Warren Buffett, a legendary investor, built Berkshire Hathaway (BRKA +0.97%) (BRKB +0.89%) into a highly respected investment firm. His insights have influenced many investors, and even in retirement, his successor, Greg Abel, has largely maintained Buffett's investment strategies and positions.

While Buffett wasn't primarily known for investing in technology, he did acquire a significant stake in Alphabet (GOOG +0.87%) (GOOGL +0.97%) shortly before stepping down. Abel recognized further value in Alphabet and increased Berkshire's investment during the second quarter, indicating a strong belief in the company's potential.

Alphabet aligns with many of Buffett's investment principles. Although it engages in advanced technologies, at its core, it operates as an advertising marketplace, generating substantial revenue through platforms like Google and YouTube, which rank among the most visited websites globally.

Additionally, Alphabet's cloud computing segment is gaining traction. While it supports various advanced technologies such as AI, it fundamentally functions as a rental business, providing excess computing capacity to clients.

Alphabet also boasts a successful investment arm, having made lucrative investments in companies like Space Exploration Technologies and Anthropic. Acknowledging its limitations in investing in cutting-edge firms, Berkshire's investment in Alphabet allows it to benefit from these ventures.

As a result, Alphabet has become Berkshire's third-largest holding when considering both classes of its shares. However, as value investors, Buffett and Abel must assess whether Alphabet's stock still presents a worthwhile investment opportunity.

In comparison to Berkshire's largest holding, Apple, Alphabet's valuation appears more attractive. Apple, which has significantly contributed to Berkshire's growth, currently trades at a premium, with a price-to-earnings ratio of around 23 times projected earnings for the next year.

This stark difference in valuations highlights Alphabet's potential, especially as it positions itself in various industries, including AI. Buffett's prior investment in Alphabet and Abel's subsequent purchases suggest a strong belief in the company's future prospects.

If Alphabet is deemed a solid investment by one of the world's leading investment firms, it may also represent a wise choice for individual investors.