Few investors are known for their stock-picking abilities quite like Warren Buffett. The Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) founder is among the wealthiest in the world, and his influence on investing strategies is far-reaching. But for as reputable as Buffett is as an investor, his track record on tech stocks has been infamous. Buffett has always lacked in the sector of technology. Still, he is all in on the newly-booming artificial intelligence (AI) market. There are five AI stocks Buffett appears to be especially keen on.
Warren Buffett is not known for playing into the hype. His approach to investing is not based on the supply versus the demand of a company’s shares. Instead, he approaches investments with a more comprehensive evaluation of worth. Is a company providing a good or service that is, or will be important? Is the company currently severely undervalued?
It’s not a popular investing strategy for this current generation of retail investors, who are focused on high-volume trading. But it’s tried and true. That much is made certain by the successes of Berkshire and Buffett’s eye-watering net worth of over $106 billion.
This strategy also makes it much less surprising to know that Buffett is not very good at tech investing. Tech is an industry focused wildly on hype. As such, he had, until the last decade, been loathe to invest in this sector at all. Buffett has also said he does not invest in products he doesn’t understand. Of course, in tech, there’s a lot investors might not understand, which more or less bars him from the entire industry. And even when he began to buy into tech stocks in the early 2010s, his track record had been tumultuous at best.
Warren Buffett’s AI Stocks Bet Rests on Tech Giants
Given the billionaire’s fraught relationship with tech, it comes as a big surprise that he has some deep stakes in AI stocks. Indeed, Buffett must believe in a future supplemented further by machine learning.
Of course, the billionaire might be high on tech giants, given Buffett’s five AI stock holdings. The five stocks are Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA). The first four companies represent the largest stocks on Wall Street by market capitalization. The fifth is a top 10 stock by market cap.
Any celebrity investor worth their salt likely owns most of these stocks. Buffett would be a fool not to own any of the stock market’s four most prominent players. And while these companies have varying levels of exposure to AI, they aren’t driven solely by AI. So, it isn’t apparent from these holdings that Buffett is genuinely an AI believer.
His holding in NVDA stock is a bit more telling, though. The company is less esteemed than its peers here. And it’s the most deeply entrenched in the AI hype train, thanks to its A100 chip. This chip makes up 95% of the market for machine deep-learning microprocessors. And while it didn’t perform well in its recent earnings, the stock soared almost entirely on bullish sentiment for AI growth.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.