Is Buffett entering the AI field? Which AI companies did he invest $398.7 billion in?
TechFlow Selected TechFlow Selected
Is Buffett entering the AI field? Which AI companies did he invest $398.7 billion in?
The Investment Landscape of the AI Stock God.
Navigating Web3 tides with focused insightsBy Anthony Di Pizio
Translated by MetaverseHub
While Buffett may not be chasing the latest stock market trends, many of the stocks in Berkshire Hathaway’s portfolio are benefiting from artificial intelligence.
Buffett has led the Berkshire Hathaway holding company since 1965. He prefers investing in companies with stable growth, reliable profitability, and strong management teams that implement shareholder-friendly measures such as dividend payments and share buybacks.
This strategy has clearly worked: from 1965 to 2023, Berkshire delivered an astonishing return of 4,384,748%, equivalent to a compound annual gain of 19.8%—nearly double the S&P 500’s 10.2% annual return over the same period.
In dollar terms, a $1,000 investment in Berkshire Hathaway stock in 1965 would have grown to over $43 million today, compared to just $312,333 for an identical investment in the S&P 500 with dividends reinvested.
Buffett is not an investor who chases the latest market fads, so you won’t see him piling into hot AI stocks today.
However, three stocks currently held by Berkshire stand to benefit significantly from artificial intelligence, collectively representing over 45% of Berkshire’s publicly traded securities portfolio, worth $398.7 billion in total.
01. Snowflake: 0.2% of Berkshire Hathaway’s portfolio
Snowflake developed a data cloud platform that helps businesses consolidate critical data onto a single system, enabling more effective analysis and maximizing data value.
The service is designed for large, complex enterprises that work with multiple cloud providers like Microsoft Azure and Google Cloud by Alphabet, a setup that often leads to data silos.
Last year, Snowflake launched its CortexAI platform, allowing businesses to combine ready-made large language models (LLMs) with their own data to build generative AI applications.
Cortex also comes with a full suite of AI tools, such as Document AI and Snowflake’s Copilot virtual assistant. The former enables companies to extract valuable data from unstructured sources like invoices or contracts, while the latter uses natural language prompts to deliver actionable insights across the Snowflake platform.
For the first quarter of fiscal 2025 ended April 30, Snowflake reported product revenue of $789.6 million, up 34% year-over-year. On the surface, this is a strong growth rate, though it represents a slowdown from previous quarters.
Despite continued heavy investments in growth initiatives such as marketing and R&D, Snowflake’s pace of acquiring new customers is slowing, and existing customers are expanding their spending at a slower rate.
Berkshire Hathaway bought shares in the data cloud specialist during its initial public offering in 2020, likely at around $120 per share.
In 2021, the stock surged to a high of $392 but has since fallen 63% from that peak, trading at $142 today. Unfortunately, given the company’s slowing growth, the stock still appears quite expensive—so investors may want to avoid this pick from Berkshire.
02. Amazon: 0.5% of Berkshire Hathaway’s portfolio
Berkshire bought Amazon (AMZN +1.22%) stock in 2019, and Buffett has repeatedly said he regrets not discovering the opportunity earlier. What began as an e-commerce company has expanded into cloud computing, streaming, digital advertising—and now into artificial intelligence.
Its Amazon Web Services (AWS) cloud division designs its own data center chips, which can reduce costs for AI developers by up to 50% compared to infrastructure using Nvidia chips.
Additionally, Amazon’s Bedrock platform offers developers access to a ready-made library of LLMs from some of the industry’s leading startups, along with Titan, a family of LLMs developed in-house.
Essentially, AWS aims to become the go-to destination for developers looking to build their own AI applications. Wall Street forecasts suggest artificial intelligence could add between $7 trillion and $200 trillion in economic output globally over the next decade, potentially making this Amazon’s biggest opportunity ever.
Berkshire Hathaway holds a $2 billion stake in Amazon, representing just 0.5% of the conglomerate’s stock portfolio.
Over the long term, AI could drive substantial growth for Amazon. So if Buffett previously wished he had taken a larger position, he might now regret not increasing it sooner as a new AI era begins.
03. Apple: 44.5% of Berkshire Hathaway’s portfolio
Apple (AAPL +2.16%) is by far Berkshire Hathaway’s largest holding. The conglomerate began accumulating shares in 2016, investing approximately $38 billion, with the current stake valued at $177.6 billion.
The company focuses on producing the world’s most popular electronic devices, including the iPhone, iPad, Apple Watch, AirPods, and Mac computers.
It is entering the AI space with its new Apple Intelligence software, set to launch alongside the iOS 18 operating system this September.
The software was co-developed with OpenAI and will transform the user experience on Apple devices. Siri will integrate ChatGPT capabilities, and writing tools in Notes, Mail, and iMessage will also use ChatGPT to help users generate content quickly.
With over 2.2 billion active Apple devices worldwide, Apple could soon become the largest distributor of AI technology to consumers.
The upcoming iPhone 16 is expected to feature powerful new chips capable of handling on-device AI workloads, potentially triggering a significant upgrade cycle.
Apple meets all of Buffett’s stock selection criteria. Since Berkshire’s initial investment in 2016, the company has demonstrated steady growth, consistent profitability, strong leadership under CEO Tim Cook, and has returned substantial capital to shareholders through dividends and share buybacks.
In fact, Apple recently announced a new $110 billion buyback program, the largest in U.S. corporate history.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@themotleyfool
