A 13F filing by Berkshire Hathaway for the first quarter of 2026 points to more active portfolio management and a greater concentration of selected exposures. The company significantly increased its stake in Alphabet and added a new position in Delta Air Lines. At the same time, Berkshire fully exited several major holdings, including Amazon, UnitedHealth, Visa and Mastercard.
According to Charu Chanana, Chief Investment Strategist at Saxo Bank, the first signs of Greg Abel’s strategy do not suggest a departure from Warren Buffett’s principles, but rather their adaptation to today’s market environment. In practice, this means applying value investing to a market in which technology platforms now generate the cash flows, scale and durable competitive advantages once associated mainly with leaders of the traditional economy.
Abel’s Emerging Strategy: Buffett’s Principles Adapted to the AI Economy
For decades, classic value investing was associated primarily with banks, consumer staples, insurance companies, railways, energy and industrial businesses. The structure of the market, however, has changed significantly. Alphabet, Microsoft, Apple and other global technology platforms are no longer seen purely as “growth stocks.” They have recurring revenues, global scale, high margins, substantial cash-generation capacity and the ability to fund large investment cycles from their own resources.
This gives them some defensive characteristics, even if their valuations remain demanding.
The message of the Abel era can be summed up simply: value is no longer defined by sector. It is defined by the durability of cash flows and the strength of competitive advantage.
Big Tech Is Becoming Defensive Growth
The largest technology companies are increasingly treated not only as sources of growth, but also as a form of balance-sheet quality in an uncertain macroeconomic environment. This matters in a world of higher bond yields, elevated geopolitical risk, inflationary pressure and uneven economic growth.
In such conditions, companies with net cash positions, pricing power, recurring revenues and high returns on capital naturally become more attractive.
This does not mean that the largest technology companies are risk-free. It means that the strongest among them are now being used by investors as a combination of growth exposure and quality exposure.
AI Exposure Is Becoming More Selective
The artificial intelligence trend is not over, but it is maturing.
The market is gradually moving away from rewarding every company linked to the AI narrative. Investors are becoming more focused on the difference between AI spending, AI-related revenues and the margins generated by AI.
That is why the actions of major investors matter. Some are increasing positions in Alphabet, others in Microsoft, while others are rotating between the same mega-cap technology names.
The message remains clear: AI is still a powerful market driver, but the selection of winners will increasingly depend on fundamentals and the specific characteristics of each company.
Portfolio Concentration Is Rising, but Retail Investors Should Be Careful
Berkshire Hathaway’s portfolio became more concentrated in the first quarter. This fits a broader market pattern: many leading investors are focusing exposure on a smaller number of companies in which they have stronger conviction.
However, this should not be read as a signal for individual investors to blindly build highly concentrated portfolios. In a market driven by growing differences in earnings, balance-sheet quality and AI exposure, investors should assess more carefully what role each holding plays in their portfolio.
What Does This Mean for Investors?
The Definition of “Value” Is Changing
Berkshire Hathaway’s move toward Alphabet is a reminder that value investing does not have to mean avoiding the technology sector. In today’s market, some of the best “cash-generating machines” are global technology platforms.
The key distinction is between buying technology simply because it is fashionable and investing in technology companies because of the durability of their business model, scale, competitive advantages and ability to generate free cash flow.
Berkshire’s move appears closer to the second category.
Big Tech Remains Crucial, but Selectivity Matters More
Alphabet, Microsoft, Apple, Amazon, Meta and Nvidia all form part of the technology ecosystem, but their risk factors are different. These include advertising, cloud computing, devices, enterprise software, AI infrastructure, semiconductors, capital expenditure and regulation.
The next phase of the AI trend may depend less on broad exposure to the narrative itself and more on identifying companies where artificial intelligence investment actually translates into revenue growth, margin resilience and free cash flow generation.
Quality Matters More When Yields Are High
Higher bond yields raise the bar for equities. This makes companies with weak balance sheets, distant profits or uncertain cash flows more vulnerable to pressure.
That is why many large investors continue to favor companies with pricing power, scale and high returns on capital. In a world where the cost of capital is no longer close to zero, quality is not a luxury. It is a risk-management tool.
The Old Economy Has Not Disappeared
Berkshire Hathaway still holds significant positions in financials, branded consumer companies and energy. The purchase of Delta Air Lines shares and the reduction of the Chevron position also show that the portfolio is not moving one-way into technology.
In other words, Berkshire appears to be building a portfolio based on cash flows from both the old and new economy. This is an important lesson for investors: AI may remain a key investment theme, but it does not remove the need for diversification across sectors, business cycles and sources of risk.
Conclusion
Investors who are especially sensitive to valuations are increasingly finding room in their portfolios for the largest technology companies, provided the quality of their business models remains high enough.
Berkshire Hathaway’s increased position in Alphabet should not necessarily be interpreted as a call to chase the AI trend. Rather, it is a signal that the line between value investing and growth investing has become increasingly blurred.
For investors, the conclusion is clear: the largest technology companies remain an important part of the market, AI still has structural potential, but selectivity is becoming crucial. The winners of the next phase may not be the companies with the loudest AI story, but those able to turn artificial intelligence spending into durable cash flows.
