Berkshire's AI Bets: Apple, Alphabet, Moody's—Not Nvidia

Berkshire Hathaway's portfolio, valued at $361 billion, has largely sidestepped the AI hardware boom. Instead, it holds companies that apply AI to enhance their existing products: Apple's on-device intelligence, Alphabet's cloud and Gemini model, and Moody's AI-driven financial data services. This reflects Warren Buffett's historical caution with tech businesses he doesn't fully understand, a stance his successor Greg Abel appears to share, favoring less cyclical sectors.

Nvidia's dominance in data center GPUs, used by major AI companies like Google and Microsoft, has driven its stock to a 912% five-year return. In contrast, Berkshire's AI-exposed stocks have delivered lower but still substantial gains. Analysts expect Nvidia's revenue and EPS to grow at 59% CAGRs through fiscal 2029, suggesting continued outperformance is possible.

The key risk for Berkshire is whether its focus on AI applications, rather than the underlying semiconductor infrastructure, will capture sufficient long-term value. While its holdings are less exposed to the semiconductor industry's cycles, they may also miss out on the most explosive growth. The outcome likely hinges on whether AI's value accrues primarily to chipmakers like Nvidia or to the companies that deploy AI in their products and services.