Investors commonly differentiate between value stocks and growth stocks, with value stocks appealing more to conservative investors. However, Warren Buffett’s Berkshire Hathaway owns growth-oriented stocks like Amazon and T-Mobile. This article highlights three AI-oriented value stocks that may appeal to Buffett: Alphabet, Meta Platforms, and Qualcomm.
1. Alphabet (NASDAQ: GOOGL, GOOG)
Alphabet leads in AI and digital advertising, generating 74% of its revenue from ads. The company also earns 14% from Google Cloud and invests $75 billion this year in capital expenditures (capex). With $95 billion in liquidity and $75 billion in free cash flow over the past 12 months, its P/E ratio of around 19 suggests it may appeal to value investors.
2. Meta Platforms (NASDAQ: META)
Meta, known for its social media platforms, has 3.4 billion daily users. The company plans to invest $64 to $72 billion in capex through 2025 to develop its infrastructure. It holds $70 billion in liquidity and generated $50 billion in the last year, with a P/E ratio around 27, making it attractive for growth-focused value investors.
3. Qualcomm (NASDAQ: QCOM)
Qualcomm is diversifying into IoT and automotive sectors, aiding its recovery in smartphone demand. It spent $1.1 billion in capex over the last year and has a P/E ratio of 15, which is significantly below its peers. Its automotive revenue grew 59% and IoT revenue increased 27%, presenting potential for an AI-driven recovery.
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