Buffett's traditional style prevails amid A.I. hype
Warren Buffett, CEO of Berkshire Hathaway, (BRK-A, BRK-B) enters the new year with over 40 holdings in the company's portfolio—including Occidental Petroleum (OXY), Apple (AAPL), and BYD Company (BYDDY). While these stocks have garnered attention thanks to having Berkshire as an investor, Buffett's traditional investment style, focusing on solid fundamentals, contrasts with the high valuations and non-traditional nature of A.I. plays.
Yahoo Finance’s Brian Sozzi and Bradley Smith take a closer look at potential shifts in Buffett’s investment strategy and whether A.I could be in view.
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Video Transcript
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BRAD SMITH: Warren Buffett, Berkshire Hathaway CEO is one of the most successful investors in history. The Oracle of Omaha is set to enter the new year with more than 40 holdings in Berkshire's portfolio. And all of those holdings we saw Buffett liking-- Occidental Petroleum, Apple, and Chinese electronic maker BYD.
This year, we'll see if he likes those stocks again in 2024. There's a range of companies that you can throw into the Warren Buffett favor bucket, if you will, that have seen some type of attention thrust their direction as a result of Berkshire Hathaway initiating a position.
At this point, Occidental is one of those positions that they have to report within their own filings as well because of the fact that they own so much of the company. But still one of the top holdings, Apple, that's going to continue to catch attention as well.
BRIAN SOZZI: And you know what? Maybe this isn't a surprise. But what Buffett doesn't really own is that true AI play. Now, none of these AI plays are classic Buffett. A lot of them are trading price to earnings multiples well above the S&P 500. They're trading well above their book value per share. So it doesn't-- these are not classic investments.
But, Brad, Buffett has mentioned in the past that he has missed names like Amazon that have driven the tech movement. So do we see Warren Buffett trying to play a little catch up in 2024 by getting involved with some of these AI plays? Does he go out there and buy some Salesforce? Does he make a play for NVIDIA on a pullback? I think that is going to be an interesting story to follow.
Because I don't see Apple at least right now being a major AI player. Now they're supposed to launch some reality headset goggles, but to me that is not the pure AI play.
BRAD SMITH: Yeah, it's just a matter of what AI actually looks like in critical mass in people's fingertips. And at the top of their mind every day doing-- leveraging AI to the same extent that they, even Google things at this point.
BRIAN SOZZI: I mean, you could argue that Buffett rotated out of his really one of his first AI plays, that's HP. He purchased HP, but he's been unloading his stake in that company. Now HP next year should be a main player in getting these AI PCs to market. A lot of folks on the Street really banking on a major reset or refresh cycle in the PC market driven by the likes of HP.
BRAD SMITH: Yeah, well, maybe Microsoft will catch a bid from Buffett.
BRIAN SOZZI: Yeah, maybe.
