Warren Buffett, the renowned investor, has made significant changes to his portfolio’s exposure to artificial intelligence (AI) stocks.
Berkshire Hathaway hitting $1 trillion market cap feels like a crowning achievement for a storied investment career by Warren Buffett.
— Anthony Pompliano ? (@APompliano) August 28, 2024
According to recent filings, Berkshire Hathaway, the conglomerate led by Buffett, has reduced its stake in AI-related investments by approximately 50%. This move comes after Berkshire Hathaway had invested around $189 billion across four prominent AI stocks.
The decision to slash these holdings marks a notable shift in Buffett’s investment strategy. Buffett’s AI investments were primarily concentrated in four companies: Apple, Amazon, BYD, and Snowflake.
Warren Buffett paid approximately $14.86 per share to acquire Berkshire Hathaway in 1965. Buffett initially began purchasing shares at around $7.60 per share.
His total investment in acquiring control of Berkshire was about $14 million.— David Kass (@DrDavidKass) August 29, 2024
While Berkshire Hathaway has maintained its positions in Amazon and BYD, it has significantly reduced its holdings in Apple and completely exited its stake in Snowflake.
Berkshire Hathaway repurchased $27 billion of its stock in 2021, but only $9 billion in 2023, and just $2.9 billion in the first half of 2024, indicating that Warren Buffett may be viewing Berkshire as approaching full value.
— David Kass (@DrDavidKass) August 29, 2024
Apple, which has been a central component of Berkshire’s AI investments, recently unveiled “Apple Intelligence” at its annual Worldwide Developer Conference. This initiative includes AI-powered features such as an enhanced Siri voice assistant and a ChatGPT-powered chatbot integrated into the operating system. However, despite these advancements, Apple’s sales have been lackluster over the past year.
The company reported a 1% decline in iPhone sales in fiscal 2024, and its physical-device sales have struggled.
Berkshire Hathaway's market cap just hit $1 trillion for the first time ever.
An early birthday present for Warren Buffett. pic.twitter.com/9q8udovwHq
— Kevin Carpenter (@kejca) August 28, 2024
Buffett shifts AI investment strategy
Amazon, particularly through its cloud service arm, Amazon Web Services (AWS), has also been a key part of Berkshire’s AI-focused investments.
AWS holds a substantial share of the global cloud infrastructure market and is actively investing in generative AI solutions to enhance various aspects of its services. BYD, a China-based manufacturer, utilizes AI to improve driver safety through its Xuanji Architecture, an intelligent driving platform. The company is also collaborating with Chinese regulators to test autonomous vehicle capabilities.
Snowflake, a cloud data-warehousing company, has been part of Berkshire’s portfolio since its 2020 IPO. The company is working on deploying generative AI solutions within its data cloud. However, due to a decline in valuation, Berkshire has completely divested its 6,125,376 shares in Snowflake.
These recent moves by Berkshire Hathaway reflect a strategic reevaluation of its AI investments. The decisions align with Buffett’s investment philosophy, which considers both the growth potential and the valuation of the companies. Given the current market dynamics, further adjustments to Berkshire’s AI stock holdings may be on the horizon.
Investors closely follow Buffett’s investment moves to gain insights, but it is crucial for individuals to conduct their own due diligence before making investment decisions.
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