It's been hard to ignore that artificial intelligence is a hot topic the last few months.

The generative engine ChatGPT opened in November and has quickly caught the imagination of the public.

There is even talk that Microsoft Corp (NASDAQ: MSFT), which is a major investor in the startup behind ChatGPT, could challenge Alphabet Inc (NASDAQ: GOOGL)'s two-decade domination of internet searches by injecting AI into Bing.

Already "a veritable rainforest of new AI startups is being freshly funded", according to Frazis Capital Partners portfolio manager Michael Frazis.

"While it won't be clear for some time which will win and which will fall…, one thing is certain: they will all [need] immense amounts of computing power," he said in a memo to clients.

"Power that, absent this revolution, may not have been required for many years."

As such, some investors are looking to gain exposure to companies involved in manufacturing computer chips or, their key ingredient, semiconductors.

The best semiconductor stocks in the world

Shaw and Partners portfolio manager James Gerrish was recently asked which are the best ASX shares of businesses involved in the semiconductor industry.

"When I think semiconductors, my first thoughts are international companies such as Qualcomm Inc (NASDAQ: QCOM), NVIDIA Corporation (NASDAQ: NVDA), Texas Instruments Incorporated (NASDAQ: TXN), Broadcom Inc (NASDAQ: AVGO), Intel Corporation (NASDAQ: INTC), Taiwan Semiconductors Mfg Co Ltd (NYSE: TSM), Samsung Electronics Co Ltd (KRX: 005930), etc," he said in a Market Matters Q&A.

"Unfortunately there are no companies of this magnitude on the ASX."

So Gerrish suggested the next best option could be exchange-traded funds. But again, they are overseas shares.

"Two of our preferred ETFs to gain exposure to the semiconductor markets are the iShares Semiconductor ETF (NASDAQ: SOXX) and the VanEck Semiconductors ETF (NASDAQ: SMH)," he said.

"Locally, at this stage, there aren't any companies on the Market Matters radar."

Frazis took the example of Nvidia to demonstrate how critical computer chips are to power an AI-driven future.

"Nvidia is partnering with Mercedes Benz Group AG (ETR: MBG) to power their next generation of cars from 2024, including level 4 autonomy, over-the-air updates, and best-in-class safety and convenience applications," he said.

"Nvidia is a small position for us, bought at lower prices, but their 81% market share in AI processing is now more relevant than ever."

The post What are the best ASX shares to buy for semiconductor exposure? appeared first on The Motley Fool Australia.

So what can we learn from Buffett's 2022 moves here on the ASX?

Well, let's check out how Buffett has been managing his cash over the year that (almost) was.

So according to a comprehensive analysis of Buffett's moves from our Fool colleagues over in the US, Buffett made several big moves in Berkshire's portfolio this year.

Buffett's Berkshire bets big on oil

Amongst his bigger bets was a massive increase in Berkshire's exposure to oil. Berkshire already owned significant chunks of oil giants Chevron and Occidental Petroleum. But Buffett more than quadrupled Berkshire's stake in Chevron in 2022, growing the company into Berkshire's fourth-largest position. He also boosted Occidental's position significantly as well.

So Buffett clearly thinks the oil space is one well worth investing in for 2023 and beyond. This might not bode well for motorists in the new year.

Another sector Buffett has apparently been focusing on in 2022 is tech. Buffett has famously been slow on the uptake when it comes to tech shares. He barely owned any tech stocks until 2016. But that was when Berkshire started buying Apple.

A combination of aggressive buying and a ballooning Apple stock price has resulted in Apple now being the largest holding in Berkshire Hathaway's portfolio. And by a mile too.

Berkshire's tech portfolio is expanding

Buffett hasn't bought too much more of Apple in 2022. but he has been loading up on two other tech stocks: HP and Taiwan Semiconductor Manufacturing Co (TSMC) HP is a dominant manufacturer of printers and PCs. he reportedly purchased a chunk of HP when it was sitting at a price-to-earnings (P/E) ratio of just 6, so this looks like a classic value play.

His purchase of TSMC is more interesting. TSMC is by far the most dominant manufacturer of advanced semiconductor chips in the world, with more than half the world's market share. It's Buffett's first foray into the world of semiconductors, but one he has built out aggressively.

His purchase of more than US$4 billion worth of TSMC stock has made this company into Berkshire's tenth-largest position today.

So what can we ASX 200 investors learn from Buffett's 2022 moves?

Well, it's pretty obvious that Buffett is still betting big on oil and tech – specifically semiconductors. Unfortunately, the ASX doesn't have much in the way of semiconductor stocks. But there are plenty of oil and energy shares, including Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) to choose from.

The post What can ASX 200 investors learn from Warren Buffett's big moves in 2022? appeared first on The Motley Fool Australia.

A number of the ASX's leading names have seen their share prices take a bath in recent times. For example, the Xero Limited (ASX: XRO) share price has dropped more than 50% in the year to date.

Whether the sell-off is justified for Xero and many other ASX growth shares is debatable. But the question now is whether these declines represent an opportunity, or whether higher interest rates mean these lower prices are about right.

Warren Buffett's wise advice

I don't think every business is worth buying just because its share price has dropped, but when almost the entire market is sold down, such as during the COVID crash, I think indiscriminate selling presents a great hunting ground.

One of the most quoted Warren Buffett sayings is this:

Be fearful when others are greedy and greedy when others are fearful.

In other words, the best time to buy ASX shares may be when there is widespread uncertainty because this is when share prices are lower.

But, there are also likely to be times when investors are euphoric. I think 2021 was an example of this when almost everything displaying growth was loved by investors. We should be cautious around those times.

Buffett also has this gem of advice from 2001:

To refer to a personal taste of mine, I'm going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep. For most people, it's the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don't like them anymore.

In his 1997 annual letter, Buffett said:

If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period?

Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.

Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.

Foolish takeaway

Warren Buffett doesn't try to predict where share prices are going to go in the short term. If he sees a wonderful business at a fair price, then he's willing to invest. For example, Taiwan Semiconductor Manufacturing recently entered the Berkshire Hathaway portfolio after Warren Buffett's business invested US$4 billion. He's still investing during this period and I think we can find some good ASX shares at the current prices.

If we waited until things seemed completely 'safe', share prices would probably have gone much higher. Plus, there always seems to something going on in the news, so it may be wise to ignore that noise.

The post Is it safe to invest in ASX shares now? Take advice from Warren Buffett appeared first on The Motley Fool Australia.

It has been a challenging year for investors, but we can all take heart in the fact that some of the world's most renowned investors are finding opportunities in the bear market and are initiating positions in new stocks.

These billionaires have long track records of building significant wealth, and according to the latest 13F filings, they were all adding new positions during the third quarter. Let's look at three interesting new buys that billionaires made during the period.  

1. Warren Buffett: Taiwan Semiconductor 

Warren Buffett is arguably the most renowned investor of all time, so anytime his Berkshire Hathaway initiates a new position, it makes a splash within the investment community. His newly revealed position in Taiwan Semiconductor Manufacturing Company (NYSE: TSM) went a step further and made waves because the $4 billion investment instantly becomes a top-10 position for Berkshire.  

Buffett has said that it's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. TSMC seems to be both a wonderful company and available at a wonderful price. The company has a significant moat in that it makes some of the world's smallest and most advanced computer chips.

Not many companies can simply set up shop and start competing with it. Apple, Buffett's largest holding, is TSMC's largest customer and the chipmaker is considered such an important supplier that it is building a foundry in Arizona to serve Apple further. Outside of Apple, Taiwan Semiconductor serves an array of end markets including artificial intelligence, high-performance computing, Internet of Things-enabled devices, and the automotive sector.

The stock is down 33% year to date as investors worry about an oversupply of semiconductors in the market. But this sell-off created an attractive price for Buffett. The stock trades for just 14 times forward earnings. While TSMC is down year to date, Buffett and his team recognize that semiconductor demand will continue to increase over the long term as chips go into more devices. As a leader in such an industry trading at an attractive valuation, it looks like a great long-term investment.    

2. Seth Klarman: Lithia Motors

While it's not quite as catchy or alliterative as "the Oracle of Omaha," Seth Klarman is sometimes called "the Oracle of Boston." And Klarman, the portfolio manager of Baupost Group, is a noted value investor in his own right.

He founded the hedge fund in 1982 and has grown it to over $31 billion in assets under management. Klarman is notable in that he is a hedge fund manager who doesn't even own a Bloomberg Terminal because he is unbothered by day-to-day price changes, which is a good lesson for all investors.

During the third quarter, he initiated a position in Lithia Motors (NYSE: LAD),  an Oregon-based company with a growing network of auto dealerships across the United States and Canada. Given Klarman's penchant for value investing, it's not surprising that Lithia Motors caught his eye. The stock has returned nearly 500% over the past decade, but after a 25% decline year to date in 2022, it trades at just 5 times earnings, which is music to Klarman's ears.

The stock is down because investors are concerned about a cooling auto market and a slowing economy, but a long-term investor like Klarman recognizes that Lithia has grown earnings at an impressive 32% compound annual rate over the past 10 years. During the most recent quarter, Lithia reported the highest revenue and earnings per share (EPS) in its history.

Its goal is to grow EPS to $55 or more by 2025, up from about $45 today. Given Lithia's track record, this seems like a credible target. It also returns considerable capital to shareholders via share repurchases and a small dividend. As the company continues to grow earnings and deliver buybacks and payouts, Lithia looks poised for solid returns over the long term.

3. Bill Gates: Waste Connections

While Bill Gates is best known as the founder of Microsoft, the Bill and Melinda Gates Foundation also has a $34 billion investment portfolio. Buffett is a trustee for the foundation, so Gates is getting insight from one of the best in the business. 

During the third quarter, Gates started a $290 million position in Waste Connections (NYSE: WCN), making the waste collection company a top-10 holding. While waste collection isn't the most glamorous industry, it is resilient as an essential business that customers rely on no matter what type of market we are in. Gates seems to appreciate that durability -- Waste Management (NYSE: WM) is another one of his largest holdings.

Waste Connections isn't cheap at 24 times forward earnings, but this defensive stock has vastly outperformed the broader market in 2022 with a 3% gain year to date, while the S&P 500 and Nasdaq are deep in the red. The company has handled inflationary pressures on fuel and labor well, and is guiding to higher EPS, revenue, and free cash flow in 2023. In a volatile market, there's something to be said for this type of consistency and stability. Waste Connections looks like a great choice for investors wanting to preserve their capital with a high-quality defensive stock.       

While investors should always do their own due diligence, it's never a bad idea to study what some of the best investors are doing and to look for new ideas based on their buys. Billionaire money managers also wisely know that market pullbacks are buying opportunities over the long run.

All three of these stocks that billionaires bought last quarter look like good long-term investments, with Taiwan Semiconductor and Lithia Motors standing out based on their attractive valuations.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Only a handful of companies have reached the trillion dollars in value mark, but that number will likely grow in coming years. As I set out to find companies that could reach a trillion-dollar valuation, I had a few requirements. The companies must have an extremely large addressable market, must have an identifiable moat to build on, and be growing and profitable today. 

The three stocks that stood out to me are Taiwan Semiconductor (NYSE: TSM), Disney (NYSE: DIS), and Adobe (NASDAQ: ADBE). 

Taiwan Semiconductor Manufacturing

There's one chip manufacturer that's more important than any other in the world today, and that's Taiwan Semiconductor Manufacturing. The company is a third-party manufacturer for chip leaders like Apple (NASDAQ: AAPL), Nvidia (NASDAQ: NVDA), and dozens of other companies designing their own chips. 

Designing a great chip is great, but someone has to make the chip, and that's where Taiwan Semiconductor comes in. 

You can see in the chart below that the company is now trading at just 13.2 times earnings, and has grown revenue and net income by 91.5% and 140.4% respectively in the last three years. 

TSM Market Cap data by YCharts

What's fascinating about the company's place in chip manufacturing is that there's no clear competitor at the bleeding edge of manufacturing. Intel (NASDAQ: INTC) is years behind, GlobalFoundries (NASDAQ: GFS) is much smaller, and AMD (NASDAQ: AMD) has a more integrated business model. For chip companies that don't own fabrication facilities, Taiwan Semiconductor is still the go-to manufacturer if you're designing at the cutting edge. 

Given the company's strong strategic position, technology, growth, and profitability, I think this could be the first of these companies to reach $1 trillion in value. 

Disney

The last five years haven't been quite as smooth sailing at Disney. The company has seen cable connections decline, streaming has been an enormous investment, and the pandemic had a huge effect on both theaters and theme parks. But Disney is positioned for a decade of growth. 

DIS Market Cap data by YCharts

Disney now technically has more subscribers than Netflix (NASDAQ: NFLX) when you add together Disney+, ESPN+, and Hulu. So, it's a leader in next-generation media distribution.

Investors haven't liked the money being spent on streaming, but the payoff may be getting better very soon. Disney announced an advertising tier, but instead of offering a lower-cost version of Disney+ with ads, it is keeping the same $8 per month price but adding advertising, increasing the price to $11 per month if you want no ads.

Disney's ability to create compelling content and then monetize it through what I call a waterfall of businesses -- from the theater to streaming to merchandise to theme parks -- is unmatched in media. The company needs to do well to reach a $1 trillion valuation by 2030, but I think it can get there. 

Adobe

Adobe has long made valuable software for designers, but it's now poised to become the operating system of the design and programming community if it can complete the acquisition of Figma. 

You can see below that Adobe's business of licensing software to creators has been a growth machine over the last decade. But it's creating tools that people use to create assets, not a platform they're using to collaborate on. That's why the acquisition of Figma is a big deal. 

ADBE Revenue (TTM) data by YCharts

You can see above that Adobe currently trades for 28.5 times trailing earnings, and Figma should help with future growth. But for Adobe to become a $1 trillion company, it needs to lean into Figma's multi-user platform to become a real juggernaut. I think it can do that, pulling not only graphic designers but programmers, project managers, and many more into the Figma ecosystem. Don't be surprised if products like Photoshop and Illustrator become add-ons to Figma, not the other way around. 

Now that Adobe has a potential platform solution, the sky is the limit for the company's value. That's why I think this could be a $1 trillion company by the end of the decade. 

Thinking big

There's no guarantee any of these companies will reach the heights of a $1 trillion company, but they all have the foundation needed to get there. If management thinks big, these stocks could be trading near the most valuable companies in the world. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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WAM Global is one of WAM's newer LICs, only hitting the ASX back in 2018. It was a first for the fund manager, considering WAM Global would be the first Wilson LIC to focus on companies outside the ASX (hence the name).

Since its ASX IPO back in June 2018, WAM Global has gone on to deliver an average performance of 12.1% per annum since. This includes some healthy dividend growth as well. WAM Global shares today offer a fully franked trailing yield of 3.5%.

WAM's ASX wedding bells toll

Well today, it seems WAM Global is set to grow even larger. In an ASX announcement this morning, WAM Global told investors it has entered into a scheme with Templeton Global Growth Fund Ltd (ASX: TGG). This will allow the two funds to merge. Under the scheme, all Templeton shareholders will receive WAM Global shares and options. Shareholders can also choose to have their shares bought back by WAM for a cash consideration if the scrip offer isn't appealing.

The exact cash/scrip numerations have yet to be determined. But WAM Global has stated that the scrip offer will be "calculated by reference to the relative NTA [net tangible assets] per share after tax, but before deferred taxes of WAM Global and TGG". The cash offer, should investors choose to take it, will consist of shareholders receiving "cash equal to the NTA per [Templeton] share after all current and deferred taxes and associated transaction costs".

Until the review of an "independent expert" over the deal, Templeton Global Growth Fund's board has given their initial approval. They have told investors that they intend to vote in favour of the merger.

WAM Global founder and chair Geoff Wilson stated the following:

The WAM Global Board of Directors believe that the Scheme will be beneficial to both companies and result in a superior merged entity leveraging Wilson Asset Management's proven investment strategy. We look forward to welcoming TGG shareholders to the Wilson Asset Management family as we continue to grow WAM Global.

WAM Global estimates that if all goes to plan, the merger can be implemented by the end of October 2021.

What would a combined LIC look like?

As we touched on earlier, WAM Global invests in companies mostly outside the ASX and Australia. Its current portfolio (as of 31 May 2021) is weighted 56.4% to US companies, 10.4% to German companies and 7.5% to British shares, amongst others. Some of WAM's top holdings at the current time include Chinese giant Tencent Holdings ADR (OTCMKTS: TCEHY). As well as payments behemoth Visa Inc (NYSE: V) and gaming titan Electronic Arts Inc. (NASDAQ: EA).

Meanwhile, Templeton Global Growth's top holdings (also as of May) include JPMorgan Chase & Co. (NYSE: JPM), Samsung Electronics Co Ltd (OTCMKTS: SSNLF), American Express Company (NYSE: AXP) and Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM). Templeton is also weighted heavily to the USA, which has a 36.9% weighting in the fund. Other significant geographical exposures come from Britain, Germany, Japan and South Korea.

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The ASX tech sector has become very famous over the past few years. Tech winners like Xero Limited (ASX: XRO) and Afterpay Ltd (ASX: APT) have prompted many an investor to try and find the 'next Xero' or the 'next Afterpay'. Unfortunately, unlike some other markets, the ASX tech sector holds a relatively small slice of the Australian share market.

Thus, if you are really bullish on tech, it might be prudent to look beyond our shores to bolster your portfolio.

That's where this ASX exchange-traded fund (ETF) comes in.

The BetaShares Asia Technology Tigers ETF (ASX: ASIA) is an ETF dedicated to tracking the best tech companies in Asia, outside of Japan. Asia is the most populous continent on the planet. Despite this, it's also an area where the big US tech companies have a far more limited reach and scope than in advanced economies like the US and Australia. Alphabet Inc's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google is essentially banned in China, after all. As is Netflix Inc (NASDAQ: NFLX) and Facebook Inc's (NASDAQ: FB) products.

Asian tech tigers roar

That's where the usefulness of an Asian tech company like Baidu might come in handy. It's often described as the 'Google of China'. Or iQiYi, the 'Netflix of China'. Not to mention the pervasive dominance of Chinese ecommerce companies like Tencent Holdings, JD.com or Alibaba Group Holding Ltd. These companies dominate both the Chinese e-commerce market, as well as China's social media scene.

All of these tech companies are major holdings of the BetaShares Asia Technology Tigers ETF. Other holding include the global electronics titan Samsung Electronics Co. As well as the giant computer chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd.

But China is the country that dominates this ETF with 54% of the fund's holdings. Taiwan comes in second with 22%, with South Korea, India, and Hong Kong rounding out the list with 18.3%, 4.8%, and 0.2% respectively.

But turning to performance, and we can really see the value of investing in the Asian tech sector. The index that the ASIA ETF tracks has returned an average of 26.3% over the past 3 years and 29% per annum over the 5 years. The ASIA ETF itself has returned 36.5% per annum since its inception in 2018. As well as a whopping 70.34% over the past 12 months alone. It charges a management fee of 0.67% per year.

The post Love tech shares? This ASX ETF is a great buy today appeared first on The Motley Fool Australia.

Most weeks, the Commonwealth Bank of Australia (ASX: CBA) CommSec brokering platform tells us the ASX and international shares (almost always just US shares) that are the most popular with its Australian customers.

CommSec is among the most popular share trading platforms in the country. As such, the data it gives us can be a useful snapshot into the mind of the average Aussie investor.

Today, we have already looked at the most popular ASX shares last week. So here are the top 10 United States shares CommSec customers were buying last week. This week's data covers 8-12 March. 

GameStop shares among most traded US shares on the ASX

1. Tesla Inc (NASDAQ: TSLA) – representing 7.6% of total trades with an 81%/19% buy-to-sell ratio.
2. GameStop Corp (NYSE: GME) – representing 5.4% of total trades with a 51%/49% buy-to-sell ratio.
3. Apple Inc (NASDAQ: AAPL) – representing 2.8% of total trades with an 83%/17% buy-to-sell ratio.
4. Nio Inc (NYSE: NIO) – representing 2.6% of total trades with a 76%/24% buy-to-sell ratio.
5. Palantir Technologies Inc (NYSE: PLTR) – representing 1.8% of total trades with an 84%/16% buy-to-sell ratio
6. Roblox Corp (NYSE: RBLX)
7. ARK Innovation ETF (NYSE: ARKK)
8. AMC Entertainment Holdings Inc (NYSE: AMC)
9. Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM)
   
10. Microsoft Corporation (NASDAQ: MSFT)

What can we learn from these trades?

Well, GameStop certainly knows how to excite Aussie investors, that's for sure. GameStop was on last week's list, at the number four spot with a buy/sell ratio of 68%/32% to be precise. So it's interesting to see a convergence of buyers and sellers.

Since 5 March (the end of last week's covered period), the GameStop share price is up another 59% on current pricing, but has also lost around 17% of its value since 10 March. It seems that is enough to get half of its Aussie investors to move to take their profits off of the table.

Outside GameStop, electric vehicle and battery manufacturers Tesla and Nio remain as popular as ever. Both companies have been recovering somewhat after being hard-hit in the US tech selloff of the past month or so.

It's also interesting to see that data company Palantir remains popular with Aussies, even though the company is still down around 30% from where it was on 9 February.

Some new faces this week are Roblox and Taiwan Semiconductor. Taiwan Semiconductor is a massive high-flying chip manufacturer that has recently come off the boil. It was down close to 20% from it's February peak at one point, so clearly some Aussies are seeing a bargain here.

Roblox is a new gaming company that has only just IPOed in the past week on the US markets. Clearly, Aussies have been excited to get aboard this train.

At the time of writing, Roblox stock remains around 3.8% above the level it debuted on the New York Stock Exchange at, so it's been a winner so far.

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