Warren Buffett said in an interview with CNBC in April 2023 that artificial intelligence (AI) was "extraordinary." However, Buffett quickly added that he didn't "know if it's beneficial."
Whatever the multibillionaire's opinion of AI is, he has already benefited financially from the technology. Buffett has invested $159 billion in these eight AI stocks -- and most of them have been big winners over the last 12 months.
1. Apple
Apple (AAPL 1.45%) is by far the biggest AI holding for Buffett. Berkshire Hathaway's stake in the tech giant is worth roughly $156.9 billion. The stock hasn't performed especially well over the last 12 months, though, due to sluggish sales growth.
NASDAQ: AAPL
Key Data Points
That could change soon. Apple is widely expected to unveil its AI strategy at its developer conference and announce new AI functionality for iPhones in June.
2. Amazon
Berkshire owns $1.8 billion in Amazon (AMZN 3.89%) stock. Although Buffett didn't make the original decision to buy the e-commerce and cloud services leader, he's expressed regret for not buying the stock earlier.
Amazon has long been a pioneer in AI, reaping substantial efficiency gains from the technology. The ongoing surge in the adoption of generative AI should provide a big tailwind for its Amazon Web Services cloud platform.
3. Microsoft
Is Microsoft (MSFT 2.44%) a Buffett AI stock? Although you won't find it listed in Berkshire's regulatory filings, the answer is a resounding "yes." Berkshire subsidiary New England Asset Management (NEAM) has a stake in Microsoft worth $11.6 million.
Microsoft has been one of the biggest winners of the AI boom. The company has integrated OpenAI's GPT-4 large language model throughout its product lineup. Microsoft's Azure cloud platform is also enjoying strong growth as customers scramble to build and deploy AI apps.
4. Broadcom
Buffett also owns shares of Broadcom (AVGO 2.82%) thanks to NEAM. The investment firm's position in Broadcom was valued at over $9.5 million at the end of 2023.
Broadcom is a leading provider of custom AI accelerators and networking software used to scale AI applications. Its new XPU accelerator could claim the record as the biggest chip ever built for a consumer AI company.
5. NXP Semiconductors
NXP Semiconductors (NXPI 2.65%) is another AI chipmaker in NEAM's portfolio (which makes it a Buffett stock, albeit indirectly). NEAM owns a stake of $8.9 million in NXP.
AI is everywhere these days -- and that's good for NXP. The company focuses on chips for the automotive, Internet of Things (IoT), mobile, and communications infrastructure markets.
6. Qualcomm
Through NEAM, Buffett has a position worth $8.3 million in Qualcomm (QCOM 2.63%). Although Qualcomm hasn't delivered the sizzling gains over the last 12 months that some AI stocks owned by Buffett have, it's still up over 35%.
NASDAQ: QCOM
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Qualcomm is best known for its technology, which is used in mobile phones. The company is also investing heavily in AI and recently teamed up with several other top tech companies to develop open-source software that allows AI apps to run on any chip.
7. IBM
Berkshire Hathaway once directly owned shares of IBM (IBM 2.20%) but no longer does. However, the tech pioneer remains a Buffett stock due to NEAM's $5 million stake in IBM.
IBM might not be viewed as much of an AI leader now as it once was. The company's Watson platform, though, is used by many companies to harness the power of AI.
8. Alphabet
Buffett admitted publicly a few years ago that he made a mistake by not investing in Google parent Alphabet (GOOG 2.45%) (GOOGL 2.30%) earlier. While the tech giant still isn't in Berkshire's portfolio, NEAM owns around $2.5 million worth of Alphabet's shares.
NASDAQ: GOOGL
Key Data Points
Alphabet has had a couple of public relations embarrassments with its AI efforts. But the company remains one of the leaders in AI development. It's also rumored to be in negotiations with Apple about integrating the Google Gemini AI models with iPhones.
Are these Buffett AI stocks good picks to buy now?
I think that all of these Buffett AI stocks could deliver solid long-term returns. Which are the best picks? I like Amazon, Microsoft, and Alphabet. In my view, AI will primarily run in the cloud. These three companies operate the largest cloud platforms and should continue to be big winners for years to come.
