Abel goes his own way with new Berkshire investments, including billions for AI

Buffett praises new CEO for 'fast' and 'smooth' acquisition

Warren Buffett tells CNBC's Becky Quick new Berkshire Hathaway CEO Greg Abel has "launched" with his first major deal, the $6.8 billion acquisition of Taylor Morrison Home, a residential homebuilder and developer with operations in 12 states.

On Monday's "Squawk Box," Becky quoted Buffett from a phone conversation the day before when the deal was announced:

"Greg did this faster than I could have done it, smoother than I could have done it, and I never talked to the CEO.

"He has launched."

Becky noted that when Buffett wanted to do a deal, he would move quickly, and "this is basically what Greg has picked up and done, too."

She reports Abel went to Arizona and spent around five hours with Taylor Morrison CEO Sheryl Palmer, but when he came back, he did not think he had a deal.

Then, a few days later, Palmer called to say the price was fair and her board was ready to proceed.

Becky says Abel spoke with Buffett and Berkshire lead director Sue Decker but didn't tell the rest of the board until after the deal had been completed.

"That's kind of the Berkshire way, to try and move quickly on these things," she added.

Appearing on Monday's "Squawk on the Street" later that morning, Palmer said joining Berkshire is a "once in a lifetime opportunity for the company, for the brand, and for team members across the country." (The entire interview is available to CNBC Pro subscribers.)

She started speaking with Abel "probably just a number of weeks ago," and his "pitch" was that Berkshire "has this wonderful collection of on-site builders, and they build generally around the first-time buyer ... and if you think about the Berkshire eco-system, and what they've build for decades, I think what Greg saw was the opportunity, on a national scale, to build a platform."

Berkshire housing and home improvement subsidiaries include Clayton Homes, Shaw Industries, Johns Manville, and Benjamin Moore. 

In a joint news release on the deal, Abel echoed Palmer, saying, "Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans."

Christopher Davis at Hudson Value Partners points out to Bloomberg the goal of unifying operations is a "notable departure" from Berkshire's long-standing practice of letting subsidiaries run independently, but he thinks investors "will welcome that evolution in approach."

CFRA Research analyst Cathy Seifert tells the AP, "Given Greg's strength as an operator it will be interesting to see if he does consolidate these units to get some greater scale and efficiencies."

Reuters reports UBS analyst John Lovallo is telling clients a combination of Taylor Morrison with Clayton would create one of the country's five largest homebuilders.

He calls the acquisition "a strong vote of confidence in the mid-long term outlook for the homebuilding industry," which has a shortage of around 7 million homes.

Abel adds to big bet on Alphabet's AI ambitions

And in what appears to be a vote of confidence in the future of artificial intelligence, Berkshire will invest $10 billion in Alphabet, helping to fund that company's big spending on its "world-class AI compute infrastructure to meet its unprecedented customer demand."

As part of a larger plan to raise around $80 billion from stock sales, Google's parent will use a private placement to sell $5 billion of its Class A shares (GOOGL) to Berkshire for $351.81 each and another $5 billion of Class C shares (GOOG) for $348.20 each.

According to Bloomberg, the purchase was the result of a "stealthy weekend call" to Berkshire by Goldman Sachs, the firm putting together Alphabet's enormous equity offering, and a "rapid signoff" from Abel, offering "fresh reassurance that Warren Buffett's investing conglomerate remains the first port of call for companies in need of a big check or a vote of confidence."

When the deal was announced after Monday's close of trading, Berkshire's GOOGL purchase price was 5.5% below the stock's market value and GOOG was a 6.5% bargain.

Now the discounts are down to 4.5% and 4.8%.

Berkshire already owns $21.3 billion of Alphabet's Class A shares, making it the fifth largest position in its equity portfolio.

It was apparently Abel's decision to more than triple the stake in the first quarter to almost 58 million shares from the close to 18 million shares Berkshire purchased in last year's third quarter.

When the new shares are added, Alphabet will probably become Berkshire's third or fourth biggest stock holding, rivaling its long-held Coca-Cola stake, which is currently worth almost $32 billion.

Abel's enthusiasm for Alphabet is a marked contrast to Buffett's great reluctance to invest in tech.

He felt he didn't have the ability to predict which companies would prosper in the long term, so he was "perfectly willing to trade away a big payoff for a certain payoff" in areas he better understood, especially during what turned out to be a dot-com bubble in the late 1990s.

So far, Buffett hasn't said anything publicly about Berkshire's Alphabet investments.

Buffett missed the boat on Google (2017)

In a 2017 interview with CNBC, Warren Buffett says he should have known about Google's profit potential because GEICO had been a major customer of the company.

BRK.A stock price: $733,550.00

BRK.B stock price: $488.13

BRK.B P/E (TTM): 14.53

Berkshire market capitalization: $1,053,525,726,365

Berkshire Cash as of March 31: $397.4 billion (Up 6.5% from Dec. 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $380.2 billion (Up 3.0% from Dec. 31)

Berkshire repurchased $234 million of its shares in Q1 2026.

(All figures are as of the date of publication, unless otherwise indicated)

Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of March 31, 2026, as reported in Berkshire Hathaway's 13F filing on May 15, 2026, except for:

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch