The Motley Fool·2025-11-30 01:05Core Insights - Berkshire Hathaway's recent investment in Alphabet marks a significant shift in Warren Buffett's investment strategy, as it is a rare move into a pure tech stock while simultaneously reducing its stake in Apple [2][3][4] - Apple has agreed to pay Alphabet $1 billion annually to utilize its large language model, Gemini, to enhance Siri's capabilities, indicating a strategic partnership aimed at improving Apple's AI competitiveness [9][10][12] - Despite selling a portion of its Apple shares, Berkshire's investment in Alphabet may reflect continued confidence in Apple's long-term prospects, especially given the strong performance of the iPhone and the new iPhone 17 [5][10][12] Investment Strategy - Buffett's team sold approximately 41.8 million shares of Apple, representing about 14.9% of its position, while simultaneously acquiring $4.3 billion worth of Alphabet stock [3][4] - At the end of 2023, Apple's stake constituted 50% of Berkshire's equity portfolio, which has since decreased to just over 21%, suggesting a need for diversification [5][6] - The high valuation of Apple, with a P/E ratio of 37, may have influenced the decision to sell some shares, despite the company's stability and reliability [7][8] Market Performance - Apple's stock has been gaining traction due to strong iPhone sales, particularly with the new iPhone 17 performing well in China, reinforcing the notion that betting against Apple has historically been unwise [10][12] - The partnership with Alphabet is seen as a strategic move to bolster Apple's AI capabilities, addressing market concerns about its competitiveness in this area [10][12] - Buffett's long-standing regret over not investing in Alphabet earlier, combined with the new partnership, suggests a dual vote of confidence in both companies' futures [13]