Better AI Investment: Warren Buffett's Apple vs. Cathie Wood's Tesla

$Berkshire Hathaway-A (BRK.A.US)$ $Berkshire Hathaway-B (BRK.B.US)$ Buffett and $ARK Innovation ETF (ARKK.US)$ Wood picked successful stocks despite radically different approaches to AI.

As mentioned before, both Buffett and Wood hold extensive AI investments. Buffett's investments such as $Amazon (AMZN.US)$ and banks like $Bank of America (BAC.US)$ use AI extensively. By comparison, Wood's investments are more tech-heavy portfolios consisting mostly of smaller large caps. Her fund holds AI stocks like $UiPath (PATH.US)$ , $Zoom Communications (ZM.US)$ , and numerous others.
But despite owning several AI stocks, Buffett has said relatively little about the technology. He stated at his 2017 shareholders meeting that it could bring notable productivity gains and significant job losses.
Still, he has typically avoided smaller, money-losing stocks built on cutting-edge technologies such as AI. His team has given no indication that it owns Apple or any other AI stock specifically because of artificial intelligence.
Wood takes a more direct approach. She believes AI will be one of the major pillars of innovation over the next few years, calling the potential productivity gains "astounding and shocking." Such a prediction might have led her team to place a price target of about $1,500 on Tesla by 2026.

$Apple (AAPL.US)$ does not publicly discuss which of its products and services use AI. Nonetheless, virtually all of its products, especially the iPhone, appear to integrate AI on numerous levels. Functions such as Siri, texting, Face ID, Apple Maps, and Apple Photos reportedly use AI functionality in some form.
Apple has also reached out to the academic community. Programs such as Apple Scholars and its AIML Residency Program tap into knowledge from numerous disciplines to develop new AI applications.

In contrast, $Tesla (TSLA.US)$ has addressed AI more directly. For one, it developed semiconductors to power AI. Among these is the FSD chip to control autonomous driving features, and the Dojo chip, Tesla's semiconductor designed for deep learning. And the automaker develops AI software to improve the driving experience.
While both companies will likely excel in AI development, Tesla might have a slight advantage as an investment. Its market cap is under $600 billion, compared with Apple's market cap of nearly $2.6 trillion. Thus, Tesla will have an easier time achieving higher-percentage growth.

In 2022, $Tesla (TSLA.US)$ grew revenue by 51% year over year. In contrast, Apple's revenue fell slightly in its fiscal first quarter of 2023 (ended Dec. 31, 2022), and in fiscal 2022, it grew revenue by only 8%.
Although Apple's revenue increases could return to double-digit levels, it is unlikely to match a monster growth stock like Tesla. But Apple will probably remain cheaper from an earnings perspective, as Tesla's faster growth led to a premium valuation in the stock.