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Though Warren Buffett is known for his investments in financials and consumer staples, he has more than 22% of Berkshire Hathaway's invested assets tied up in two artificial intelligence (AI) stocks.
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One of Buffett's core AI stocks sports the largest share repurchase program on the planet.
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Meanwhile, the other is incorporating generative AI solutions and large language model capabilities into its most-profitable operating segment.
For six decades, billionaire Warren Buffett has been dazzling Wall Street with his investing prowess. Though his company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), hasn't outperformed the benchmark S&P 500 every year since 1965, he's nearly doubled the average annual total return of this broad-based index, including dividends, spanning 60 years.
For some investors, riding the Oracle of Omaha's coattails and mirroring his trading activity has been a pathway to long-term riches. Historically, this has meant buying time-tested businesses in the financial or consumer staples sectors.
But you might be surprised to learn that even 95-year-old Warren Buffett, who's set to retire at the end of the year and has, by his own admission, never been particularly tech-savvy, is invested heavily in the evolution of artificial intelligence (AI).
With AI, software and systems are given the capacity to make split-second decisions without human oversight or intervention. These systems may also have the ability to learn over time, which can make them more efficient at their assigned tasks. In Sizing the Prize, the analysts at PwC pegged this global addressable opportunity for artificial intelligence at $15.7 trillion by 2030.
While most brand-name businesses are incorporating AI solutions in some way or another (e.g., assisting with supply chain management), there are only two AI stocks in Berkshire Hathaway's $302 billion investment portfolio whose future growth prospects are highly dependent on AI investments -- and they comprise a whopping $68 billion of the invested assets Warren Buffett oversees.
Long before artificial intelligence became the hottest thing since sliced bread on Wall Street, Apple (NASDAQ: AAPL) was incorporating this technology into its flagship iPhone. Predictive text and typing suggestions have been a staple in iPhone for more than a decade, and voice assistant Siri was initially introduced in early 2010. Though Apple might not be thought of as a current AI leader, it's been a pioneer of AI applications for more than a decade.