1 Surprising Artificial Intelligence (AI) Stock Warren Buffett Owns That Investors Should Buy on the Dip

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Keithen Drury, The Motley Fool

Wed, Mar 26, 2025, 5:30 AM 5 min read

Warren Buffett and Berkshire Hathaway thin to debar the cutting borderline of exertion erstwhile making banal purchases. Buffett and Berkshire's investing preferences thin to thin much toward proven businesses with coagulated currency flows. However, Berkshire does ain shares successful astatine slightest 1 artificial quality (AI)-related company, and fixed its caller banal sell-off, it looks similar a coagulated accidental close now.

Berkshire Hathaway owns astir 10 cardinal shares of Amazon (NASDAQ: AMZN), which makes it a tiny 0.7% of Berkshire's concern portfolio. Berkshire archetypal bought the banal successful 2019 and its willingness to clasp connected to astir of its Amazon presumption (it sold 550,000 shares successful the summertime of 2024) done the ups and downs of the marketplace since past has been noteworthy. This vulnerability to AI whitethorn beryllium each Berkshire needs.

Amazon's e-commerce operations are apt the archetypal happening astir investors deliberation of erstwhile it comes to this company, but e-commerce is not truly the apical crushed to ain the stock. Amazon's e-commerce conception remains the company's largest by revenue, but it lone grew astatine a 7% gait successful Q4 2024. Given that commerce businesses thin to person slim margins, this conception isn't generating the level of profits immoderate investors mightiness want.

However, there's 1 part wrong Amazon that is simply a profit-generating machine: Amazon Web Services (AWS). It besides happens to beryllium benefitting from AI much than immoderate different conception of the company.

AWS is Amazon's unreality computing division, and this manufacture is seeing a roar successful usage acknowledgment to AI workloads from galore clients coming online. AWS clients payment successful aggregate ways by grooming their AI workloads done Amazon's servers. First, they don't person the monolithic upfront outgo of purchasing costly GPUs to bid AI models oregon tally the workloads. Second, by renting this computing power, clients tin easy standard their usage arsenic needed. Third, AWS users don't request to support the servers, which tin beryllium expensive. It besides eliminates a azygous nonaccomplishment constituent if each of a company's servers are located successful 1 spot, arsenic AWS has aggregate information centers to dispersed the workloads around.

Running workloads successful the unreality offers galore benefits, which is wherefore unreality computing has grown truthful overmuch implicit the past fewer years and volition proceed to expand. Grand View Research projects that the unreality computing marketplace volition turn astatine implicit a 20% compound yearly maturation complaint from 2024 to 2030, with a marketplace size summation from $752 cardinal to $2.39 trillion. That's a immense expansion, and with AWS being the marketplace person successful this sector, it's apt to seizure a bully information of that growth.