Buffett Backs Google's AI Push: Alphabet's Stock Soars to New Heights

Alphabet shares surged nearly 6% after Berkshire Hathaway invested in the tech giant, endorsing its AI efforts amid market bubble fears. The purchase marks a significant shift for Warren Buffett's firm. Analysts believe Alphabet's AI leadership and ad business make it a compelling investment amid cautious tech market sentiment.

On Monday, Alphabet's shares jumped nearly 6% to a record high following news of Berkshire Hathaway's significant new investment. The conglomerate, led by Warren Buffett, bought 17.85 million shares valued at approximately $4.93 billion, signaling confidence in Alphabet's artificial intelligence initiatives during a period of market skepticism regarding tech valuations.

This strategic stake is notable as it represents a rare entry into the tech sphere for the typically tech-averse Berkshire. Though Buffett has consistently described Apple, Berkshire's largest holding, as akin to a consumer products company, this move signifies a potential shift within Berkshire's investment strategy, according to Steve Sosnick of Interactive Brokers.

The endorsement by Berkshire comes amidst growing caution over tech stock valuations, driven by an AI boom that some experts warn may not align with fundamentals. Despite these concerns, Alphabet has distinguished itself among tech stocks, achieving a 46% gain this year and proving its strong position in AI and solid foundational business strategy.

(With inputs from agencies.)