Buffet discreetly Holds Stakes in Three Pioneering Artificial Intelligence (AI) Corporations
In the realm of Wall Street heavyweights, none shine quite as brightly as Berkshire Hathaway's CEO, Warren Buffett, also known as the "Oracle of Omaha." With an astounding 5,422,200% return on Berkshire Hathaway's Class A shares (BRK.A) since he took charge, Buffett has left the competing S&P 500 in the dust with its 38,751% return over the same period.
Investors often find themselves mimicking Buffett's trades, an action facilitated by examining Berkshire's quarterly filed Form 13F. However, this document only offers part of the picture.
Berkshire's hidden portfolio:
Berkshire Hathaway first gained control of reinsurance company General Re in a 1998 all-stock deal worth $22 billion. The deal included General Re's specialty investment firm, New England Asset Management (NEAM). Post the acquisition, Berkshire Hathaway became NEAM's new owner. As of September 30th, NEAM managed $642 million worth of assets across 120 securities. Although Buffett doesn't control NEAM's investments like he does Berkshire Hathaway's 44-stock, $293 billion portfolio, whatever NEAM owns, it shares the same space as Buffett's company.
Buffett's secret tech investments:
In stark contrast to NEAM's traditional focus on value stocks and well-known businesses, three leading artificial intelligence (AI) stocks enrich this secret portfolio.
1. Broadcom (AVGO 0.62%):
NEAM made an investment of 19,855 shares in Broadcom, valuing it at nearly $4.5 million. Broadcom is a leading provider in the networking solutions, specifically catering to AI-accelerated data centers. Broadcom's Jericho3-AI fabric can seamlessly connect up to 32,000 GPUs, reducing latency and managing data flow at unprecedented speeds. Broadcom has also diversified its operations beyond AI, catering to the growing demand for 5G-capable smartphones and cybersecurity solutions.
2. Microsoft (MSFT -0.41%):
NEAM's portfolio also includes 7,490 shares of Microsoft, valued at approximately $3.1 million. While Microsoft is expanding its AI capabilities in data centers and developing AI-GPUs, its primary AI ties lie in expanding the utility of this technology. Microsoft Azure has established a 20% share of cloud service spending and partners with several firms to invest in required data center infrastructure. AI can potentially contribute to accelerating Azure's growth.
3. Alphabet (GOOGL -1.35%, GOOG -1.30%):
Although NEAM has sold shares in Alphabet for five consecutive quarters, they remain invested in 5,195 Class A shares. Alphabet is less focused on AI hardware and more on exploiting AI for real-world applications, particularly through its Google Cloud. Google Cloud trails only Microsoft's Azure and Amazon Web Services in terms of global cloud service spending share. Alphabet has emphasized the use of AI for managing machine learning requirements and transforming generative AI solutions.
Although these AI stocks are but a small part of Berkshire Hathaway's diversified portfolio, they might serve as a glimpse into the tech giants attracting Buffett's attention.
Investors interested in replicating Buffett's investment strategies might also consider looking into Berkshire Hathaway's lesser-known holdings, such as the tech stocks in NEAM's portfolio.
Regardless of NEAM's separate management, these tech investments still share a connection to Buffett's company due to its ownership.
%20Corporations){kind=link}