Can Warren Buffett Save You from an AI Bubble?

Investors who fear markets are in an AI bubble want a safe place to put their money so it won't disappear if the bubble pops.

As I was pondering this problem today, some stock-picking advice from Warren Buffett came to mind:

'Buy commodities, sell brands' has produced enormous and sustained profits for Coca-Cola since 1886 and Wrigley since 1891. I understand a Wrigley or a Mars a whole lot better than I understand the balance sheet of some of the big banks. I don't know what oil or cocoa or anything like that's going to be selling for next year. I do know people are going to be chewing Wrigley gum and eating Mars bars.
— Warren Buffett

Buffett says strong brands give companies the ability to raise prices while still keeping their customers, even when the market stumbles. Some of his best investments have been brands firmly established in the consumer mind, not just Coca-Cola or Wrigley, but also See's Candies and Apple.

Let's look at Apple more closely. What Buffett likes about the tech company is not its rapid innovation but the power of its brand. Through Berkshire Hathaway, Buffett put about $40 billion into the iPhone maker, then watched as it turned into around $150 billion.

That makes Apple Berkshire's most profitable investment ever.

In fact, Buffett once said about Apple's CEO, "Tim Cook has made Berkshire a lot more money than I’ve ever made for Berkshire Hathaway."

Buffett's advice suggests companies that combine strong brands and consumer loyalty with an attractive current purchase price might offer shelter during an AI storm.

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