Buffett's $5B Alphabet Bet Just Triggered a Stock Surge—But Is the Party Over?

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**The Setup**Berkshire Hathaway quietly dropped a bomb on the market last month: a $5 billion stake in Alphabet—roughly 17.9 million shares disclosed on Nov. 14. The move sent Google's stock flying, and it's been on a tear ever since, up over 50% year-to-date and now hovering near all-time highs.Why does this matter? Because Buffett doesn't throw $5 billion at companies lightly. This is essentially the Oracle of Omaha giving his stamp of approval to Alphabet's massive AI bet.**The Numbers Tell a Story**Alphabet's Q3 results dropped just before Berkshire's filing, and they were genuinely impressive:- Revenue jumped 16% YoY to $102.3B (Q2 was 14% growth)- Net income surged 33% to $35B- EPS climbed 35% to $2.87- Google Services (search + YouTube) grew 14% to $87.1B- Google Cloud? That's where things get interesting—34% growth to $15.2BCEO Sundar Pichai basically said it on the earnings call: "AI is now driving real business results across the company."**The AI Spending Spree**Here's the thing—Alphabet isn't just talking about AI. They're putting real money behind it. Capital expenditure guidance got bumped to $91-93B for 2025, up from the previous $85B target. That's almost entirely for data centers and AI infrastructure.Yet somehow, they're still printing cash:- $24.5B in free cash flow last quarter- $73.6B over the trailing twelve months- $98.5B sitting on the balance sheet**The Valuation Question**Even after the 50%+ run-up, Alphabet trades at a P/E of just 28. For a company growing 16% and generating this much cash while reinvesting aggressively in AI? That doesn't scream overvalued.**The Risk Nobody's Talking About**But let's be real—dumping $90B annually into infrastructure has zero margin for error. If AI demand flattens or competition heats up, shareholders are going to feel the pain. Plus, years of depreciation from this capex wave will squeeze reported margins.**The Bottom Line**Buffett's move signals that Alphabet's AI investments aren't reckless—they're strategic. The company has the cash flow and balance sheet to fund this transition. But the stock isn't cheap just because the valuation multiple still looks reasonable. You're paying for execution risk on a multi-year AI buildout.If you believe in Alphabet's competitive moat and AI momentum, the stock probably isn't overpriced. If you think the capex cycle is getting ahead of returns, this might be a time to wait for a better entry.Either way, Berkshire's vote of confidence just made Alphabet impossible to ignore.