You don't have to be a billionaire to invest like Warren Buffett. Actually, you don't need much money at all to follow in the legendary investor's footsteps.
Sure, one Berkshire Hathaway (BRK.A -0.41%) (BRK.B -0.33%) Class A share costs nearly $500,000. But the top stocks in its equity portfolio aren't nearly as pricey. Here are the three best Buffett stocks to buy with $300 right now.
1. Amazon
Berkshire owns more than 10.5 million shares of Amazon (AMZN 0.20%). That's way more than you'll be able to buy. However, with the e-commerce and cloud stock currently trading at less than $115, you can pick up one share of Amazon and have money left over to invest in a couple of other Buffett stocks.
Why buy Amazon stock? There are plenty of reasons, but two especially stand out to me.
First, the tech company has a massive growth opportunity with its Amazon Web Services (AWS) cloud hosting business. The rapid advances in artificial intelligence (AI) make AWS even more valuable as organizations scramble to adopt AI.
Amazon CEO Andy Jassy thinks that the cloud's market share of information technology spending will increase from between 5% and 10% today to as much as 95% over the next 10 to 15 years. Even if he's overly optimistic (although I don't think he is), AWS stands to be a huge growth driver for the company.
Second, Amazon's other crown jewel is its logistics network. Shopify recently announced it's selling most of its logistics business. This move underscores the exceptional moat that Amazon has on this front, in my view. It also puts Amazon in an even stronger position to grow its e-commerce business over the next decade and beyond.
2. Bank of America
Buffett seems to have largely shifted away from bank stocks. However, Bank of America (BAC -2.87%) is a striking exception. He bought even more shares of the banking giant in the first quarter of 2023. You can buy a couple of shares as well for less than $30 each.
Bank of America is trading at the cheapest valuation it has had in years because of the banking crisis. But Buffett understands that the institution remains strong financially. It even posted surprisingly good numbers for the first quarter, with revenue and earnings jumping 13% and 15% year over year, respectively.
I suspect that Bank of America's shares will continue to be volatile for a while. The issues for regional banks that have rattled investors won't be resolved overnight, and the mega-bank will be mired in the mess even though it really shouldn't be.
Over the longer term, however, I expect this stock will be a big winner. Buffett seems to agree. He wouldn't have added to Berkshire's already huge stake in the bank in recent months if he didn't.
3. Occidental Petroleum
There's another stock that Buffett continues to buy at an even more aggressive pace -- Occidental Petroleum (OXY -2.06%). After scooping up a share of Amazon and two of Bank of America, you should have enough money left over from your initial $300 to buy two shares of the oil stock, which is trading at under $60.
Many experts predict that oil prices will rise this summer with increased demand and lower production. This should provide a nice catalyst for Occidental stock. It would also boost the company's free cash flow. That's important because CEO Vicki Hollub said in the first-quarter earnings call that the company plans to use excess free cash to buy back shares, which will make the remaining shares outstanding more valuable.
Berkshire will also almost certainly continue buying Occidental stock just as it has in recent quarters. The conglomerate has regulatory approval to purchase up to 50% of Occidental. Its stake is currently around 23.6%.
Occidental's longer-term prospects are admittedly murkier due to the ongoing shift from fossil fuels to renewable energy sources. However, direct air capture of carbon emissions could present a significant growth opportunity for the company.
