Name: Warren Buffett Just Bought an AI Stock.
Uploaded: 2025-11-20T18:02:44.000Z
Duration: 11 min 24 s
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Warren Buffett just made the biggest investment of his life.

He has never invested in Tesla, Nvidia or Google.

The recent F13 filing shows that Warren Buffett, for the first time ever invested in Google.

And that is very strange and unusual because we are in this hyper inflated market and the entire stock market does not make sense.

And that's why Warren Buffett has been accumulating cash for the last three years and is almost on $400 billion worth of cash.

So what exactly has changed and why Warren Buffet suddenly wanted to invest in Google?

Warren Buffett's investing strategy has always been Benjamin Graham's strategy.

You buy troubled businesses at an extremely cheap price and then you restructure and improve them and then sell them for a higher price.

Once these businesses start to generate revenue, imagine in the streets and you find a really bad business.

I mean, they have some good products, but the company is going through some kind of a crisis.

But it needs some improvements, some investments, and

once it's fixed, then it can be sold at a higher price.

Imagine there is a very bad piece of real estate in a very good neighborhood.

You buy the property, renovate it, fix it, and then you sell it for a higher price.

That is the investing strategy that Benjamin Graham laid very clearly in his video, very famous book, the Intelligent Investor.

But after following this strategy for decades, Warren Buffett realized that this is a very bad strategy.

And you should not be following this strategy.

Bad businesses take a lot of time, they take a lot of stress, and

very rarely they are turned into great businesses.

What is a far better investing strategy is to focus initially on very great businesses at a fair price.

If there is a great business, that business is run by very passionate people who know exactly what they're doing.

They have products that are always there in demand.

Take an example of Apple, which is a great business.

You first get yourself an iPhone, then a MacBook, then an iPad, and

then suddenly you realize that your entire life consists of Apple products.

Great businesses also have brand loyalty.

When you see the brand, you're like, oh, I like that.

I'm gonna buy that because I trust that brand.

The reason that so many people buy Nike shoes is because there is such a strong brand loyalty.

If you see that Nike sign, then you know that that's the kind of shoes that you want to wear.

Since they have such great products, they are run by very passionate people.

You just buy these businesses and you never sell them unless the fundamentals of the business change.

If suddenly the brand loyalty is lost, suddenly the management is bad.

Suddenly they start producing very bad quality products and that's when you sell that business.

The problem with these companies is that they attract a lot of investors.

Suddenly everybody wants to buy in that business and that's why you see their stock price skyrocket to the roof.

It is very difficult to find such businesses at a fair price.

They have such a strong brand loyalty and they are actually changing the world.

But the problem with Palantir is that there is so much demand to Palantir that their stock price is not being backed by earnings.

And that's why the trick with this strategy is that you want to buy that business at a fair price.

At a price that you know for a fact that is being backed by real earnings behind it.

When Apple already developed the iPhone, it developed its business strategy.

And since then the stock has grown by over a thousand percent.

Why would you buy a troubled business when you have a great business that has already grown by a thousand percentage points?

And the only reason that he sold a substantial amount of his investments in Apple is not because something has changed with Apple, but

rather his Apple investment became so big that it dominated his entire portfolio.

In fact, back in 2017, in his annual letter to shareholder, he told the shareholder that he regrets not buying Google and Amazon.

These two businesses were extremely great because Warren Buffett holds a lot of small businesses.

And all of these small businesses use Google Ads to advertise their products.

So basically, if your businesses are using Google to sell their products, well, maybe you should be investing in Google because they have a product that every business on earth wants.

But the trick in investing is that you don't buy businesses just because they are great.

You buy great businesses at a fair price.

And that's what differentiates a great investor from a beginner.

Because those old beginner investors who try to tell you that you should buy Tesla, Palantir or Nvidia, yeah, they're going to give you a very good reasons for.

The price of that stock is over inflated.

The demand is so strong that the stock price is shot to the roof.

And that's why Warren Buffett was waiting until the price of the stock drops to the point where that price is backed by real earnings.

And it seems like we've got to the point where it's time to buy Alphabet.

The stock market is certainly overvalued and most tech stocks are being sold way above that the real valuation.

But if you look at Google stock price, even though that its valuation is about $3.5 trillion, it is PE ratio is about 28.

PE ratio basically is how much investors are paying for a single earnings of the company.

So the higher the P E ratio, the more investors are paying in hopes that that company is going to generate a lot more money.

For tech companies, a pe ratio of 20 to 20 to 25 is considered normal.

Alphabet is not insanely overvalued like Palantir, that has a P e ratio of 200 or 300.

There was a time where Tesla's PE ratio was like 850.

And that's why since then the price of Tesla stock has dropped.

Some might say that, well, the market cap is like $3.5 trillion.

The market cap could be even $10 trillion.

That doesn't have to check the market cap and see if it's being backed by real earnings.

In 2024, the company generated a revenue of $350 billion and a net income of $100 billion.

There aren't many companies that can tell you that we have a net income of $100 billion.

I don't think even Nvidia, which worth over $5 trillion, I think its valuation has already dropped since then, is not even making $100 billion.

And yet Nvidia has a $5 trillion valuation and Google has a much lower valuation.

And these are the revenues and net income for the last year.

This year, Google is expected to generate $400 billion in revenue and a net profit of $115 billion.

The company is making far more than Nvidia.

And in its market cap, it's far, far lower.

And that's why maybe you should be buying Google and not Nvidia.

Nvidia's revenue and profit margin exploded just in recent years because we have this AI rush that is happening and everybody wants GPUs from Nvidia.

And since there is such a huge demand that Nvidia can fulfill, they have risen their prices.

But in a year or two, most likely they will have to lower down their prices to stay competitive.

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