Warren Buffett is arguably the best-known person in investing. His company, Berkshire Hathaway, has grown into a trillion-dollar powerhouse, and his $160 billion fortune has made him one of the world's richest people.
With that type of success, it's understandable that people would look to Berkshire Hathaway's stock holdings to get inspiration for what to invest in. That's why entire websites, newsletters, platforms, and more have been dedicated solely to tracking Buffett and Berkshire Hathaway's portfolio moves.
Although Berkshire Hathaway holds over 45 stocks, there are two in particular that I love as a long-term buy and hold.
1. Amazon
Amazon (AMZN 0.87%) is a stock that Buffett was admittedly hesitant about investing in until he was later convinced by one of his managers. And it's a good thing he listened. The stock has more than doubled since Berkshire Hathaway made its first purchase in early 2019.
NASDAQ: AMZN
Key Data Points
Amazon became what it is today because of its e-commerce business, but it has since spread its wings to become one of the more dominant tech companies in the world.
E-commerce continues to drive Amazon's top line, accounting for roughly 83% of its revenue in 2024. However, the company's long-term appeal is its cloud platform, Amazon Web Services (AWS). AWS launched in 2006 and is largely considered the pioneer of modern cloud services.
Since its founding, AWS has become a juggernaut in its own right, making up 58% of Amazon's operating income, even though it's only responsible for around 17% of its revenue. AWS' $39.8 billion in operating income in 2024 is more than many Fortune 500 companies' total revenue for the year.
AMZN Revenue (Annual) data by YCharts
The cloud services industry has plenty of growth ahead of it. Between artificial intelligence advancements, the need for remote work infrastructure (cybersecurity, collaboration tools, etc.), and increased digitization, cloud providers are in a position for a lot of growth. As of 2023, the cloud industry was estimated to be around $600 billion. By 2030, it's estimated to be around $2.4 trillion. That's a compound annual growth rate of around 21%.
Amazon is more than just e-commerce and AWS. Its advertising business is picking up steam, Amazon Prime is growing, and businesses like Supply Chain by Amazon have begun taking advantage of logistics networks to profit from other businesses. If you're investing long term, you typically want a diversified business, and Amazon has that to a generous degree.
2. Visa
Visa (V +0.21%) doesn't quite fit the "diversified business" model that I mentioned with Amazon, but there are always exceptions to the rule. In Visa's case, its business model and massive reach make it a cornerstone of the world's global financial system.
Visa is accepted in over 200 countries and territories by over 150 million merchants, has around 4.7 billion cards (or similar credentials) in circulation, and processed $15.9 trillion in payments in 2024.
NYSE: V
Key Data Points
That's a reach which none of its competitors come close to achieving, and the gap likely won't shrink soon because of the network effect. Cardholders prefer Visa because it's the most widely accepted card; merchants prefer to accept Visa because it's the most popular card globally.
Visa's business model is simple: Take a percentage of every transaction that comes through its network. It's a business model that has allowed Visa to operate with high margins because its costs don't noticeably rise with each additional transaction.
Visa's net income in its fiscal 2025's first quarter (ended Dec. 31) was $5.1 billion on $9.5 billion in revenue -- both of which have shot up over the past decade.
V Net Income (Quarterly) data by YCharts
Financials aside, what makes Visa appealing in the long term is the growth of digital payments in general. Visa doesn't benefit much when people use cash, but there is a lot to gain from the increased use of cashless payments worldwide.
According to a report from consulting firm McKinsey, electronic payment volume rose 17% from 2018 to 2022. From 2017 to 2020, the number of cashless transactions per person annually rose from 91 to 135. Considering how electronic payments have been trending, you can bet that both numbers are higher today.
Visa relies on people spending money, so economic down periods could slow down its business in certain periods. But over the long term, Visa is well-positioned for growth as the world shifts to digital payments.
