Amid increasing market volatility, Berkshire Hathaway’s stock portfolio remains a strong potential source of solid investments. Warren Buffett’s skill in identifying resilient companies that endure through economic cycles has significantly benefited Berkshire shareholders. The following two elite growth stocks from Berkshire’s $271 billion portfolio are considered excellent buys at present.
1. Amazon
Amazon (AMZN) has historically provided substantial returns for investors over several decades. Berkshire Hathaway began investing in the e-commerce leader in 2019 and maintained a holding of 10 million shares at the close of 2024. With its combination of robust competitive advantages and a compelling valuation, Amazon’s stock presents an attractive opportunity.
While Amazon’s growth has traditionally been driven by e-commerce, much of the company’s current revenue is derived from non-retail segments such as cloud computing, advertising, and third-party fulfillment services. These service-based operations offer higher profit margins and represent Amazon’s most rapidly expanding sectors.
Amazon Web Services (AWS) commands over a 30% share of the expanding $330 billion cloud market, according to Synergy Research, establishing AWS as the leading provider of cloud services. This positions Amazon to benefit from the rising demand for artificial intelligence (AI). In 2024, AWS revenue increased by 18% to generate $107.6 billion annually, contributing 17% to Amazon’s overall revenue.
Additionally, Amazon’s expanding AI capabilities are set to strengthen its competitive edge in online retail. With more than 600 million Alexa devices deployed in homes, Amazon’s e-commerce operations stand to gain significantly as AI facilitates easier shopping for consumers.
Amazon is deeply embedded in both the retail and enterprise domains. Currently, its stock trades at only 16 times its cash from operations per share, marking the lowest valuation in over a decade. As the business continues to grow, this is expected to result in substantial returns.
2. Mastercard
Mastercard (MA) is recognized as one of the most profitable enterprises, with a stock return of nearly 500% over the past decade. By the end of the previous year, Berkshire held almost 4 million shares in this business, known for its significant growth prospects and strong competitive positioning.
While credit card spending is often influenced by economic conditions, Mastercard’s stock remained resilient during the market downturn of 2022. With ongoing recession concerns, Mastercard remains a prudent portfolio choice for investors.
Mastercard’s resilience to economic downturns is attributed to its business model, which does not involve issuing cards or assuming credit risk like banks. Instead, it specializes in processing card transactions, generating substantial profits. Operating in a high-margin industry with limited competition among top credit card networks, Mastercard consistently delivers impressive financial results.
In the previous year, Mastercard processed transactions worth $9.8 trillion, leading to a revenue of $28.2 billion, marking a 12% increase from 2023. Typically, around half of this revenue is converted into profits, with net income rising by 15% to $12.9 billion last year.
Despite Mastercard’s global acceptance at 150 million locations, approximately 1.5 trillion transactions are still conducted using cash and checks annually. Mastercard is poised to capture this opportunity over the coming years, promising further benefits for investors.
Although Mastercard shares might seem expensive, trading at 37 times earnings, this valuation is characteristic of such elite growth stocks. Businesses with substantial growth prospects, like Mastercard, tend to trade at a premium. Analysts predict its earnings will grow by 14% annually in the near future, ensuring continued strong returns for investors.
