Warren Buffett, the legendary investor known for his aversion to tech stocks, actually has several surprising positions in the tech sector. While he typically avoids investing in stocks outside his comfort zone, Buffett’s portfolio includes a number of tech companies, particularly through Berkshire Hathaway’s subsidiary, New England Asset Management (NEAM).
Among Buffett’s top tech stock picks are some of the biggest companies in the world, including three of the FAANG stocks. Alphabet (Google’s parent company) and Microsoft are part of NEAM’s portfolio, but Buffett indirectly holds stakes in them. Additionally, some consider Amazon a consumer cyclical stock, but its significant presence in cloud services and online business categorizes it as a tech stock.
At the top of Buffett’s list is Alphabet, with its attractive valuation and immense opportunities in artificial intelligence and, potentially, quantum computing. Berkshire Hathaway’s portfolio also includes promising up-and-coming tech stocks, such as StoneCo, a leading fintech and e-commerce company in Latin America, and Snowflake, a cloud company with substantial growth prospects despite its high valuation.
Buffett’s tech stock portfolio further includes a cluster of chipmakers, with Taiwan Semiconductor Manufacturing Company standing out as a solid business despite concerns related to geopolitical tensions and its premium valuation.
The final group of tech stocks in Buffett’s portfolio consists of fogies and frozen companies. These are long-standing technology firms like IBM, HP, Texas Instruments, Cisco, and VeriSign. While they may not be perceived as high-growth stocks, Buffett’s rankings are based on his expectations of growth compared to their current valuations.
Activision Blizzard, a video game company, sits at the bottom of the list due to its pending acquisition by Microsoft, which suggests limited movement in its share price. While it has been a successful investment for Buffett in the past, the current situation keeps its ranking low.
Tech stocks may not typically align with Warren Buffett’s investment strategy, but his portfolio demonstrates some solid choices in the sector. It’s important to note that different investors may have varying rankings based on their perspectives and preferences. Nevertheless, Buffett’s tech stock selections reflect his ability to identify promising companies even outside his usual wheelhouse of investments.
