Berkshire Hathaway, under the leadership of CEO Warren Buffett, has emerged as one of the world’s largest conglomerates, with a market capitalization of approximately $959 billion. While Buffett is renowned for his value investing approach, it is worth noting that his conglomerate’s portfolio includes significant exposure to the rise of artificial intelligence (AI). Two of the most prominent AI stocks in Berkshire Hathaway’s portfolio are Apple and Amazon.
Apple, accounting for 23.2% of Berkshire Hathaway’s public equity portfolio, is not only the conglomerate’s largest stock holding but also its biggest AI play. Since Berkshire Hathaway first invested in Apple in Q1 2016, the tech giant’s shares have delivered a remarkable total return of over 800%. Apple recently introduced its Apple Intelligence software with the iPhone 16 smartphones, positioning AI as a key selling point for its next-generation mobile devices. With a dominant position in the mobile hardware market, Apple benefits from a large and engaged user base, providing access to valuable data and a loyal customer base for add-on services. Apple’s software and services business is projected to generate over $100 billion in annual revenue. However, Berkshire Hathaway has recently reduced its stake in Apple, selling a significant amount of its shares. While the exact reasons for this move remain speculative, it appears that Buffett and his team may be adopting a more cautious outlook on the stock market as a whole.
In contrast, Amazon holds a much smaller position in Berkshire Hathaway’s portfolio, accounting for only 0.7% of its stock holdings. Although it was one of Buffett’s investment managers who made the purchase, the conglomerate has benefited from owning this top AI stock. While Amazon is primarily known as the leader in e-commerce, its Amazon Web Services (AWS) segment has emerged as the global leader in the cloud infrastructure industry, capturing 31% of the market. As the leader, Amazon has been actively investing in generative AI services, offering a wide range of options to meet various needs and budgets. The company is even developing its own AI processors, enabling it to provide competitive pricing to its cloud services clients. Amazon’s AI capabilities extend beyond AWS, as it leverages AI to analyze consumer-shopping data, optimize its logistics network, and enhance its digital advertising business. CEO Andy Jassy has emphasized the significant growth potential of generative AI and AI as a whole, particularly as the global IT spend shifts from on-premises to cloud-based solutions.