46% of Warren Buffett's $410 Billion Portfolio Invested in AI Stocks

Warren Buffett has achieved over 5,000,000% aggregate return in Berkshire Hathaway's Class A shares since he took control in 1965. Although known for focusing on value stocks, Buffett has inadvertently placed a significant bet on the future of artificial intelligence (AI). Four AI stocks comprise $188.8 billion of the 44-stock, $410 billion portfolio that Buffett oversees.

Buffett's Investment Strategy and AI Exposure

Known as the "Oracle of Omaha," Warren Buffett has a stellar reputation in Wall Street investing. Since 1965, Berkshire Hathaway's Class A shares have seen a cumulative return of 5,028,429%. Buffett's success formula focuses on investing in well-known, established businesses with competitive advantages. While primarily targeting value stocks, his portfolio also includes some growth stocks.

Surprisingly, nearly $189 billion of Berkshire Hathaway’s assets are invested in four leading AI stocks. These investments make up 46% of the $410 billion portfolio managed by Buffett.

Apple: Dominating Tech and AI

Apple is the largest AI-related investment in Buffett's portfolio, accounting for almost 45% of Berkshire's total assets with $183.9 billion. In June, Apple introduced "Apple Intelligence," integrating AI solutions like ChatGPT-powered chatbots and enhancing Siri’s capabilities. However, Buffett likely invested in Apple due to its dominance in the smartphone market and its successful shift to a higher-margin, services-based model. Despite stagnant growth, Apple's substantial stock buybacks have supported its valuation.

BYD: Leading in Autonomous Driving and EVs

China-based electric vehicle (EV) manufacturer BYD is another significant AI investment. Berkshire holds approximately 65.8 million shares in BYD, worth around $2 billion (0.5% of invested assets). BYD is leveraging AI for advanced driving assistance and autonomous driving technologies. The company is leading in battery-EV sales globally and is progressing with Level 3 autonomous driving tests, outpacing U.S. competitor Tesla in some areas.

Amazon: AI and Cloud Services

Amazon, with about $2 billion worth of shares in Berkshire's portfolio (0.5% of invested assets), is well-known for its dominant online marketplace. However, its cloud service platform, Amazon Web Services (AWS), is a crucial segment. AWS utilizes generative AI solutions to offer virtual chatbots, assist with large language models (LLMs), and support cloud infrastructure. Amazon’s advertising and subscription services, including Amazon Prime, also contribute to its sustained growth.

Snowflake: Innovating with Generative AI

The fourth AI stock in Buffett's portfolio is Snowflake, a cloud data-warehousing company. Snowflake represents $842 million of Buffett's AI investments (0.2% of invested assets). Snowflake’s acquisition of Neeva, which uses generative AI for search improvements, underscores its commitment to AI. Snowflake’s data cloud platform simplifies data sharing across different cloud services, and its pay-as-you-go model attracts and retains clients. Although Snowflake is a high-valuation stock, its competitive advantages make it an appealing investment.