Warren Buffett says Alphabet is more likely to beat 90% to 95% of the stock picks Wall Street makes. The Berkshire Hathaway chairman made the rare endorsement on CNBC’s Squawk Box on Wednesday. Alphabet jumped 3.65% to $370.36 after the interview, with Berkshire’s stake now topping $31 billion.
Buffett’s Endorsement
Buffett ended speculation that new CEO Greg Abel was behind the Alphabet bet, telling interviewer Becky Quick, “I initiated.” He added that Abel has the final word, and the two talk every day to approve each other’s moves.
AI Spending
Buffett called Alphabet’s AI spending “real money,” citing the company’s plans to spend $180 billion to $190 billion in capital expenditures this year. He noted that this dwarfs the spending of railroads, and warned that the risk is not insignificant. Alphabet generated $174 billion in operating cash flow over the past year, and grew Q1 revenue 22% to $110 billion.
Market Impact
The praise from Buffett had limits, as he still likes at least four or five other Berkshire businesses more. He also took a shot at analysts, saying they obsess over the next quarter instead of real returns. Alphabet’s earnings later this month will test whether the Buffett bump holds, as several billionaires have picked Amazon as their top AI trade instead
Based on reporting from crypto.news.
