Warren Buffett's Stock Picks: Time to Consider Investment?

Market corrections offer buying opportunities. Learn why Buffett stays invested in stocks like Amazon, American Express, and Apple, even amid challenges. Find out how economic factors may affect their stock prices.

Date: 18-03-2025

AI Rating: 6

Investment Insights

The report discusses Warren Buffett's investment strategies amidst market corrections affecting companies like Amazon, American Express, and Apple, all of which are well-known stocks within the S&P 500. Despite recent downturns, Buffett's commitment to quality stocks suggests a potential for long-term recovery.

Amazon (AMZN) is described as facing a 19% decline since February, attributed partially to economic pressures and tariffs. However, the company's profitability largely stems from its high-margin Amazon Web Services (AWS), which accounts for 58% of its operating income. The ongoing need for cost-effective goods might allow Amazon to retain its sales appeal even during economic downturns. This highlights the resilience and growth potential of the cloud segment relative to its e-commerce operations.

American Express (AXP) shares have dropped 20% since late January, largely due to fears that an economic slowdown may impact credit card usage. However, the report notes that historically, the affluent clientele of American Express has been able to weather economic challenges. Growth for this company was recorded even in the face of downturns, suggesting that current fears may be overblown.

Apple (AAPL) has seen a decline of 18% from its peak, with concerns regarding its AI capabilities and iPhone sales growth. Despite this, Apple remains a significant part of Berkshire Hathaway's portfolio, indicating ongoing confidence in its long-term prospects. Analysts predict that Apple could leverage its AI capabilities, although significant growth may not materialize until further down the line.

Overall, the uncertainties present an opportunity for investors, especially those looking to follow Buffett's strategy of buying undervalued stocks with long-term potential.

Stocks: AMZN AXP AAPL