The best Warren Buffett stocks to buy now with $50,000

Warren Buffett’s holding company, Berkshire-Hathaway (BRK.A 0.74%) (BRK.B 0.86%)has a long history of growth. Berkshire’s stock portfolio has achieved an average annual gain of about 20% from 1965 to 2023. This figure exceeds the S&P50010.2% return over that period, including dividends. As a result, Berkshire Hathaway’s holdings have become a guide for new and old investors who use the portfolio as inspiration for their trading operations.

The company’s success over the years has led to massive share price gains, so it’s worth taking a closer look at some of Berkshire Hathaway’s top performers. The company’s portfolio is full of stocks that have delivered solid long-term growth and are likely to continue to do so for years to come.

So here are the best Warren Buffett stocks to buy with $50,000 right now ($25,000 per company). But even if you’re not ready to invest that much, these companies are still worth considering for a smaller investment.

Apple: Despite a recent divestment, it is still Berkshire Hathaway’s largest holding

Apple (AAPL -0.68%) and Buffett have long been making headlines together; Berkshire Hathaway first invested in 2016. Since then, Apple’s share price has risen 762%, making Apple one of Berkshire’s most successful investments.

Buffett is known for his admiration for Apple, praising its brand loyalty and market penetration. As a result, Wall Street was completely blindsided earlier this month when Berkshire Hathaway slashed its Apple shares by nearly 50%. The move reduced its stake in Apple from about 6% to just under 3%.

But despite the sell-off, Apple remains Berkshire’s largest holding. The $91 billion stake makes up 29 percent of its portfolio. And there are good reasons for that.

Apple is gearing up for a massive push into artificial intelligence (AI), revamping its product lineup to better meet rising demand for generative services. In May, Apple launched its seventh-generation iPad Pro, the first device to feature the AI-enabled M4 chip. Meanwhile, reports in April suggested that the tech giant plans to launch Macs with the same hardware soon.

But the tech giant’s most promising AI project may be the iPhone 16 release in September. The smartphone’s launch will usher in the debut of Apple Intelligence, an AI overhaul of the company’s operating systems that will bring new features to iPhones, iPads, and Macs. The company expects its AI expansion to unleash a flood of product upgrades for consumers. In the meantime, the updates are likely just the beginning, as the company is expected to launch paid AI services at some point.

Apple stock is not the best bargain, trading at 34 times forward earnings. However, the company recorded $62 billion in cash, cash equivalents, and marketable securities in the last quarter (Q3 2023). At the same time, the company is just at the beginning of its AI career, which could take it far in the long term. With enormous financial resources and a strong brand, Apple could make huge profits over the next decade with a $25,000 investment. At the current price, $25,000 could buy about 110 Apple shares.

Amazon: Boosting business with AI

Berkshire Hathaway’s participation in Amazon (AMZN -1.34%) only makes up about 0.6% of its portfolio. However, its shares are worth nearly $2 billion. Berkshire could be considered a late investor in Amazon, as it bought its first shares in the first quarter of 2019. But Amazon’s 136% stock growth since then shows that investing late is almost always better than never. Meanwhile, recent developments suggest Amazon will continue to generate excellent earnings for years to come.

Like Apple, Amazon has also gone all-in on AI. The company is familiar with the technology and has been using AI for years to track shopping trends on its e-commerce site and improve warehouse logistics. However, Amazon has been increasing its efforts in the industry to maintain its lead over competitors. Microsoft And alphabetThe retail giant faces tough competition from these companies, each of which holds a prominent position in the cloud market with their respective platforms.

Cloud computing has become a crucial growth area in AI as companies increasingly use such platforms to boost their productivity. Amazon has an advantage in this space, with a leading 31% market share thanks to the success of Amazon Web Services (AWS). As a result, the recent boom in AI has led to a surge in the company’s profits. The company’s free cash flow and operating income have increased by 186% and 31%, respectively, over the last year.

Meanwhile, the company has used its new cash gains to reinvest in its business and expand AWS with new data centers in multiple regions domestically and internationally. Amazon has also announced new AI tools for AWS and a foray into chip design.

Amazon’s price-to-earnings ratio is high at 38. However, this is well below its 12-month average of 42, suggesting that the stock is trading at one of its best values ​​in months. Berkshire Hathaway made millions on its first investment in Amazon. AI’s price could rise significantly in the coming years, making an investment of $25,000 worthwhile – which would buy 141 Amazon shares at the current price.