Why Alphabet Emerges as Warren Buffett's Top Nine Quarter Pick—And Why Long-Term Growth Potential Matters More Than Current Valuations

Berkshire Hathaway’s latest quarterly filing reveals that the investment conglomerate added stakes across nine different stocks during Q3, but one holding stands distinctly apart when evaluating multiyear appreciation potential. While several of these acquisitions offer compelling near-term attractions—whether through attractive valuations or dividend yields—Alphabet demonstrates the strongest foundation for sustained capital appreciation driven by transformative technology trends.

The Full Portfolio of Q3 Acquisitions

Warren Buffett’s team deployed capital across a diverse set of businesses in the most recent quarter. Alphabet (the Google parent company) received the largest single investment, with Berkshire acquiring over 17.8 million shares valued at approximately $4.3 billion. This purchase reversed Buffett’s earlier regret about not establishing a position in Google sooner.

Beyond the tech titan, Berkshire expanded positions in several established operators. Chubb, the property and casualty insurance provider, saw an additional 4.3 million shares added to the portfolio. The satellite radio and podcast operator Sirius XM Holdings received a 4.2% boost to Berkshire’s existing stake. Domino’s Pizza experienced a roughly 13.2% increase in Berkshire’s holdings, demonstrating renewed appetite for the franchise model.

Real estate exposure was also reinforced through increased stakes in both share classes of Lennar, marking consecutive quarters of this homebuilder addition. Lamar Advertising rounded out the media and communications theme with a modest purchase of over 32,000 additional shares. International diversification came through expanded positions in Japanese conglomerates Mitsubishi and Mitsui, revealed through their own filings in late summer and early fall.

The Valuation Paradox: Why Cheapness Isn’t Everything

The nine stocks Berkshire acquired in Q3 display sharply different financial profiles. Sirius XM commands attention from a valuation perspective, trading at a forward price-to-earnings multiple of just 7.1—the most attractive among the group. Chubb follows with a forward P/E of 11. These compressed multiples traditionally represent Buffett’s core investment thesis: purchasing quality assets at discounted prices.

Income-focused investors might equally favor Sirius XM for its 5% forward dividend yield, with Lamar Advertising close behind at 4.8%. These cash-generation characteristics appeal to those prioritizing near-term returns.

However, 2025 trading patterns suggest a more nuanced story. Alphabet shares have appreciated roughly 50% year to date, substantially outpacing most peers. Mitsubishi has climbed nearly as sharply, while other positions have delivered more modest gains. The performance gap hints at a distinction between value traps and genuine growth compounding.

The Case for Alphabet as the Superior Long-Term Vehicle

Despite lacking the cheapest valuation or highest yield among the nine purchases, Alphabet emerges as the most likely to generate outsized returns across the investment horizon. This conclusion rests not on current momentum but on fundamental transformations reshaping the company’s future earnings power.

The artificial intelligence revolution continues accelerating, and Google’s ecosystem is uniquely positioned to capture disproportionate value. Google Cloud infrastructure increasingly powers enterprise generative AI deployments, with adoption curves still in early stages. This business unit should become a material profit contributor as customers build production-grade applications throughout the remainder of the decade.

Waymo, Alphabet’s autonomous vehicle division, commands leadership in the emerging robotaxi market. While this sector remains nascent, the addressable opportunity rivals—or potentially exceeds—Alphabet’s current advertising revenue pool. Materialization of this optionality would fundamentally expand the company’s growth runway.

Extended reality represents another frontier where Alphabet holds competitive advantages. Its Android XR operating system positions the company to capture meaningful share in smart glasses and immersive computing, should these categories achieve mainstream adoption.

Quantum computing breakthroughs from Google Quantum AI could unlock entirely new categories of value, though this remains more speculative than current AI applications or Waymo’s near-term trajectory.

Why This Matters for Succession Planning

Buffett is ceding the CEO role to Greg Abel with this new investment as part of his legacy. The choice to significantly deploy capital into Alphabet signals confidence in multiple growth vectors extending well beyond the 2020s. It represents a philosophical endorsement of companies positioned at inflection points rather than mature-but-stable operators—a meaningful statement about where long-term compounding will originate.

The nine stocks acquired in Q3 collectively demonstrate Berkshire’s investment discipline, but Alphabet distinguishes itself as the probable compounding engine for the next decade and beyond.