Abel is going his own way with new Berkshire investments, including billions in AI
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ABEL LEADS HIS WAY WITH A NEW INVESTMENT IN HOME BUILDING … AND AI
Buffett praises new CEO for ‘quick’ and ‘smooth’ acquisition
Warren Buffett tells CNBC’s Becky Quick that Berkshire Hathaway’s new CEO, Greg Abel, has “delivered” on his first big deal, a $6.8 billion buyout. Taylor Morrison’s homeresidential home builder and developer operating in 12 states.
On Monday’s “Squawk Box,” Becky quoted Buffett in a phone interview the day before the deal was announced:
“Greg did this faster than I could have done, smoother than I could have done, and I never spoke to the CEO.
“You have introduced.”
Becky noted that when Buffett wanted to make a deal, he would move quickly, and “this is basically what Greg refined and did, too.”
He reports that Abel went to Arizona and spent about five hours with Taylor Morrison CEO Sheryl Palmer, but when he came back, he didn’t think he had a deal.
Then a few days later, Palmer called to say the price was right and his board was ready to go.
Becky says Abel talked to Buffett and Berkshire’s lead director Sue Decker but didn’t tell the rest of the board until after the deal was done.
“That’s kind of the Berkshire way, to try to move quickly on these things,” he added.
Appearing on Monday’s “Squawk on the Road” later that morning, Palmer said joining Berkshire is “a once-in-a-lifetime opportunity for the company, the brand, and the team members across the country.” (The entire interview is available to CNBC Pro subscribers.)
He started talking to Abel “probably a couple of weeks ago,” and his “tone” was that Berkshire “has this great collection of local builders, and they usually build for the first-time buyer…
Berkshire’s real estate and home improvement brands include Clayton Homes, Shaw Industries, Johns Manville, and Benjamin Moore.
A home under construction stands behind a “sold” sign at a new development in York County, South Carolina, US, February 29, 2020.
Lucas Jackson | Reuters
In a joint news release about the deal, Abel echoed Palmer, saying, “Over time, we expect to consolidate our local home building operations into a unified platform that allows us to bring the dream of home ownership to more Americans.”
Christopher Davis at Hudson Value Partners points out Bloomberg the goal of combining operations is a “significant departure” from Berkshire’s long-standing practice of letting subsidiaries operate independently, but he thinks investors will “welcome that evolution along the way.”
CFRA Research analyst Cathy Seifert tells AP“Given Greg’s strengths as an operator it will be interesting to see if he can put these units together for greater scale and efficiency.”
Reuters reports UBS analyst John Lovallo tells clients that the combination of Taylor Morrison and Clayton will create one of the country’s five largest homebuilders.
He calls the purchase a “strong vote of confidence in the housing industry,” which has a shortfall of about 7 million homes.
Abel adds a big bet to 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 fund that company’s capital investment in “a world-class AI computing infrastructure to meet its unprecedented customer demand.”
As part of a larger plan to raise an estimated $80 billion in stock sales, Google’s parent company will use a private placement to sell $5 billion of its stock. Class A shares (GOOGL) to Berkshire for $351.81 each and another $5 billion Class C shares (GOOG) for $348.20 each.
In accordance with BloombergThe purchase was the result of a “confidential weekend call” to Berkshire by Goldman Sachs, the company behind Alphabet’s big offering, and a “quick sign” from Abel, which gives “new confirmation that Warren Buffett’s investment conglomerate remains the first port of call for companies that need a big check or guarantee.”
When the deal was announced after the close of trading on Monday, GOOGL Berkshire’s purchase price was 5.5% below the stock market value and GOOG was 6.5% flat.
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 holding in its equity portfolio.
Apparently it was Abel’s decision to triple the number of shares in the first quarter to about 58 million shares from about 18 million shares that Berkshire bought in the third quarter of last year.
When the new shares are added, Alphabet will likely become Berkshire’s third- or fourth-largest stock, rivaling its long-held Coca-Cola stake, which is currently worth about $32 billion.
Abel’s enthusiasm for Coins is in stark contrast to Buffett’s reluctance to invest in technology.
He felt that he had no ability to predict which companies would be successful in the long term, so he was “absolutely willing to trade a lot of profit for some profit” in areas he understood better, especially during what became the dot-com bubble of the late 1990s.
So far, Buffett has not said anything publicly about Alphabet’s Berkshire investment.
BUFFETT & BERKSHIRE IN INTERNET HEAVEN
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HIGHLIGHTS FROM THE CNBC BUFFETT ARCHIVES
Buffett Missed the Boat on Google (2017)
In a 2017 interview with CNBC, Warren Buffett said he should have known about Google’s potential for profit because GEICO had been the company’s biggest customer.
WARREN BUFFETT: Google I had to have some insight into, because GEICO was a heavy user in the beginning.
So here we saw the importance of something. At that time – I don’t know what we pay per click now, but – but we were paying $10 or $11 for a click for something that had no cost of goods sold, and we would continue to do it. I mean we could see that.
So – I should have had more insight into that.
Now, whether Bing would come or other people would take over the market, that is another question.
That you had the identity of the – early user benefit that would – will be – and there’s a lot of technology in it.
So – for someone to come up with a better technical product I would have no idea about that.
I definitely had an understanding of the user benefit.
A STOCK WATCH IN BERKSHIRE
BRK.A stock price: $733,550.00
BRK.B stock price: $488.13
BRK.BP/E (TTM): 14.53
Berkshire’s market capitalization: $1,053,525,726,365
Berkshire Cash as of March 31: $397.4 billion (Up 6.5% from Dec. 31)
Excluding Railroad and Debt Relief Bills Payable: $380.2 billion (Up 3.0% from December 31)
Berkshire repurchased $234 million of its shares in Q1 2026.
(All figures are as of date of publication, unless otherwise indicated)
BERKSHIRE’S EQUITY HOLDINGS – Jun. 5, 2026
Berkshire’s top publicly traded shares in the US and Japan, by market value, based on recent closing prices.
Withholding as of March 31, 2026, as reported in Berkshire Hathaway’s May 15, 2026 13F filing, except for:
A complete list of holdings and current market values is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTS
Please send any questions or comments about this book to alex.crippen@nbcuni.com. (Sorry, but we don’t send questions or comments to Buffett himself.)
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Also, Buffett’s annual letters to shareholders are highly recommended reading. There is a collection here on the Berkshire website.
— Alex Crippen, Editor, Warren Buffett Watch
