Buffett Admits ‘Mistake’ on Alphabet: ‘I Should Have Bought Earlier’

Warren Buffett told CNBC in a recent interview that he personally made the call for Berkshire Hathaway (BRK.A) to invest in Alphabet (GOOGL) and admitted he “made a mistake” — regretting not buying the Google parent sooner. Yet as of 2:34 p.m. ET on July 17, Alphabet shares were trading at $344.50, down 2.81% (-$9.96) from the prior close of $354.46. The stock opened at $348.045 and hit an intraday low of $341.36. This extends a decline from the prior session (July 16), when Alphabet closed down 4.4%, wiping out roughly $200 billion in market cap, after Bloomberg reported that its flagship Gemini 3.5 Pro AI model is facing delivery delays.^{[Yahoo Finance]}

Buffett Made the Call: Berkshire’s Billion-Dollar Alphabet Bet

Buffett said in the interview that he “initiated” Berkshire’s investment in Alphabet and stressed that he has not made any decisions without the approval of his successor, Greg Abel, and vice versa.^{[Business Insider]} According to Business Insider, Berkshire currently holds roughly $31 billion in Alphabet stock, representing about 6% of its total portfolio, making it Berkshire’s sixth-largest holding, behind Occidental Petroleum, Chevron, Bank of America, Coca-Cola, American Express, and Apple.^{[Business Insider]}

Forbes provided further details: Berkshire first disclosed a stake of about 17.8 million Alphabet shares last November, then worth $4.3 billion. It added 36.4 million Class A shares and 3.6 million Class C shares earlier this year, bringing its total to roughly 58 million shares. Additionally, last month Alphabet announced that Berkshire had agreed to buy $10 billion in newly issued stock to help fund Alphabet’s AI infrastructure expansion.^[Forbes]

Buffett said in the interview: “I made a mistake,” referring to not investing in Alphabet sooner. He added: “I think, based on their track record, they’re more likely to be a winner, with odds better than 90% or 95% of the companies Wall Street pitches.”^{[Business Insider]}

AI Capex and Gemini Delays: Two Market Concerns

Despite Buffett’s optimism on Alphabet’s AI prospects, market sentiment remains under pressure from multiple factors. Buffett also addressed AI capex in the interview, saying these expenditures are “hanging over Google and other tech giants.” Investors have been worried that, despite billions in spending, many companies have yet to see profits or meaningful cost savings from AI. Buffett commented: “They [these companies] are, in many cases — or in some cases — playing a game they don’t want to play.” But he added that Alphabet seems more likely to win than others.^{[Business Insider]}

However, a more immediate pressure comes from the AI model itself. According to Yahoo Finance, citing Investing.com, Alphabet closed down 4.4% on July 16, wiping out roughly $200 billion in market cap, after Bloomberg reported that Google is months behind schedule on delivering its most powerful flagship AI model, Gemini 3.5 Pro. The report said the delay stems from Google needing extra time to improve the model’s capabilities, particularly in coding. The setback has frustrated Google’s engineers, AI researchers, and management, with many worried the company could lose market position in the AI race as rivals Anthropic and OpenAI have already released models that surpass Gemini’s current capabilities. Meta Platforms also recently released a new model that leads Google in AI coding.^{[Yahoo Finance]}

A Google spokesperson responded that the company is rapidly rolling out multiple models while maintaining cost efficiency for customers. The spokesperson added that Google is currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and is having productive discussions with the U.S. government on model testing and broader frameworks.^{[Yahoo Finance]}

Stock Swings and Founder Fortunes

On the day Buffett made his comments (July 15), Alphabet shares rose 3.9%, closing at roughly $373, extending a nearly 2% gain from the prior session.^[Forbes] That rally added $8 billion to Alphabet co-founder Larry Page’s fortune, pushing it to $301.7 billion, making him the world’s second-richest person. Sergey Brin’s fortune rose by $7.3 billion to $278.2 billion, placing him third. Both trail only Elon Musk (net worth over $866 billion).^[Forbes]

But the good times didn’t last. On July 16, Alphabet shares gave back those gains, closing down 4.4% on the Gemini delay news.^{[Yahoo Finance]} As of intraday trading on July 17, the stock continued to slide, trading at $344.50, down 2.81% from the prior close.^[CNBC]

Earnings Ahead: Market Focuses on AI Strategy Update

Alphabet is set to report second-quarter earnings next week. Yahoo Finance noted that investors will be closely watching for updates from management on the revised timeline for Gemini 3.5 Pro and the broader AI development strategy.^{[Yahoo Finance]} Earlier, Alphabet reported its first year with annual revenue topping $400 billion, with cloud revenue surging 48%. The company expects capex of up to $185 billion for fiscal 2026, up from $105 billion the prior year.^[Forbes]

While Buffett is confident in Alphabet’s long-term prospects, near-term concerns over AI model competition and massive capex — along with the upcoming earnings report — will continue to drive Alphabet’s stock price.

This content is for informational purposes only and does not constitute investment advice, trading advice, or any guarantee of returns.