Throughout Warren Buffett’s long-term investment career leading Berkshire Hathaway, his philosophy of “permanent holding” has profoundly shaped the company’s portfolio structure. Even after his departure, this investment approach will continue to exert its influence. Currently, two technology stocks in Berkshire’s holdings, with reasonable valuations and growth momentum, are poised for strong performance in 2026.
As the parent company of Google, Alphabet (GOOGL) faced stock price pressure last year due to market concerns about its progress in artificial intelligence. However, the situation is quietly changing as the company announced capital expenditures exceeding $90 billion dedicated to AI. Upgrades to the Gemini model, the expansion of Waymo’s business, and a year-over-year increase in free cash flow to nearly $74 billion (excluding capital expenditures) in the third quarter all demonstrate its steady growth despite heavy investments. Berkshire increased its holdings by over 17.8 million shares, approximately $4.3 billion, in the third quarter of 2025, bringing its stake to nearly 2%. Currently, its price-to-earnings ratio of 31 times is in line with the average level of the S&P 500 and ranks as the second-lowest valuation among the “Magnificent Seven.” With ongoing technological investments and innovation leadership, the stock has long-term upside potential.
Amazon (AMZN) has similarly allocated substantial capital expenditures to artificial intelligence, investing $120 billion over the past 12 months while still generating $15 billion in free cash flow during the same period. AI technology has permeated its cloud computing, e-commerce recommendations, and advertising businesses, becoming a core driver of efficiency improvements. Although the stock recently consolidated due to market sentiment fluctuations and AWS facing competition from Google Cloud and Microsoft Azure, its valuation has significantly adjusted. Currently trading at a price-to-earnings ratio of around 32 times, similar to Alphabet, it is more attractive compared to historical levels. After initiating a position in 2019, Berkshire made minor reductions but ceased selling in 2023. Against the backdrop of AI investments gradually materializing, the company’s earnings flexibility is expected to support a stock price recovery.
Berkshire’s holdings in Alphabet and Amazon reflect its recognition of technology giants creating long-term value through strategic investments. Both companies’ sustained investments in the field of artificial intelligence and their relatively low current valuations may lay the groundwork for growth in 2026. Under the continuation of Berkshire’s investment logic, these two stocks could become focal points for those seeking excess returns.
