Warren Buffett’s Timeless Investment Strategies: Two Stocks to Consider

Billionaire Warren Buffett has navigated every type of market cycle, from prosperous peaks to significant downturns. Throughout these fluctuations, his portfolio has experienced both gains and losses, but over time, Buffett has consistently emerged victorious. Over his 59 years as chairman of Berkshire Hathaway, he has achieved a compounded annual gain of nearly 20%. This performance significantly exceeds the S&P 500‘s compounded annual gain, which hovers around 10%.

Given this remarkable track record, it is reasonable to trust Buffett’s investment decisions. He favors well-established companies with strong competitive advantages, purchasing them at reasonable valuations and holding them for the long term. While some of Buffett’s major investments may have appreciated since he acquired them, recent declines have positioned certain Buffett favorites at intriguing price points.

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Current concerns surrounding President Donald Trump’s tariff plan have impacted stock prices, creating short-term challenges for companies. Nevertheless, this does not overshadow the positive long-term outlook for many market leaders. With that context, let’s explore two compelling Buffett stocks worth considering today.

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1. American Express

Buffett has been expanding Berkshire Hathaway’s stake in American Express (NYSE: AXP) since the 1990s. The company enjoys a significant competitive edge due to its reputation as a premium credit card provider, a wide-reaching global network, and attractive perks for its cardholders. Buffett values competitive advantages, or “moats,” which serve to keep a company ahead of its competitors.

American Express has demonstrated resilience over the years, consistently increasing both revenue and net income. Despite concerns over economic instability and tariff implications, the company’s business has remained robust. Its cardholders predominately belong to higher income brackets, which experience less financial strain during economic slowdowns.

According to recent reports, American Express saw its first-quarter revenue climb 8% to $17 billion, with card member spending up 6%. The company has projected its performance to align with or exceed 2024 expectations. Given this momentum, American Express has maintained its guidance for full-year revenue and profit.

In the face of ongoing economic challenges, American Express holds strong due to its cardholder demographics, making it a solid long-term investment. Currently trading at just 15 times forward earnings estimates, it presents a great opportunity for investors.

2. Apple

Despite Berkshire Hathaway reducing its position in Apple (NASDAQ: AAPL) last year, this Stock remains the company’s largest holding. Interestingly, Buffett typically avoids tech investments. However, Apple’s strong brand, distinguished leadership, and history of innovation have captured his attention. Notably, decision-making at Berkshire Hathaway is a collective process; Buffett alone does not shape investment choices.

Investors have recently viewed Apple as somewhat precarious due to its manufacturing reliance in China, which faces steep import tariffs. Although electronics are currently exempt under Trump’s administration, this exemption may not last. Consequently, Apple could confront increased costs that impact its profitability. However, it seems unlikely that the U.S. government and leading tech companies would allow the tech sector to falter without seeking a resolution that minimizes adverse effects on companies like Apple.

While Apple faces short-term challenges, its long-term prospects remain strong. With an installed base of 2.35 billion devices, the company is entering a new phase of revenue growth driven by services—from cloud storage to digital content. This large customer base has resulted in record increases in services revenue quarter after quarter.

Currently trading at 26 times forward earnings, down from over 35 times a few months ago, Apple stands out as a favorable addition to any investment portfolio.

Should you invest $1,000 in American Express right now?

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American Express is an advertising partner of Motley Fool Money. Adria Cimino holds shares in American Express. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.