Alphabet said it would issue $80 billion of equity, including $10 billion of stock to Berkshire Hathaway, as it funds its huge AI computing infrastructure buildout.
Alphabet said it plans to issue $30 billion in concurrent underwritten public offerings consisting of $15 billion of mandatory convertible preferred stock and $15 billion in its class A and class C common equity. Another $10 billion of stock will be sold to Berkshire in a private placement.
Alphabet also said it plans to issue $40 billion of stock in an “at-the-market” offering starting in the third quarter of 2026.
Alphabet shares were falling as investors reacted to the news of the big equity offerings. Alphabet’s voting Class A stock (GOOGL) class C shares both dropped abou 4% in Tuesday’s morning trading.
The huge equity offering amounts to a surprise. Alphabet did not mention a large potential equity capital raise on its first-quarter earnings call in April. The company has emphasized its strong internal cash flow and it has also raised $85 billion in debt financing over the past year.
Alphabet said in a press release Monday that the equity offering is part of a “balanced way” to fund investments while maintaining a “healthy balance sheet.”
Alphabet’s large equity offering reflects the big size of its capital spending needs, which it said in its first quarter earnings call would total $180 billion to $190 billion in 2026. Alphabet also said on that call that it expects capital expenditures to “significantly increase” in 2027 relative to 2026.
Berkshire will be adding to its already sizable Alphabet holding with the $10 billion of new equity purchases. Berkshire owned about 58 million shares of Alphabet stock at the end of the first quarter that was worth about $22 billion as of Monday’s close.
Berkshire will now hold about $32 billion of Alphabet stock, making it a top equity holding behind only Apple, American Express and about equal toCoca-Cola.
Berkshire is buying Alphabet stock at a nice discount to the closing price of the shares. It is paying about $352 a share for the Class A stock and $348 for the class C stock. That’s a 6%-plus discount to the closing prices of Alphabet stock Monday.
Big equity offerings often are sold at discounts to the market price but the Berkshire discount seems generous given Alphabet’s market capitalization of $4 trillion and the enormous liquidity of its stock.
The deal shows that Alphabet is keen to have Berkshire as a sizable investor even without Warren Buffett at the helm. Buffett was succeeded by Greg Abel as CEO at year-end. The offering could sit well with Berkshire investors who are eager to see the company invest a chunk of its roughly $380 billion in cash.
The $15 billion of Alphabet mandatory convertible preferred stock likely will be sold at $50 a share and will be among the largest such offerings sold. The Alphabet mandatory convertible preferred stock will pay a fixed dividend for three years and then convert into equity based on a predetermined formula. The twin preferred offerings—convertible into class A and class C stock respectively—will trade on the Nasdaq under ticker symbols GOOGM and GOOGN. Mandatory convertible preferred can be less dilutive to issuers than common shares.
Mandatory convertibles often carry dividend yields of 4% or more.
The underwritten offerings are being led by Goldman Sachs, JP Morgan and Morgan Stanley, with Goldman acting as the private placement agent on the Berkshire transaction.
An at-the-market offering that Alphabet is planning to start in the third quarter will allow it to issue $40 billion of equity directly into the market—likely through a group of Wall Street firms.
The large Alphabet equity offering shows how quickly the company has gone from being a large buyer of its stock to an issuer of equity. The company bought back $62 billion of stock in 2024 and $46 billion in 2025. There were no repurchases in the first quarter and now the company is planning to sell $80 billion of stock.
