3 Tech Stocks Warren Buffett Admits He's Made Mistakes On

Core Insights - Warren Buffett has acknowledged mistakes in his investment decisions, particularly in the tech sector, despite his long-standing success in stock-picking [1][2] Group 1: Amazon - Buffett underestimated Amazon's potential for growth, admitting he was "too dumb" to recognize its future opportunities [3] - Amazon's valuation may have become too high for Buffett by the time its potential was evident, with the company posting its first profit of $5 million in late 2001 after going public in 1997 [4] - Currently, Amazon trades at around 41 times its trailing earnings, which is considered a more attractive valuation compared to its historical averages, indicating potential for investors who see value in tech [5] Group 2: Alphabet - Buffett recognized the opportunity with Alphabet (formerly Google) but was concerned about its competitive advantage and the possibility of being overtaken by other companies [6] - Current concerns for Alphabet include competition from AI technologies like ChatGPT and regulatory challenges following a ruling on its monopoly status in search [7] - Alphabet is trading at a reasonable 23 times trailing earnings, presenting a potential buying opportunity for long-term investors willing to accept associated risks [8] Group 3: International Business Machines (IBM) - Buffett initially invested in IBM, believing in the strong demand for its IT services, but later regretted this decision as the company struggled to grow and adapt to new technologies [9][10] - IBM's revenue growth has been stagnant, with only a 1% increase projected for 2024, and it is trading at over 23 times its future profits, which appears steep given its lack of growth [12] - This situation serves as a reminder of the volatility in the tech sector and the importance of ongoing evaluation of individual stocks [11]