Google Reports 30% Cloud Growth and Secures $4B Berkshire Hathaway Investment
During Q3 2025, Google reported $102.3B in total revenue, including $74.2B in advertising (up from $65.9B) and over 30% cloud revenue growth. Berkshire Hathaway bought 17.85M Class A shares for ~$4B ($225 avg), and analysts project 14% revenue growth with slowing EPS in 2026.
1. Google’s 2026 EPS Growth Outlook and Cloud Imperative
Wall Street analysts project that Alphabet’s earnings per share growth will decelerate to approximately 12% in fiscal 2026, down from 18% in 2025, as the company ramps up AI capital expenditures. Despite this slowdown, revenue is still expected to expand by 14%, driven largely by Google Cloud. Management has guided for cloud revenue growth in the mid-20% range next year, and analysts believe that sustaining or exceeding this pace will be critical to offsetting margin pressure from higher R&D and infrastructure spending on data centers and custom AI accelerators.
2. Buffett’s $4 Billion Alphabet Purchase Highlights Long-Term Value Thesis
In Q3 2025, Berkshire Hathaway acquired 17.85 million Class A shares of Alphabet, representing a $4 billion investment at an average cost of $225 per share. This stake now accounts for roughly 1.8% of Berkshire’s portfolio and 0.3% of Alphabet’s outstanding Class A shares. Warren Buffett and vice chairman Greg Abel have signaled confidence in Alphabet’s durable advertising moat and accelerating cloud and AI monetization, reflecting a shift from their previous underweight position in the Magnificent Seven technology names.
3. Core Businesses Fuel Alphabet’s Top Pick Status for 2026
Since early 2024, Alphabet has outperformed the S&P 500 by more than 50%, powered by double-digit growth in its core advertising segment and YouTube. In Q3 2025, ad sales rose 13% year-over-year to $74.2 billion, while YouTube revenue grew 15%. Alphabet Cloud surged 34% in the same quarter, contributing to a more diversified revenue mix. A favorable antitrust resolution and the market’s adoption of Gemini have reinforced investor conviction that the company’s platform economics remain robust heading into 2026.
4. Emerging Catalysts and Risks for Alphabet in 2026
Investors will watch several potential catalysts: the possible sale of Tensor Processing Units to external customers such as Meta, which could establish a new AI hardware revenue stream; continued Cloud revenue growth above 30%; and the monetization of a roughly 7% stake in SpaceX, which could deliver a multi-billion-dollar cash influx if the launcher goes public. At the same time, forward price-to-earnings multiples near 30x imply limited upside absent execution beats, and ongoing AI infrastructure competition with Nvidia remains a strategic challenge.