Good morning, investors. With the AI era has come plenty of change, but few would have predicted those repercussions would make their way to the steadiest and most productively boring conglomerate in history.

And yet here we are…

Greg Abel envisions a different conglomerate than the one Warren Buffett built.

On Monday, Berkshire Hathaway announced it bought another $10 billion of Alphabet stock in a private placement, bringing its total holdings of the Google parent company above $26 billion.

That makes it larger than Berkshire’s long-time holdings of Bank of America and Chevron, and reinforces the tech-forward pivot led by Abel.

Buffett famously avoided Big Tech for six decades, save for his one position in Apple from 2016. His thesis was always that he didn’t understand new technology well enough to make an informed bet on the sector.

But Abel, who took on the CEO role in January, doesn’t seem to share that hesitation.

In his first quarter at the helm, he raised Berkshire’s Alphabet stake by 224%, and his latest move Monday is an added exclamation point on his bet on Google being an AI winner.

Now, Buffett historically structured Berkshire’s portfolio around insurance, railroads and consumer staples.

Hard to believe that he would have signed off on a venture into AI and cloud.

Letting Alphabet become the conglomerate’s fourth-largest holding — behind Apple, American Express, and Coca-Cola — suggests two things:

This also answers Wall Street’s lingering question as to whether Abel would maintain the status quo built by Buffett, or repurpose it for a new era.

To be sure, Alphabet is not exactly a risky bet in the technology space. There is near-consensus on it being a long-term compounder with or without AI.

That said, it’s still built upon variables that Buffett likely would steer clear of:

The fact that Abel bought in with Alphabet right near all-time highs also points to an executive that isn’t ready to wait decades for a perfect “fat pitch” of a stock.

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🤖 Anthropic filed for its IPO. The company could go public this fall, and the move tentatively puts it ahead of OpenAI’s debut in the stock market. Elon Musk’s SpaceX is set to IPO next week. (WSJ)

🛢Oil climbed with no clarity in the Middle East. Brent crude jumped 2.4% to $93.33 after Israel pushed deeper into Lebanon and Iran reportedly added more mines to the Strait of Hormuz, undercutting a fragile ceasefire. (CNBC)

📈 Nvidia just stormed the PC chip market for the first time in a decade. Jensen Huang unveiled the RTX Spark superchip at Computex on Monday, sending Dell, HP and Microsoft higher with the company now competing with Intel and Qualcomm. (Yahoo Finance)

📊 US factory activity just hit its strongest stretch in 4 years. The ISM Manufacturing PMI rose to 54 in May from 52.7 in April, the highest reading since May 2022 and the fifth straight month of expansion. (Reuters)

🗓 June 2, 1978: The New York Stock Exchange building at 11 Wall Street was designated a National Historic Landmark.

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