Abel Era Prediction: Which AI Stock Will Berkshire Hathaway Target Next?

With Warren Buffett’s retirement concluded at the end of 2025 and Greg Abel now firmly in control of Berkshire Hathaway’s investment strategy, investors are closely watching to see how this leadership transition will influence the conglomerate’s approach to artificial intelligence opportunities. While Berkshire’s historical philosophy has centered on disciplined value investing, many industry observers believe Abel’s tenure could signal a more proactive stance on emerging technology sectors. The ai stock prediction game is heating up as analysts attempt to identify which technology companies might benefit from Berkshire’s substantial dry powder and patient capital.

Berkshire’s Current AI Stock Holdings Paint an Interesting Picture

The realm of artificial intelligence investing extends far beyond flashy AI software startups—it encompasses everything from cloud computing infrastructure to hardware manufacturers to energy providers powering data centers. Berkshire’s existing portfolio already contains several meaningful AI exposures that investors often overlook.

The conglomerate holds significant stakes in Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG/GOOGL), both of which derive substantial business value from AI-related operations. Particularly notable is Berkshire’s Q3 2025 addition of Alphabet shares to its portfolio—a strategic move that has already proven financially rewarding for the investment vehicle.

Currently, Berkshire maintains a position of 10 million Amazon shares, which represents only 0.8% of its total investment portfolio. This seemingly small allocation is striking when you consider Amazon’s potential. Given the company’s dominant position in cloud computing infrastructure, where artificial intelligence workloads are increasingly concentrated, this underweight position raises an intriguing question: could Amazon be next on Berkshire’s ai stock shopping list?

Amazon’s Tech Fundamentals Create a Compelling Investment Case

After a subdued opening to 2025, Amazon accelerated significantly during the latter portion of the year. The company reported net sales growth of 13% year-over-year, reaching $180 billion, with particularly strong momentum in its highest-margin business segments.

The standout performers were Amazon Web Services (AWS), which handles cloud infrastructure and increasingly AI computing workloads, and Amazon’s advertising division. These aren’t Amazon’s largest revenue sources by volume—AWS generates just 18% of total sales—yet their outsized profitability is extraordinary. In Q3, AWS contributed 66% of Amazon’s total operating profit despite representing less than one-fifth of revenues. This margin differential reflects the premium customers are willing to pay for reliable cloud infrastructure, particularly as AI applications proliferate.

The advertising segment, while not breaking out specific margin figures, clearly operates in a similar high-margin territory as comparable businesses like Alphabet and Meta Platforms (NASDAQ: META). Industry analysis suggests advertising operating margins typically range between 30-40%, substantially above Amazon’s overall company average.

With AWS growth expected to sustain its current momentum into 2026, these margin dynamics create a compelling thesis for Amazon’s profit expansion. This is the kind of structural profitability improvement that aligns perfectly with value investing principles—strong business units generating improving returns on capital.

The Portfolio Manager Question: Who Originally Championed Amazon at Berkshire?

While Buffett’s name dominates Berkshire’s public image, the conglomerate’s investment decisions were never his alone. Portfolio managers Todd Combs and Ted Weschler carried significant purchasing authority and notably demonstrated a greater comfort with technology-focused investments than Buffett himself.

Combs’ recent departure to accept a leadership position at JPMorgan Chase introduces an element of uncertainty. If Combs was instrumental in Berkshire’s original Amazon acquisition and subsequent add-ons, his absence could signal reduced enthusiasm for technology allocations. Conversely, if Ted Weschler championed the Amazon thesis, that narrative remains intact and potentially strengthened under Abel’s leadership.

The broader implication depends on Abel’s own investment philosophy. Will he maintain Berkshire’s core principle of acquiring excellent businesses at reasonable valuations? Will he be willing to consolidate and expand holdings in existing portfolio companies that have changed in character over time?

Valuation Methodology Reveals Amazon’s Current Attractiveness

Traditional price-to-earnings ratios provide poor valuation guidance for Amazon due to the substantial investment portfolio embedded within the company. Investment gains and losses in that portfolio can swing reported earnings dramatically without reflecting operational business performance.

The operating price-to-earnings ratio provides a clearer lens. By this metric, Amazon currently trades near the lower end of its recent valuation range, suggesting favorable entry pricing for investors willing to commit capital. Combined with Amazon’s projected strong operational performance throughout 2026, this convergence of valuation reasonableness and improving business fundamentals creates the type of investment setup that historically appeals to Berkshire’s capital allocation discipline.

The Prediction: Berkshire’s AI Stock Opportunity Window

For those monitoring the ai stock prediction space around Berkshire’s next major technology allocation, Amazon presents a particularly intriguing scenario. The company’s dominant AWS position, growing advertising profitability, and reasonable current valuation create multiple reasons why Abel might direct capital toward incremental Amazon shares.

The timing appears propitious. Abel has begun deploying the substantial cash reserves Buffett accumulated during his final years as CEO. The new leadership likely seeks to establish its own investment record while honoring the core value-investing philosophy. Expanding an existing, partially-owned position like Amazon aligns elegantly with both objectives.

Whether Abel elects to increase Amazon’s weighting, shift toward alternative technology holdings, or pursue entirely new investments remains to be determined. However, for ai stock prediction purposes, Amazon’s combination of business quality, operational momentum, and favorable valuation positioning makes it a leading candidate for Berkshire’s capital allocation attention in 2026.