Investors are chasing technology, but Buffett is choosing a different strategy — here’s why

The tech-heavy Nasdaq rose to all-time highs in 2025, driven by continued enthusiasm around artificial intelligence and other technologies.

But when the crowd’s enthusiasm is concentrated in a hot sector, Warren Buffett’s doubts grow. At the height of the dot-com bubble in 1999, he openly stated that his holding company, Berkshire Hathaway Inc. (BRK.A, BRK.B), doesn’t own any Internet stocks — not because they’re undervalued, but because he and his former right-hand man Charlie Munger couldn’t predict their economics. He wrote that the investor should remain “within his circle of jurisdiction” and warned against being “where the action is.” The same mentality seems to be at work again.

Berkshire’s recent moves

monetary: Far from chasing momentum, Berkshire has clearly maintained a huge cash position and holding of US Treasuries. In his 2023 letter to Berkshire shareholders, Buffett called this “extreme financial conservatism.” In 2025, Berkshire’s cash holdings reach an all-time high.

Japan: Buffett quietly doubled his stake in Japanese conglomerates. In his 2024 letter, Buffett explained the situation with a long-term perspective, which is the opposite of trend chasing.

Traditional deals: In October 2025, Berkshire agreed to acquire Occidental’s (OXY) chemicals company, OxyChem, for $9.7 billion in cash. The company manufactures basic water treatment chemicals, pharmaceuticals, etc.

Downsizing big tech: While Buffett remains his largest position, he recently reduced his exposure to Apple, Inc. (AAPL).

Why is Buffett comfortable ignoring technology hype?

Buffett’s contrarian moves are never an end in themselves, but rather a function of his views on the underlying business. It adheres to two basic principles:

1. The knowledge economy transcends sensationalist novels. If you can’t reliably estimate a company’s medium-term earnings strength, don’t touch it – and be especially careful in sectors where technological, regulatory and competitive outcomes are highly uncertain. This was the reason most of the technology of the late 1990s was ported. This still applies to today’s AI-driven gold rush.
2. Price and durability are more important than buzz. Berkshire is patient in refraining from frothy sectors, instead making large, direct investments when the accounts and companies are compelling.

For Buffett, the strategy is to focus on companies, not stocks. If you can’t explain how the company will make money five years from now, you’re just speculating.

“Now, speculation—in which the focus is not on what assets will produce, but on what the next person will pay for them—is not illegal, unethical, or un-American,” Buffett wrote in his 2000 chairman’s letter. “But it’s not a game for Charlie to participate in [Munger] And I want to play. “We don’t bring anything to the party, so why should we expect to take anything home?”

In moments when technology is all you hear about, it’s easy to confuse excitement with inevitability. His latest stance of doing deals on an old-economy basis, which relies on big cash infusions, is an application of the same principles he used to avoid the dot-com bubble. You don’t have to bet against technology, and you don’t even have to buy expensive stocks, which is often the case when everyone is buying.