Berkshire Under New CEO Boosts Alphabet, Exits Amazon; Ackman Raises MSFT Stake to 5.65M

The changing of the guard at Berkshire Hathaway coincided with a strategic reorientation that rivals the company's historic portfolio overhauls. In the first quarter of 2026, newly appointed CEO Greg Abel orchestrated a significant shift away from Amazon and toward Alphabet, marking a notable divergence from Warren Buffett's long-held positions. This move is not merely a tactical trade but reflects Abel's thesis that search-based ad platforms with durable moats can justify premium valuations even in a higher-rate environment. The reallocation also signals confidence that Alphabet's AI initiatives and cloud infrastructure can drive earnings growth sufficient to offset near-term multiple compression from rising yields.

Parallel to Berkshire's moves, Bill Ackman's Pershing Square Capital Management announced that it had initiated a new position in Microsoft during February at 21x forward earnings, arguing that the valuation was reasonable relative to MSFT's historical average and growth profile. By May 15, Ackman's Form 13F filing revealed that Pershing Square had accumulated 5.65M Microsoft shares, with an additional 1.84M Amazon shares also added, contrary to Berkshire's Amazon exit. This divergence between two elite institutional investors reflects a nuanced view: Ackman is betting that Microsoft's AI integration across Office, Azure, and enterprise software can sustain growth, while Berkshire's Abel is positioning for a world where search advertising (Alphabet) outcompetes cloud infrastructure plays (Amazon and Microsoft) on a risk-adjusted basis.

These moves matter beyond portfolio composition because they represent a public bet by two of the world's most respected capital allocators on which mega-cap tech narratives will persist. Ackman's conviction on MSFT at 21x earnings implies he believes the Street's capex and margin assumptions are conservative. Similarly, Berkshire's pivot to Alphabet while exiting Amazon suggests Abel sees Google's moatA sustainable competitive advantage that protects long-term returns on capital. and AI optionality as more durable than Amazon's retail, cloud, and advertising businesses combined. The market has yet to price in the full implications of these positions, particularly if yields stabilize and growth fears ease.

Skeptics counter that both moves are defensive in nature: Berkshire is retreating from the e-commerce and cloud battles where competition is fiercest, while Ackman's Microsoft entry at 21x earnings is not a screaming bargain. Furthermore, if yields continue to climb toward 5%, both Alphabet and Microsoft could face multiple compression that outweighs earnings growth. Some analysts note that mega-cap rotation out of Nvidia and into search or enterprise software could be a precursor to broader growth stock weakness, not a sign of health. The next earnings season for all three (Alphabet, Microsoft, and Amazon) will test whether these institutional bets are prescient or early.