3 Top Buffett Stocks to Buy and Hold for the Long Haul
Warren Buffett has shown that owning great businesses and holding them for the long term can help investors build wealth. Through Berkshire Hathaway, the legendary investor had consistently favored companies with durable competitive advantages, strong cash flows, and leadership that thinks long term.
Following Buffett’s investment philosophy can often shine a light on companies with robust fundamentals. The now-retired investor amassed his wealth by focusing on value and not chasing speculative trends. That framework has guided him to many long-term picks, including these three stocks in the Berkshire portfolio that should continue to gain market share for many years.
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Some of the best companies to invest in are household names, including Amazon(NASDAQ: AMZN). The tech stock started as an online bookstore and has expanded to sell almost every item under the sun, but its online marketplace is far from its only growth engine.
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The company has multiple business segments in high-margin industries. Amazon Web Services is the company’s cloud computing unit, and its growth has reaccelerated in recent quarters due to the artificial intelligence (AI) boom. Amazon’s online ads have also achieved a double-digit growth rate for several years. Online ads have high margins, and they are showing up in Amazon’s business. The company’s gross margin has been steadily climbing for several years, recently exceeding 50%.
Amazon has several established business models that drive profits while boasting billions of dollars in quarterly sales. However, it also has new segments like its Trainium AI chips, which have already become a multibillion-dollar component of Amazon’s corporate umbrella.
Amazon’s AI chips can become significant profit drivers in the future. While that’s a speculative part of the business, it doesn’t have to work perfectly for Amazon stock to march higher. The online marketplace, advertising, and Amazon Web Services are proven businesses with compelling long-term potential.
Buffett doesn’t chase speculative picks, but he likes companies with strong moats. Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) practically owns the entire search engine market with Google, and YouTube is the leading video platform. Those two assets help Alphabet generate substantial revenue with high margins.
Some of that capital goes toward moonshot opportunities. While those opportunities are speculative, they are backed by a top-tier business that is loaded with cash. It took more than a decade for Google Cloud to record its first profitable quarter, but all of those investments were worth it. Google Cloud is the third-largest cloud provider and has turned into a meaningful profit engine that has exceptional top-line growth.
The positive cash flow from Alphabet’s profitable businesses makes it easier to fund newer companies like Waymo and Gemini. Waymo’s self-driving cars are already operating in multiple U.S. cities, and more than 750 million people use Gemini’s AI model for various prompts each month. Gemini is Alphabet’s answer to ChatGPT, and it can become a lucrative income source within a few years thanks to its monthly subscription plans.
Alphabet is the perfect blend of established, high-moat businesses with exposure to megatrends like digital and physical applications of artificial intelligence. It’s no wonder the tech giant has a spot in Buffett’s portfolio.
Buffett first bought American Express(NYSE: AXP) in 1962 to capitalize on the Salad Oil Scandal, which put the company at risk of bankruptcy. During the scandal, American Express and other backers were duped into offering financing for fraudulent assets. Investors felt nervous at the time, but holding American Express proved to be the smart move.
That scandal is deep in the history books, but if you turn to the modern day, you will see a vibrant company with rising profit margins. The major credit card issuer targets affluent customers and has multiple income streams that revolve around how much people spend. As consumer spending goes up, American Express cards are used in more transactions, resulting in additional merchant fees. American Express also collects interest on outstanding balances.
That setup was enough to produce 10% year-over-year revenue growth throughout 2025, with fees and interest playing key roles. Higher consumer spending was another major catalyst.
American Express doesn’t have much competition at the top. While it will have to battle for market share with Visa and Mastercard, it’s difficult for new competitors to penetrate the industry. American Express has built an impressive line-up of competitive credit cards with enticing reward programs that make the company hard to beat.
Finances aren’t a problem for the company, based on its 16% year-over-year dividend hike. A rising dividend indicates the company has plenty of extra capital to distribute to investors, and it’s one of the few numbers a company cannot fake. A 16% dividend hike means American Express must grow its net income by at least 16% year over year to end up ahead after the dividend boost. Luckily, net income growth has accelerated in recent quarters, and the company is sitting on a $47.8 billion cash position.
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American Express is an advertising partner of Motley Fool Money. Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool has a disclosure policy.
