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Make Your ETF Portfolio AI-Rich in Buffett-Like Manner

Warren Buffett expressed his fascination with artificial intelligence (AI) in an interview with CNBC in April 2023, labeling it as "extraordinary," per a Motley Fool article, as quoted on Yahoo Finance. However, he added a caveat too, stating uncertainty about its overall benefits.

Despite this, Buffett has invested $159 billion in eight tech stocks that have prominent presence in the AI field. Most of these stocks emerged winners over the last one year. Here's a breakdown:

Apple: Apple is apparently a laggard in the Ai race. The stock's performance has been somewhat lackluster recently with about 3.2% gains past year (as of Mar 28, 2024). Still, Buffett’s Berkshire Hathaway's investment stands at approximately $156.9 billion in Apple.

Now, Apple is widely expected to unveil its AI strategy at its developer conference and announce new AI functionality for iPhones in June. With this expectation, we can consider Apple as a potential AI bigwig. Apple has about 19.36% exposure to Technology Select Sector SPDR Fund XLK.

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    Amazon: With a $1.8 billion investment in Amazon AMZN, Buffett has acknowledged missing out on earlier opportunities with the e-commerce giant, which has been leveraging AI for efficiency gains. The ongoing surge in the adoption of generative AI should provide a big tailwind for its Amazon Web Services cloud platform. Amazon has about 23.71% exposure to ProShares Online Retail ETF ONLN.

Microsoft: Despite not appearing directly in Berkshire's filings, Buffett indirectly holds a stake in Microsoft (MSFT) through Berkshire subsidiary New England Asset Management (NEAM), valued at $11.6 million. Microsoft's integration of AI across its products has contributed to its huge success. Microsoft has close association with ChatGPT-famed OpenAI. Microsoft has about 24.1% exposure to XLK.

    Broadcom: NEAM's position in Broadcom AVGO, valued at over $9.5 million, aligns with Buffett's AI investments, given Broadcom's advancements in AI accelerators and networking software. Broadcom has about 10.17% exposure to Pacer Data and Digital Revolution ETF TRFK.

NXP Semiconductors: Another NEAM holding, NXP Semiconductors NXPI, valued at $8.9 million, caters to various markets benefiting from AI applications. The company focuses on chips for the automotive, Internet of Things (IoT), mobile, and communications infrastructure markets. NXP Semiconductors has about 4.25% exposure to Columbia Seligman Semiconductor and Technology ETF SEMI.

Qualcomm: NEAM's $8.3 million stake in Qualcomm QCOM reflects Buffett's interest in AI, considering Qualcomm's involvement in mobile technology and AI development. Qualcomm has about 8.27% exposure to First Trust Nasdaq Semiconductor ETF FTXL.

    IBM: While Berkshire Hathaway no longer directly owns shares of IBM IBM, NEAM's $5 million stake keeps it within Buffett's AI portfolio, with IBM's Watson platform still relevant in AI utilization. IBM has about 8.27% exposure to FTXL.

    Alphabet: NEAM's ownership of around $2.5 million worth of Alphabet GOOGL shares underscores Buffett's continued interest in AI, despite previous missed opportunities with Google parent Alphabet. Alphabet has about 13% exposure to iShares Global Comm Services ETF IXP and Fidelity MSCI Communication Services Index ETF FCOM each.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

International Business Machines Corporation (IBM) : Free Stock Analysis Report

NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report

Broadcom Inc. (AVGO) : Free Stock Analysis Report

Technology Select Sector SPDR ETF (XLK): ETF Research Reports

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Columbia Seligman Semiconductor and Technology ETF (SEMI): ETF Research Reports

Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports

First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports

iShares Global Comm Services ETF (IXP): ETF Research Reports

ProShares Online Retail ETF (ONLN): ETF Research Reports

Pacer Data and Digital Revolution ETF (TRFK): ETF Research Reports

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