Volatility has returned to the financial markets. The prices of many stocks declined in recent weeks, as traders grew more fearful of tariffs, geopolitical tensions, and a potential downturn in the economy.
Those words should perk up your ears. Students of Warren Buffett’s priceless teachings know that fear creates opportunities for long-term investors.
If you would like to take advantage of the current commotion in the stock market to make some smart investments, here are two outstanding Buffett stocks for your consideration.
Buffett stock to buy No. 1: Apple
Buying shares of great businesses when they’re on sale is a classic Buffett strategy. Investors have an opportunity to do just that with Apple (AAPL -2.67%) today.
Apple’s stock price is down about 15% from its 52-week high. Traders focused on the short term are a bit miffed that the tech titan delayed artificial intelligence (AI) upgrades to its popular Siri virtual assistant. But those AI-powered enhancements are still coming, likely within the next year.
The company is working to make Siri more helpful by using AI to personalize responses. The next generation of its digital assistant is also expected to be more conversational and better able to control multiple apps at the same time.
An AI supercharged Siri could help to spark a powerful iPhone upgrade cycle. Higher iPhone sales, in turn, should boost sales and profits.
Buffett no doubt knows this. It’s likely part of the reason Apple remains his largest public stock holding. As of the end of 2024, his investment conglomerate owned 300 million shares of the company, which are currently worth $66 billion.
Moreover, Apple remains a financial powerhouse. With $96 billion in net income during the trailing 12 months, few businesses can match its incredible profitability.
Yet despite its massive scale — the business’ revenue and market value stand at $395 billion and $3.3 trillion, respectively — it continues to grow its profits at an impressive clip. Wall Street expects Apple to increase its earnings per share by more than 10% annually in the coming years.
Buffett stock to buy No. 2: Berkshire Hathaway
It’s hard to have a list of Warren Buffett stocks to buy without including Berkshire Hathaway (BRK.A -1.45%) (BRK.B -1.54%) itself. The $1.1 trillion investment colossus has created wealth for its shareholders for six decades, and more gains are still to come.
Buffett may have foreseen the recent weakness in the stock market. Berkshire trimmed several of its stock holdings, bringing its cash reserves to $334 billion by the end of 2024.
Now, he has plenty of dry powder to buy into his best ideas. The legendary investor has a knack for scooping up shares in excellent businesses when they go on sale. This skill could prove especially valuable to Berkshire’s shareowners should stock prices continue to decline.
Like Apple, Berkshire is a financial fortress. More than 60 operating subsidiaries provide the conglomerate with an unrivaled level of diversification.
Its companies operate in such varied industries as insurance, railroads, battery technology, chemical production, private jets, and truck stops. Geico, BNSF Railway, Duracell, Lubrizol, NetJets, and Pilot Travel Centers are just some of Berkshire’s lucrative enterprises. In all, they produced $47 billion in operating profits in 2024, which was up an impressive 27% from the prior year.
It’s for these reasons that Berkshire tends to thrive during market downturns. Its diversified revenue streams enable it to weather all manner of economic environments and continue to pile up cash, which Buffett can then use to make value-creating investments. It’s a virtuous and extremely profitable cycle that should continue to serve shareholders well.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
