Buffett Has ‘Mountain’ of Cash on Hand but Admits No Good Assets to Invest In?

TradingKey - According to reports, Warren Buffett explicitly stated in an interview last May that he felt deeply frustrated by the lack of investment opportunities. After serving as CEO of Berkshire Hathaway for over 50 years, Buffett recently officially stepped down.

Looking at the holdings of Berkshire Hathaway (BRK) as represented by Buffett, the top-ranked position remains Apple (AAPL) , and following the resumption of trimming its Apple stake in the second quarter, Berkshire Hathaway intensified its selling in the third quarter, with its Apple holdings declining nearly 15% quarter-over-quarter.

[Overview of Buffett's Holdings, Source: macromicro]

Notably, Alphabet was ranked as Berkshire Hathaway's tenth-largest holding in the most recent 13F report. However, given Buffett's value investing philosophy and his consistently conservative stance toward high-growth tech stocks, this purchase of Alphabet stock may not have been his personal decision.

During the three months ended September 30, 2025, Berkshire Hathaway remained a net seller of stocks for the 12th consecutive quarter, indicating a lack of attractive investment opportunities in the market.

[Overview of Buffett's Holdings by Sector, Source: macromicro]

2024–2025 is hailed as the dawn of the AI era, with most AI-related tech stocks achieving impressive gains, such as Apple, which Buffett holds, and Alphabet, which he increased his stake in during Q3.

However, looking at the sectors in Buffett's portfolio, the weight of tech stocks has been increasingly reduced, signaling his concerns over the high valuations of growth stocks.

Why does Buffett believe there are no suitable investment targets?

Examining Buffett's lifelong investment history, the core reason he still finds no suitable targets—even as the AI wave sweeps the globe and his cash reserves hit record highs—lies in the misalignment between his steadfast investment logic and the current market environment.

The core of Buffett's investing is the "margin of safety." He is accustomed to being "greedy" when the market is fearful and assets are severely undervalued, such as his capital injections during the 2008 financial crisis.

Between 2024 and 2025, AI concepts have driven a sharp expansion in tech stock multiples. In Buffett's discounted cash flow (DCF) model, current stock prices have already pulled forward growth expectations for many years to come, indicating clear valuation overheating. At these high valuations, if the commercialization of AI fails to meet expectations, the risk of a significant price drawdown is immense.

Furthermore, Buffett has repeatedly emphasized: "We don't have to be experts on every company."

Buffett favors companies with "long-term franchises" and "wide moats," such as Coca-Cola. However, in the AI era, technological turnover is extremely rapid; today's leaders could be disrupted by new algorithms in just two years.

While AI can improve efficiency, for a long-term investor like Buffett, it remains unclear who can translate it into stable, long-term net profits. Buffett will not enter profit models he does not fully understand simply due to "fear of missing out" (FOMO).

It should be noted that Berkshire's current scale means only "elephant hunting" can move the needle on its performance. In a bull market, such high-quality yet cheap targets are nearly extinct.

Trimming the top holding, Apple, is not because the company has deteriorated, but because its qualitative nature has changed.

As Apple's AI features roll out, market expectations have peaked. Buffett's reduction may be to lock in profits and reallocate capital into more "defensive" assets or wait for a more attractive interest rate environment.

Buffett's belief that there are no suitable targets is essentially the "loneliness of a value investor." Amidst the irrational exuberance triggered by the AI dawn, he chose to retreat to his defensive lines, adhering to his famous adage: "Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1."

This "sober solitude" is the true secret behind his resilience throughout a career spanning over 50 years—when the market loses its mind, cash is his most powerful weapon.