Buffett's successor began using huge amounts of cash! Berkshire (BRK.A.US, BRK.B.US) added a net purchase of nearly $20 billion in shares of Delta Air Lines (DAL.US) and Alphabet (GOOGL.US) in the second quarter

The Zhitong Finance App learned that Berkshire Hathaway (BRK.A.US, BRK.B.US) further increased its holdings in Delta Air Lines (DAL.US) and Google's parent company Alphabet (GOOGL.US) in the second quarter. With Greg Abel succeeding Warren Buffett as CEO, the investment giant began to gradually use its huge cash reserves to increase stock investment and mergers and acquisitions.

In the second full quarter after Abel took over as CEO, the company increased its holdings of Delta Air Lines by 17.5 million shares, according to regulatory documents submitted by Berkshire on Friday. By the end of June, Berkshire's shares in Delta had reached a value of US$5.37 billion.

At the same time, Berkshire significantly increased its Alphabet holdings and purchased an additional 48.1 million shares in the second quarter. As of mid-year, Alphabet's holdings reached 37.8 billion US dollars, making Alphabet the third-largest stock holdings in Berkshire.

Berkshire previously revealed when announcing its second-quarter results that the company's net share purchases for the quarter were close to 20 billion US dollars, while spending about 4.5 billion US dollars to buy back its own shares. This marks a marked change in Berkshire's capital allocation strategy.

As investments and repurchases expanded, Berkshire's cash reserves also began to decline. By the end of June, the company held US$365.5 billion in cash, a decrease of US$31.5 billion from the record of US$397 billion at the end of March, but the overall cash volume is still at an all-time high.

During Buffett's last few years at the helm, Berkshire's large-scale investment and mergers and acquisitions activities were relatively cautious due to his many beliefs that the market was overvalued. After Abel took over, the company continued to push for multiple multi-billion dollar deals in the second quarter, indicating that it is more actively deploying Berkshire's cash accumulated over the years.

Among them, Berkshire spent $6.8 billion to acquire homebuilder Taylor Morrison Home, continuing the company's long-favored value investment style. The deal was completed last month.

On the other hand, Berkshire is also investing $10 billion into Alphabet to support the latter's investments related to artificial intelligence. For Berkshire, whose investment style has long been relatively traditional, this means that the company is beginning to invest more capital in emerging fields such as AI.

Overall, from a significant increase in Alphabet and Delta Air Lines, to net share purchases of nearly 20 billion US dollars and share repurchases of 4.5 billion US dollars, to continuous promotion of large-scale acquisitions and AI-related investments, Berkshire is gradually speeding up the pace of capital deployment after Abel took over. Although the company still holds more than $360 billion in cash, its investment strategy is clearly more positive than the cautious state of previous years.