24% of Warren Buffett's Portfolio is Invested in These 3 Artificial Intelligence (AI) Stocks

Core Insights - Berkshire Hathaway, led by Warren Buffett, maintains a large equities portfolio valued at over $300 billion, demonstrating a commitment to core investing principles while exploring newer sectors [1][2]. Investment Focus - Berkshire Hathaway has invested significantly in the "Magnificent Seven" stocks, with nearly 24% of its portfolio allocated to just three of these companies [2]. - The three major holdings include Apple, Alphabet, and Amazon, which represent key areas of focus for the company [2]. Company Analysis Apple - Apple constitutes 21.3% of Berkshire's portfolio, with the initial investment made in 2016. The position was once as high as 40% [3]. - Concerns exist regarding Apple's AI strategy, but the company is expected to benefit from AI integration in its products [4]. - Despite being Berkshire's largest position, the company has sold 74% of its stake since early 2023, indicating a cautious approach amid market concerns [6]. - Apple has performed well during the AI sell-off due to its limited investment in AI infrastructure compared to peers, making it a long-term hold for investors [7]. Alphabet - Alphabet represents 1.8% of Berkshire's portfolio, with a new position initiated in the third quarter. The stock has been favored by hedge funds despite a challenging year [8]. - The U.S. Department of Justice's lawsuit against Google for monopolistic practices resulted in a weaker punishment than expected, allowing the company to continue normal operations [9]. - Alphabet's stock trades at about 30 times forward earnings, with strong growth potential in various sectors, including Google Cloud and YouTube [11]. Amazon - Amazon accounts for 0.7% of Berkshire's portfolio, with the initial purchase made in 2019 [13]. - The company operates a robust e-commerce platform and a significant cloud business, Amazon Web Services (AWS), which holds a 30% market share in the global cloud market [16]. - Amazon's stock trades at about 32 times forward earnings, reflecting its strong growth potential despite not being considered cheap [18].