Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has long been celebrated for his unparalleled investment acumen. Known as the "Oracle of Omaha," Buffett has steered his company's Class A shares (BRK.A) to an astronomical return of nearly 5,000,000% since taking over as CEO, dwarfing the S&P 500's respectable gain of over 35,000%. While most eyes are on Berkshire's well-known $379 billion portfolio, there's a lesser-known $646 million portfolio managed by New England Asset Management (NEAM) that contains intriguing surprises, including three notable AI stocks.
In a recent article from The Motley Fool, it was revealed that Buffett's secret portfolio includes Alphabet, Broadcom, and Microsoft, each of which is making significant strides in artificial intelligence.
First on the list is Alphabet (GOOGL), the parent company of Google, YouTube, Waymo, and Google Cloud. NEAM held 10,500 Class A shares of Alphabet as of the end of March. The Motley Fool article highlights that "virtually all aspects of Alphabet's operating segments utilize AI," with Google Cloud's generative AI solutions playing a pivotal role. This division achieved profitability in 2023, a milestone that underscores its importance to Alphabet's future. Google continues to dominate global search with a 90% market share, while YouTube, with its 2.5 billion monthly active users, strengthens its ad-driven revenue streams.
Next is Broadcom (AVGO), a semiconductor giant with a significant focus on AI technology. According to The Motley Fool, NEAM held 3,970 shares of Broadcom, valued at nearly $5.3 million. Broadcom's impressive Jericho3-AI chip, capable of connecting up to 32,000 GPUs, is designed to enhance the processing power required for training large language models and operating high-compute data centers. The ongoing demand for 5G technology and smartphone upgrades further solidifies Broadcom's position in the market.
Finally, Microsoft (MSFT), the world's largest public company at the time of writing, rounds out the trio. NEAM's holdings included 13,210 shares of Microsoft, worth close to $5.6 million. The Motley Fool reports that Microsoft has heavily invested in OpenAI, the company behind ChatGPT, and is developing its own AI chips, the Azure Maia 100. Microsoft's cloud services, led by Azure, consistently exhibit strong growth, with constant-currency sales growth hovering around 30%. With $80 billion in cash reserves, Microsoft is well-positioned to continue its AI-driven innovations. To read the full details of Buffett's hidden AI bets, check out the original article on The Motley Fool here.