Warren Buffett’s investment track record — a 5,789,503% cumulative return over six decades — has made him Wall Street’s most-followed money manager.
Thanks to an acquisition 27 years ago, Berkshire Hathaway is the parent company of a specialty investment firm, New England Asset Management.
Two of the 122 securities held in Buffett’s secret portfolio have lofty quantum computing ambitions.
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For the better part of the last six decades, billionaire Warren Buffett has been running circles around Wall Street as CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). In his tenure as CEO, he’s overseen a 5,789,503% cumulative return in his company’s Class A shares (BRK.A), as of the closing bell on July 7. For the sake of comparison, the benchmark S&P 500 has returned around 41,400%, including dividends, over the same span.
The Oracle of Omaha’s jaw-dropping long-term outperformance is what draws 40,000 investors to Berkshire Hathaway’s annual shareholder meetings. It’s also the reason investors attempt to mirror the buying and selling habits of Berkshire’s billionaire chief by closely tracking Berkshire’s quarterly Form 13F filings. This is the form that concisely details the buying and selling activity of Wall Street’s leading asset managers.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
But here’s something you might not know about the stock market’s most-followed money manager: Berkshire’s 13F offers an incomplete picture of which stocks are held by Buffett’s company.
Though we often think of Warren Buffett as an investor of mature, brand-name businesses, you’re about to discover that, indirectly, Berkshire’s billionaire investor is wagering on the quantum computing revolution to make his company’s shareholders richer.
With the exception of the “confidential treatment” tag, which was affixed to Berkshire Hathaway’s 13F filing for the March-ended quarter, you’d be under the impression that all the securities (stocks and exchange-traded funds, or ETFs) held by Buffett’s company are listed in its 13F — but you’d be wrong.
In 1998, Berkshire Hathaway acquired General Re in a $22 billion all-stock deal. Although the crown jewel of this transaction was General Re’s reinsurance operations, it also owned a specialty investment firm known as New England Asset Management (NEAM). When the buyout of General Re closed in December 1998, Berkshire Hathaway became its new parent company.
To be crystal clear, Warren Buffett doesn’t directly oversee NEAM’s assets under management in the same manner that he oversees the buying and selling activity in Berkshire Hathaway’s primary investment portfolio, which tipped the scales at $292.3 billion, as of the closing bell on July 7. Nevertheless, the securities held by NEAM are, ultimately, under the umbrella of its parent company, Berkshire Hathaway. This makes New England Asset Management Warren Buffett’s “secret” portfolio.
Institutional investors with at least $100 million in assets under management (AUM) are required to file a quarterly 13F with the Securities and Exchange Commission. NEAM closed out the March-ended quarter with $616 million in AUM, which means investors have the ability to track buying and selling activity for this secret portfolio in the same manner they’d follow the purchases and dispositions from Berkshire Hathaway’s primary investment portfolio.
Although the Oracle of Omaha’s secret portfolio is packed with diversified ETFs and a host of brand-name companies, it also houses two potential leaders in the quantum computing arena.
Image source: Getty Images.
With quantum computing, specialized computers rely on quantum mechanics to solve complex calculations that traditional computers can’t do. The elevator pitch of this potentially game-breaking technology is that it can expedite drug development, improve financial risk management, and has the potential to make artificial intelligence (AI)-driven algorithms more efficient.
Among the 122 securities held by New England Asset Management at the end of March are two magnificent quantum computing stocks.
According to NEAM’s first quarter 13F filing, it held 5,195 shares of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) — specifically the Class A shares (GOOGL).
Alphabet is best-known for its Google search engine, which has held a near-monopoly-like share (89% to 93%) of global internet search dating back more than a decade. With businesses willingly paying a premium to get their message(s) in front of users, and Google ideally positioned to take advantage of long-winded economic expansions, this ad-driven segment is nothing short of a cash cow.
Additionally, Alphabet’s Google Cloud is the world’s No. 3 cloud infrastructure service provider by total spend, based on estimates from Canalys. Alphabet is incorporating generative AI solutions into Google Cloud to reaccelerate its growth rate and bolster margins that are already considerably higher than what it nets from its advertising operations.
However, Alphabet has also firmly dipped its toes into the quantum computing arena with the development of its Willow chip. Introduced in December 2024, Willow is an experimental chip that’s demonstrated the ability to reduce errors as it scales, and has completed complex calculations in minutes that even the most-advanced supercomputers would spend “10 septillion” years to calculate, according to Alphabet.
Make no mistake about it, Willow is nowhere close to being commercialized or deployed on a large-scale basis. But it does provide a foundation for Alphabet to build its quantum computing ambitions on. With Alphabet generating in excess of $36 billion in net cash from its operations in the first three months of 2025, and the company ending the quarter with over $95 billion in combined cash, cash equivalents, and marketable securities, it has the ability to take risks and lead with its innovation.
The other magnificent quantum computing stock that Warren Buffett indirectly owns through his secret portfolio and is wagering on to make Berkshire Hathaway’s shareholders richer is none other than Microsoft (NASDAQ: MSFT). New England Asset Management ended the first three months of the year with 4,530 shares of Microsoft in its investment portfolio.
Similar to Alphabet, Microsoft is known for its cash cow legacy operating segments and its rapidly-growing cloud service infrastructure platform, known as Azure. With regard to the former, Windows and Office aren’t the growth stories they were a quarter of a century ago. However, they still generate exceptionally high margins, which allows Microsoft to redirect its cash to fast-growing initiatives.
Meanwhile, Microsoft is aggressively investing its capital and forging collaborations to accelerate growth for Azure, which is the world’s No. 2 cloud infrastructure service platform by spending. Incorporating generative AI solutions and providing the tools that allow clients to build and train large language models has helped Azure sustain or surpass a 30% annual growth rate.
But Microsoft has big quantum computing ambitions, as well. Its novel quantum processing unit, Majorana 1, is being integrated with its cloud-based compute platform known as Azure Quantum to allow users to run quantum-based algorithms. The proposed speed and scalability of Microsoft’s quantum platform can accelerate research and aid in solving complex problems that classical computers simply can’t do.
Admittedly, quantum computing is the equivalent of crumbs relative to Microsoft’s piece of the pie at the moment. It’s going to take quite a bit of time for this technology to mature and offer broad-based utility. Thankfully, Microsoft closed out March with almost $80 billion in combined cash, cash equivalents, and short-term investments, and has generated over $93 billion in cash from its operations over a nine-month stretch (ended March 31). Like Alphabet, it has plenty of buffer to be aggressive and take risks.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Billionaire Warren Buffett Is (Indirectly) Wagering on 2 Quantum Computing Stocks to Make Berkshire Hathaway’s Shareholders Richer was originally published by The Motley Fool
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