Warren Buffett’s Top Stock Picks and One to Avoid in March
Among all institutional money managers on Wall Street, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett captures the most attention. Over the past 60 years, Buffett has guided his company’s Class A shares (BRK.A) to a remarkable cumulative return of 6,231,887% as of the end of February 2025.
By consistently outperforming Wall Street’s key benchmark, the S&P 500, Buffett has garnered a loyal following of investors eager to replicate his successful trades for long-term gains.
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Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Berkshire Hathaway’s Portfolio Overview
As of March, Warren Buffett manages a substantial portfolio of 44 stocks valued at $297.5 billion. While a few notable stocks in this collection appear to be strategic buys in a time of elevated market prices, one particular holding stands out as one to avoid.
Top Stock Pick: Sirius XM Holdings
The first compelling investment suggestion for March is Sirius XM Holdings (NASDAQ: SIRI). This satellite radio company, recognized for its unique stock-split position, is currently trading at a notably low valuation. Buffy has been increasing his stake in Sirius XM over recent months, indicating his confidence in its potential.
Despite encountering challenges such as a less-than-1% decline in self-pay subscribers year-over-year for 2024, Sirius XM possesses multiple advantages that make it a strong stock choice.
With its exclusive legal status as the sole licensed satellite radio operator, Sirius XM enjoys a rare level of pricing power to attract subscribers. By simplifying its pricing model, the company aims to restore growth in in-car subscriptions.
Additionally, Sirius XM benefits from a diversified revenue stream. Unlike most traditional and online radio companies that rely primarily on advertising revenue, Sirius XM generated 20% of its $8.7 billion sales from ads, with a majority (76%) coming from self-pay subscriptions. This distinction enables the company to maintain stable cash flow even during economic downturns, as consumers typically continue their subscriptions while advertisers cut back.
The final compelling factor is Sirius XM’s attractive valuation. With a projected earnings multiple of approximately 7.7 times for 2026, the stock is valued at nearly 50% lower than its five-year average forward multiple.
Image source: Amazon.
Top Stock Pick: Amazon
The second noteworthy investment for March is Amazon (NASDAQ: AMZN). Although not inexpensive by conventional standards, Amazon represents significant value, especially when considering its reinvestment strategy for growth.
Amazon is well-known as the leading e-commerce platform, with eMarketer forecasting that it will capture close to 41% of U.S. e-commerce sales by 2025. However, its online marketplace isn’t the primary source of cash flow.
The real growth driver for Amazon has been its ancillary businesses, particularly Amazon Web Services (AWS). This platform currently commands an estimated 33% share of global spending on cloud infrastructure, according to tech analysis firm Canalys. AWS is integrating artificial intelligence (AI) advancements and has a revenue run-rate exceeding $115 billion as of the fourth quarter.
In addition to AWS, Amazon continues to grow its advertising services rapidly, with significant pricing power stemming from its over two billion global monthly visitors. Subscription service revenue is also on the rise, aided by exclusive streaming agreements that are likely to boost Prime subscriptions.
Historically, Amazon shares have traded at a premium cash flow multiple, averaging around 21.3 times over the last five years. Presently, however, they are valued at just 12.8 times the forecast cash flow per share for 2026, presenting an attractive entry point for investors.
Stock to Avoid: Apple
While a stock’s inclusion in Buffett’s $297.5 billion portfolio does not guarantee it is a worthy investment. Berkshire’s major holding, Apple (NASDAQ: AAPL), may actually be a stock best avoided at present.
Why Apple’s Stock May Not Be the Right Investment Choice
(NASDAQ: AAPL) exemplifies a strong business, yet its stock raises caution for potential buyers.
Apple’s Brand Strength and Service Growth
Apple has successfully built a powerful brand, ensuring consumer loyalty within its ecosystem of products and services. For instance, the iPhone remains the leading smartphone in the domestic market.
Tim Cook, Apple’s CEO, has played a significant role in expanding subscription services. The revenue from Apple’s services segment has shown consistent growth, increasing at a high-single-digit to low-double-digit percentage. Over time, this growth should enhance Apple’s operating margin. As services contribute more to overall sales, they can help stabilize revenue fluctuations that typically occur during major iPhone upgrade cycles.
Concerns Amidst Apple’s Success
However, certain issues surrounding Apple cannot be ignored. Product sales have been disappointing for the past two years. Despite customer loyalty, recent changes to the iPhone do not seem to resonate with consumers. The robust growth of the services segment has not prevented the stagnation of Apple’s overall growth.
A troubling indicator of this stagnation is that even with high inflation rates seen in 2023, revenue from Apple’s physical products has still declined.
Impact of Share Buybacks and Declining Earnings
An ongoing concern is the effect of Apple’s significant share repurchase program, which has seen nearly $750 billion spent on buying back stock since 2013. Approximately 43% of its outstanding shares have been retired. Despite this reduction, earnings per share have remained relatively flat over the past two years. Furthermore, net income fell from $99.8 billion in fiscal 2022 to $97 billion in fiscal 2023, and projected to drop further to $93.7 billion in fiscal 2024.
Valuation Discrepancy
Given the combination of stalled growth and declining net income, the current stock valuation of 38.5 times trailing-12-month earnings—close to a decade high—raises concerns about sustainability.
Investment Considerations for Sirius XM
Before considering an investment in other stocks, such as Sirius XM, potential investors should review insights from the Motley Fool Stock Advisor team. They recently identified ten top stocks for investment, with Sirius XM not being one of them. These selected stocks are expected to deliver substantial returns in the future.
For instance, had you invested $1,000 in Nvidia at the time it was recommended on April 15, 2005, that investment could have grown to approximately $765,576 today.
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Disclaimer: The opinions presented here reflect those of the author and do not necessarily represent the views of Nasdaq, Inc.
