Warren Buffett may be stepping down from his role as CEO of Berkshire Hathaway by the end of the year, but the man's wisdom and investing philosophy remain timeless. Long after he's gone, people will look to the things he's said and the moves he's made for inspiration, an already popular habit on Wall Street.
Buffett's stock picks are carefully scrutinized because he's made a habit of beating the market over the long run, so for those looking for companies to invest in for a decade or more, it's not a bad idea to take a peek at his conglomerate's portfolio.
Here are two corporations in Berkshire Hathaway's list of holdings that are worth holding onto for a decade at least: Amazon (AMZN 1.92%) and Visa (V 0.57%).
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1. Amazon
Trade-related concerns have weighed on Amazon's stock this year. The company could experience decreased sales volume and increased costs within its e-commerce business if President Trump implements his plans for sweeping tariffs aimed at bringing manufacturing back to the U.S. Of course, Amazon would also suffer if the economy tanks. Even the company's cloud computing unit, Amazon Web Services (AWS), would probably be affected.
Despite these issues, Amazon is an excellent stock to hold for the next decade. The company is capitalizing on two massive growth drivers: cloud computing and artificial intelligence (AI), both of which are still in their early stages, according to CEO Andy Jassy.
That statement should excite investors, considering that AWS has been one of Amazon's fastest-growing segments and a leading source of profit for a while now. Yet, a massive runway lies ahead. That's not all. Amazon's advertising business continues to grow rapidly. It ended 2024 with a $69 billion annual run rate, a figure that was just $29 billion four years ago -- that's a compound annual growth rate of 24.2%. Besides these fast-growing segments, Amazon's business is diversified. It has footprints in music and video streaming and grocery shopping and is increasingly making a move in healthcare with initiatives that are disrupting the field, such as Amazon Pharmacy.
The company may be a leader in several fast-growing markets, but its strongest qualities are its culture of innovation, which has enabled it to identify and pursue attractive opportunities multiple times, and its relentless focus on customer service. Amazon should be able to deliver market-beating results in the next decade thanks to these factors. That makes the stock a buy today despite the issues it faces.
2. Visa
Higher tariffs on imported goods could have an indirect impact on Visa. The company generates revenue by charging fees for the credit and debit card transactions it facilitates. If tariffs lead to higher prices for those items, that would be beneficial for the company, as the fees it charges are a percentage of the dollar transaction. It might also lead to less economic activity overall, which would harm the company. It's challenging to predict precisely how things will develop for Visa in the short run, given the uncertainty surrounding Trump's trade policies.
However, the company's business has several advantages that investors should appreciate. Here are three. First, Visa generates juicy margins.
V Gross Profit Margin (Quarterly) data by YCharts
Gross margins in the neighborhood of 80%, while netting nearly $0.50 for every dollar it makes, is a dream come true for a company of this size. Visa's juicy margins stem from the fact that, since it has already built its payment network, additional transactions don't significantly increase the company's costs. Second, Visa doesn't directly issue credit cards. It simply operates a payment network that lets card transactions run smoothly on a global scale.
So, the company is not directly at risk of clients defaulting on their obligations. It lets issuing banks deal with that problem. Third, Visa benefits from a strong economic moat from the network effect. The more people hold credit or debit cards that bear its logo, the more attractive it is for businesses to accept them as a payment method.
These factors (and others) make Visa's business incredibly strong and consistently profitable. Regardless of what happens in the next few months, the company should continue to perform well as cash and checks increasingly fall out of favor. One factor driving this trend will be the growth of the e-commerce industry, where it's rare and difficult to execute transactions with cash.
However, even in the U.S., e-commerce sales accounted for just 16.2% of total retail sales in the first quarter. It hasn't peaked yet. It should provide ample growth fuel for Visa over the next decade and beyond. Lastly, the company is an excellent dividend stock, even with an unimpressive forward yield of 0.7% -- the S&P 500's average is 1.3%. Visa has increased its payouts by almost 392% in the past decade. The stock should appeal to both growth and dividend investors.
