Warren Buffett has served as the CEO of the Berkshire Hathaway (BRK.A 0.39%)(BRK.B 0.27%) holding company since 1965. Had you invested $1,000 in Berkshire stock when he took the helm, it would have been worth a whopping $44.7 million at the end of 2024. The same investment in the S&P 500 (^GSPC 1.33%) would have grown to just $342,906 over the same period.
Buffett and his team oversee a $265 billion portfolio of stocks and securities, in addition to several wholly owned subsidiaries. Berkshire is also holding a whopping $334 billion in cash right now, which can be put to work when new opportunities arise.
Buffett is a long-term investor who pays no mind to the latest stock market trends, so you won't find him piling into artificial intelligence (AI) stocks on Berkshire's behalf. However, at least four of the conglomerate's existing holdings -- which represent 34.4% of the total value of its $265 billion portfolio -- are using AI to supercharge their legacy businesses.
Image source: The Motley Fool.
1. Domino's Pizza: 0.4% of Berkshire Hathaway's portfolio
Buffett and his team went on a selling spree during 2024, which proved to be a smart move given the sharp decline in the S&P 500 over the last few months. But they did buy some stocks at the tail end of last year, and one of them was Domino's Pizza (DPZ +1.42%). The company serves more than 1 million customers every day in 90 countries, making it the largest pizza chain in the world, and it's using AI in several innovative ways.
NASDAQ: DPZ
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Domino's launched an AI tool called Voice of the Pizza earlier this year, which crawls discussion boards like Reddit for customer feedback, and autonomously forwards any important information back to headquarters so management can implement changes to menu items or the user experience. The company also deployed an AI algorithm on its website to analyze customer behavior, so it knows when to start making pizzas even before an order is officially placed.
Domino's eventually wants to use AI for more, from staff scheduling inventory management, which will boost efficiency and potentially drive significant earnings growth in the long run -- a feature Buffett loves in his investments.
2. Amazon: 0.7% of Berkshire Hathaway's portfolio
Amazon (AMZN 2.61%) has become an AI powerhouse by deploying the technology on multiple fronts. The company created an AI virtual assistant called Rufus, which helps shoppers compare products and make more informed decisions on its world-leading e-commerce website, Amazon.com. It also uses AI and computer vision in its fulfillment centers to weed out defective products, which reduces the number of returns and refunds.
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But Amazon also designed its own data center chips, large language models (LLMs), and an AI assistant that businesses can use to develop their own AI software through the Amazon Web Services (AWS) cloud platform. AWS is the largest cloud provider in the industry by revenue, pulling in more than $107 billion last year, and it believes AI is a once-in-a-lifetime business opportunity.
Berkshire bought Amazon stock in 2019, but Buffett has often expressed regret for failing to identify the opportunity much sooner. Nevertheless, Berkshire's stake in Amazon is worth more than $1.7 billion, so Buffett and his team could still do very well if the tech giant's AI strategies pay off in the coming years.
3. Coca-Cola: 11% of Berkshire Hathaway's portfolio
The average investor probably wouldn't associate Coca-Cola (KO +0.12%) with cutting-edge technologies like AI, but you don't become the world's biggest beverage company without a splash of innovation. In fact, Coca-Cola's AI strategy runs quite deep -- the company is using the technology in its marketing campaigns, in its day-to-day operations, and even to design new drinks.
Over the Christmas period last year, Coca-Cola ran an interactive campaign called Create Real Magic, which allowed people to generate holiday-themed digital snow globes using an AI engine on the company's website. And back in 2023, Coca-Cola ran mountains of customer data through an AI algorithm to predict what its flagship beverage might taste like in the year 3000. It sold the promotional beverage -- called Coca-Cola Y3000 -- for a limited time.
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But this is just the beginning, because the company plans to spend $1.1 billion with Microsoft Azure by 2029 to accelerate what it calls an "AI transformation" across the entire organization. Coca-Cola will use Azure to develop AI tools to improve a range of activities including workplace productivity and the efficiency of its supply chains.
Berkshire spent $1.3 billion to acquire 400 million shares of Coca-Cola between 1988 and 1994, and it has never sold a single one. That position is now worth a whopping $29.2 billion, and it also yielded $776 million in dividend payments during 2024 alone. It highlights the power of compounding, which is a key feature of Buffett's long-term investment strategy.
4. Apple: 22.3% of Berkshire Hathaway's portfolio
Apple (AAPL 0.96%) is Berkshire's largest position with a value of $59.1 billion as of this writing, which represents 22.3% of its portfolio. However, Apple made up around 50% of the conglomerate's portfolio at the start of 2024, before Buffett and his team sold more than half of its stake throughout the year.
That doesn't mean Buffett feels downbeat about Apple's long-term potential, but he has an obligation to maximize returns for Berkshire's shareholders, and having half of its portfolio in one stock probably created an unacceptable level of risk. Apple could actually become one of the best AI plays in the world in the long run, so I predict it will remain part of Berkshire's portfolio for the foreseeable future.
Apple has been preparing for the AI boom for years by designing specialized chips for its iPhones, iPads, and Mac computers. Those chips paved the way for the launch of Apple Intelligence last year, which introduced a suite of AI-powered features including a series of writing tools that can summarize and generate messages and emails, and a tool that can prioritize notifications based on what's important to each individual user.
There are more than 2.2 billion active Apple devices around the world, which means the company could soon become the largest distributor of AI software to consumers. Despite the substantial reduction in Berkshire's stake, the conglomerate could still do spectacularly well if Apple's AI strategy bears fruit.
