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Warren Buffett’s Key Stocks: A Glimpse Into Berkshire Hathaway’s Portfolio for 2025
For nearly 60 years, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has led the company through an extraordinary investing journey. Since taking the helm in the mid-1960s, he has achieved a staggering cumulative return of 5,561,176% on Class A shares (BRK.A) as of December 12. This remarkable performance has nearly doubled the average annual total return, including dividends, of the benchmark S&P 500.
Buffett’s outperformance of the widely followed stock index has garnered him a loyal following. Investors eagerly anticipate Berkshire’s Form 13F filings each quarter, which disclose the stocks Buffett has been buying and selling.
Buffett’s approach typically focuses on investing in companies with sustainable competitive advantages and strong management. However, a key feature of his strategy is concentration. He believes that his most promising investment ideas deserve a larger allocation of capital.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
As we approach a new year, Buffett is entering 2025 with 66% ($199.1 billion) of the $301 billion portfolio invested in just five key stocks.
Apple: $74.4 billion (24.7% of invested assets)
Apple (NASDAQ: AAPL) stands as Berkshire’s largest holding by a substantial margin. Notably, Buffet has sold more than 615 million shares of Apple over the past four quarters, ending in September.
At Berkshire Hathaway’s annual shareholder meeting in May, Buffett explained that recent sales were likely due to tax considerations. With expectations of a potential increase in corporate income tax rates, selling now allows him to secure significant unrealized gains at a low tax rate.
However, the outcome of the November election suggests tax rates may remain low. Despite cutting Berkshire’s stake in Apple by two-thirds, Buffett admires the company’s brand loyalty and Tim Cook’s effective leadership, which is shifting focus to higher-margin subscription services.
Buffett also appreciates Apple’s capital-return strategy. In 2025, Berkshire is set to receive approximately $300 million in dividends from its Apple investment, while Apple has repurchased $700.6 billion of its own shares since 2013.
American Express: $45.5 billion (15.1% of invested assets)
The second-largest holding is credit-services provider American Express (NYSE: AXP), which has been part of Buffett’s portfolio since 1991.
Buffett favors financial stocks due to their cyclical nature. Economic downturns are temporary, and companies like American Express often experience extended periods of growth.
American Express benefits from its dual role as both a payment processor and lender, earning fees from merchants and interest from cardholders. This model allows it to thrive during economic recoveries, especially as its cardholders typically have higher incomes, making them less sensitive to minor economic fluctuations.
With a cost basis of about $8.49 per share, Berkshire enjoys a 33% dividend yield from American Express, further confirming Buffett’s faith in the brand.
Bank of America: $35.3 billion (11.7% of invested assets)
Another significant investment is Bank of America (NYSE: BAC), which has seen a recent uptick in selling from Buffett, who has offloaded over 266 million shares since mid-July.
This selling aligns with similar motives seen with Apple, as Berkshire may look to realize gains at a low tax rate. Alternatively, the situation might reflect Buffett’s caution in a market characterized by high valuations, leading him to sell more stocks than he buys for the past eight quarters.
Despite the market’s challenges, Bank of America is positioned well. As a financial institution sensitive to interest rates, it has benefited from the Federal Reserve’s rate hikes. While rates may currently be easing, the gradual nature of adjustments should allow Bank of America to maintain profitability.
Additionally, Bank of America offers a strong capital-return program, with Berkshire expected to earn nearly $797 million in dividends in 2025, while also engaging in share buybacks during periods of economic growth.
Image source: Coca-Cola.
Coca-Cola: $25.5 billion (8.5% of invested assets)
Consumer goods giant Coca-Cola (NYSE: KO) rounds out the top four holdings in Berkshire’s portfolio. This investment has a long history, dating back to 1988.
Buffett values simplicity in his investment choices. Coca-Cola boasts a strong and recognizable brand, and its ability to generate steady revenue is an attractive feature for long-term investors.
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Coca-Cola and Chevron: Reliable Picks in Warren Buffett’s Portfolio
Coca-Cola: A Steady Revenue Stream
Coca-Cola offers a product that people purchase regardless of the economy’s performance, providing consistent cash flow year after year.
The company stands out with its extensive global reach. Coca-Cola operates in nearly every country, excluding North Korea, Cuba, and Russia. This geographic diversity ensures a steady cash flow from established markets, while also allowing for growth opportunities in emerging markets. Kantar’s annual “Brand Footprint” report reveals that Coca-Cola has been the most popular retail choice for 12 consecutive years.
Coca-Cola’s marketing strategies effectively engage different generations. Using digital channels and artificial intelligence (AI), the company targets younger consumers, while familiar holiday promotions and brand ambassadors connect with its older audience.
Additionally, Coca-Cola has a strong commitment to returning value to its shareholders. The company has consistently increased its dividend for 62 years. With Berkshire Hathaway’s cost basis in Coca-Cola at approximately $3.25 per share, the company enjoys a 60% annual yield on this investment.
Chevron: A Leader in Energy Investments
Coca-Cola’s predictability aligns with Warren Buffett’s fifth-largest investment, Chevron, which holds over $18 billion in value. When combined with other holdings like Apple and American Express, these investments will make up 66% of Berkshire Hathaway’s portfolio by 2025.
Buffett’s significant stake in Chevron indicates his predictions for oil prices to remain high or potentially increase. Factors influencing this outlook include the ongoing repercussions of Russia’s invasion of Ukraine, which has raised concerns over energy supplies in Europe, and the three years of curtailed investment in energy during the COVID-19 pandemic. Such supply constraints typically elevate commodity prices.
As an integrated energy company, Chevron diversifies its operations beyond drilling. It also manages transmission pipelines and refineries, providing a safeguard against falling crude oil prices.
Like Coca-Cola, Chevron boasts a robust return on capital program. The company has raised its dividends for 37 years and has a substantial $75 billion share buyback program in place.
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Bank of America and American Express are advertising partners of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
