Warren Buffett has already expressed remorse for his late entry into Internet businesses like Alphabet (Google's parent company) and Amazon.
In the third quarter, Warren Buffett's Berkshire Hathaway invested $4.1 billion in Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker, making it the third technology firm to rank among Berkshire's top stock holdings.
Berkshire's greatest new stock investment in the three months to September was the acquisition of 60 million US-listed shares of TSMC, which was reported with US securities authorities on Monday.
The Geico insurance company, the BNSF railroad, and the Dairy Queen ice cream company are all part of the same conglomerate, and this is the newest move into blue-chip technological businesses.
The Berkshire stock portfolio now includes Apple, computer and printer manufacturer HP, and cloud database provider Snowflake, demonstrating Buffett's increased willingness to invest in technology in recent years.
The connection between the famous value investor and the technology sector has not always been harmonious. For many years, he avoided making significant investments in the industry, telling shareholders that he was ill-equipped to assess the value of many high-tech firms due to a lack of familiarity with their processes.
However, as the business has developed and Buffett has gained a better grasp of the sector's significance in the global economy, his views have shifted. Berkshire has invested $126.5 billion in Apple, making it its single biggest holding in a publicly listed company.
In retrospect, Buffett admits he should have invested sooner in Alphabet, Google's parent company, and Amazon. He admitted in 2017 that Big Blue was experiencing heavy competition from competitors, and the firm invested in and then sold its investment in IBM. Berkshire also had a small investment in Intel, which it acquired in 2011 and then sold off the following year.
Considering the conglomerate's "portfolio firms are more old economy," Edward Jones analyst Jim Shanahan speculated that shares of technology and communications companies currently made up around half of Berkshire's stock portfolio.
It is unknown if Buffett personally invested in TSMC or delegated the task to one of his two lieutenants, Todd Combs or Ted Weschler, who assist manage Berkshire Hathaway's $306 billion stock portfolio. Although we reached out to Berkshire for comment, we received no response.
The most cutting-edge processor chips in use today may be found in products made by a Taiwanese firm, which supplies the world's leading electronics manufacturers and designers. TSMC is at the centre of a dispute between Beijing and Washington for technical dominance because to the company's extensive ties with American chip makers like Nvidia and its significant manufacturing footprint in China.
In the third quarter, Berkshire made only modest adjustments to its investment portfolio. Additionally, the firm invested $13 million in the investment bank Jefferies and $300 million in the construction supply manufacturer Louisiana-Pacific. It raised its holdings in Chevron, Occidental, and Paramount Global, all of which are Fortune 500 companies in the oil and media industries.
During the third quarter, the firm reduced its holdings in Activision Blizzard, US Bancorp, BNY Mellon, and General Motors.
Berkshire has been on a mergers and acquisitions tear this year, and its $11.6 billion purchase of Alleghany, an insurance competitor, comes on the heels of a flurry of smaller-scale changes. It has been predicted by analysts that the conglomerate's $109bn cash pile would be reduced by the payment for that purchase, which concluded in October.
On Monday, regulatory filings from big money managers revealed that other investors were also reducing their exposure to the technology sector in the face of a year-long sell-off.
Glenview Capital Management sold all of its shares in Facebook parent firm Meta, while Appaloosa and Coatue Management also decreased their holdings.
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