A New Captain at the Helm: Greg Abel Transforms Berkshire Hathaway
For over half a century, Berkshire Hathaway was synonymous with the legendary investment style of Warren Buffett. However, following the “Oracle of Omaha’s” retirement as CEO on December 31, the trillion-dollar conglomerate has entered uncharted territory. Now calling the shots is Greg Abel, Buffett’s longtime understudy, who has wasted no time in putting his own stamp on the company’s massive $332 billion investment portfolio.
Abel’s early tenure has been marked by decisive action and a willingness to pivot, signaling a strategic shift in how the company views value in a rapidly evolving digital economy.
The Great Purge: Why Domino’s and Others Had to Go
In a surprising move during the first quarter, Abel completely exited 16 different positions. While the reduction of the Amazon stake raised eyebrows, the total exit from Domino’s Pizza (NASDAQ: DPZ) was perhaps the most shocking revelation.
Buffett had spent six consecutive quarters building a position of 3.35 million shares in the pizza giant. So, why did Abel pull the plug? The answer likely lies in a combination of growth stagnation and valuation:
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- Declining Growth: For the first time in 32 years, Domino’s saw a dip in international same-store sales, posting a 0.4% decline in Q1.
- Valuation Concerns: While current forward P/E ratios look attractive, the stock was valued at nearly 25 times forward-year earnings throughout much of 2025—a price point that likely didn’t sit well with Abel’s strict value-focused approach.
The AI Power Play: Betting Big on Alphabet
While Abel was trimming the fat in some areas, he was aggressively expanding in others. Specifically, he has firmly entrenched an AI leader in Berkshire’s top-five holdings. Alphabet (NASDAQ: GOOGL / GOOG), the parent company of Google, has become a cornerstone of the new strategy.
Abel didn’t just increase the stake; he more than tripled Berkshire’s holding in Class A shares and opened a new position in Class C shares. This strategic move was further solidified by an $80 billion equity offering from Alphabet to fund its artificial intelligence (AI) ambitions, with Berkshire Hathaway securing a significant portion of this private placement.
Why Alphabet? The Power of the “Moat”
Both Buffett and Abel prioritize businesses with sustainable moats—competitive advantages that protect a company from rivals. Alphabet possesses some of the widest moats in the world:
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- Search Dominance: According to GlobalStats, Google maintains a virtual monopoly, controlling approximately 90% of worldwide internet search traffic.
- YouTube’s Reach: As the second-most-visited website globally, YouTube provides Alphabet with unparalleled advertising pricing power.
- AI Integration: By integrating generative AI and large language models (LLMs) into Google Cloud, Alphabet has re-accelerated sales growth in its high-margin cloud segment.
Final Thoughts: Evolution Over Revolution
Greg Abel is not dismantling the house that Buffett built; rather, he is renovating it for the 21st century. By swapping slower-growth consumer brands for AI-driven tech giants, Abel is ensuring that Berkshire Hathaway remains a dominant force in the global markets. For investors, the message is clear: the focus remains on value, but the definition of value now includes the frontier of Artificial Intelligence.
