‘Baby Berkshire’ Portfolio: 10 Best AI Stocks to Buy According to Warren Buffett Disciple Tom Gayner

#7 Cisco Systems, Inc. (NASDAQ:CSCO)

Markel Stake as of Q3: $38.3 Million

Markel held 355,500 shares of Cisco Systems (NASDAQ:CSCO) at the end of September 2026, which is 0.30% of its reported portfolio. The portfolio data shows no change to the position in the quarter. The London Company said in its second-quarter 2026 investor letter that strong AI infrastructure orders drive confidence in Cisco. See the full letter here.

Morgan Stanley recently downgraded Cisco to equal-weight from overweight, and the reasons apply to the whole AI story. The shares rose 43% over the past 12 months, compared with 14% for the S&P 500. Morgan Stanley says a large part of the AI-driven gain is already in the price. Cisco trades at about 19 times forward earnings, a higher multiple than it has had in the past, so there is little room for the stock to beat what investors already expect. Morgan Stanley also pointed to lower gross margins from Cisco’s AI business, and it was worried about the margins on the cloud business. It added that some customers may have bought early to get ahead of Cisco’s price increases, which could mean weaker orders later.

Morgan Stanley still likes the business itself. It sees several years of double-digit growth, mostly from cloud customers, and says that supports a higher multiple than Cisco has had before.

#6 Meta Platforms, Inc. (NASDAQ:META)

Markel Stake as of Q3: $151.7 Million

Markel held 209,163 shares of Meta Platforms (NASDAQ:META) at the end of September 2026, or 1.18% of its reported portfolio. It trimmed the position by 10.68% in the quarter. Retail investors are debating whether Meta is dead money or the best cheap AI stock. Click to see both sides.

Many readers will be surprised to see Meta in Tom Gayner’s portfolio. The Wall Street Journal has reported that Gayner looks for profitable companies with good management and a reasonable stock price. Meta is now spending so much on AI data centers that its free cash flow turned negative in its most recent quarter.

Bears say Meta’s only real moat is its huge base of users, which lets it sell ads at high prices. They say AI models are becoming commodities, because many companies now sell similar ones, so Meta will struggle to earn much from its own. Muse, Meta’s new AI model, is growing fast but is still small next to the cost of the data centers behind it. Meta also has no big cloud business to rent out its spare computing capacity, unlike Amazon, Microsoft, and Alphabet, the Journal reported. That means Meta has to earn back its AI spending through its own apps.

Bulls point to those same apps. In the most recent quarter, Meta’s average price per ad rose 14% and the number of ads shown rose 10% from the same quarter a year ago. The stock trades at about 21 times forward earnings, close to its own five-year average of about 22. Bulls say that is a fair price for a business that still grows ads this fast.

#5 Texas Instruments Incorporated (NASDAQ:TXN)

Markel Stake as of Q3: $202.8 Million

Texas Instruments (NASDAQ:TXN) makes analog and embedded chips used in factories, cars, and electronics. Markel held 724,000 shares at the end of September 2026, or 1.58% of its reported portfolio. The portfolio data shows no change to the position in the quarter. We compared Analog Devices with Texas Instruments and ON Semiconductor on whether AI infrastructure and acquisitions can drive growth. Click to see the comparison.

Texas Instruments shares fell about 11% in a single day during the recent AI selloff, even though the company had just beaten expectations in its latest quarterly results. Investors sold chip stocks across the board because they fear the AI data center boom will end sooner than expected.  Texas Instruments is more tied to that trade than before. Data centers made up about 13% of its revenue in its latest quarter, up from 9% in 2025. The stock had also risen more than 60% this year before the drop, and it trades at about 31 times forward earnings, above its own five-year average of about 28. Analog chips are also cyclical, and analysts expect growth to slow after this year.

Bulls say the sell-off hit a business that is just starting a recovery. Analog chip makers went through several weak years, and now industrial and car customers are buying again. Data center sales are growing as well. Supply is tight, and longer wait times for chips give Texas Instruments room to raise prices. Bank of America said in October that the analog industry is only about a year into an upcycle that could run through 2027, and it named Texas Instruments among the strongest performers. Texas Instruments has also finished a heavy factory build-out and expects to spend less on new plants, which leaves more cash to pay dividends. The stock yields about 2%.