Legendary investor Warren Buffett has an unmatched record of identifying high-quality companies poised for long-term growth. By taking a “buy and hold” approach with these stocks, his company Berkshire Hathaway has achieved market-crushing returns for decades. Now, retail investors have an opportunity to emulate Buffett’s success by investing in artificial intelligence. Three AI stocks backed by Berkshire could turbocharge portfolio performance in the years ahead.
Apple Leads the AI Assistant Race
With a market cap approaching $3 trillion, Apple remains the world’s most valuable public company. It is also by far Berkshire Hathaway’s largest stock position, making up around 47% of its equity portfolio. While notoriously secretive about new initiatives, Apple is positioning itself at the forefront of AI through voice-based assistants.
Apple dominates the global smartphone market and has established an early lead in the voice assistant space with Siri. If AI assistants prove to be the next revolutionary tech product category as many expect, Apple is primed to capitalize on this multibillion dollar market. With over 1 billion iPhone users worldwide, Apple has unparalleled data to refine and improve its AI offerings.
Amazon: The AI Cloud Leader
After regrettably not investing sooner, Berkshire initiated a position in Amazon in 2019 that is now worth around $1.5 billion. Amazon Web Services already enjoys market leadership in cloud infrastructure, which will likely expand as more companies shift AI workloads to the cloud. With unmatched scale and experience, AWS is the go-to platform for developers building the next generation of AI apps.
But Amazon’s AI advantage extends beyond the cloud. AI promises to turbocharge productivity in Amazon’s e-commerce operations through automated warehouses and eventually self-driving delivery vehicles. This could massively boost margins in the company’s core online retail segment. In other words, AI can drive growth both through Amazon’s cloud business and its own internal operations.
Snowflake: Unlocking the AI Data Advantage
While only accounting for 0.3% of Berkshire’s portfolio, Snowflake has explosive growth potential as a key AI enabler. Snowflake’s platform helps organizations aggregate and analyze data from diverse sources across different cloud environments. Accessing and sharing data is the foundation for impactful AI applications.
Snowflake expects to nearly triple revenue to $2.65 billion this fiscal year while improving free cash flow margins to 27%. By 2029, management forecasts $10 billion in sales at a 30% free cash flow margin. With machine learning workflows requiring vast amounts of data, Snowflake sits in the middle of an enormous AI opportunity.
The Bottom Line
Like past technological shifts, from personal computing to the internet and mobile, AI promises to reshape multiple industries for decades to come. Powered by advances in data and computation, the AI revolution is here. As Buffett has demonstrated for years, identifying and holding high quality stocks with structural growth tailwinds can transform portfolio performance. For investors looking to ride the AI wave, Apple, Amazon and Snowflake represent compelling long-term bets.
