join Him

Core Insights - Warren Buffett has shown interest in ChatGPT and recognizes its potential to save time for users [1] - Berkshire Hathaway has historically been cautious with technology investments but made a notable purchase in the last quarter [2][4] - The investment in Alphabet marks a significant shift in Berkshire's strategy towards technology [4] Investment Details - Berkshire Hathaway acquired 17.8 million shares of Alphabet, which is now its 10th-largest U.S. stock holding [4] - Alphabet's stock has increased by over 25% since the purchase, indicating strong market performance [3] Financial Performance - Alphabet generated $73.6 billion in free cash flow over the past 12 months, driven by its high-margin advertising and cloud businesses [6] - The operating margin for Google Cloud improved to 24%, up from 17% a year ago, contributing to overall earnings growth [7] Market Position - Alphabet's stock traded at a forward P/E ratio of less than 20 during most of the third quarter, which has since increased to nearly 29 following positive developments [8][14] - The company has seen a 35% year-over-year growth in earnings per share through the first three quarters of the year [9] Recent Developments - Alphabet's cloud backlog surged by 82% year-over-year, prompting an increase in capital expenditure plans to $91 billion to $93 billion for the year [11] - The positive reception of Alphabet's Gemini 3 AI model has further strengthened its market position in the AI sector [12] Competitive Landscape - Meta Platforms is reportedly considering using Alphabet's Tensor Processing Units (TPUs) for its data centers, which could significantly enhance Google Cloud's backlog [13]