This article analyzes the investment strategy of Warren Buffett’s Berkshire Hathaway in the field of artificial intelligence, focusing on its huge investment in Apple. The article discusses Apple's layout in the field of artificial intelligence, especially the "Apple Intelligence" plan, and the impact of this plan on Apple's future development and stock price. The article also analyzes Apple's current price-to-earnings ratio and provides investors with prudent investment advice. By interpreting Buffett's investment strategy and Apple's AI strategy, the article aims to help readers better understand the potential risks and opportunities of artificial intelligence investment.
Artificial intelligence (AI) is undoubtedly the topic that investors are most concerned about right now. Everyone feels this technology could be a game changer, so they hope to get some relevant exposure in their portfolios. As one of the most famous investors in history, Buffett has always had reservations about technology stocks, but his Berkshire Hathaway company actually invested 29% of its public offerings in a huge company. of AI stocks.
So, which stock is it? The answer is Apple (AAPL). Buffett's investment in Apple has been very successful. In recent years, Apple's stock price has continued to soar, bringing huge returns to investors. Although Buffett significantly reduced his position in Apple in the three months to June, Apple remains the largest stock in his portfolio.
While Nvidia is getting a lot of attention in the AI craze, we can't ignore the tech giants that are already at the forefront of digital trends. Apple is such a company. Although Apple was a little slow to announce its AI strategy, it attracted widespread attention when they launched the "Apple Intelligence" plan.
The core goal of the "Apple Intelligence" program is to make the company's various hardware devices more useful to consumers. There are some upgraded Siri assistants, enhanced writing tools, and the ability to generate images. New products will enable these AI functions on the latest software and integrate with ChatGPT.
Many investors may be looking for companies that can launch new AI products and services, but I think this way of thinking may not be correct. On the contrary, companies that already have a leading position in their industry and use AI to enhance their competitive advantage are more likely to succeed. Apple has a huge advantage here because it has more than 2.2 billion active devices worldwide, which allows it to bring AI capabilities to market immediately.
However, in the end, I think Apple's main goal in launching its AI plan is to sell more iPhones. After all, Apple is still a smartphone-based company. In the third quarter of 2024 (as of June 29), 46% of its revenue came from iPhone sales. Apple CEO Tim Cook also said on the earnings call: "We are very excited about the value of Apple Intelligence, and we believe it will provide users with even stronger reasons to upgrade their devices."
So, is now a good time to buy Apple stock? As it stands, Apple shares trade at a price-to-earnings ratio of 34 times, well above the average over the past five and ten years. Such a high price would only be justified if Apple's future growth accelerated significantly, but considering this is a mature business, future growth may not be as optimistic as expected.
Highlight:
Buffett's Berkshire Hathaway invests 29% of its public shares in Apple.
Apple’s “Apple Intelligence” program aims to improve the usefulness of hardware devices through AI technology.
? Apple’s stock price has a high price-to-earnings ratio, and investors need to carefully consider whether to buy it.
All in all, Apple's layout in the field of artificial intelligence deserves attention, but investors need to carefully assess the risks of its high valuation. Apple's success will ultimately depend on its ability to successfully translate AI technology into actual revenue growth. The information provided in this article is for reference only and does not constitute any investment advice.