Warren Buffett's AI legacy: Apple and Amazon now make up a fifth of Berkshire's $282 billion portfolio
Berkshire Hathaway, long known for its conservative investments, now has significant exposure to AI through major holdings in Apple and Amazon. While trimming its Apple stake, it remains heavily invested in the tech giant. Amazon, via AWS, represents a dynamic AI growth play, reflecting a strategic pivot in Berkshire's portfolio.
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Billionaire investor Warren Buffett has long steered clear of Silicon Valley's flashiest trends. But as he prepares to step down as chief executive of Berkshire Hathaway later this year, the investment firm he built is now deeply exposed to the engine driving today's technology boom: artificial intelligence. Apple and Amazon , two companies at the heart of the AI race, together account for roughly 22% of Berkshire's $282 billion equity portfolio , or about $62 billion in market value. The stakes underscore a subtle but meaningful shift in the strategy of an empire once defined by railroads, banks, and insurance firms.Apple, with its $3 trillion valuation, remains Berkshire's largest stock holding by far, making up 21.6% of the total portfolio. That's despite the firm selling off more than 600 million Apple shares over the past year.The reduction was part of a broader trend at Berkshire Hathaway, which has been raising its cash holdings while trimming its exposure to publicly traded stocks. That caution reflects rising unease about frothy valuations and simmering geopolitical risks. But the Apple cuts may also point to concerns specific to the tech giant.Though Apple has a dominant global presence in mobile hardware, it has struggled to match the pace of other tech titans in artificial intelligence. Its voice assistant, Siri, has reportedly fallen behind next-generation AI products in sophistication and capability, and delays in launching its AI suite in China added to the pressure. Apple eventually partnered with Alibaba to bring its software to Chinese users, but domestic rivals continue to gain ground.Still, despite the headwinds, Apple remains Berkshire's crown jewel. While the company's stake may have been trimmed, it's a sign of continued faith that Apple holds more weight in Berkshire's portfolio than any other single stock.Amazon, a much smaller position in the Berkshire portfolio, represents a very different kind of AI bet, one that was made not by Buffett himself but by his deputies, portfolio managers Todd Combs or Ted Weschler. Buffett has openly said he missed the boat by not buying Amazon earlier.The company's AI momentum is centered in Amazon Web Services (AWS), its massive cloud computing arm. AWS powers the infrastructure behind many generative AI models and is well-positioned to benefit as companies of all sizes integrate AI into their core operations."Before this generation of AI, we thought AWS had the chance to ultimately be a multi-hundred-billion dollar revenue run rate business," Amazon CEO Andy Jassy said during a recent earnings call. "We now think it could be even larger."AWS supports AI deployment at multiple levels, offering full model customization for large enterprises, semi-custom tools through its Bedrock platform, and plug-and-play AI applications for small businesses. In the first quarter, AWS revenue rose 17% from a year earlier, and the division accounted for nearly two-thirds of Amazon's total operating income.Buffett's aversion to overhyped tech plays was once central to his investing identity. But his company's current exposure tells a more nuanced story. Even as it trims certain positions and braces for global uncertainty, Berkshire remains deeply invested in the future of artificial intelligence.The real question now is what happens next. With Buffett set to relinquish day-to-day control, investors will be watching to see whether Berkshire doubles down on AI-linked stocks like Amazon, or continues the cautious rebalancing seen in recent quarters.For all his skepticism of tech fads, Buffett's portfolio suggests a recognition that the future of value may increasingly be shaped by the power of algorithms, and the platforms that run them.Also read | 3 reasons why Warren Buffett doesn't buy REITs, but here's why that shouldn't stop you (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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