Warren Buffett often claims that his favorite stock holding period is "forever." Hence, one may assume that every stock in the Berkshire Hathaway portfolio started as a "forever stock" in the minds of its investment managers.

Nonetheless, the type of such investments one might prefer depends on risk tolerances and goals. Risk-averse investors may lean toward Apple, Bank of America, or Chevron. But for those wanting to take some risk, the Berkshire portfolio contains three particular stocks that could book outsized gains over time by transforming specific industries.

1. Floor & Decor

Floor & Decor (FND -3.96%) has carved out a niche in the hardwood flooring space. One might think large competitors like Home Depot and the numerous independents might make this space uncompetitive.

However, Floor and Decor competes in two ways. Due to its specialty, the company can offer a wider variety of flooring options than generalized home improvement retailers. Also, it has grown to a noticeable size, with 191 stores in 36 states as of the end of 2022. This gives it the buying power needed to buy in bulk to keep its costs competitive.

As a result, the business generated $4.3 billion in revenue in 2022, a 24% surge over the previous year. The addition of 32 stores and a 9% increase in comparable-store sales drove the increase. Still, net income only grew 5% over the period to $298 million as the higher cost of sales and a 72% increase in income tax expenses pressured Floor and Decor's bottom line.

Indeed, at around 33 times earnings, that revenue growth for this retail stock does not come cheap. Still, it plans for 32 to 35 new stores this year, and with income tax expense growth likely to slow, revenue and profit growth should drive this stock higher over time.

2. Nu Holdings

NuBank parent Nu Holdings (NU 4.59%) is a digital bank in Brazil, Colombia, and Mexico, serving individuals and small businesses. As a digital bank, it does not operate branches, a factor that keeps costs low.

But to understand its significance, one has to understand finance in its region. Latin America is primarily a cash-based society. Only a small number of traditional banks exist in each country, leaving large portions of the population unserved. In other words, millions lack a bank account or a credit card in this part of the world.

NuBank is changing this. It gave 5.7 million Brazilians their first credit card in the last year alone. That move brings more of the population into the mainstream financial system and makes it easier to conduct e-commerce.

So successful is its approach that revenue reached $4.8 billion in 2022, an increase of 182%. Admittedly, a rapid rise in interest and financial expenses, as well as the surge in the credit loss allowance, pressured gross margins. Consequently, losses came in at $365 million, increasing from $165 million in 2021. Moreover, the stock has fallen from lofty valuations since its IPO in late 2021. 

Nonetheless, the drop in the stock price took its price-to-sales (P/S) ratio to 7, near record lows. That seems inexpensive given Nu's rapid revenue growth, and given the company's role in making the financial system more accessible, interest in the stock should eventually rise along with the revenue growth.

3. Snowflake

Buffett's team likely took a pre-IPO interest in Snowflake (SNOW -0.58%), and its role in the data cloud is the likely reason. The company's system allows users to store, secure, scale, and integrate data where necessary.

Although many of the largest cloud companies offer data clouds, Snowflake's cloud is interoperable, meaning it can work seamlessly regardless of one's cloud provider. That flexibility has probably helped it attract interest. As a result, more than 7,800 customers now use the platform, 31% more than one year ago.

Snowflake is also at the center of an enormous opportunity. Gartner estimates that the data cloud business will grow to an addressable market of $248 billion by 2026. But for now, it only covers a fraction of this market. In fiscal 2023 (ended Jan. 31), revenue came in at $2.1 billion, 69% more than a year ago. Also, a net retention rate of 158% boosted revenue, as the average long-term customer increased spending on the platform by 58% in one year.

Despite that good news, it will also take time to turn profitable. Losses came in at $797 million, up from $680 million in 2021, as operating expenses still exceed revenue. Also, the company predicts a slowing of revenue growth to the 45% range.

However, the stock price seems to have stabilized in 2023. And while its 22 P/S ratio might seem high, it is near a record low for the company. Considering the rising popularity of its platform, investors might want to buy the dip in Snowflake stock while it still trades in a range.