AI Stock: While legendary investor Warren Buffett has traditionally steered clear of high-growth tech sectors like artificial intelligence (AI), a few standout AI stocks align surprisingly well with his value-driven philosophy.
Even if these companies aren’t in Berkshire Hathaway’s portfolio today, their fundamentals, dominance, and long-term growth potential could change that.
Alphabet: AI at the Core of a Digital Empire
Alphabet Inc. (NASDAQ: GOOGL) continues to lead the digital advertising world, but its future is now deeply tied to artificial intelligence.
Despite controlling the lion’s share of the global search market for years, Alphabet is facing mounting pressure from emerging AI search tools like ChatGPT and Perplexity.
Yet the tech giant is fighting back, pledging $75 billion in capital expenditures this year to strengthen its AI infrastructure. Google’s cloud division now contributes 14% of revenue, while its self-driving unit, Waymo, holds massive long-term potential.
With $95 billion in liquidity and a trailing 12-month free cash flow of $75 billion, Alphabet remains a cash-rich enterprise.
Alphabet currently trades at a price-to-earnings (P/E) ratio around 19—undervalued compared to peers—offering a rare mix of growth and value for long-term investors.
Taiwan Semiconductor: The Backbone of AI Hardware
Taiwan Semiconductor Manufacturing Company (NYSE: TSM) may not be a Berkshire holding today, but it once was. The world’s leading chip foundry supplies advanced semiconductors to Nvidia, Apple, and AMD, producing more than 90% of the world’s cutting-edge chips used in AI.
Despite geopolitical risks involving China, TSMC’s growth is undeniable. First-quarter revenue soared 35% to $25.5 billion, while operating margins hit 48.5%. The company’s economic moat is strengthened by its massive capital expenditure requirements and longstanding customer relationships.
Currently trading at a P/E ratio of 24, TSMC offers exceptional value considering its dominance and critical role in powering AI technologies.
Meta and Qualcomm: Quiet AI Powerhouses
Meta Platforms (NASDAQ: META), better known for Facebook and Instagram, is rapidly transforming into an AI-driven enterprise. With over 3.4 billion daily active users generating vast data sets, Meta is investing between $64 billion and $72 billion in 2025 to bolster its AI capabilities and metaverse ambitions.
On the hardware front, Qualcomm (NASDAQ: QCOM) is gaining attention. Long known for smartphone chipsets, the company is expanding into AI-enabled devices across automotive, IoT, and PCs. With AI adoption growing in smartphones, Qualcomm’s diversified revenue and P/E ratio of just 15 make it a compelling value pick.
A Buffett-Style Approach to AI
While Warren Buffett may never fully embrace fast-evolving AI stocks, companies like Alphabet, TSMC, Meta, and Qualcomm are redefining what value means in today’s tech-driven world. With strong moats, disciplined capital management, and increasingly competitive positions in AI, these stocks offer both safety and upside—traits even Buffett might respect.