A $7 Billion Secret Purchase: Berkshire May Have Invested in Microsoft — Barron’s

Berkshire Hathaway, the investment firm founded by Warren Buffett, may have opened a position in Microsoft for the first time, taking advantage of the decline in the stock price this spring, Barron's speculated. In a recent report, Berkshire announced that it had begun to draw down the cash reserves accumulated by the legendary investor: it invested $23.5 billion in stocks, and for the first time in more than three years, the value of purchases exceeded the value of sales.

Barron’s bases its speculation about new Berkshire deals on data from the quarterly Form 10-Q, which was published on August 8. In this document, the investment firm listed its five largest holdings as of the end of the second quarter: Alphabet, Apple, American Express, Bank of America, and Coca-Cola. Berkshire also disclosed that these five holdings accounted for 66% of its total portfolio, valued at $324 billion.

In June, Alphabet had already reported that Berkshire had purchased an additional $10 billion worth of its shares in a private transaction. But Barron’s believes the stake was increased even further. By comparing the total value of the top five holdings with the figures for the other companies on the list, the publication concluded that Berkshire’s stake in Alphabet has grown to approximately 100 million shares worth $35 billion. This suggests that the investment firm may have purchased additional shares on the open market, pushing Alphabet into third place among its largest holdings—on par with Coca-Cola, the article states.

After analyzing Alphabet’s financials, Barron’s came up with a hypothesis about the fate of the remaining expenditures—approximately $7 billion. In the same 10-Q report, Berkshire recorded a sharp increase in investments in the “commercial, industrial, and other companies” category, which is more than could have been invested in Alphabet, the publication notes. It speculates that this money could have been used to open a new position in Microsoft.

If this hypothesis is correct, the holding company entered the asset at an extremely opportune moment: Since late July, the IT giant’s stock has risen 30% on the back of strong earnings reports, and analysts at Bernstein and JPMorgan forecast further growth of another 25–30%.

The past quarter was one of the busiest for Berkshire in recent years: for the first time in three years, the conglomerate bought significantly more shares than it sold. Total purchases exceeded $23 billion, while sales amounted to $3.7 billion. By comparison, in the first quarter, the holding company divested $24 billion in assets.

Part of the funds was directed toward foreign markets: Berkshire invested nearly $2 billion in shares of the Japanese insurance company Tokio Marine, and at least another $1 billion in Japanese trading houses, where the holding company’s total stake already exceeds $35 billion.

The detailed breakdown of all of Berkshire’s transactions in the second quarter will be disclosed when the company files its Form 13-F report. Large institutional investors are required to file this information with the regulator within 45 days after the end of the quarter. In this case, the deadline is August 14.

This article was AI-translated and verified by a human editor