Dealmaker’s Diary: The $1.8 Trillion Stock Warren Buffett Doesn’t Own (But Should)

Alpesh Patel|July 31, 2025

Warren Buffett owns Apple. He owns Coca-Cola. He owns American Express.

But he doesn’t own a meaningful stake in this $1.8 trillion AI powerhouse.

His loss could be your gain.

There’s a scene in the TV series Billions where a hedge fund manager suggests buying Apple, and his boss goes ballistic: “They pay us the big bucks to pick Apple?”

But here’s the thing – when you look at the world’s richest investors, many of their biggest winners were “obvious” picks that everyone else overlooked or dismissed.

This household name tech giant is posting numbers that would make any value investor salivate:

• Trading at just 22 P/E (cheap for any growth stock, let alone an AI leader)
• 24% cash return on capital invested (top quartile performance)
• 0.95 Sortino ratio (I rarely see one this high)
• Quantum computing and supercomputer capabilities

While Buffett sits on the sidelines, this company is going “all in” on AI. They’re hoovering up talent, building infrastructure, and positioning themselves as one of the few companies that can actually afford the supercomputing power AI requires.

The Oracle of Omaha has missed plenty of tech winners before. Don’t let his portfolio stop you from seeing what’s right in front of you.

Click on the image below to see which AI giant Buffett isn’t buying.

Transcript

Stock of the Week from the Dealmaker’s Diary, friends. Can you guess what it is from the little clue that I’ve given there?

In a way, it’s a lesson that you don’t always have to be smart or clever with investing to make money.

You might say, “Wait a minute. Do they pay you the big bucks to come up with Meta?” There’s a scene in the TV series Billions where one of the hedge fund managers who works for Axe says, “I really like Apple.” And Axe goes ballistic.

He says, “They pay us the big bucks to pick Apple?” There’s a bit more profanity than that. However, the point is when you consider that the world’s richest man has some of what you might otherwise call the obvious stocks, you might think the fictional character of Axe is wrong, and the real-life character of Warren Buffett is right. He doesn’t happen to have any meaningful amount in Meta, so it’s still out there.

What I like about this is the amount of talk about AI. But what makes this a Dealmaker’s Diary pick is the US government has just released its AI strategy report on how it’s going to stay number one in the world in AI. What was striking about that report – and I read a lot of government reports that come across my desk all the time – is just how aggressively clear America was. It is going to retain its number one position in artificial intelligence.

One of the people behind that is a fellow called Sri Ram, someone my wife worked with before in the UK, before he was brought back by President Trump to the US. The guy is seriously impressive. The president has some incredibly impressive people around him in this second term.

So let’s have a look at this. Numbers I’ve never said before in a Dealmaker’s Diary: one point eight trillion dollar market cap. Look at that PE ratio – only 22 times earnings. That’s ridiculously cheap, and we’re going to go into some of these numbers in just a second.

AI, AI, AI. One of the reasons I wanted to do this as a Dealmaker’s Diary is because, as you know, every week when I do a Dealmaker’s Diary, I look at how the company’s using AI.

These are just some of the ways it’s using it. One of the ways people won’t have picked up is the supercomputing side. Supercomputers are incredibly expensive. Quantum computers are even more expensive. Meta is one of the few companies in the world that could afford to do that. You might deal with startups that are in quantum because of my UK government work, but this is on another level – what somebody like Meta can do.

Some of the things are obvious – generative AI. I get it on my WhatsApp, Meta AI, and all the rest of it. I’ve got the Ray-Ban smart glasses as well. It’s not the consumer stuff you and I are used to. It is this advanced technology, which I would have difficulty understanding. But I know they can throw enough money at it, and thank goodness they’ve moved away from the stupid idea of the metaverse, where you wear those goggles and go into a parallel universe. It’s just ridiculous.

Look at this. For such a big company that’s growing so strongly, it still meets our Growth Value Income rating, which measures valuation of a company, revenue growth, and all those factors. Seven, eight, nine, or ten. It’s not just the smallest companies that meet this. Sometimes the titans like this can meet it.

Forecast PE – you’re paying 27 dollars for every dollar of projected earnings in the future. That has to be cheap given the exponential rate of growth of AI. If I want an AI player, I don’t go to some street corner and say, “Hey, anybody got an AI startup company I can put a few dollars into?” No. I go to the big players who can hoover up all the talent in the world, as indeed Meta has been doing recently. They’re going all in, and they’re going to be one of the winners.

Cash return on capital investment – that’s incredible. Twenty-four. Easily one of the highest numbers. Remember, that’s from Goldman Sachs Wealth Management. If you’re in the top quartile, the top 25 percent, you have exceptional returns. Here’s proof of it.

Sortino – the likes of which I have never seen on a company. 0.95. It’s very rare for a company to have a Sortino that high. In other words, average returns versus downside risk. Very low downside volatility.

The volatility itself is high – 23 percent. You will get years where this can easily drop 50 percent. But it’s clearly a buy-on-dip type of company because look at that high Sortino. Very few are buy-on-dips with good conviction.

You can see here the 78 percent drop. It shows you how ridiculous the stock market is in the short term. Drops 75 percent, then recovers it all. The stock market goes, “Oh, it’s not worth what we thought. Oh yes, it is.” That’s why timelines are more important.

When momentum, as you see here, has this crossover on what’s known as the MACD, I’d want to exit and hold cash until this flattens out and the weekly starts rising.

Projection forward – phenomenal for a company this size. Who said elephants can’t dance? This is an elephant that can dance.

Is it undervalued on discounted cash flow? That is incredible that even on the discounted cash flow, we’re getting any kind of undervaluation on it. So that’s impressive as well.

I hope that gave you a different perspective than the usual Dealmaker’s Diary in that it’s a name you’ve heard of. It’s a household name you’re surrounded by, but you might want to revisit what might be staring you in the face. Thank you very much.