Warren Buffett Watched Alphabet's Stock Price Climb 9,000% Before He Decided to Invest. Here's Why He and Greg Abel Are Making It One of Berkshire Hathaway's Biggest Investments Now.

In 2004, Warren Buffett expressed regret for missing the opportunity to invest in Google, which was then known as Alphabet. He had become familiar with the business through GEICO, Berkshire Hathaway's insurance subsidiary, which was paying high advertising rates on Google's search engine. Despite this, Buffett decided not to invest, citing his general aversion to IPO stocks and tech companies.

At the time, Google was less than six years old and had only recently turned profitable. However, the company's dominance in digital advertising and strong operating margins made it an attractive opportunity for Buffett.

Google's stock initially went public at $85 per share in 2004 and underwent a series of splits, resulting in a split-adjusted price of just $2.125 per share today. It wasn't until the third quarter of 2025 that Buffett made his move, purchasing the stock at around $200 per share. Since then, he and new CEO Greg Abel have invested tens of billions of dollars into the company, making it one of Berkshire Hathaway's biggest investments.

Buffett's decision to invest in Alphabet is driven by the company's ability to deploy capital and generate returns significantly higher than the risk-free rate, which he considers to be U.S. Treasury bills. He sees Alphabet's massive capital expenditures, such as building new data centers and outfitting them with AI servers, as a prime example of this.

Additionally, Alphabet's long-term contracts with major customers provide the company with visibility into future demand, allowing for better planning and confidence in its data center investments. With the stock trading at less than 17 times forward earnings expectations, it is expected that Buffett and Abel will continue to add to their position in the coming quarters.