As Warren Buffett officially stepped down from his CEO role at Berkshire Hathaway at the beginning of 2026, he left behind one final strategic investment blueprint that’s worth examining closely. The legendary investor’s last significant moves in the third quarter involved deploying $6.4 billion across six different stocks, even as Berkshire continued its broader trend of being a net seller of equities.
The Market Context: Why These Purchases Matter
For twelve consecutive quarters, Berkshire Hathaway has sold more stocks than it has purchased. This selling streak underscores just how challenging it has become for one of the world’s most successful investment firms to find compelling value in today’s elevated market environment. When Buffett and his investment team do make purchases in this context, it signals that these companies have passed an exceptionally rigorous screening process.
The third quarter of 2025 saw Berkshire offload significant portions of major holdings, including tech giant Apple, financial powerhouse Bank of America, and internet infrastructure company VeriSign. Against this backdrop of portfolio reduction, the six new additions and position increases become even more noteworthy.
The Six Strategic Additions
Based on Berkshire’s 13F filing with the Securities and Exchange Commission, here are the investments that made the cut:
Alphabet (GOOGL, GOOG): The search and cloud computing giant represents Berkshire’s most significant new position, with 17.8 million shares purchased. This marks a fresh entry into one of technology’s most dominant companies.
Chubb (CB): The global insurance leader saw Berkshire add 4.3 million shares to its existing position. This represents the first increase since Berkshire initially disclosed its Chubb holdings in early 2024, after quietly establishing the position in late 2023.
Domino’s Pizza (DPZ): The pizza delivery chain received an additional 348,000 shares, marking the fifth consecutive quarter that Berkshire has increased this position. This consistent accumulation pattern suggests strong conviction in the company’s business model.
Sirius XM (SIRI): The satellite radio company saw Berkshire add 5 million shares, continuing a multi-year pattern of steady position building in this predictable cash flow generator.
Lennar: The homebuilder received a modest addition of 2,007 shares split between its Class A and Class B stock.
Lamar Advertising: The outdoor advertising company saw an increase of 32,603 shares.
Understanding the Investment Thesis Behind Each Pick
Domino’s Pizza: Winning Where Others Struggle
The pizza delivery sector has faced significant headwinds, yet Domino’s continues to outperform its competitors substantially. Third-quarter same-store sales in the United States grew by 5.2%, significantly outpacing rival chains that have struggled to generate any meaningful growth.
What makes Domino’s particularly attractive from an investment perspective is its technology-driven approach to the traditional pizza business. The company has invested heavily in digital ordering platforms, delivery logistics, and customer data analytics. This operational excellence translates into market share gains even in a challenging consumer spending environment.
The consistent quarterly accumulation pattern—five straight quarters of additions—suggests this isn’t merely a opportunistic position but rather a long-term conviction play on the company’s competitive advantages and execution capabilities.
Sirius XM: Predictable Cash Flows at a Compelling Valuation
While streaming music services from Spotify, Apple, and others have disrupted traditional radio, Sirius XM maintains a defensible position through its unique value proposition and distribution advantages. The company benefits from partnerships with automotive manufacturers, creating a steady pipeline of new subscribers with every new car sale.
The subscription-based revenue model generates highly predictable cash flows, which is exactly the kind of business characteristic that appeals to value-oriented investors. With the vast majority of revenue coming from subscriptions rather than volatile advertising income, earnings visibility remains strong.
Perhaps most compelling is the valuation: Sirius XM currently trades at a forward price-to-earnings ratio below 7. This represents a significant discount to the broader market and suggests the stock is pricing in considerable pessimism about the company’s future prospects. For patient investors willing to look past the streaming competition narrative, this valuation gap presents an opportunity.
Chubb: Scale and Expertise in Complex Insurance
The property and casualty insurance sector is one where scale creates genuine competitive advantages, and Chubb operates at a level few competitors can match. The company’s international footprint and expertise in complex commercial insurance allow it to serve multinational corporate clients with sophisticated risk management needs.
Buffett’s deep expertise in the insurance industry—Berkshire’s own operations include multiple insurance subsidiaries—gives him unique insight into what separates superior insurance operators from mediocre ones. Chubb’s ability to underwrite risks that smaller competitors cannot handle, combined with its diversified geographic presence, creates a durable competitive moat.
The timing of Berkshire’s renewed accumulation is notable. After initially building a position and then pausing for several quarters, the decision to resume buying in the third quarter suggests either improved valuation or increased conviction in the company’s strategic direction.
Alphabet: The Standout Investment
Among the six additions, Alphabet deserves special attention for several reasons. First, it represents a departure from typical Berkshire investments, particularly given Buffett’s historical reluctance to invest heavily in technology companies. While some analysts believe one of Berkshire’s other investment managers may have led this purchase, Buffett has publicly expressed admiration for Alphabet’s business model in the past.
Why Alphabet Represents Exceptional Value
The Enduring Power of Search
Google’s search engine generates extraordinary economics. Despite widespread predictions that artificial intelligence chatbots would disrupt search advertising, Alphabet has successfully integrated AI capabilities into its core product in ways that enhance rather than cannibalize the business.
The introduction of AI Overviews has actually increased user engagement with search results while maintaining robust monetization through advertisements. This demonstrates management’s ability to adapt to technological change while protecting the economic engine that drives the business.
The results speak for themselves: Google advertising revenue growth has accelerated throughout 2025, reaching 15% growth in the most recent quarter. This acceleration occurred even as the company integrated AI features that some feared would reduce ad inventory or click-through rates.
Free Cash Flow Generation at Scale
Over the trailing twelve months, Alphabet has generated $73.5 billion in free cash flow. This massive cash generation occurs even as the company invests heavily in building data center infrastructure to support its rapidly growing cloud computing business.
This combination—strong current cash flows funding significant growth investments—represents exactly the kind of business quality that creates long-term shareholder value. Companies that can simultaneously return capital to shareholders while funding organic growth opportunities are relatively rare, particularly at Alphabet’s scale.
Google Cloud: The High-Growth Opportunity
While search advertising provides the stable cash flow foundation, Google Cloud Platform represents Alphabet’s major growth driver. Revenue has been growing in the low-30% range quarter after quarter, driven by strong demand for cloud infrastructure and AI services.
Even more encouraging, the backlog of committed customer contracts is growing faster than current revenue, suggesting this growth trajectory has sustainability. As the cloud business scales, operating margins have expanded significantly, reaching 24% in the most recent quarter.
This margin expansion is crucial because it demonstrates that Google Cloud isn’t just growing revenue but improving the underlying economics of the business. Scale advantages in data center operations, software development, and customer support are translating into profitability improvements.
Capital Allocation Excellence
Alphabet’s approach to capital allocation embodies principles that value investors appreciate. The company has implemented a substantial share repurchase program that consistently reduces the share count, increasing per-share value for remaining shareholders. Additionally, Alphabet has initiated a dividend program, providing direct cash returns to investors.
These capital return programs don’t compromise the company’s ability to invest in growth. The massive free cash flow generation supports both growth investments and shareholder returns simultaneously, a testament to the underlying business strength.
Valuation Considerations
While Alphabet’s stock price has appreciated since Berkshire’s third-quarter purchase, the current forward price-to-earnings ratio of approximately 29 still represents reasonable value for a business with this combination of characteristics: dominant market position, accelerating growth, expanding margins, and strong cash generation.
Compared to other large-cap technology companies, Alphabet trades at a discount despite comparable or superior fundamentals in many cases. The market appears to undervalue the durability of the search advertising business and the long-term potential of the cloud platform.
Key Investment Themes Across the Portfolio
Looking across all six investments, several common threads emerge that reveal the investment philosophy guiding these decisions:
Competitive Advantages: Each company possesses some form of sustainable competitive advantage, whether through scale (Chubb, Alphabet), brand and operational excellence (Domino’s), or unique distribution (Sirius XM).
Cash Flow Predictability: With the possible exception of the homebuilder Lennar, these businesses generate predictable cash flows that provide visibility into future earnings.
Reasonable Valuations: None of these purchases required paying excessive multiples. Each offers a combination of quality and value that’s increasingly difficult to find in today’s market environment.
Management Quality: These companies are led by management teams with track records of navigating competitive and technological challenges successfully.
Implications for Individual Investors
While few investors have Berkshire Hathaway’s resources or investment timeline, there are valuable lessons in these portfolio moves:
Patience Pays: The willingness to sell more than you buy for twelve straight quarters while waiting for genuine opportunities demonstrates disciplined patience. Investors shouldn’t feel pressured to deploy capital in expensive markets.
Quality Over Quantity: Six carefully selected positions totaling $6.4 billion suggests depth of analysis rather than broad diversification for its own sake.
Look Beyond Headlines: Sirius XM faces a “streaming threat” narrative, yet careful analysis reveals a more nuanced picture with attractive risk-reward dynamics at current valuations.
Technology Isn’t Monolithic: Not all technology investments carry the same risk profile. Alphabet’s combination of mature cash-generating businesses and growth opportunities creates a more balanced risk profile than pure-play growth stocks.
The Bottom Line
Among Berkshire Hathaway’s latest additions, Alphabet stands out as particularly compelling for investors seeking to follow this legendary investor’s footsteps. The combination of dominant market position in search, rapidly growing cloud business, massive cash generation, and reasonable valuation creates an attractive investment profile.
However, each of the six stocks offers something valuable: Domino’s operational excellence in a competitive industry, Sirius XM’s cash flows at bargain valuations, Chubb’s insurance expertise and scale, and the smaller positions in Lennar and Lamar Advertising that round out the portfolio.
As Buffett transitions from his CEO role, these final investment decisions serve as a reminder of the principles that have guided Berkshire Hathaway’s success: focus on business quality, demand reasonable valuations, and maintain the patience to wait for genuine opportunities even when markets make that difficult.
For investors building their own portfolios in 2026’s challenging market environment, these principles remain as relevant as ever.
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