Warren Buffett’s renowned investment strategy revolves around exhibiting patience, focusing on robust businesses, and prioritizing long-term expansion. In times when market stability is questionable, two of his top picks – Amazon and Berkshire Hathaway – shine due to their resilience and promising future prospects for investors.
1. Amazon
As an ardent investor, I find the apprehensions about Amazon (AMZN 0.39%) being a less attractive option compared to its tech peers to be somewhat exaggerated. Admittedly, trade tensions could potentially affect Amazon’s operations, but any negative impact is more likely to be short-lived and transient.
The company’s e-commerce sector continues to thrive, boasting a level of resilience rarely seen among businesses throughout history. It’s challenging to exaggerate the extent to which this company has become an integral part of consumers’ daily routines worldwide. Although retail generates most of its income, Amazon’s advancements in artificial intelligence (AI) are particularly noteworthy when considering growth potential.
Amazon Web Services (AWS), a subsidiary of the company, stands as the world’s leading cloud service provider, consistently pouring substantial resources into AI-focused hardware infrastructure. This investment has been driven by the escalating and colossal need for computational power due to AI model calculations. Consequently, AWS’s revenue surged by 17% compared to the previous year during the first quarter, propelled by this growth in demand.
In a recent earnings discussion, CEO Andy Jassy emphasized the significant potential he sees for Amazon Web Services (AWS), remarking: “Previously, we believed AWS had the possibility to become a company with billions of dollars in annual revenue. Now, we suspect it might have an even greater scope.
Apart from Amazon aiming directly at the technology sector, they are supporting Anthropic, a notable AI firm fighting for market supremacy. Anthropic’s AI assistant, Claude, is among the few models that often match OpenAI’s performance. Given that AWS provides Anthropic with its cloud services, Amazon essentially benefits from a reduced cost when investing in this company.
I’ve been observing, and it seems that Amazon is not only focusing on its AI ventures such as the robotaxi project, Zoox, but also pouring resources into improving its core e-commerce business. This investment could yield significant returns, as the technology is expected to enhance logistical efficiency and reduce fulfillment costs by leveraging advanced robotics, potentially leading to a substantial boost in profits.
With significant investments in artificial intelligence (AI), Amazon is poised to sustain growth across multiple business areas for years to come. Although temporary challenges from international trade might arise, Amazon’s AI journey is only beginning and promises an exciting future.
2. Berkshire Hathaway
Numerous investors are searching for security within the current market landscape. Remarkably, Berkshire Hathaway, the esteemed enterprise led by Buffett, provides just that assurance.
With over $300 billion in cash reserves, Berkshire Hathaway holds a substantial advantage that rivals some countries’ total GDP. This vast reserve acts as an impressive safety net if the economy experiences a downturn. Not only will it help Berkshire to weather any economic storm, but it also positions the company to flourish during significant market declines.
During the Great Financial Crisis in 2008, events unfolded precisely as described. To illustrate with Warren Buffett’s action regarding Bank of America: He transformed a $5 billion investment into an apparent profit of $12 billion over a short period by purchasing when others were offloading their shares.
The assortment of businesses that Berkshire Hathaway manages generates a steady income stream. Notably, their flagship insurance business, GEICO, is witnessing a significant increase in profits. In fact, it reported an impressive $8 billion in pre-tax profit in the year 2024 – a figure almost equivalent to the total profit made over the past five years combined.
In simpler terms, the money that Berkshire’s insurance companies keep on hand before settling claims (often referred to as the insurance float) essentially acts as an interest-free loan for the company to invest. Additionally, Berkshire’s diverse portfolio of wholly owned businesses, spanning industries from railroads to utilities, provides a steady stream of cash that can be used for future investment opportunities.
To wrap it up, let me touch on a topic that’s been on everyone’s mind: The speculations about Buffett leaving. I believe these concerns are exaggerated. His handpicked successor, Greg Abel, has been under Buffett’s tutelage for quite some time now and fully grasps the company’s long-term, value-driven investing strategy.
Amazon and Berkshire are both solid picks
For individuals seeking to establish enduring prosperity following the method of Warren Buffett and the Foolish Investor, Amazon’s AI-driven transformation and Berkshire Hathaway’s robust resilience make them strong investment choices worth considering at present.
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2025-07-18 01:36