Imagine having owned and held on to a $1,000 stake in Berkshire Hathaway on the day that Warren Buffett acquired the company in 1965. The Oracle of Omaha acquired Berkshire at $18 per share and used it as the foundation to build one of the world's most successful investment conglomerates. Today, the company's Class A stock trades at roughly $472,000 per share, which means that your $1,000 position would now be worth more than $26 million.

With Berkshire Hathaway sporting a market cap of roughly $683 billion and standing as the world's sixth-largest public company, its most explosive days of growth are likely in the past. But there are growth stocks held in the Berkshire Hathaway portfolio that could go on to post market-crushing, multibagger returns. Read on for a look at two high-risk, high-reward stocks owned by Berkshire Hathaway that trade down massively from previous highs that could bounce back and deliver stellar returns for risk-tolerant investors. 

Warren Buffett in a crowd.

Image source: The Motley Fool.

1. Snowflake

Snowflake (SNOW 0.01%) stock put up a dismal performance in conjunction with the market's pivot away from growth stocks and signs that a more challenging economic backdrop is leading to some sales growth deceleration. The company's share price is now down roughly 65% from its peak, and it stands as one of the worst-performing holdings in the Berkshire portfolio over the last couple of years.

SNOW PS Ratio (Forward) Chart.

SNOW PS Ratio (Forward) data by YCharts.

Despite dramatic sell-offs, Snowflake is still valued at roughly 16 times this year's expected sales. While the stock still trades at a growth-dependent valuation even after a big valuation pullback, I also think that it has a huge upside at current prices. With expectations for 40% annual growth to push revenue to roughly $2.7 billion and a non-GAAP (adjusted) free cash flow margin of 25% for the year, Snowflake trades at about 68.5 times this year's expected FCF.

Again, that's a highly growth-dependent valuation, but it presents a more favorable picture than just looking at the company's price-to-sales ratio might suggest. And crucially, there's a good chance Snowflake can deliver strong growth in the years to come.

Whether it's providing services directly to users or determining upcoming moves, data analytics is central to success for companies and organizations. Snowflake is helping its customers get the full picture when processing information, and that's only going to become more important as data analytics becomes increasingly essential for services and strategies. The company's cloud-based data warehousing technology makes it possible to combine and analyze information from apps hosted by leading infrastructure providers, including Amazon, Microsoft, and Alphabet, and this capability makes a huge difference when it comes to gathering and assessing relevant information. 

In addition to its data-warehousing service that makes it possible to combine and analyze information from otherwise walled-off cloud infrastructure providers, Snowflake also provides a data marketplace that allows parties to buy and sell access to data. Thanks to the advantages offered by its data warehousing and marketplace services, Snowflake's ecosystem is emerging as a foundation for application development and maintenance, and the company could play a huge role in shaping the future of the information age. 

2. StoneCo

No stock held by Berkshire Hathaway has performed worse since the beginning of 2021 than StoneCo (STNE 0.31%). The stock once traded above $94 per share, but it's fallen roughly 90% from that high and can now be purchased in the $9.50 range. 

The valuation collapse hasn't been entirely unwarranted. In addition to inflation, rising interest rates, and other risk factors generally causing the market to decide that growth stocks weren't the place to be anymore, StoneCo's credit business encountered some major setbacks over the last couple of years. Brazil's economy has been racked by high levels of inflation and weak recovery from challenges created by the pandemic, and these conditions have resulted in business failures.

Making matters worse, StoneCo was relying on Brazil's national-registry system as the foundation for its underwriting process, and bad data in the system led the company to grant loans to businesses that weren't actually creditworthy. The fintech has already lost hundreds of millions on its credit portfolio, and it still has roughly $92 million in bad debt on the books -- almost all of which will likely be taken as a loss. 

But it's not all doom and gloom. Risk-tolerant investors could score big wins by building a position in the beaten-down Brazilian fintech player. The company's core payment-processing business has continued to add customers, grow total payment volume (TPV), and increase revenue at a pace that points to the overall company still being quite healthy and capable of thriving over the long term.

In the third quarter, active payment clients rose 70.9% year over year, TPV was up 24.5%, and financial services revenue was up 84.1%. These catalysts helped push StoneCo's total revenue for the period up 71% to roughly $488.4 million and adjusted net income up 90.5% to approximately $31.7 million. With that kind of growth and shares trading at roughly 16 times expected forward earnings, StoneCo looks attractively valued for risk-tolerant investors even with lingering challenges from its loan book.