Warren Buffett, the legendary figure in the investment world, has once again demonstrated his unique foresight in the tech wave. Despite being renowned for value investing, Buffett has quietly positioned himself in the artificial intelligence (AI) sector through his two core holdings, drawing widespread market attention.
Since taking the helm of Berkshire Hathaway in 1965, Buffett has created astonishing returns for investors with his distinctive investment philosophy. Under his leadership, Berkshire's stock has achieved an annual compound return rate of 19.8%. This means that an investment of $1,000 in 1965 would now be worth over $42.5 million. Buffett has consistently favored companies with strong profitability, excellent management, and a focus on shareholder interests, earning him the nickname "The Oracle of Omaha."
Surprisingly, Buffett's significant investments are making their mark in the AI sector. These two stocks—Apple and Amazon—collectively account for 29.5% of his $305.7 billion investment portfolio, serving as key pieces in Berkshire's AI strategy.
Apple, as the world's most valuable tech giant, holds a central position in Buffett's portfolio. Since beginning to increase his stake in 2016, Berkshire's investment in Apple has grown from $38 billion to over $170 billion. Although Buffett has recently reduced his Apple holdings, the remaining stake is still worth $88.3 billion, representing 28.9% of the portfolio, making it Berkshire's largest single investment.
It is worth noting that Apple is at a critical transformation stage. With over 2.2 billion active devices worldwide, Apple is poised to become the largest consumer distributor of AI technology. The company is collaborating with OpenAI to develop "Apple Intelligence" and plans to integrate it into the upcoming iOS18 operating system. This technology will bring revolutionary AI features to the latest iPhone16 and iPhone15Pro, including smart writing tools and an upgraded Siri voice assistant.
On the other hand, Amazon, although representing a smaller portion of Berkshire's portfolio (only 0.6%), has equally impressive AI ambitions. Amazon Web Services (AWS), the world's largest B2B cloud platform, is also striving to become the preferred AI solution provider for businesses. Products like AWS's self-developed data center chip Trainium, the large language model Titan series, and the AI assistant Amazon Q all showcase Amazon's ambitions in the AI field.
Buffett's investment in these two companies not only demonstrates his forward-looking judgment in the AI sector but also offers valuable insights for investors. In today's rapidly evolving tech landscape, investing in high-quality companies with competitive advantages remains a reliable path to steady value appreciation.
Although Buffett has reduced his Apple holdings, this seems to reflect a cautious stance on the overall market rather than doubts about Apple's prospects. Currently, the S&P 500's P/E ratio is 27.6, far exceeding the average of 18.1 since 1950, which may be one reason for Buffett's relatively conservative strategy.
As AI technology becomes increasingly prevalent, the evolution of Apple and Amazon's strategies in their respective fields will undoubtedly be a focal point for investors. Consulting firm PwC predicts that by 2030, AI could contribute $15.7 trillion in growth to the global economy. In this vast market, both Apple and Amazon are expected to hold significant shares.
Buffett's portfolio once again proves that even in the fast-paced tech era, adhering to a value investing philosophy can still find growth opportunities in emerging sectors. Whether it's Apple's consumer AI strategy or Amazon's deep dive into enterprise AI services, they offer diversified options for investors to participate in the AI revolution. In the future, these two companies are likely to become the AI stars in Buffett's portfolio, bringing substantial returns to Berkshire.
