Warren Buffett’s AI bet: 46.1% of Berkshire Hathaway’s $353 billion stock portfolio is in these 2 artificial intelligence (AI) growth stocks

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Berkshire Hathaway CEO Warren Buffett is known for his great success as a value investor. On the other hand, 46.1% of his company’s $353 billion stock portfolio is currently in just two artificial intelligence (AI) growth stocks.

To shed some light on how Oracle of Omaha’s current bets on AI are positioned, two Motley Fool contributors have profiled the top AI stocks in the investment group’s portfolio. Read on for a look at the AI ​​company that Berkshire bet big on — and another small bet that’s poised to be a long-term winner.

Apple has proven that it can harness the power of new technology

Parkev Tetevosian: Warren Buffett’s Berkshire Hathaway portfolio may not have invested apple (AAPL -0.41%) Stocks due to AI, but Apple could be one of the major beneficiaries of technological advances. Apple’s iPhones, iPads, computers and more could all benefit from an infusion of AI. One such example is the voice assistance Siri. In its current form, Siri isn’t as intuitive as it could be. Still, people can download ChatGPT app on iPhone, which makes the device more valuable for users.

Moreover, AI is still in the very early stages of development. It would be reasonable to assume that Apple will incorporate more new technologies into its devices and services over the next few years. Already, Apple has projected revenue of $394 billion in 2022. He has achieved this success through relentless innovation. Warren Buffett is not enthusiastic about a company after a success or two. Instead, the Oracle of Omaha is more interested in companies that have demonstrated that expertise over multiple iterations.

Interestingly, Apple turns innovation into profit. There have been many remarkable inventions in our history. Fewer still turn it into a successful business. Apple has achieved both great innovation and profitability. Indeed, Apple’s operating income is projected to surpass $119 billion in 2022. Given these achievements, it’s no surprise that 45.7% of Berkshire Hathaway’s portfolio is invested in Apple stock.

Amazon will win AI on many fronts

Keith Noonan: Beyond Apple, along with large Berkshire Hathaway holdings Bank of America And American Express There will be some significant tailwinds associated with artificial intelligence. But you have to go further down the list of the investment group’s weighted stock portfolios to find a company commonly considered an “AI stock.”

Coming in at just 0.4% of Berkshire’s total stock holdings, Amazon (AMZN -2.99%) It is only the 23rd largest in the group’s portfolio. But while Buffett’s exposure to the stock is relatively low, the e-commerce and cloud computing giant has a good chance of being one of the AI ​​revolution’s biggest winners.

In the short term, the impact of artificial intelligence will be most visible in the company’s Amazon Web Services (AWS) cloud-infrastructure business. Amazon remains the world’s leading provider of cloud services, and as an increasing number of AI applications are launched and scaled, the company’s infrastructure sees increasing demand.

But AWS isn’t the only business segment that will benefit from AI. Although the transformational potential will take longer to materialize, artificial intelligence will make Amazon’s e-commerce business more profitable.

Amazon still generates most of its revenue from online retail, but the business has historically been relatively low-margin. As AI paves the way for improved automation in warehouses and enables high-performance self-driving delivery vehicles, operating costs should decrease for the company’s e-commerce business. In turn, the company’s biggest source of sales has become more profitable.

Apple and Amazon look like long-term AI winners

Thanks to their technological advantages, funding strength and other competitive advantages, big tech companies will be the biggest winners of the AI ​​revolution. Apple and Amazon each benefit from huge platforms and infrastructure that will be very difficult for competitors to disrupt, and this strength positions each company to push artificial intelligence forward and reap the benefits. For long-term investors looking to take advantage of today’s hottest tech trends, building positions in both stocks would be a smart move.

American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of Amazon subsidiary, The Motley Fool. Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian, CFA holds positions at Apple. The Motley Fool has positions in and recommends Amazon.com, Apple, Bank of America and Berkshire Hathaway. Motley Fool has a disclosure policy.

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