Alphabet earnings miss hits Berkshire’s big bet

Warren Buffett's big late-career bet on Google's parent is now losing money. Alphabet shares fell about 10% in after-hours trading on Wednesday, October 28, after the company missed Wall Street's revenue and profit estimates, CNBC reported. That drop likely leaves Berkshire Hathaway with a loss on the Alphabet shares it bought in the first half of 2026, Barron's reported. Barron's called the position Buffett's last major stock investment as Berkshire's chairman.barrons.com+1

A rare double miss

Third-quarter revenue rose 25% to $127.58 billion. Analysts polled by LSEG had expected $128.22 billion, and it was Alphabet's first miss on both revenue and earnings in nearly four years, according to CNBC. Adjusted earnings were $2.67 per share against expectations of $3.02, and free cash flow was negative $9.07 billion. Search revenue grew 12% to $63.35 billion, short of estimates. Google Cloud more than doubled to $30.7 billion.cnbc.com

The core advertising business brought in $82.01 billion, about $1.41 billion below expectations, Reuters reported. Reuters also said the company's cash burn grew as it spent on cloud capacity and AI research. Bloomberg reported that the decline set the stock up for its biggest market-value loss ever, after Alphabet disclosed that its AI search product was eating into its core ad business.reuters.com+1

Berkshire's underwater shares

Berkshire spent more than $11 billion buying Alphabet stock on the open market in the first quarter of 2026. In June it added $10 billion through a private placement at an average price of about $350 per share, The News & Observer reported. The June purchase was part of an $85 billion equity raise to fund Alphabet's AI infrastructure, Investopedia noted. By June 30 Berkshire owned nearly 106 million shares worth about $37.8 billion, which made Alphabet its third-largest stock holding, Reuters reported.newsobserver.com+2

Berkshire's first purchase, about 17.8 million shares in the third quarter of 2025, was made at much lower prices. That earlier block cushions the overall position, even though the 2026 purchases now appear to be underwater.

"I initiated it"

Many investors had seen the Alphabet stake as the first major move by Greg Abel, who succeeded Buffett as CEO. In a July interview with CNBC, Buffett said otherwise. "I initiated it," he said, adding: "I am not doing anything that he doesn't approve of. He's not doing anything I don't approve of. We talk all the time, but he is the decider," CNBC reported.cnbc.com

Buffett had his doubts even then. He said Alphabet was "putting out huge amounts of money" on AI and that he didn't like it as well as four or five other Berkshire businesses. He still said he thought it was "more likely to be a winner" than "90 percent or 95 percent of what gets merchandised through Wall Street," CNBC reported.cnbc.com