This renowned investor might not have a heavy focus on tech firms in his portfolio, but he does include various companies utilizing AI to improve their offerings.
After leading for 60 years, Berkshire Hathaway’s Warren Buffett will retire as CEO by year’s end. Under his leadership, the conglomerate has achieved remarkable market dominance. Between 1965 and 2024, the growth of Berkshire’s stock reached an astounding 5,502,284%, significantly outperforming the S&P 500, which saw a return of 39,054%.
Much of that impressive growth stemmed from gains within a diversified stock portfolio now valued at $320 billion. It’s safe to say that many investors still look to Buffett’s portfolio for insights and inspiration.
While he generally shies away from tech investments, several of Berkshire’s holdings are in companies that actively use artificial intelligence (AI), with three of these firms making up 27% of his overall portfolio.
1. Apple
Buffett began his investment in Apple (AAPL 0.20%) in 2016, and this stake now constitutes 23.9% of Berkshire’s portfolio, marking it as his largest position. Though Apple isn’t a front-runner in AI, it has begun rolling out AI features from 2024, despite some enhancements being delayed until 2026. Apple is incorporating AI technologies into its products, which include functionalities like real-time text analytics and optimized battery management.
Rather than creating its own competitive AI models, Apple has opted to collaborate with AI firms, like OpenAI, which developed ChatGPT. It’s rumored that Apple will pay Alphabet $1 billion each year for a tailored Gemini AI model to enhance Siri, their virtual assistant.
This strategy could be more financially prudent, especially amid concerns that many tech companies are overspending on AI. While Apple may not perform like a traditional growth stock, its loyal customer base suggests it will likely continue to serve its shareholders well.
2. Chubb
The insurance sector proves to be a profitable one for Buffett. Berkshire’s portfolio features multiple insurance firms, including Geico. In 2023 and 2024, Berkshire will also include Chubb (C.B. 0.25%), a company that offers a range of insurance solutions globally.
Chubb has gained a reputation for its innovative methods, utilizing AI to automate processes such as underwriting, claims assessment, and fraud detection. Recently, they introduced an AI-enabled optimization tool that analyzes data to suggest personalized insurance products to clients.
While a positive outlook is commendable, what ultimately matters is performance. Chubb’s combined ratio—a key measure of profitability for insurance companies—indicates efficiency; a ratio of 100% means breaking even, while anything lower signals profitability. Chubb’s non-life combined ratio for 2024 was 86.6%, outperforming the industry average of 96.6%.
At present, Chubb makes up 2.5% of Berkshire’s portfolio. It could be a sensible addition for those in search of a stable stock benefiting from AI advancements.
3. Visa
Visa (V 1.84%) went public in 2008, with Buffett acquiring shares a few years later in 2011. This holding makes up nearly 1% of Berkshire’s portfolio.
AI surged into the spotlight after the launch of ChatGPT in late 2022. Still, Visa was an early adopter, leveraging AI for risk and fraud management back in 1993. Its Visa Advanced Authorization product uses this technology to prevent approximately $28 billion in fraud each year.
Visa is working on an AI tool that helps streamline the online shopping experience, allowing users to make purchases based on queries without needing to navigate various websites.
Alongside its competitor MasterCard, Visa processes about 90% of all payment transactions outside of China, positioning it as a relatively stable investment with strong growth potential.
