Alphabet shares hit record after Berkshire bet with $4.9-B stake

ALPHABET shares rallied nearly 6% to a record high on Monday after Berkshire Hathaway’s new stake provided an endorsement of the tech giant's artificial intelligence (AI) efforts amid heightened worries over a looming bubble.

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The purchase of 17.85 million Alphabet shares — worth about $4.93 billion as of close on Friday — is one of the final major investments by the conglomerate under Warren Buffett and marks a rare foray into the industry by tech-averse Berkshire.

The billionaire investor has long compared Apple, Berkshire’s largest holding, to a consumer products company.

“The stake purchase of a tech company may represent a different type of mentality at Berkshire, though it’s not a total departure from its value-investing model,” said Steve Sosnick, chief strategist at Interactive Brokers.

The vote of confidence comes as broader sentiment on tech has turned cautious, with several business leaders and experts warning that the AI frenzy driving up tech stock prices has detached valuations from fundamentals and that returns from hundreds of billions in data-center spending remain uncertain.

The Roundhill Magnificent 7 ETF, which tracks the biggest tech stocks such as Nvidia, Microsoft and Alphabet, has been little changed since September, after outperforming the benchmark S&P 500 for much of the year.