Had you invested $1,000 in Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) when Warren Buffett became its CEO in 1965, you would have $42.5 million today. The same investment in the S&P 500 would have grown to just $343,000 over the same period, which highlights Buffett’s incredible ability to pick stocks.
You won’t ever find Buffett chasing the latest stock market trends, not even one as powerful as artificial intelligence (AI). However, four existing holdings in Berkshire’s $297 billion portfolio of publicly traded securities are using AI to supercharge their legacy businesses.
Berkshire bought shares in Domino’s Pizza (NASDAQ: DPZ) during the third quarter of 2024 (ended Sept. 30), so it’s a relatively new addition to the portfolio. It’s the world’s largest pizza chain, serving over 1 million customers per day from its 21,000 stores across 90 countries.
Domino’s uses technology extensively to improve efficiency, which translates into lower costs and higher profits. The company has deployed an AI algorithm to identify patterns in customer behavior, so it knows when to start making pizzas — even before an order is officially completed on its website. That means customers receive their food faster than ever.
Eventually, Domino’s wants AI to handle everything from inventory management to staff scheduling, so this is just the beginning of a technological revolution at the company.
Winning the approval of Buffett and his team wasn’t easy last year, because Berkshire was a net seller of stocks overall. Domino’s was one of just five new additions to the conglomerate’s portfolio, which might be a very bullish sign for the pizza giant.
Amazon (NASDAQ: AMZN) is the world’s largest e-commerce company. It also dominates the cloud computing industry, and it has a growing presence in digital advertising and streaming. AI isn’t just a tool for Amazon, it’s going to be a core part of its entire organization.
The company already uses AI in its recommendation engine to show customers products they are likely to buy. And it developed an AI assistant called Rufus to help customers with their purchase decisions.
Even Amazon’s fulfillment centers rely on AI — aside from the fleets of autonomous robots, a new technology called Project Private Investigator uses AI and computer vision to identify defective products before they are shipped to customers.
Then there is the Amazon Web Services (AWS) cloud platform, which is becoming a preferred destination for developers looking to build AI software. AWS is working to dominate the three core layers of AI cloud services: infrastructure (data centers and chips), large language models (LLMs), and software.
