Berkshire's Buffett-Approved Stocks: Amazon and Visa Rise

Berkshire Hathaway's recent investment urges a closer look at Amazon and Visa. Amazon's AWS margins and Visa's robust market presence signify strong opportunities. Investors should weigh these stocks against tariffs and digital payment growth for potential gains in the coming months.

Date: 20-04-2025

AI Rating: 8

**Earnings Outlook for Amazon:**
Amazon's financial performance, particularly its Amazon Web Services (AWS) segment, is highly noteworthy. AWS is projected to generate $107.6 billion in revenue for 2024, which is larger than some well-known competitors such as Bank of America and Tesla. Also, AWS is expected to contribute $39.8 billion in operating income, representing 58% of Amazon's total operating income. This robust growth could positively impact overall earnings per share (EPS) and signify a strong profit margin for the company.

**Impact of Tariffs on Amazon:**
While the report highlights potential concerns regarding tariffs on goods imported from China impacting Amazon's e-commerce segment, it suggests that the long-term outlook for the company remains strong. The AWS division's continued growth and profit potential can overshadow the short-term pressures from tariffs.

**Visa's Competitive Advantage:**
Visa holds an exceptional position in the financial services market, cited for its dominant reach with over 4.7 billion payment credentials and acceptance at over 150 million merchants. This strong market presence signifies significant revenue potential and reinforces the company's competitive edge, ensuring high profit margins of around 53%. The network effect further strengthens Visa's business model, leading to increased transaction volumes as digital payments expand globally.

**Future Considerations:**
As digital payment adoption increases, Visa stands to benefit greatly, with expectations of approximately 16% compound growth in the digital payments market, projected to reach $36.8 trillion within four years. This growth trajectory is likely to support continued revenue growth and robust cash flow for the company.

In summary, both Amazon and Visa present compelling investment cases based on their growth potential and business robustness. Investors are advised to monitor short-term economic factors like tariffs but maintain a focus on the long-term profitability and strategic positions of these companies.

Stocks: AMZN V