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New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
Berkshire Hathaway has delivered market-crushing returns under Warren Buffett's leadership, which dates back to 1965.
Buffett typically avoids pouring money into red-hot stock market trends like artificial intelligence (AI), because he's a long-term value investor.
However, at least four of the existing holdings in Berkshire's $304 billion portfolio are using AI to transform their legacy businesses.
Warren Buffett is the CEO of the Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) holding company, but he will relinquish the role at the end of this year. He will continue to serve as chairman of the board, so his brand of long-term value investing will endure, which is great news for shareholders.
Since Buffett took control of Berkshire in 1965, its stock has delivered a compound annual return of 19.9%. An investment of $1,000 back then would have been worth a staggering $44.7 million at the end of 2024. The same investment in the S&P 500 (SNPINDEX: ^GSPC) would have grown to just $342,906 over the same period.
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Berkshire owns a number of subsidiaries, in addition to a $304 billion portfolio of publicly traded stocks and securities. Buffett likes to invest in companies with solid growth prospects, strong earnings, and experienced management teams, but one thing he never does is chase the latest stock market themes -- not even those as powerful as artificial intelligence (AI).
Nevertheless, 33.5% of Berkshire's $304 billion portfolio is invested in four companies that are using AI to supercharge their legacy businesses.
Image source: The Motley Fool.
Becoming the world's largest pizza chain requires more than just good food. It takes a commitment to innovation to deliver the fastest, and most convenient customer experience in the industry. That's why more than 1 million people order from a Domino's Pizza (NASDAQ: DPZ) store every day.
AI is a big part of the company's strategy. An AI-powered voice assistant now takes customer orders over the phone, and it adopts a different accent in each region of the U.S. so it's as relatable as possible. Domino's also developed a program called "Voice of the Pizza," which uses AI to learn from mountains of indirect customer feedback on discussion platforms like Reddit.
Finally, Domino's embedded AI into its sales channels to analyze customer behavior, so it knows when to start making pizzas even before a final order is placed, which speeds up delivery times.
Berkshire bought Domino's stock during the third quarter of 2024, and it has added to the position in every quarter since.
Amazon (NASDAQ: AMZN) is a global leader in technology segments like e-commerce and cloud computing, and it has deployed more than 1,000 AI applications to cement its dominance. These apps include a virtual assistant which helps customers compare products to make more informed purchases, and another assistant which helps sellers craft more engaging ads to boost conversions.
But the Amazon Web Services (AWS) cloud platform is the beating heart of the company's AI strategy. It operates powerful data centers filled with advanced chips from suppliers like Nvidia, which it leases to businesses who use it to deploy AI software. The AWS Bedrock platform also offers a growing portfolio of ready-made large language models (LLMs) which businesses can use to accelerate their AI projects.
Amazon CEO Andy Jassy said AI revenue within AWS surged by a triple-digit percentage during the second quarter of 2025 (ended June 30), compared to the year-ago period. It's unlikely AI was on Buffett's mind when Berkshire bought the stock in 2019, but he's going to benefit as this technology fuels Amazon's next growth phase.
Like Domino's, Coca-Cola (NYSE: KO) leans heavily on technology to scale its production, distribution, and marketing operations as efficiently as possible. Without it, successfully managing more than 200 brands worldwide would be almost impossible.
The beverage giant recently partnered with Adobe to create a new AI tool called Fizzion, which will learn from its human designers to speed up the creation of new marketing campaigns and digital assets. This could save significant amounts of time, and materially reduce advertising costs.
In 2024, the beverage giant also signed a five-year deal with Microsoft Azure, under which it will spend $1.1 billion to fuel its AI strategy. It will use the cloud platform's infrastructure, and software tools like the Copilot virtual assistant, to transform operations including manufacturing processes to supply chains.
Buffett invested $1.3 billion in Coca-Cola between 1988 and 1994, and he has not sold a single share. Today, that position is worth $26.5 billion, and it will pay Berkshire $816 million in dividends this year alone. It's the perfect example of Buffett's long-term investing strategy in action.
Berkshire's stake in Apple (NASDAQ: AAPL) was worth more than $170 billion at the beginning of 2024 – far more than the estimated $38 billion it outlayed between 2016 and 2023. Buffett and his team have since sold more than half the position to lock in some of those enormous gains, but Apple remains Berkshire's largest holding with a portfolio weighting of 23.7%.
Apple continues to build its latest iPhones, iPads, and Mac computers for the AI era, by fitting them with advanced chips it designed in-house to run Apple Intelligence. This is an expanding suite of AI apps and features, which can summarize texts and emails, generate images, and even analyze user behavior to prioritize notifications.
Apple's new iPhone 17 lineup, which launched in September, comes with the company's most powerful chips to date. They provide enough juice to run even the most demanding AI smartphone apps currently on the market, which is driving a much better upgrade cycle than expected. Morgan Stanley even raised its price target for Apple stock from $240 to $298 as a result.
Therefore, Berkshire can still do extremely well from here despite its trimmed-down position in Apple.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Amazon, Apple, Berkshire Hathaway, Domino's Pizza, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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