Staff Reporter
On May 3, Warren Buffett announced he will step down as CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) at the end of 2025, a position he has held since 1965.
His remarkable stock-picking skills have delivered a compound annual return of 19.9% for investors. To put that in perspective, a $1,000 investment in Berkshire stock in 1965 would have grown to an astounding $44.7 million by the end of 2024, compared to just $342,906 in the S&P 500 over the same period.
While Buffett is stepping down as CEO, he will remain chairman, allowing him to maintain influence over the company’s strategy. His approach to investing emphasizes long-term growth, stable profitability, and strong management, principles likely to persist.
Buffett has traditionally avoided chasing market trends, but three of Berkshire’s existing holdings—accounting for 32.9% of its $286 billion portfolio—are leveraging artificial intelligence (AI) to boost their legacy businesses.
- Amazon: 0.7% of Berkshire’s Portfolio
Amazon, the world’s largest e-commerce platform, integrates AI in various ways. Its recommendation engine helps customers find products, while the Rufus virtual assistant aids in informed decision-making.
The real driver of Amazon’s AI strategy is its cloud platform, AWS, which has developed its own data center chips that are up to 40% cheaper than third-party options. AWS also created the Nova family of large language models, offering significant cost savings for developers.
In the first quarter of 2025, Amazon reported $155.7 billion in revenue, with AWS contributing $29.3 billion. AI revenue within AWS is now multibillion-dollar and growing rapidly. Buffett regrets not recognizing the opportunity sooner, but Berkshire stands to benefit from Amazon’s AI-driven growth.
- Coca-Cola: 10% of Berkshire’s Portfolio
Coca-Cola, the largest beverage company globally, has embraced technology to enhance its success. Appointing Pratik Thakar as head of generative AI in 2023 marked a significant step in its AI strategy. The company has used AI for interactive marketing content and even to create a new beverage, Coca-Cola Y3000, by analyzing customer data.
In 2024, Coca-Cola committed $1.1 billion over five years to integrate AI across its operations, marketing, and supply chains. Buffett’s initial investment of $1.3 billion in Coca-Cola shares between 1988 and 1994 has now ballooned to $28.6 billion, along with $776 million in dividends last year.
- Apple: 22.2% of Berkshire’s Portfolio
Buffett’s team invested about $38 billion in Apple shares from 2016 to 2023, with that stake valued at over $170 billion going into 2024. Although Buffett sold part of this position last year to reduce risk, Apple remains Berkshire’s largest holding at 22.2% of the portfolio.
Apple has been gearing up for the AI revolution, designing chips for its devices with AI capabilities in mind. The launch of Apple Intelligence introduced AI features that enhance user experience, including smarter Siri capabilities and advanced writing tools.
With over 2.35 billion active Apple devices worldwide, the company is poised to become a major distributor of AI technology to consumers, presenting significant opportunities for growth. Berkshire could reap substantial returns as Apple’s AI strategy evolves.
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