By the end of 2025, billionaire CEO Warren Buffett intends to turn Berkshire Hathaway over to fellow executive Greg Abel. But the leadership transition hasn't happened yet. Therefore, the information in Berkshire's latest 13F filing from May 15 -- the document that investment managers are required to regularly file -- represents decisions still under Buffett's control.
There are thousands of publicly traded companies in the world, but Berkshire Hathaway only holds around 40 positions in its stock portfolio. From this standpoint, one could say that if it's in the portfolio, Buffett must like the stock. And if Buffett just bought more of any particular stock, he must really like it.
Image source: The Motley Fool.
The stocks I'm going to talk about are small positions in Berkshire's portfolio compared to its positions in companies such as Apple and American Express. But I believe that Amazon (AMZN -0.51%), Domino's Pizza (DPZ -0.33%), and Pool Corporation (POOL -0.14%) are three top Buffett stocks to buy and hold for the long term.
1. Amazon
As of this writing, Amazon stock is down 17% from its all-time high, which is only the fourth time this decade that it's dropped that much. The last three times were good times to buy, and I believe this dip will prove to be an opportune moment as well, thanks to the ongoing growth in Amazon Web Services (AWS).
As of the first quarter of 2025, Amazon's AWS has $117 billion in annualized revenue -- if it were a stand-alone business, it would be one of the biggest in the world. But management believes it can grow much bigger. According to Amazon CEO Andy Jassy -- previously head of AWS -- 85% of enterprise spending on information technology (IT) still takes place on premises, but much of this is predicted to shift to cloud-computing platforms such as AWS in the coming decade.
This huge shift in spending already had Amazon executives optimistic that AWS could double or more in size. But the trend in artificial intelligence (AI) is only increasing those convictions. Cloud platforms are an optimal way for businesses to harness the power of AI, and AWS is a logical beneficiary.
Keep in mind that Amazon's AWS is its most profitable business venture, with a Q1 operating margin of nearly 40%. Therefore, with outsized growth, Amazon's profits should head higher as well, making Amazon stock a good stock to buy and hold long-term.
2. Domino's Pizza
Berkshire owns a larger position in Amazon than in Domino's or Pool. However, Buffett's company only bought six stocks during the first quarter, and Domino's and Pool were two of those stocks. Starting with Domino's, Berkshire increased its stake in the world's largest pizza chain by 10%.
Buffett once famously told Bill Gates that he was more interested in investing in chewing gum (something resistant to change) than investing in computers (something that was fast-changing). Viewed from this lens, the attraction to Domino's Pizza makes sense. Consumers around the world love to eat pizza, and that's unlikely to change. And Domino's is a strong business that's likely to keep its top spot in the space.
Domino's franchises most of its restaurants, which is a capital-light, high-margin business model. It recently launched new menu items and partnered with DoorDash to increase consumer demand and keep franchisees happy. And happy (and profitable) franchisees are key to keeping the cash flowing.
Domino's isn't a high-growth business. But the consistent generation of free cash flow allows management to routinely repurchase shares, boosting profits for remaining shareholders. And it also frequently increases its dividend payments.
DPZ Average Diluted Shares Outstanding (Quarterly) data by YCharts
These moves are small individually. But collectively taking them into consideration, Domino's can be a consistent moneymaker for patient investors.
3. Pool
Whereas Berkshire's stake in Domino's only increased by 10%, Buffett more than doubled his company's stake in Pool stock -- the biggest percentage increase for the six stocks that Berkshire bought in Q1. And on first glance, it's surprising.
It's surprising because Pool isn't doing great right now. Homeowners aren't installing many new swimming pools, which is a substantial part of this business. Overall net sales consequently decreased by 4% in 2024 and by 4% in the first quarter of 2025 as well. Moreover, management only expects earnings per share (EPS) of $11.10 to $11.60 this year. That's a substantial drop from its annual EPS of nearly $19 just a couple of years ago.
That said, Pool generates around 60% of its revenue from existing customers -- pool owners who spend to maintain their pools. In other words, there's considerable predictability with this business. Moreover, even with profits down, it still had a nice Q1 profit margin of 5% -- some competitors don't have any profits right now.
In Q1 alone, Pool returned over $100 million to shareholders with buybacks and dividends. For a business valued at $11 billion, that's a lot for a single quarter. Management is committed to continuing this trend, having recently increased its dividend payment and stock buyback program. Like Domino's, these moves can collectively pay off over the long term.
That said, at some point, one would expect new swimming pool installations to pick back up, giving Pool a nice tailwind once again and increasing its customer base for ongoing maintenance.
In my view, Amazon, Domino's, and Pool are three top Buffett stocks for long-term investors. But if I only invested in one today, I would invest in Amazon stock. Like Domino's and Pool, I believe it's a safe stock. But it also has much more upside potential with its AWS business.
