Warren Buffett may not chase the latest stock market trends, but many of the holdings in his Berkshire Hathaway portfolio are benefiting from artificial intelligence (AI).
Led by Warren Buffett Berkshire Hathaway (BRK.A 1.17%) (BRK.B 1.33%) We have been operating a holding company since 1965. We prefer to invest in companies with stable growth, reliable profitability, strong management teams, and shareholder-friendly initiatives such as dividends and share repurchase programs.
This strategy has worked: Berkshire has delivered a return of 4,384,748% between 1965 and 2023. That equates to a compound annual rate of 19.8%, nearly double the benchmark’s 10.2% annual rate. S&P 500 Over the same period, Berkshire Hathaway shares rose by more than $43 million in dollar terms, while the same investment in the S&P 500 index with dividends reinvested would have only earned $312,333.
Buffett isn’t the kind of investor who chases the latest stock market trends, so he’s unlikely to rush into the current wave of artificial intelligence (AI) stocks, but Berkshire Hathaway already owns three stocks that stand to benefit greatly from AI and account for more than 45% of the conglomerate’s $398.7 billion publicly traded portfolio.
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1. Snowflake: 0.2% of Berkshire Hathaway’s portfolio
Snowflake (snow 0.11%) The company developed Data Cloud to help businesses consolidate their critical data on one platform so they can analyze it more effectively and extract maximum value from it. The service is available across multiple cloud providers ( Microsoft Azure alphabet(such as Google Cloud), situations often arise that lead to the creation of data silos.
And last year, Snowflake released its Cortex AI platform, which enables businesses to combine off-the-shelf large-scale language models (LLMs) with their own data to create generative AI applications. Cortex also comes with a suite of AI tools, including Document AI, which helps businesses extract valuable data from unstructured sources like invoices and contracts, and Snowflake’s Copilot virtual assistant, which can be commanded using natural language and provide valuable insights across the Snowflake platform.
In the company’s fiscal first quarter, which ended April 30, Snowflake’s product revenue was $789.6 million, up 34% from the same period last year. At face value, that’s a solid growth rate, but it continues to show a slowdown from the previous quarter. Snowflake continues to invest heavily in marketing, research and development, and other growth initiatives, but the pace of new customer acquisition has slowed and existing customers are also expanding spending at a slower pace.
Berkshire Hathaway purchased Snowflake shares around the time of the data cloud specialist’s IPO in 2020, likely paying around $120 per share. The company’s shares have skyrocketed to $392 in 2021, but have since fallen 63% from that level and are currently trading at $142. Unfortunately, with the company’s growth slowing, the stock still seems quite overpriced, so investors may be better off avoiding Berkshire (for now).
2. Amazon: 0.5% of Berkshire Hathaway’s portfolio
Berkshire buys Amazon (AMZN 1.22%) Buffett, who first bought Amazon shares in 2019, has repeatedly expressed regret for not realizing the opportunity sooner. Amazon was founded as an e-commerce company but has expanded into cloud computing, streaming, digital advertising and now AI.
The company’s Amazon Web Services (AWS) cloud division designs its own data center chips, which it says are up to 50% cheaper for AI developers to use than other cloud-based infrastructure. NVIDIAAdditionally, the Amazon Bedrock platform offers developers a library of pre-built LLMs from industry-leading startups, in addition to Amazon’s own in-house built LLM family called Titan.
Essentially, AWS wants to become the go-to place for developers looking to create their own AI applications. AI is expected to add between $7 trillion and $200 trillion in value to the global economy over the next decade, according to various Wall Street forecasts, which could make it Amazon’s biggest opportunity of all time.
Berkshire Hathaway owns $2 billion in Amazon stock, but that’s just 0.5% of the conglomerate’s stock portfolio. AI could drive significant growth for the company over the long term, so if Buffett has wanted to grow his position for some time now, he may regret not adding to it sooner as this next chapter unfolds.
3. Apple: 44.5% of Berkshire Hathaway’s portfolio
apple (AAPL 2.16%) It’s Berkshire Hathaway’s largest position to date. The conglomerate has spent about $38 billion since 2016 to buy up shares, and despite selling 13% of its holding earlier this year (for tax reasons), its holding now stands at $177.6 billion. Apple makes some of the world’s most popular devices, including the iPhone, iPad, Apple Watch, AirPods and Mac line of computers.
The company will enter the world of AI with its new Apple Intelligence software, which will be released alongside the iOS 18 operating system in September. Developed in partnership with OpenAI, the software will transform the user experience on Apple devices. The company’s Siri voice assistant will utilize ChatGPT’s power, while writing tools like Notes, Mail and iMessage will also utilize ChatGPT’s power to help users create content quickly.
With more than 2.2 billion active Apple devices worldwide, the company could soon become the largest seller of consumer AI, and the upcoming iPhone 16 is expected to feature powerful new chips capable of handling AI workloads on the device, potentially spurring a major upgrade cycle.
Apple checks all the boxes for a Buffett stock: Since Berkshire first invested in the company in 2016, the company has grown steadily, been consistently profitable, has solid leadership in CEO Tim Cook, and has returned huge amounts of money to shareholders through dividends and share buybacks. In fact, Apple just announced a new $110 billion share repurchase program, the largest in the history of a U.S. company.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anthony DiPizio has no investment in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Microsoft, NVIDIA, and Snowflake. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
