In the quiet arithmetic of a long investing life, Warren Buffett has spent decades preferring businesses he understands over technologies he admires from a distance, and yet artificial intelligence has found its way into his portfolio through Apple. Buffett himself voiced unease at this year's shareholder meeting, echoing Einstein's warning that the atomic bomb changed everything except how people think, and noting that a thing which can do everything is one the world cannot easily un-invent. An analysis carried on Yahoo Finance argues that Apple, which Berkshire Hathaway holds at roughly 5.9%
Why Warren Buffett Calls Apple His Favorite AI Play, Even as He Worries About the Technology
Buffett loves Apple's business; the AI label is the author's.
Mark
Buffett is wary of AI, yet the headline says Apple is his favorite AI play. How do those fit together?
Mimi
They fit only because the article makes them. Buffett praised Apple as a business, a better one than anything Berkshire owns outright. The AI label is the author's.
Luke
Right, and that gap matters. Buffett never called Apple an AI stock in anything quoted here. The framing is the Motley Fool's.
Mark
What is his actual case for Apple?
Mimi
The iPhone. He called it extraordinary and said Berkshire has nothing like it among its wholly owned companies. Apple is nearly half of the equity portfolio, and Berkshire holds about 5.9% of the company.
Luke
Worth noting that the stake grows through Apple's buybacks, not through Berkshire buying more. That's Buffett's own account in the piece.
Mark
And the AI spending?
Mimi
Close to $1 billion a year on generative AI, according to a Bloomberg report from October. Tim Cook said on the November call that Apple is investing a lot in it.
Luke
That figure is one report's estimate, not something Apple has stated. Also, the piece says the chips enable on-device AI and better privacy. That's a possibility it describes, not a shipped result.
Mark
So how should a reader take it?
Mimi
As a bullish argument. The author owns Apple stock, and the same outlet's advisory team left Apple off its top ten list.
Luke
Agreed. The facts about the stake and the market share are checkable. The claim that AI starts Apple's next growth round is a forecast.
Il Polso
- Buffett voiced open unease about AI at Berkshire's May meeting, warning that a technology able to do everything is one the world cannot un-invent.
- Apple reportedly spends close to $1 billion a year on generative AI, a modest sum for a firm sitting on roughly $160 billion in cash and investments.
- Apple is racing to build its own large language model and a ChatGPT-style chatbot while keeping user data on the device rather than on remote servers.
- Berkshire's 5.9% stake keeps growing through Apple's buybacks, and shares sit near an all-time high, with the bet hinging on whether AI features lift the higher-margin services business.
- The analysis comes from a stock advisory outlet whose own team left Apple off its top picks, so the upside case remains unproven.
In the quiet arithmetic of a long investing life, Warren Buffett has spent decades preferring businesses he understands over technologies he admires from a distance, and yet artificial intelligence has found its way into his portfolio through Apple. Buffett himself voiced unease at this year's shareholder meeting, echoing Einstein's warning that the atomic bomb changed everything except how people think, and noting that a thing which can do everything is one the world cannot easily un-invent. An analysis carried on Yahoo Finance argues that Apple, which Berkshire Hathaway holds at roughly 5.9% of its shares, is the AI bet that matters most, because its consumer platform and chip design position it to carry AI into the daily lives of hundreds of millions of people. Read with care, since the piece is opinion-leaning promotional writing from a stock advisory outlet, it still asks a question older than any single technology: whether a company's reach among ordinary people will turn a new capability into lasting value.
At Berkshire Hathaway's shareholder meeting in May, Warren Buffett was asked about artificial intelligence and reached for Einstein's remark about the atomic bomb: it changed everything except how people think and behave. He admitted that a technology able to do all kinds of things made him a little uneasy, because the world cannot take it back once invented. Buffett has never been one to chase technology trends, yet AI has still reached his portfolio, and an analysis carried on Yahoo Finance from The Motley Fool names Apple as the most important example.
Buffett calls Apple a better business than any Berkshire owns, and the stake of about 5.9% grows each quarter as Apple buys back its own shares. Its share price has climbed 47% since the end of 2020. Apple's phones stay in use longer than rivals', so iPhones now make up nearly 30% of smartphones worldwide and over 58% in the United States. Buffett largely sees Apple as a consumer goods company, and the article argues investors should not overlook its AI spending, which Tim Cook described as considerable and which Bloomberg put near $1 billion a year.
The argument rests on hardware as much as spending. The M3 chips in Apple's newest Macs make heavier AI work possible, and the iPhone 15 shares that chip platform, so AI could run on the device and keep sensitive data off remote servers. The author concludes that Apple's consumer reach should lift its higher-margin services business as AI spreads. The source leans promotional, though: its own advisory team did not pick Apple among its top ten, and the author holds the shares. Buffett has not called Apple an AI stock himself. The real test is whether these AI features actually grow Apple's services revenue.
At Berkshire Hathaway's shareholder meeting in May, Warren Buffett was asked about artificial intelligence and reached for Albert Einstein. He paraphrased the physicist's remark on the atomic bomb: that it can change everything in the world except how men think and behave. His unease was plain. When something can do all kinds of things, he said, he gets a little worried, because the world won't be able to un-invent it.
Buffett is not an investor who buys into technology trends, but that has not kept AI out of Berkshire's portfolio. He holds several companies that are leading its development and distribution. According to an analysis published by The Motley Fool and carried on Yahoo Finance, the one that matters most is Apple, which the piece calls arguably his favorite AI stock.
The case begins with how Buffett talks about the company. Apple makes up nearly half of Berkshire's equity portfolio, and at this year's meeting he called it a better business than any Berkshire owns. Berkshire holds about 5.9% of Apple's outstanding shares. Buffett noted that the stake grows every quarter as Apple's management buys back its own stock. He also said that selling some shares in 2020 for tax purposes was a mistake. Apple's share price has risen 47% since the end of 2020, which the article says suggests he is right.
He has pointed to the iPhone as the reason. It is an extraordinary product, he said, and Berkshire owns nothing like it outright, a comparison to wholly owned businesses such as GEICO and BNSF Railway. The article puts numbers on that hold. Apple's share of global smartphone sales sits in the high teens, but its phones stay in use longer than competitors' do. As a result, iPhones make up nearly 30% of all smartphones in use worldwide and more than 58% of those in the United States. Rivals have tried to copy Apple's strategy with little success so far, the piece says.
Buffett mostly regards Apple as a consumer goods company: it sells products to consumers, not technology. The article argues that investors should not overlook how much Apple is spending on AI. On the fourth-quarter earnings call in November, CEO Tim Cook said the company is investing considerably in generative AI. A Bloomberg report from October put the figure near $1 billion a year, directed at building Apple's own large language model and testing a ChatGPT-style chatbot. That is small for a company with about $160 billion in cash and investments and billions in free cash flow each quarter, though the piece notes it would be a huge outlay for most firms.
The hardware is part of the argument. The M3 chips in Apple's latest Macs have redesigned GPUs and more working memory, allowing far heavier AI processing and making the high-end MacBook a leading choice for AI developers. The iPhone 15 runs on the same chip platform as the M3, which opens the way to AI applications that run on the device. Apple could then keep user data on the phone instead of sending it to a web server, which would allow uses involving more sensitive information.
The author's conclusion is that Apple's AI strategy rests on what first attracted Buffett: a large, growing platform that reaches consumers. That should help its faster-growing, higher-margin services business as AI spreads, much as the smartphone did over the past decade. With shares near an all-time high, the article suggests Apple may be at the start of another growth phase.
A caution on the source: this is an opinion-leaning piece from a stock advisory outlet. Its own Stock Advisor team did not include Apple among its ten top picks, and the author discloses holding Apple shares. Buffett has not called Apple an AI stock himself. The thing to watch is whether Apple's AI features actually expand its services revenue.
Citazioni salienti
Apple is a better business than any we own.— Warren Buffett, Berkshire Hathaway shareholder meeting, May 2023
When something can do all kinds of things, I get a little bit worried because I know we won't be able to un-invent it.— Warren Buffett, on AI
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