Warren Buffett, the legendary investor behind Berkshire Hathaway, has consistently led the investment company to market-beating returns every year since 1965.
When evaluating potential investments, Buffett looks for a long track record of success, solid growth potential, and a strong management team. He particularly favors companies that return money to shareholders through dividends and stock buybacks to accelerate the effects of compound growth on an investment over the long term.
It may seem out of character for Buffett to buy a stock solely for the company’s artificial intelligence (AI) capabilities. However, Berkshire Hathaway owns stakes in several companies that are developing aspects of AI on top of their core businesses, and just four of them account for 55.1% of its $370 billion portfolio of publicly listed stocks.
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Snowflake: 0.3% of Berkshire Hathaway’s portfolio
While a small portion of the portfolio, Snowflake (NYSE: SNOW) was an atypical choice for Berkshire Hathaway. It was acquired during its initial public offering in 2020. Although Snowflake is not yet turning a profit and does not pay a dividend, it is an innovative cloud computing enterprise with a fast-growing presence in AI.
Snowflake’s flagship Data Cloud product helps organizations aggregate their data onto one platform, regardless of the cloud infrastructure providers they use. Additionally, its Snowpark platform facilitates collaboration for software developers, and the company also launched Cortex — a collection of AI-focused tools designed to complement its cloud services.
One tool within Cortex is Document AI, enabling businesses to extract valuable insights from unstructured data commonly found in contracts or invoices. Cortex also features Snowflake Copilot, a generative AI virtual assistant capable of creating computer code from text-based prompts, which could significantly expedite software development projects for Snowflake’s cloud customers.
Amazon: 0.4% of Berkshire Hathaway’s portfolio
Berkshire has held Amazon (NASDAQ: AMZN) stock since 2019. Amazon is becoming a dominant player in the AI industry and is incorporating AI into every segment of its business. Amazon Web Services (AWS), its cloud computing arm, is particularly noteworthy as it offers business customers a diverse range of large language models to facilitate the development of AI applications. Moreover, in a bid to compete with Nvidia, Amazon is striving to establish itself as a key player in the AI chip market.
AI Revolutionizes Berkshire Hathaway’s Investment Portfolio with These 3 Stocks
Amazon: 7.6% of Berkshire Hathaway’s portfolio
In a strange juxtaposition, the reigning e-commerce king, Amazon (NASDAQ: AMZN), has ventured into the sphere of artificial intelligence. Mining its expertise and resources, Amazon has engineered its data center chips to process AI workloads, mimicking ‘the Meltdown’ that fizzles and yet scorches with an unnerving, burning gusto. It also integrates generative AI tools, granting businesses unearthing treasures on its e-commerce platform the ability to fashion captivating product images, descriptions, and advertisements.
Amazon’s AI initiative extends to fostering more refined product recommendations tailored to customers’ idiosyncratic browsing habits and buying predilections. But could this budding dalliance with AI render Amazon as one of Berkshire’s superlative long-term wagers?
Coca-Cola: 6.4% of Berkshire Hathaway’s portfolio
Enter the effervescent and illustrious soda emperor, Coca-Cola (NYSE: KO); an unexpected foray into AI has left discerning onlookers scratching their heads in bemusement. Yet, Coca-Cola has deftly tiptoed into the AI domain, culminating in the launch of Y3000, an AI-crafted elixir foretelling the nectar of the future. Imbibing inputs from mortals, Coca-Cola exalted the predictions weaved by AI to birth Y3000. Unveiling the ever-enchanting “Create Real Magic” parade during the jubilant Yuletide, Coca-Cola employed an AI puppeteer, powered by OpenAI GPT-4 sorcery, to enable consumers to fashion Christmas-themed reveries synonymous with Coca-Cola.
These enchanting endeavors amid Y3000 and Create Real Magic serve as harbingers of deep consumer involvement, fostering heightened brand cognizance, and possibly stoking a fervent sales conflagration. With Berkshire Hathaway’s enduring stake in Coca-Cola since 1988, its $23.6 billion investment currently sits as the portfolio’s fourth most prominent asset.
Apple: 48% of Berkshire Hathaway’s portfolio
The throbbing core of Berkshire’s portfolio, Apple (NASDAQ: AAPL), has soared to ethereal heights, with only a solitary shadow casting a fleeting veil upon its brilliance—Microsoft. A venerated entity that materialized in 1976, the bulk of its ascendancy has unfolded post-2007, triggered by the momentous inauguration of its inaugural iPhone. This segued into an opulent vista peppered with billion-dollar hardware reservoirs—the Apple Watch and AirPods.
Apple’s latest opus, the iPhone 15 Pro, is the seasoned prologue to its AI adjunct. Possessing the indomitable A17 Pro helm, the iPhone ushers in a realm of deftly processing AI tasks on-device, eschewing the dependence on remote data repositories. Ergo, swift and deft responses are bestowed upon its users, amplifying the allure. A monumental paradigm shift heralding a potential AI leviathan is stealthily camouflaged within.
The cogs within Apple’s bastion are discretely whirring as they unfurl colossal language models, illuminating pathways for an AI marvel poised to rival ChatGPT. This harbinger of rebirth promises to infuse automation across emails, messages, and rendezvous arrangements; unleashing an epoch of expedited image and video creation which users shall wield to regale kin and kindred online.
The specter of an assembled legion of over 2 billion active Apple devices—iPhones, iPads, Mac computers—lends credence to the inevitability of any Apple AI brainchild commanding fervent allegiance, potentially eclipsing incumbent stalwarts like ChatGPT. Though AI may not have been the lodestar guiding Berkshire to Apple initially, it holds the key to substantial, enduring gains.
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