Warren Buffett’s Berkshire Hathaway made a significant move by buying Alphabet stock in the third quarter, quickly becoming the 10th-largest position in their portfolio. The purchase of $4.3 billion worth of Alphabet shares was influenced by a key data point that emerged in Q3.

Alphabet’s stock had a strong year, with a 46% total return YTD, but faced challenges earlier in the year. The company’s valuation was below market, prompting concerns about potential disruption to its Search business. However, improvements in paid click growth and innovative Search features led to a positive outlook.

Alphabet’s reacceleration in paid clicks during Q2 following strong earnings results may have influenced Buffett’s decision to buy shares. The introduction of AI mode and sustained growth in paid clicks showcased Alphabet’s ability to enhance its Search ecosystem, alleviating concerns about potential decline in Search activity.

Alphabet’s solid performance in Q3, with a 7% increase in paid clicks year over year, coupled with a reasonable valuation of 28 times trailing earnings, positioned the company well for future growth. With key businesses like Search and Cloud thriving, Buffett’s investment in Alphabet appears to be a strategic move for long-term gains.

Read more at Nasdaq: Warren Buffett Just Bought Alphabet Stock, and Here’s The Likely Reason Why