With legendary CEO Warren Buffett's time complete with Berkshire Hathaway, many investors are wondering where the company will go under the direction of new CEO Greg Abel. Buffett and Berkshire have been staunch value investors for multiple decades, but could this transition indicate a shift in investment philosophy?
I wouldn't be surprised if Berkshire becomes more aggressive with Abel at the helm, and maybe invests in an artificial intelligence (AI) stock or two. But which one will it buy?
Image source: Getty Images.
Berkshire already owns some AI stocks
The number of companies that fall under the artificial intelligence investing umbrella is quite large. There are software applications, facilitators, hardware plays, or even infrastructure, including energy companies. Berkshire already owns a few stocks that I'd consider AI plays, including Amazon (AMZN 1.30%) and Alphabet (GOOG 1.60%) (GOOGL 1.70%). Berkshire added Alphabet to its portfolio during Q3 2025, and this recent addition has already made it a ton of money.
NASDAQ: AMZN
Key Data Points
The next AI stock Berkshire may purchase could be one it already owns, and I wouldn't be surprised if Amazon is one of the next stocks it adds to. Berkshire first took a stake in Amazon in 2019 and has added to that position over time, but hasn't purchased any Amazon shares in a while. Berkshire owns an even 10 million shares of Amazon, which sounds like a ton. However, Amazon is only a 0.8% stake in Berkshire's investment portfolio. With Amazon being an undersize portion of Berkshire's portfolio compared to the outsize returns it could generate, it makes sense that the conglomerate may elect to add shares in 2026.
After a so-so start to 2025, Amazon is really starting to gain momentum in the second half of 2025. Net sales rose 13% year over year to $180 billion, with recent high growth rates in several of its key business units. Amazon Web Services (AWS, its cloud computing segment) and advertising services each posted the best growth in multiple quarters. This is key, as both of these business units have much greater operating margins than other commerce-focused business units.
In Q3, AWS made up 66% of Amazon's total operating profit despite only generating 18% of total sales. With AWS' growth reaccelerating and it projected to continue that strength into 2026, that bodes well for Amazon's profit picture.
Amazon doesn't break out the advertising service's operating margin as it does with AWS. Still, if you look at other advertising-focused businesses like Alphabet and Meta Platforms (META 2.45%), it's clear that this business unit likely has operating margins in the 30% to 40% range, which is far higher than the whole company's operating margin.
GOOGL Operating Margin (TTM) data by YCharts
Continued success of these two business units is key for Amazon, but is it enough for Berkshire to warrant purchasing shares?
One of the possible minds behind the first Amazon purchase is gone
Buffett wasn't the only portfolio manager at Berkshire Hathaway. Todd Combs and Ted Weschler also had some purchasing power, and they were known to purchase more tech-focused investments than Buffett did. Todd Combs is no longer a part of Berkshire, as he accepted a position at JPMorgan Chase. If Combs was the original purchaser of Amazon shares, this may not bode well for Amazon's future inclusion in Berkshire's investment portfolio. But if it was Ted Weschler, it may be on his shopping list.
One of Berkshire's core investment philosophies is to buy great companies at good prices. Most investors would agree that Amazon is a great company, but what's a good price?
The best metric to value Amazon's stock is the operating price-to-earnings ratio. The standard P/E ratio isn't a great measure for Amazon, as it has a significant investment portfolio whose gains and losses can cause its diluted earnings per share (EPS) metric to rise and fall, even if Amazon didn't sell any of its investments. By this metric, Amazon is the cheapest it has been in some time.
AMZN Operating PE Ratio data by YCharts
With Amazon trading at the bottom end of its recent range and expected to have a strong 2026, I wouldn't be surprised if Berkshire decides to add some more Amazon shares to its portfolio. Time will tell where Greg Abel wants to lead this business, but I'd be shocked if he didn't start spending some of the cash Buffett piled up during his last few years as CEO.
