The world’s most influential investor has unveiled the latest investment move: the purchase of a billion-dollar stake in chipmaker giant TSMC. Why did the Oracle of Omaha bet in tech?
Which sector to focus on in this very uncertain moment? One hint comes from the latest move by Warren Buffett, the richest and most influential investor in the world.
The billionaire’s conglomerate, Berkshire Hathaway, said it had bought more than $4.1 billion shares of Taiwan Semiconductor Manufacturing, in what appeared to experts as a rare but significant incursion into the technology sector by the Oracle of Omaha.
It is the third-largest technology company in the vast industrial conglomerate’s major equity holdings. The purchase of 60 million shares of US-listed TSMC, disclosed to US securities regulators on Monday, marked Berkshire’s largest new equity investment in the three months to September.
Why did Warren Buffett, hitherto tech skeptic, make this move? Is it an advice for global investors.
Why invest in tech and chips? The purchase of Warren Buffett reveals it
News of Buffett’s purchase sent shares of TSMC surging to close 7.9% higher in Taiwan as it boosted investor sentiment for the biggest chipmaker of the world.
The giant hit a two-year low last month on a sharp slowdown in global semiconductor demand. It should be specified, however, that the Taiwanese company produces semiconductors for customers such as Nvidia Corp. and Qualcomm Inc. and is the exclusive supplier of Apple’s custom silicon chips.
There was, however, some surprise from analysts at this move by the billionaire investor. It is true that Buffett has shown more willingness to invest in technology in recent years, with the Berkshire stock portfolio now counting among its holdings Apple, the computer and printer maker HP and cloud database company Snowflake.
However, the Oracle of Omaha has had a sometimes "litigious" relationship with the tech industry. He avoided large investments in the industry for years, warning shareholders that he either didn’t understand the operations or wasn’t well equipped to value the assets of many high-tech companies.
But that changed as the industry matured and Buffett’s understanding of the industry’s role in the global economy evolved. Chip manufacturing is a segment that promises sustained growth in the coming years as it is essential for the expansion of newborn industries such as self-driving and electric cars, artificial intelligence, and connected home applications.
Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pa., which owns Berkshire stock, commented, “I suspect Berkshire believes the world cannot do without Taiwan’s manufactured products. Only a small number of companies can raise the capital to supply semiconductors, which are increasingly central to people’s lives."
Now, it is unclear whether Buffett directed the investment in TSMC himself or whether it was made by Todd Combs or Ted Weschler, the two “lieutenants” who help oversee the 306 billion dollars of the company. Berkshire did not respond to a request for comment. What is certain is that the richest and most influential investor in the world now owns shares in the chip sector.
Original article published on Money.it Italy 2022-11-15 10:33:29.
Original title: L’ultimo consiglio di Warren Buffett è investire nei chip
