As the stock market swings wildly thanks to erratic, unpredictable, and potentially economically damaging tariff policies from the Trump administration, predicting anything in the near term about stocks has become next to impossible. For long-term investors, focusing on solid companies that can make it through a severe economic storm is likely the best approach for now.
AT&T (T 0.63%), Berkshire Hathaway (BRK.A 0.77%) (BRK.B 0.71%), and IBM (IBM +1.88%) are three such companies that investors can buy and hold for the long run.
1. AT&T
Telecom giant AT&T will certainly feel some pain if the Trump administration's tariff policy leads to an economic slowdown. Customers could delay smartphone upgrades, downgrade wireless plans, or dawdle on making monthly payments. AT&T's outlook for at least $16 billion in free cash flow this year, excluding contributions from DIRECTV, could be in jeopardy if economic conditions deteriorate.
NYSE: T
Key Data Points
One thing that probably won't change is the essential nature of smartphones, wireless service, and home internet service. In the long run, looking past the current tariff chaos, mobile data usage will likely continue to rise. AT&T is one of three major wireless operators in the United States, a competitive landscape that's unlikely to change given the capital-intensive nature of building out a nationwide wireless network. By continuing to invest in its network, AT&T can grow revenue and free cash flow in the coming decades despite the near-term headwinds.
The Trump administration's tariff policy could wreak havoc on the global economy, but for long-term investors, AT&T stock is a good place to ride out the storm.
2. Berkshire Hathaway
Warren Buffett's Berkshire Hathaway is heavily exposed to a tariff-induced economic slowdown. Berkshire's vast stock portfolio is being hammered as tariffs roil markets, and the company's core businesses in manufacturing and transportation would take major hits in a recession.
NYSE: BRK.B
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Berkshire has two extremely valuable assets. First, there's Buffett himself, who's shown a knack for making deals and investments during times of crisis that ultimately enrich Berkshire shareholders. Second, there's a mountain of cash on the balance sheet. At the end of 2024, Berkshire had an incredible $334 billion in cash and cash equivalents.
That cash provides Buffett with firepower to make deals, but it also acts as a huge buffer. Berkshire can survive essentially anything that's thrown at it, including a severe recession and an escalating trade war. While the stock will almost certainly sink along with the major indices, there's no safer long-term bet than Berkshire Hathaway.
3. IBM
IBM's transformation over the past decade has been a slow affair, but the tech giant is now well positioned for the future. IBM has shed underperforming businesses and bet on two key areas, hybrid cloud computing and artificial intelligence. Software and consulting now account for most of the company's revenue, although the iconic mainframe business is still chugging along.
NYSE: IBM
Key Data Points
IBM was already seeing weakening demand from clients for discretionary projects before the Trump administration's tariff policy was enacted. However, digital transformation projects with clearly defined benefits have been a different story. As clients look to reduce costs and boost productivity, IBM is proving to be a valuable partner.
If the U.S. economy enters a recession this year, overall IT spending growth could weaken. That would hurt IBM's growth rate and could lead to the company falling short of its outlook for at least 5% revenue growth this year. On the flip side, a recession could drive demand for digital transformation projects higher as efforts to cut costs go into overdrive. Implementing AI or moving to a hybrid cloud architecture when the goal is to cut costs makes sense in any economic environment.
Once the dust has settled on the current era of economic uncertainty, IBM will be in good shape to resume its growth trajectory.
