Warren Buffett’s Berkshire Hathaway Embraces AI Innovations in Investments
Warren Buffett leads Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), managing a substantial portfolio valued at $281 billion. This collection includes publicly traded stocks and various privately held subsidiaries. Additionally, Berkshire holds a remarkable $334 billion in cash reserves, ready to be invested as new opportunities arise.
If you had invested $1,000 in Berkshire stock when Buffett took charge in 1965, your investment would now be an astonishing $44.7 million. In contrast, the same investment in the S&P 500 would have grown to only $342,906, showcasing Buffett’s exceptional stock-picking skills.
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A Value Investor Focused on Long-Term Gains
Buffett’s investment strategy focuses on long-term value, often holding stocks for decades rather than chasing current market trends, even in rapidly evolving sectors like artificial intelligence (AI). Notably, three of Berkshire’s investments are currently leveraging AI to enhance their business models.
Image source: The Motley Fool.
1. Amazon: 0.7% of Berkshire Hathaway’s Portfolio
Amazon (NASDAQ: AMZN) is the leading e-commerce player globally, but its cloud platform, Amazon Web Services (AWS), has garnered significant attention for its AI capabilities. AWS aims to dominate critical aspects of AI technology:
- Hardware: AWS operates advanced AI data centers powered by chips from top manufacturers like Nvidia, and has developed its own chips, Trainium and Inferentia, providing cost advantages for AI developers and differentiating AWS from competitors.
- Large Language Models (LLMs): Developers can access over 100 pre-built LLMs through AWS’s Bedrock platform to expedite their AI projects. Amazon’s Nova family of LLMs can significantly reduce costs—by up to 75%—compared to third-party models.
- Software: An AI assistant, “Q,” is integrated into AWS, allowing it to generate code and analyze extensive internal data, thus helping businesses uncover cost-saving and revenue-generating opportunities.
Beyond AWS, Amazon has created an AI shopping assistant named Rufus for its retail platform, which aids customers in product comparison and decision-making. Additionally, sellers on Amazon can utilize AI to enhance their product listings and advertisements, making them more appealing and easily discoverable.
In 2024, AWS achieved a record $107.5 billion in revenue, contributing to more than half of Amazon’s overall $68.6 billion in operating income, despite representing only 16.8% of the company’s total revenue of $637.9 billion. Berkshire’s Amazon investment, which was initiated in 2019 and constitutes roughly 0.7% of its portfolio, is valued at nearly $2 billion, positioning it for potential high returns as Amazon further invests in AI.
2. Coca-Cola: 10.2% of Berkshire Hathaway’s Portfolio
Coca-Cola (NYSE: KO) remains the largest beverage corporation globally. However, success extends beyond great-tasting products; the company strategically invests in technology to increase efficiency and revenue, with a growing emphasis on AI.
For instance, Coca-Cola has employed AI in multiple marketing campaigns, including predicting future flavors, as seen in its Coca-Cola Y3000 beverage release. They also utilized AI for a Christmas campaign called “Create Real Magic,” where consumers could create digital snowglobes using prompts on its website.
In April 2024, Coca-Cola announced an investment of $1.1 billion over five years in Microsoft‘s Azure cloud services to enhance its marketing, productivity, and supply chains through advanced AI tools.
Berkshire Hathaway owns 400 million shares of Coca-Cola, accumulated between 1988 and 1994 at a total cost of $1.3 billion. Today, this position is valued at approximately $28.8 billion, alongside dividends of $776 million received in 2024—essentially allowing Berkshire to double its original investment every two years purely from dividends. While AI was not a consideration when Buffett initially invested, it may support future growth in returns.
3. Apple: 24.3% of Berkshire Hathaway’s Portfolio
Berkshire Hathaway invested around $38 billion in acquiring shares of Apple (NASDAQ: AAPL) between 2016 and 2023. As of 2024, this position’s value exceeds $170 billion, reflecting a substantial profit margin. Last year, Berkshire sold over half of its Apple stake, though it remains the largest investment in its portfolio.
Apple has made impressive strides in AI with the launch of Apple Intelligence on its latest devices, incorporating new features to enhance content creation and user interaction. The Siri voice assistant now benefits from knowledge sourced from ChatGPT due to its collaboration with OpenAI.
With over 2.2 billion active Apple devices around the world, the company’s ongoing innovations in AI signify its potential to further solidify its leading position in the market and enhance Berkshire’s investment returns.
Apple’s AI Advancements Could Benefit Berkshire Hathaway’s Investment
Apple is on track to become a leading distributor of artificial intelligence (AI) to consumers. The company holds a competitive edge because it designs its own chips, which are among the most powerful globally for both traditional computing and AI workloads. Recently, Apple launched a new series of MacBooks featuring its M4 chip, along with the iPhone 16, equipped with the A18 Pro smartphone chip. Both products are crafted to meet the increasing demands for computing power driven by AI software.
Berkshire Hathaway is poised for significant gains as it retains over $68 billion in Apple stock. Should Apple’s foray into AI spark a surge in demand for its latest devices and software services, Berkshire stands to benefit greatly from this growth.
Should You Invest $1,000 in Amazon Right Now?
If you are contemplating buying stock in Amazon, it is essential to consider the following:
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John Mackey, the former CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool’s board of directors. Anthony Di Pizio holds no positions in the stocks mentioned. The Motley Fool invests in and recommends Amazon, Apple, Berkshire Hathaway, Microsoft, and Nvidia. Furthermore, The Motley Fool has positions in the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. A full disclosure policy is in place.
The views and opinions expressed herein belong to the author and do not necessarily reflect the opinions of Nasdaq, Inc.
