Key points:

• Alphabet shares slide 1%
• Berkshire to buy $10B worth
• $30 billion to come from public

Search giant is seeking to expand its AI computing infrastructure. Berkshire is in with $10 billion.

🤖 AI Spending Comes With a Bill

• Alphabet shares GOOGL slipped about 1% in after-hours trading Monday after the company unveiled a massive $80 billion equity raise. Investors usually get nervous when new shares hit the market because issuing stock can dilute existing shareholders’ ownership.
• The fundraising package includes $15 billion in mandatory convertible preferred stock, $15 billion in common shares sold through public offerings, and another $40 billion through an “at-the-market” program planned for later in 2026.
• The surprise factor is here, too. Alphabet hadn’t signaled a giant equity raise during its April earnings call, where management emphasized strong cash flow despite already raising roughly $85 billion in debt over the past year.

🏗️ Building the AI Empire

• Alphabet says the money is needed to fuel its AI infrastructure buildout. Translation: data centers, chips, networking equipment, and enough computing power to train and run increasingly complex artificial intelligence models.
• The company expects capital expenditures of $180 billion to $190 billion in 2026 and warned spending could climb even higher in 2027. That’s an eye-watering figure even by Big Tech standards.
• Management described the stock offering as a “balanced” way to fund growth while maintaining a healthy balance sheet. Investors, however, are now weighing future AI opportunities against the cost of financing them.

🐂 Berkshire Doubles Down

• While some traders headed for the exits, Berkshire Hathaway reached for its wallet. The conglomerate agreed to buy $10 billion of Alphabet stock in a private placement, signaling confidence in the company’s long-term outlook.
• Berkshire already owned roughly 58 million Alphabet shares worth about $22 billion at the end of the first quarter. The new purchase boosts that stake to around $32 billion.
• That makes Alphabet one of Berkshire’s largest equity positions, sitting next to major holdings like Apple and American Express, and roughly on par with Coca-Cola.

Source: Tradingview