On the age of 94 and at present in his final yr as CEO of Berkshire Hathaway, it could be straightforward to view Warren Buffett as an old school investor. However you do not grow to be the very best investor of all time by staying previously.
Whereas Buffett at all times abides by a core set of investing rules which have served him nicely, he is by no means been afraid to put money into new sectors if he sees an exquisite enterprise buying and selling at a good value. Whenever you look throughout Berkshire’s large $291 billion equities portfolio, most sectors are represented — even the high-flying synthetic intelligence (AI) sector. In truth, 39.1% of Berkshire’s portfolio is invested in simply three AI shares.
Picture supply: The Motley Idiot.
1. Apple: 21.9% of portfolio
Buffett and Berkshire first acquired shares within the iconic client tech firm Apple (AAPL 0.46%) in 2016, and at one level, Apple consumed over 40% of Berkshire’s portfolio. Since then, Berkshire has decreased its place within the firm, though it was nonetheless the most important place within the portfolio on the finish of the primary quarter of the yr.
As a “Magnificent Seven” inventory and one of many largest publicly traded firms, Apple has at all times led the best way on technological innovation with merchandise reminiscent of the unique MacIntosh laptop, the MacBook, the iPad, AirPods, and naturally, the iPhone. So naturally, it isn’t stunning to see the corporate grow to be a number one innovator within the AI area by incorporating the tech into its product set.
Not way back, Apple launched Apple Intelligence, its broad suite of AI instruments. These instruments embrace extra environment friendly methods to write down on Apple merchandise, new methods to create pictures and different visible content material, and methods to leverage AI and machine studying into Apple’s conversational chatbot Siri, which additionally integrates ChatGPT. Apple primarily put a supercomputer in everybody’s pocket with the iPhone, so it is completely logical to imagine that the iPhone will combine extra AI instruments over time. Apple additionally makes use of AI for a lot of different duties inside the iPhone, together with battery administration, voice recognition, fraud prevention in Apple Pay, and Face ID.
The inventory has struggled this yr and is down about 13.5% in 2025 (as of July 15). The entire chaos brought on by tariffs has harm Apple as a result of a lot of its provide chain relies in China and Vietnam. Buying and selling above 29 instances ahead earnings, barely above its five-year common, I nonetheless have near-term issues concerning the inventory. The tariff saga is actually not over and I feel buyers in all probability need to see Apple do extra with AI. Nonetheless, given the model Apple has constructed and its market share, I strongly suspect Apple will be capable of climate the storm, so long-term buyers must be tremendous.
2. American Specific: 16.4% of portfolio
The bank card and funds firm American Specific (AXP -2.35%) will probably by no means be seen as a standard AI inventory. That is as a result of American Specific, at its core, is a financial institution, and banks should maintain regulatory capital. The banking sector has additionally woefully underperformed the broader market because the Nice Recession, and banks additionally face cyclical headwinds as a result of they make loans, which might go unhealthy throughout financial downturns.
Nonetheless, American Specific is actually not your conventional financial institution and in addition operates a closed-loop funds system. Buffett has owned the inventory for many years, and there is no doubt that the corporate is tapping into AI and machine studying for automation and to extra effectively run advanced components of its banking and funds companies as nicely.
American Specific has a 17-person Frontier Analysis Group that particularly focuses on the way it can use AI/ML throughout its operations. This group seems for areas the place AI can be utilized to assist market to and approve new prospects for merchandise. In addition they need to use AI to assist prospects higher handle their accounts nearly, and for customer support and funds.
One use case of the Frontier group was how AI/ML could possibly be used to enhance credit score selections and fraud prevention. They leaned on information pre-processing, which includes taking uncooked information and utilizing AI/ML to prepare it into codecs which might be simpler to investigate, which not solely saves time for extra necessary duties, however helped the corporate higher practice and enhance its credit score fashions.
American Specific has been a superb inventory to personal for many years, so it is no shock to see the corporate on the forefront of innovation. American Specific has a extremely coveted income stream pushed by curiosity revenue from bank card loans made to higher-income debtors, in addition to a big funds system that brings in payment revenue, and that will not be straightforward to copy.
3. Amazon: 0.8% of portfolio
The big e-commerce and tech conglomerate Amazon (AMZN 0.97%) is a a lot smaller place for Buffett than the 2 shares talked about above, nevertheless it is likely to be Berkshire’s most conventional AI play.
Not solely can Amazon combine AI capabilities into its large on-line e-commerce enterprise to enhance logistics and higher market its merchandise, however the firm mentioned earlier this yr that it’ll probably spend $100 billion on AI-related capital expenditures. AI is a perfect match for Amazon Internet Providers, which helps firms run their enterprise within the cloud with out having to personal and function the bodily infrastructure. Amazon can now tack on AI companies that firms can use with out having to construct AI-related infrastructure.
In accordance with CNBC, Amazon has been constructing and investing in information facilities and different {hardware} wanted to energy AI since OpenAI launched ChatGPT in 2022. The corporate has additionally unveiled many AI instruments and merchandise, together with a chatbot for procuring referred to as Rufus, a bundle of huge language fashions for constructing AI purposes, and even its personal semiconductor chip referred to as Trainium.
Amazon has had its personal struggles with tariffs, primarily as a result of so many sellers and merchandise the corporate sells usually are not situated in or made within the U.S. However contemplating how a lot alternative there may be to convey companies onto the cloud, not to mention the potential for widespread business AI use, it is arduous to see how Amazon will not be a long-term beneficiary of the AI motion.
John Mackey, former CEO of Entire Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. American Specific is an promoting accomplice of Motley Idiot Cash. Bram Berkowitz has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Amazon, Apple, and Berkshire Hathaway. The Motley Idiot has a disclosure coverage.
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