Buffett's investment strategy is to run a discounted cash-flow analysis on the stock's fundamentals to figure out its "true" value, and then only invest in it if this is significantly above its market price.
Most consumer software companies have cash-flow graphs where they spend 5-10 years with zero revenue just gaining users and building a monopoly, then they turn on the monetization strategy and instantly start making $10B/quarter or so, and then they continue to make massive profits until some younger, cooler software company comes along and takes all their users, and then they either buy that company for a good fraction of outstanding shares or they die. In other words, their cash flows are unpredictable and back-loaded, and depend upon a number of factors that are unknowable early in the company's life, like 1) is there a viable monetization strategy? 2) when will the founder/CEO turn it on? 3) will they run out of capital first? 4) how big will the userbase be at the time? 5) will they be replaced by further developments in technology?
For an investor who wants predictability and rationality in investing, these are anathema; it's like going to a casino where the house holds the information advantage and hoping you can play enough rounds that you win.
The whole approach is based on figuring out when a good time to buy a stock is based on when it's cheap / undervalued. However, many techs cos are growth stage investments, and it's hard to predict which ones will (eventually) win / succeed in creating moats.
Determining the value of pre-revenue companies, for example recent tech IPOs, is just hard. You don't have the revenue history that you do for a company like Coca Cola. There's much more projection and extrapolation required.
https://www.quora.com/Is-there-such-thing-as-a-strategy-like...
https://www.mckinsey.com/business-functions/strategy-and-cor...
