(AAPL), (AMZN), (MSFT), (AVGO), (NXPI), (QCOM), (IBM), (GOOGL)
Let's be honest, the Oracle of Omaha isn't exactly known for chasing the latest tech trends.
But when artificial intelligence (AI) came up in an interview in 2023, Buffett called it "extraordinary" – then immediately followed up with a classic dose of skepticism about its overall benefits.
Love it or hate it, Buffett's wallet has already felt the impact of AI. He holds a massive $159 billion position spread across eight AI-related stocks.
And the funny thing is, most of those have been absolute winners this past year.
Let's start with the big fish: Apple (AAPL). We all know Buffett and his sweet tooth for Apple.
That $156.9 billion position makes it Berkshire Hathaway's crown jewel. But with slowing iPhone sales lately, is this really about AI or just an old man's love affair with a familiar brand?
Keep in mind though that the company ain't just about slick gadgets anymore. Rumors are swirling about huge AI upgrades at the June developer conference.
Could Siri start sounding a lot less robotic? Could Apple finally make a splash in the smart home race? We'll find out soon enough.
Then there's Amazon (AMZN), with Berkshire holding a modest $1.8 billion stake. Okay, $1.8 billion isn't exactly pocket change, but it pales compared to Buffett's usual bets.
Still, the fact that he's in on Amazon at all says something. The man hates stuff he doesn't understand, and he's famously admitted missing the boat on this one early.
Why the change of heart? Amazon Web Services (AWS) is where the real AI action is. This cloud computing behemoth powers a vast chunk of the internet and stands to rake in cash as AI tech needs more and more processing muscle.
Buffett might be old school, but he clearly sees the writing on the wall here.
The next is Microsoft (MSFT). I know what you’re going to say. This company isn't technically on Berkshire's books, right? Well, that depends.
His little secret is New England Asset Management (NEAM), a subsidiary that's got a cool $11.6 million tucked away in Microsoft. Sly move, Warren.
Why the hush-hush? It's simple. Microsoft is crushing it with AI. They've woven OpenAI's language models into everything they do, and their Azure cloud is exploding because of it. Companies are scrambling to use that platform to build the next big AI thing.
Another under-the-radar Buffett play is Broadcom (AVGO), again thanks to NEAM. They're holding onto $9.5 million+ worth of this chipmaker.
Now, Broadcom isn't a household name, but it's supplying the nuts and bolts for the AI revolution. They specialize in custom accelerators and the kind of networking infrastructure that makes AI apps actually function at scale.
Heard of their new XPU accelerator? Yeah, it could be the biggest chip ever built for AI.
Another chipmaker that pops up in the NEAM wallet is NXP Semiconductors (NXPI), which has a solid $8.9 million stake. So, is this really a Buffett AI play or just a bet on tech in general?
The answer lies in where NXP gets its bread and butter. Forget smartphones – they're focused on cars, IoT gadgets, and even the infrastructure that connects it all.
Think about it: self-driving cars, smart homes, 5G networks bursting with AI-powered data... that's where NXP could be raking it in.
There’s also Qualcomm (QCOM), often a footnote in discussions of phone tech, is on Buffett's radar as well.
This company might not have seen the same explosive gains as other Buffett-backed AI stocks, but a $8.3 million investment isn't chump change. And that 35% growth? Not bad either.
Besides, we all know Qualcomm as the king of smartphone chips. But they're not sitting on their laurels. They're deep in the AI game and even partnering with tech giants to develop tools that help AI apps run anywhere.
Smart move, considering how fragmented the chip market is. Could be a long-term play by Buffett – definitely one to keep an eye on.
Meanwhile, do you still remember when IBM (IBM) was the king of the AI hype machine? Well, Buffett dumped that stock a while back, but NEAM still holds onto a cool $5 million.
So, is this a "past its prime" play, or does Big Blue still have some AI magic up its sleeve?
Watson, their big AI platform, isn't the headline-grabber it used to be. But don't underestimate the power of established connections – plenty of companies still rely on Watson to get their feet wet with AI. It's not cutting-edge, but it's a reliable workhorse in the AI world.
Finally, Alphabet (GOOGL). Buffett has been kicking himself for missing out on Google – we've heard that story before. At least NEAM has a modest $2.5 million stake, so it's not a complete loss.
Admittedly, Alphabet's had some embarrassing AI misfires lately. But don't write them off just yet. They're still one of the top dogs in AI development.
And those rumors about Apple cozying up to their Gemini AI models? If true, that could be a game-changer.
Now that we've covered the big guys, the underdogs, and a few of Buffett's sneaky side bets in the AI space, here’s the most important question: are they worth your hard-earned cash right now?
Honestly, every single one of these stocks has the potential for solid long-term gains. But if, like me, you think AI is all about that cloud power, there are clear standouts.
The first is Amazon. Its AWS isn't just a side business, it's the engine driving their AI innovations.
Then, there’s Microsoft Azure locked in a fierce battle with AWS, plus they're weaving AI into everything they touch.
And, of course, Alphabet. They may stumble sometimes, but their deep pockets and cutting-edge research mean they'll always be in the game.
Bottom line: There's no magic formula to picking AI winners, even with Buffett's billions backing them. I suggest you buy the dip in the ones I mentioned and keep the rest on your watchlist.
