Berkshire Hathaway (BRK-B) chair Warren Buffett avoided technology stocks (QQQ) in the late 1990s. In hindsight, it looks like a good decision as most high-riding tech stocks of that era turned out to be duds in what’s now known as the dot-com bust.
However, after shying away from the technology space (NVDA) (AMD), Buffett has been slowly cozying up to the sector. IBM (IBM) was Berkshire’s first investment in the tech sector. This pick was followed by Apple (AAPL). Last year, Berkshire bought stakes in two tech companies, Oracle (ORCL) and Red Hat (RHT). However, it’s worth noting that Buffett sees Apple as a consumer products company and not as a technology company (INTC).
To be sure, Buffett’s experience with the tech sector (FB) (NFLX) hasn’t really been pleasant. It exited IBM last year and also sold its entire stake in Oracle in the fourth quarter within a quarter of buying the stock. Last year, Buffett also admitted to missing out on Amazon (AMZN) and Alphabet (GOOG) and revealed why he doesn’t invest in Microsoft (MSFT).
Having said that, while Buffett might still not be totally comfortable with the tech sector as the Oracle exit shows, he has seemed open to investments in the space as the Red Hat transaction shows.
Over the years, Buffett’s opinion of the airline sector has also changed. We’ll discuss this in the next article.