Why Berkshire's Cash Pile Keeps Growing (and Which AI Stock It Might Buy Next)
2026-07-31 13:15
•Micah Zimmerman •The Motley Fool
••••••• ••••••••• Axe Cap view
Berkshire’s Cash Hoard Signals AI Bets Are Coming
Berkshire Hathaway’s massive cash reserves hint at focused AI investments, with Taiwan Semiconductor emerging as a frontrunner.
Berkshire Hathaway sitting on nearly $400 billion in cash and Treasuries is no accident. This is patience and discipline, hallmarks of Warren Buffett’s legacy — now continued by Greg Abel. The big question is where that capital goes next. AI is the obvious theme. Taiwan Semiconductor (TSM) stands out as a smart choice: it dominates the AI chip space, earns strong cash flow, and is still relatively fairly valued compared to US tech giants. While Berkshire has dipped into Alphabet recently, TSM offers more direct exposure to the AI hardware boom, which could shape global tech for years. For South African investors, this matters since a stronger dollar trade usually pressures the rand (USD/ZAR), impacting local stocks like Naspers and Prosus that are tech-heavy and dollar-earning. Watch the rand closely; if it weakens further, caution around these names is wise. This view could be wrong if AI hype slips or if geopolitical risks disrupt semiconductor supply chains. this is just our opinion and not financial advice
Watch USD/ZAR closely and trim exposure to dollar-earning tech like Naspers or Prosus if the rand weakens sharply. Meanwhile, hold cash or defensive names until AI investments from big players like Berkshire start shaping sentiment.
- USD/ZAR
- Naspers
- Prosus
- Geopolitical disruption in semiconductor supply chains
- AI hype fades delaying major tech investments
6/10
Berkshire Hathaway has accumulated a record $397 billion in cash and Treasury bills by selling stocks and earning substantial interest income. New CEO Greg Abel is expected to deploy this capital into AI-related investments, with Taiwan Semiconductor Manufacturing being the most logical candidate due to its dominant market position, cash generation, and reasonable valuation relative to other AI stocks.
Our take is based on reporting first published by The Motley Fool.