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You don't need a lot of money to generate long-term wealth. Even small sums can grow immensely over time. All you need is time and the right stock picks.
Have $60 to spare? Consider splitting that sum across the two Warren Buffett stocks below. To generate true wealth, you'll likely need add to these investments over time. But getting started is the hardest part, and these two stock picks -- using fractional shares offered by many online brokerages -- instantly give you a portfolio of businesses primed to benefit from the biggest growth market this century: artificial intelligence (AI).
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Amazon is a secret bet on artificial intelligence
Most people think of Amazon (NASDAQ: AMZN) as an e-commerce giant. But its Amazon Web Services division -- more commonly referred to simply as AWS -- is arguably the company's biggest strength right now. This division is not only delivering big profits, but also provides Amazon with its biggest growth opportunity in years.
What exactly does AWS do? It delivers on-demand cloud computing services. Think of it as a distributed computer. You can have entire applications run in "the cloud," which essentially just means that AWS is running them on its services. This allows businesses like AI start-ups to scale up infrastructure fast without needing to purchase its own equipment. In a nutshell, you can think of AWS as a rental business that rents out processing and storage capabilities.
What does this all have to do with artificial intelligence? AI applications require a lot of computing power to train and execute their models. Demand can be variable and fluctuate wildly. Cloud infrastructure allows this to occur seamlessly, scaling up and down depending on the businesses needs that day. If every AI company needed to purchase its own GPUs and build out its own infrastructure, innovation would crawl to a halt. With a 30% market share for cloud infrastructure worldwide, AWS is a top choice for many AI businesses.
Buffett's holding company, Berkshire Hathaway, owns roughly $2 billion of Amazon shares. Considering AWS contributed roughly 75% of Amazon's operating income last year, it's fair to say that Buffett and company have a lot staked on the AI economy through this position alone. But it's the next holding on this list that is truly a huge bet on AI.
This Buffett stock is already an AI winner
As with Amazon, most investors don't think of Apple (NASDAQ: AAPL) as an AI company. That's because most of its sales and profits are still derived from hardware, things like iMacs, iPhones, and iPads. But a growing source of revenue for the company is in App Store sales. And this gives Apple a front row ticket to the rise of AI, no matter which AI service ultimately wins out.