By Cameron Shackell, The College of Queensland; Queensland College of Know-how
The world’s most dear publicly listed firm, US microchip maker Nvidia, has reported document $US57 billion income within the third quarter of 2025, beating Wall Road estimates. The chipmaker mentioned income will rise once more to $US65 billion within the final a part of the yr.
The higher than anticipated outcomes calmed international buyers’ jitters following a tumultuous week for Nvidia and broader worries concerning the synthetic intelligence (AI) bubble bursting.
Simply weeks in the past, Nvidia grew to become the primary firm valued at greater than $US5 trillion – surpassing others within the “magnificent seven” tech firms: Alphabet (proprietor of Google), Amazon, Apple, Tesla, Meta (proprietor of Fb, Instagram and Whatsapp) and Microsoft.
Nvidia shares have been up greater than 5% to $US196 in after-hours buying and selling instantly following the outcomes.
Over the previous week, information broke that tech billionaire Peter Thiel’s hedge fund had offered its whole stake in Nvidia within the third quarter of 2025 – greater than half one million shares, value round $US100 million.
However in that very same quarter, an much more well-known billionaire’s agency made a shock wager on Alphabet, signalling confidence in Google’s skill to revenue from the AI period.
Fortune Dwell Media, CC BY-NC-ND
Buffett’s new stake in Google
Based mostly in Omaha, Nebraska in the US, Berkshire Hathaway is a worldwide investing big, led for many years by 95-year-old veteran Warren Buffett.
Berkshire Hathaway’s newest quarterly submitting reveals the corporate gathered a US$4.3 billion stake in Alphabet over the September quarter.
The dimensions of the funding suggests a strategic determination – particularly as the identical submitting confirmed Berkshire had considerably offered down its huge Apple place. (Apple stays Berkshire’s single largest inventory holding, at the moment value about US$64 billion.)
Buffett is about to step down as Berkshire’s chief government. Analysts are speculating this funding might supply a pre-retirement clue about the place sturdy earnings within the digital financial system may come from.
Buffett’s document of selecting winners with ‘moats’
Buffett has picked many winners over the many years, from American Categorical to Coca Cola.
But he has lengthy expressed scepticism towards expertise companies. He additionally has type in getting huge tech bets improper, most notably his underwhelming funding in IBM a decade in the past.
With Peter Thiel and Japan’s richest man Masayoshi Son each not too long ago exiting Nvidia, it could be tempting to assume the “Oracle of Omaha” is popping up because the occasion is ending.
However that framing misunderstands Buffett’s funding philosophy and the character of Google’s enterprise.
Buffett shouldn’t be late to AI. He’s doing what he’s at all times finished: betting on an organization he believes has an “financial moat”: a built-in benefit that retains opponents out.
His agency’s newest transfer indicators they see Google’s moat as widening within the generative-AI period.
Two alligators in Google’s moat
Google received the search engine wars of the late Nineties as a result of it excelled in two key areas: decreasing search price and navigating the regulation.
Over time, these benefits have acted like alligators in Google’s moat, preserving opponents at bay.
Google understood earlier and higher than anybody that decreasing search price – the effort and time to seek out dependable info – was the web’s core financial alternative.
Joi Ito/Wikimedia Commons, CC BY
Firm founders Sergey Brin and Larry Web page began with a revolutionary search algorithm. However the actual innovation was the enterprise mannequin that adopted: freely giving seek for free, then auctioning off extremely focused promoting beside the outcomes.
Google Advertisements now brings in tens of billions of {dollars} a yr for Alphabet.
However establishing that enterprise mannequin wasn’t straightforward. Google needed to weave its method by way of pre-internet mental property regulation and international anxiousness about change.
The search big has fended off actions over copyright and emblems and managed worldwide regulatory consideration, whereas defending its model from scandals.
These enterprise superpowers will matter as generative AI mutates how we search and brings a brand new wave of scrutiny over mental property.
Berkshire Hathaway seemingly sees Google’s observe document in these areas as a bonus rivals can’t simply copy.
What if the AI bubble bursts?
Maybe the genius of Berkshire’s funding is recognising that if the AI bubble bursts, it may carry down a few of the “magnificent seven” tech leaders – however maybe not its most sturdy members.
Client-facing giants like Google and Apple would most likely climate an AI crash properly. Google’s core promoting enterprise sailed by way of the worldwide monetary disaster of 2008, the COVID crash, and the inflationary bear market of 2022.
In contrast, newer “megacaps” like Nvidia might battle in a downturn.
A lot may nonetheless go improper
There’s no assure Google will be capable to capitalise on the brand new economics of AI, particularly with so many ongoing mental property and regulatory dangers.
Google’s model, like Buffett, may simply get outdated. Youthful persons are utilizing engines like google much less, with extra utilizing AI or social media to get their solutions.
New tech, resembling “agentic procuring” or “recommender methods”, can more and more bypass search altogether.
However with its rivers of internet marketing gold, expertise again to the daybreak of the industrial web, and capability to make use of its platforms to nurture new habits amongst its huge person base, Alphabet is much from a nasty wager.
Disclaimer: This text gives normal info solely and doesn’t take into consideration your private targets, monetary scenario, or wants. It’s not supposed as monetary recommendation. All investments carry threat.
Cameron Shackell, Adjunct Fellow, Centre for Coverage Futures, The College of Queensland; Queensland College of Know-how
This text is republished from The Dialog underneath a Artistic Commons license. Learn the authentic article.