Berkshire Hathaway's AI Play: Why It Passed on Nvidia
Berkshire Hathaway's $361 billion portfolio includes dozens of companies, but it surprisingly doesn't hold any shares in Nvidia, the world's top AI chipmaker. Instead, its exposure to the AI market comes through investments in Apple, Alphabet, and Moody's.
Apple accounts for 20.2% of Berkshire's portfolio and generates most of its revenue from iPhone sales, but it also uses AI to increase customer loyalty and subscription services. Alphabet makes up 7.4% of the portfolio and is a more focused AI play, providing infrastructure for AI applications through its Google Cloud Platform.
Moody's is another significant holding, making up 3.4% of Berkshire's portfolio, and uses AI to upgrade economic forecasts and credit rating services. However, these stocks have underperformed Nvidia over the past five years, with Apple, Alphabet, and Moody's delivering total returns of 113%, 138%, and 35% respectively compared to Nvidia's 912%.
Nvidia dominates the general-purpose AI training market due to its data center GPUs, which are used by top AI companies such as Google and Microsoft. Analysts expect Nvidia's revenue and EPS to grow at CAGRs of 59% from fiscal 2026 to fiscal 2029.