Warren Buffett's investment moves are legendary, and even as he prepares to step away from the day-to-day duties of running Berkshire Hathaway, investors still look to the massive portfolio he's built through his conglomerate for investment ideas.
No matter what type of stocks you're inclined toward, there are likely a few that Buffett owns that will strike a chord with your investment strategy. Here's why Amazon (AMZN 0.60%) and Visa (V -0.44%) are no-brainer Buffett stocks that could make a nice addition to your portfolio right now.
Image source: The Motley Fool.
1. Amazon: AI, advertising, and e-commerce advantage
Some investors might be dismissive of Amazon stock right now because its share price gains of 5.5% year-to-date have failed to keep pace with the S&P 500's 8.5% increase. But I think investors are underestimating Amazon's long-term potential in areas like advertising and artificial intelligence and overlooking its continued dominance in e-commerce.
Consider that Amazon holds 38% of the e-commerce market in the U.S., far outpacing fellow retail juggernauts Walmart and Target, which have just 6% and 2%, respectively. Recent tariff uncertainty has some people worried about the rising price of goods, but Amazon's advantage is that many people -- more than 200 million -- are loyal to the platform because of the Prime membership that gives them free shipping and perks like free video streaming.
An added benefit to Amazon's large e-commerce platform is that advertising spending on the site soared recently. Amazon's ad revenue jumped 18% in the first quarter to $13.9 billion and is now the company's fastest-growing revenue segment.
What's more, Amazon is still in the early stages of benefiting from artificial intelligence (AI). AI cloud computing services will reach an estimated $2 trillion by 2030, and with Amazon the leading public cloud player with 30% of the market, it's perfectly poised to tap into this trend for years to come.
2. Visa: Payment processing and credit dominance are unmatched
There's no shortage of fintech companies to invest in these days, but overlooking Visa's lead in the payment processing market would be a mistake. The company commands about 70% of the U.S. payment processing space, and collects fees on billions of transactions worldwide annually.
Visa's strong position in this space helped the company's sales jump 9% to $9.6 billion in the second quarter and earnings per share spike 10% to $2.76. And there's likely more growth on the way when you consider that the increase in digital and cashless payments has created a $200 trillion total addressable market for Visa.
Payment volume is on the rise as well, climbing 8% in the quarter, and cross-border volume jumped 13%. These are good signs that consumers and merchants continue to utilize Visa's processing for their payment needs.
Finally, Visa continues to innovate and has expanded its revenue sources through the company's value-added services, including licensing, certification, and account-holder services. All of these are part of Visa's "other revenue" category, and revenue from the segment popped 24% in the most recent quarter.
Both Visa and Amazon have the potential to be great investments over the long term, but only if you're patient. Implementing a buy-and-hold strategy is one of the most important rules of investing like Buffett. And if you're looking for another way to invest like Oracle of Omaha, you can always follow his recommendation to buy a low-cost index fund and hold it for life.
