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Google CEO Sundar Pichai
Google CEO Sundar Pichai (Jakub Porzycki/Getty Images)

Google jumps as Berkshire Hathaway reveals $5.1 billion stake, search giant announces $40 billion investment in Texas data centers

A double dose of big news after the close on Friday.

Luke Kawa

Google popped at the end of last week and is building on those gains in premarket trading on Monday thanks to a double dose of news after the close on Friday. The firm announced plans to bolster its data center footprint and got a long overdue seal of approval from Warren Buffett’s Berkshire Hathaway.

The search giant announced plans to invest $40 billion through 2027 to build three data center campuses in Texas, its largest investment in any US state.

That’s another hefty chunk added to the huge and growing pile of AI capital expenditure by the hyperscalers that dominate the S&P 500. And it’s the latest addition to a number of AI-linked investment dollars going to the Lone Star State, with Meta, Anthropic, Fermi, IREN, and Oracle all recently outlining fresh spending commitments or progress on projects in the pipeline.

“Google’s $40 billion investment in new data centers in Texas is a further sign of the geographic diversification of Alphabet’s data-center infrastructure, where its lower token cost advantage stands to aid market share in both enterprise APIs and consumer applications,” wrote Bloomberg Intelligence analysts Mandeep Singh and Robert Biggar. “Increased availability of its TPU chips, both through its own data centers and neoclouds, can hasten the Google Cloud segment’s share gains in AI workloads vs. hyperscale cloud peers including Microsoft Azure and Amazon AWS.”

In addition, Berkshire Hathaway’s 13F filing showed that the conglomerate amassed a significant position in Alphabet at the end of the third quarter, worth about $5.1 billion after the stock’s jump in after-hours trading on Friday.

Warren Buffett and his since deceased vice chairman, Charlie Munger, lamented on multiple occasions missing out on Google’s meteoric rise, with the Oracle of Omaha noting that its insurance subsidiary Geico was contributing to its ad business success in Google’s early days. At Berkshire’s 2017 annual meeting, Buffett said he “blew it” by passing on Google shortly after its IPO.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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