Berkshire Boosts Alphabet, Exits Amazon Under New CEO Abel: Portfolio Shift Signals Valuation Concerns

Berkshire Hathaway's portfolio rebalancing under new CEO Greg Abel offers a window into how one of the world's most sophisticated capital allocators views current technology valuations. In Q1 2026, Abel added 5.65 million shares of Microsoft, a new position, while increasing Alphabet holdings and completely exiting Amazon, a move that contradicts the conventional wisdom that Amazon's cloud division and AI exposure justify premium valuations. The portfolio shift suggests concerns about crowding and relative valuation in cloud and consumer-facing tech names.

Microsoft's addition is particularly notable given that Buffett and Abel have historically been cautious on mega-cap software. The timing, as Microsoft rallied sharply on AI enthusiasm, raises questions: is this a continuation of Buffett's decade-long de-risking, or does Abel see structural value in Microsoft's enterprise moatA sustainable competitive advantage that protects long-term returns on capital.? Goldman Sachs data shows that Ackman began buying Microsoft in February at 21x forward earnings, near market averages, suggesting the stock was reasonably priced at that entry. Bill and Melinda Gates Foundation's complete exit of MSFT (selling 7.7 million shares) complicates the narrative; perhaps early holders are taking profits as mega-caps reach new highs.

The Amazon exit is the most provocative move. For years, Buffett held Amazon as a bet on e-commerce dominance and AWS cloud services. Abel's decision to unwind the position entirely suggests either that the valuation no longer provides margin of safety, or that AI upside is already reflected in the price. Notably, Amazon recently pivoted its AI strategy, killing the Rufus shopping assistant and rolling out an AI-powered Alexa; execution risk on these initiatives may have spooked Berkshire strategists.

The debate centers on whether Abel's moves reflect genuine valuation concerns or a shift in investment philosophy. Some argue that exiting Amazon and Microsoft at record valuations is prudent de-risking, given that both stocks have already incorporated significant AI upside. Others contend that mega-cap tech will continue to outperform, and Berkshire's caution may lead to underperformance if AI capex and deployments accelerate. Ackman's continued buying of MSFT at elevated valuations suggests not all sophisticated investors agree with Berkshire's exit thesis.