Warren Buffett is recognized as one of the most successful investors in history — and he’s delivered incredible returns for shareholders who believe in him. Basically, if you have a stake of $1,000 Berkshire Hathaway The day the Oracle of Omaha bought a controlling stake in the company and became its CEO in May 1965, your position would roughly qualify now. $37.7 million.
With this kind of stellar performance, it’s no wonder investors around the world look to the Oracle of Omaha for investment tricks and wisdom. If you’re looking to get a jump on financial wins in the new year, read on to see why two Fool.com contributors think these two Buffett-backed stocks look like great buys to start 2025.
Keith Noonan (Sirius XM): With the recent market rally, Buffett is actually taking a more conservative stance on investing. Berkshire Hathaway has been a net seller of stocks over the past year, and there are some signs that the Oracle of Omaha’s valuation has concerns when it comes to the broader market. But Berkshire has still been buying some stock recently, and Sirius XM(NASDAQ: SIRI ) is one of the few companies in which the investment group continues to invest.
While the broader market is enjoying an impressive rally, Sirius stock has seen a really big selloff. As of this writing, the company’s share price is down nearly 59% over the past year. Berkshire has warmed to growth-oriented tech companies in recent years, but Buffett one Value investors At heart — and it appears he and his analyst teams see Sirius as a classic value play.
Of course, there have been some solid catalysts driving Sirius’s massive valuation pullback. While the company is the clear-cut leader in satellite radio services, the growth of streaming platforms Spotify And appleApple Music has put pressure on its business model. On the other hand, Sirius is making moves to improve its position in streaming, and it’s also making smart moves to strengthen partnerships with auto manufacturers. By getting its hardware into more vehicles, the company can continue to target the largest and most important segment of its addressable market.
In addition, Sirius is also taking major steps to reduce its costs. While the company will continue to spend on new content and programming, it is taking some drastic steps to reduce capital expenditures. Essentially, the company thinks its core infrastructure is already in place and sustainable. As a result, it expects to be able to reduce annual capital expenditures (capex) from about $300 million this year to zero in 2028. This will provide a significant positive catalyst to the company’s already solid bottom-line results.
Sirius is trading at around 17 times 2024 and just 88.5% of expected sales. Meanwhile, the company is trading at around 7 times its estimated earnings for 2025. The shares look attractively valued at the moment. If you’re looking to take a page out of Buffett’s investment playbook for 2025, stocks are a top pick.
Jennifer Sabil (Amazon):Amazon(NASDAQ: AMZN ) is taking a page from its playbook and building a brand new business out of generative artificial intelligence (AI). In two short years, it has exploded from a new concept to a full-fledged business that already has a billion dollar run rate, and management believes the best is yet to come.
AI has been an integral part of Amazon’s e-commerce business for years. Amazon uses it to make inventory decisions and product recommendations, with instant comparisons and similar items to get instant conversions. Amazon has millions and billions of data points that it uses with machine learning that leads to accuracy and sales generation.
The company takes all that data a step further with generative AI. It uses its wealth of data to build large language models (LLM), and it offers access to these LLMs to cloud computing clients through its Bedrock program. Amazon also provides tools for users to create their own LLMs using their own data for a more customized experience, and it also offers AI tools for small businesses that don’t have the budget or manpower for a custom program. .
In addition to using its AI platform, Amazon is also developing its own graphics processing units (GPUs) that are more affordable than the GPU giant. nvidiaAmazon will continue to partner with Nvidia to build its own LLMs and work on the bottom layer for its largest Amazon Web Services (AWS) clients, but Amazon’s GPUs offer high performance without high costs for mid-tier customers. will make it easy to get
CEO Andy Jessee noted that Amazon has launched more AI features and services in the past year and a half than all other major cloud computing providers combined. He also goes on to say that 90% of the company’s information technology (IT) spending is still on premises, but it’s going to shift to the cloud, and Amazon is ready for the moment. It’s already seeing new client signups for AWS as companies want to get on board with generative AI, and they can’t get the full benefits without being on the cloud. AWS sales growth rose 19% year-over-year in the third quarter.
Generative AI may be Amazon’s strongest growth driver right now, but it’s not the only one. It’s upgrading its e-commerce distribution network to make it cheaper and faster, it’s supercharging its advertising business, and it’s investing in its streaming networks. Amazon is in an excellent position to thrive and reward investors in 2025.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts a “Double down” stock Recommend companies they think are going to pop. If you’re worried that you’ve already missed out on an investment opportunity, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:If you invested $1,000 when we doubled in 2009,You will have $348,216!*
Apple: If you invested $1,000 when we doubled in 2008, You will have $47,425!*
Netflix: If you invested $1,000 when we doubled in 2004, You will have $480,681!*
Right now, we’re issuing “double down” alerts for three great companies, and there may not be another opportunity like this anytime soon.
John Mackey, former CEO of Whole Foods Market, is a member of the board of directors of The Motley Fool, an Amazon subsidiary. Jennifer Sabil There are positions in Apple. Keith Noonan No position in any of the stocks mentioned. The Motley Fool recommended positions in Amazon, Apple, Berkshire Hathaway, Nvidia, and Spotify Technologies. Motley Fool has a Disclosure Policy.
