Warren Buffett serves as the CEO of Berkshire Hathaway. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) In his role at the holding company, he supervises a $281 billion collection of publicly traded stocks and bonds, along with various privately owned affiliates. The firm also holds an unprecedented $334 billion in cash, which Buffett and his colleagues can use whenever they identify fresh investment prospects.
If you had invested $1,000 in Berkshire stock back when Buffett assumed control in 1965, it would now be worth approximately $44.7 million. A similar investment in the S&P 500 during the same period wouldn’t have yielded nearly as impressive returns. S&P 500 Would have expanded to merely $342,906 during the same timeframe, underscoring Buffett's remarkable knack for selecting winning stocks.
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Buffett leans towards being a long-term value investor, typically holding onto stocks for many years without succumbing to fleeting market fads, including the potent force of artificial intelligence (AI). Nonetheless, within Berkshire Hathaway’s current stock portfolio, at least three companies are utilizing AI to upgrade their traditional operations.
1. Amazon represents 0.7% of Berkshire Hathaway's investment holdings.
Amazon (NASDAQ: AMZN) Is the biggest online shopping corporation globally, yet investors have their sights set more on its cloud computing The platform, Amazon Web Services (AWS), offers businesses access to an expanding range of AI services. Indeed, AWS aims to lead in the three primary tiers of this transformative tech sector.
- Hardware AWS runs artificial intelligence data centers packed with chips from leading suppliers like Nvidia However, they have developed their proprietary chips named Trainium and Inferentia. These components provide economic benefits for AI creators and set apart AWS from competing cloud service providers.
- Large language models (LLMs) Developers have access to more than 100 pre-built LLMs through this platform. Bedrock The platform provided by AWS allows them to speed up their AI software initiatives. Amazon has developed its own series of LLMs named Nova, potentially decreasing expenses by as much as 75% when contrasted with numerous alternative models available through Bedrock.
- Software Amazon has incorporated an AI assistant named "Q" within AWS. This tool can compose computer code for developers upon request and sift through vast amounts of internal data to assist businesses in uncovering chances to possibly cut costs or boost earnings.
Amazon’s application of artificial intelligence extends beyond AWS. The company created an AI-powered shopping assistant named Rufus for amazon.com, designed to help shoppers compare items and make more informed buying decisions. Additionally, sellers on Amazon can leverage AI tools to develop compelling product listings and ads that resonate with potential buyers and improve visibility within the site’s search algorithms.
AWS is wrapping up after a record-breaking year. In 2024, it generated $107.5 billion in revenue. Despite this constituting only 16.8% of Amazon’s overall revenue of $637.9 billion, the cloud segment contributed over half of the corporation's $68.6 billion in operating income. To put it another way, AWS serves as the primary driver of profits within the whole company.
In 2019, Berkshire acquired shares of Amazon, which constitutes merely 0.7% of its overall investment portfolio. Nonetheless, previously Buffett He expressed regret for not recognizing the opportunity earlier. Despite this, Berkshire's stake is nearly valued at $2 billion, which means it might still achieve substantial gains if Amazon's investments in artificial intelligence prove successful.
2. Coca-Cola comprises 10.2% of Berkshire Hathaway's investment holdings.
Coca-Cola (NYSE: KO) is the globe's biggest drink manufacturer, yet surprisingly, such prominence isn’t just due to popular fizzy drinks. Coca-Cola pours significant resources into tech advancements aimed at boosting productivity and maximizing profit from their items, with the firm currently placing major stakes on new technologies. AI .
The leading drink manufacturer has previously incorporated artificial intelligence into multiple advertising initiatives. They utilized AI algorithms to forecast how Coca-Cola could potentially taste in the year 3000, drawing from extensive consumer information, before crafting a special promotion known as Coca-Cola Y3000. Additionally, the firm employed AI technology for a holiday-centered campaign titled Create Real Magic during the previous Christmas season. This allowed patrons to produce virtual snow globes through their site with simple instructions.
In April 2024, Coca-Cola pledged to invest $1.1 billion over half a decade for this purpose. Microsoft 's The Azure cloud platform, offering an expanding range of AI services, will be utilized by Coca-Cola to improve its marketing strategies, boost productivity, and optimize supply chain management.
Berkshire holds 400 million shares of Coca-Cola, purchased from 1988 to 1994. This stake initially required an outlay of $1.3 billion for Berkshire, but now stands at approximately $28.8 billion. Additionally, the company received $776 million in dividends in 2024 — essentially doubling its original investment roughly every two years through these payouts alone. dividend payments alone!
AI definitely didn't play a role in this. Buffett's choice to purchase Coca-Cola shares thirty years back, yet the innovation might still boost his potential earnings over time.
3. Apple: Constitutes 24.3% of Berkshire Hathaway's Investment Portfolio
Berkshire invested approximately $38 billion in purchasing stocks. Apple (NASDAQ: AAPL) Between 2016 and 2023, heading into 2024, that role had grown to be valued at more than $170 billion, indicating that the corporate entity held assets of significant worth. substantial profit. As a result, Buffett His group removed some funds from their portfolio last year by selling over fifty percent of Berkshire Hathaway's position in the company that makes iPhones.
Apple remains the biggest holding in Berkshire's portfolio , this could potentially be advantageous given the company’s advancements in the AI domain. They have recently released their Apple Intelligence software for the newest iPhones, iPads, and Macs. This release brought forth an array of new features designed to revolutionize how users generate and use content, handle notifications, and engage with applications. As Apple Intelligence was created in collaboration with OpenAI , the Siri voice assistant has also undergone significant improvements as it now draws upon information from ChatGPT.
Given that there are over 2.2 billion active Apple devices globally, this firm could very well emerge as the leading consumer-oriented distributor of artificial intelligence technology someday. Additionally, Apple holds a distinct edge due to their custom-designed processors, known for being among the strongest available today across conventional and AI-related tasks. They have introduced a fresh lineup of MacBook models equipped with the advanced M4 chipset, alongside the latest iPhone 16 featuring an enhanced A18 Pro mobile processor—both innovations tailored specifically to meet the escalating computational demands posed by AI applications.
As Berkshire continues to hold more than $68 billion worth of Apple stock It has the potential to perform exceptionally well if Apple's entry into artificial intelligence sparks increased demand for their newest gadgets and expands their range of software services.
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John Mackey, who previously served as CEO of Whole Foods Market, which is now owned by Amazon, sits on The Motley Fool's board of directors. Anthony Di Pizio does not hold an interest in any of the listed stocks. However, The Motley Fool holds stakes in and endorses buying shares of Amazon, Apple, Berkshire Hathaway, Microsoft, and Nvidia. Additionally, they recommend specific option strategies for these companies: purchasing long-term call options at the $395 strike price for January 2026 on Microsoft, as well as selling short-term call options with a higher $405 strike price within the same timeframe for Microsoft. Furthermore, The Motley Fool has a disclosure policy .
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