Warren Buffett and his team at Berkshire Hathaway have turned the conglomerate into one of the world's most valuable companies, with a market cap topping $880 billion (as of June 23). It hasn't happened overnight; it's been the result of decades of strategic investments and patience.
Considering Buffett and Berkshire Hathaway's investing success, it's not a surprise that their stock portfolio has become a go-to for investors looking for stock inspiration.
Keeping in mind that your portfolio should reflect your financial situation and not necessarily that of a billionaire and nine-figure company, there are still stocks worth considering from their portfolios. The following three companies are great buys right now for long-term investors.
1. Amazon
Amazon (AMZN +3.83%) is a stock that Buffett was admittedly hesitant to sign off on at first, but it's always better late than never -- especially considering how rewarding it has been to investors.
NASDAQ: AMZN
Key Data Points
Amazon has already cemented itself as the leader of e-commerce, but its true growth will likely come from its cloud computing service, Amazon Web Services (AWS). AWS is the world's leading cloud platform and Amazon's biggest profit generator, responsible for over 61% of its operating income in the first quarter ($9.4 billion).
AMZN Operating Income (Quarterly) data by YCharts
The first-mover advantage of AWS helped it capture a large market share, but competitors like Microsoft Azure have been gaining ground. However, AI advancements could help it with another growth spark. That's not because of AI innovations per se but because of what they enable other companies to do.
Amazon is using AWS to help companies build and deploy machine learning models (SageMaker) and build and scale AI applications (Bedrock). This allows it to capitalize on its top-of-the-line infrastructure without depending too much on internal AI developments.
It's taking a similar approach with Supply Chain by Amazon, a full-set shipping and logistics service that allows businesses to streamline their operations and efficiently run their own e-commerce businesses.
Amazon has spent years and billions building out its tech and supply chain infrastructure, and now it's leveraging these investments to benefit without relying so much on constant innovation (although that remains a priority). As this approach plays out, Amazon's revenue streams should grow and continue to solidify as one of the top cash cow businesses in the world.
2. Apple
Apple (AAPL 0.14%) is Berkshire Hathaway's top holding, making up close to 43% of its stock portfolio.
NASDAQ: AAPL
Key Data Points
Much fuss was made about Apple lagging behind in the AI race, but it's much better to be delayed and thorough than rushed and faulty. Apple has consistently taken this approach when it comes to releasing new products and features.
During Apple's Worldwide Developer Conference, it announced its own AI: Apple Intelligence. It's not Apple's in-house development; instead, it will integrate features powered by ChatGPT into its operating systems beginning in the fall.
Apple's new Apple Intelligence will only be available on its newest model iPhones, iPads, and Macs, giving consumers an incentive to upgrade their current products. This move, and the excitement around it, should help give Apple's revenue a much-needed boost after it has lagged in recent years due to slowing iPhone sales.
AAPL Revenue (Quarterly YOY Growth) data by YCharts
An anticipated rebound in hardware sales will be a great complement to the company's growing services segment, which grew 14% year over year in the first quarter and accounted for more than 26% of Apple's revenue.
Apple has already done great at incentivizing customers to remain in its product ecosystem. Add in its growth services like financial and health, and it's bound to be one of the world's top companies for quite some time.
3. Visa
Buffett is a major fan of companies with huge competitive moats, and Visa (V +0.61%) fits that description. Its competitive moat is its vast reach, with more than 130 million merchant locations and 4.4 billion cards in circulation.
NYSE: V
Key Data Points
As the world's leading payment processor, Visa stands to gain a lot from the network effect. Potential cardholders go with Visa because it's the most widely accepted card in the world, and merchants are likely to accept Visa cards because they're the most used.
This network effect has put Visa in a position to expand organically and operate with industry-leading profit margins.
V Profit Margin (Quarterly) data by YCharts
The world is becoming more digitally connected by the day, but many countries still operate on a cash economy. As they transition to digital payments, Visa is positioned to capture a significant amount of the growing market.
Visa has shown that it's willing to make the necessary investments to innovate, expand, and remain the industry's top player. You want that from a company whose stock you plan to hold onto long-term.
