2 Warren Buffett Stocks to Buy With $750 Right Now, According to Wall Street

An analysis of Berkshire Hathaway's holdings in Apple (AAPL) and Domino's Pizza (DPZ) suggests limited near-term upside despite Wall Street's consensus "buy" ratings and median target prices implying 13% and 7% gains, respectively. While Apple's Q2 revenue grew 5% to $95 billion, driven by services, and Domino's Q1 earnings rose 21% to $4.33 per share, both companies face valuation concerns with price-to-earnings ratios near 30; furthermore, challenges exist, including delays in Apple's AI initiatives and Domino's operating income falling short of its "Hungry for More" strategy target.

Analysis

The article presents a cautious assessment of Apple (AAPL) and Domino's Pizza (DPZ), key holdings in Berkshire Hathaway's portfolio, despite Wall Street's consensus "buy" ratings. Analysts project a 13% upside for Apple to a $235 median target price, based on its current $207 share price, and a 7% upside for Domino's to a $530 median target from its $495 price. Apple's Q2 FY25 results showed a 5% revenue increase to $95 billion, driven by services, and an 8% rise in GAAP EPS to $1.65, aided by share repurchases. However, concerns persist regarding its AI initiatives, with the upgraded Siri delayed and Apple Intelligence yet to be significantly monetized, alongside CEO Tim Cook's caution about limited visibility due to tariffs. With projected 6% annual earnings growth through FY26, Apple's valuation at 29 times earnings is considered expensive by the article's author. Similarly, Domino's Pizza reported mixed Q1 results: revenue grew 2.5% to $1.1 billion, missing consensus, while GAAP EPS rose 21% to $4.33, beating expectations. Despite gaining market share, Domino's Q1 operating income growth of 3.6% (ex-currency and one-time items) fell short of its "Hungry for More" strategy's 8% annual target through 2028. Management's confidence in this medium-term target contrasts with the author's view that its valuation at 28 times earnings is high, even if the 8% profit growth is achieved, given Wall Street's 6% annual earnings growth estimate through 2026. The article highlights that The Motley Fool Stock Advisor did not include Apple in its recent top 10 stock recommendations, reinforcing a generally neutral to cautious outlook despite analyst optimism.

Key Decisions for Investors

• Investors should critically evaluate Apple's current valuation of 29 times earnings against its 6% projected annual earnings growth and the ongoing challenges in monetizing its AI developments, such as Apple Intelligence and the delayed Siri upgrade, before aligning with Wall Street's buy consensus.
• For Domino's Pizza, consider the discrepancy between its Q1 operating income growth of 3.6% and its strategic target of 8% annually, alongside a valuation of 28 times earnings; a more attractive entry point, potentially 20% lower as suggested by the author, or sustained achievement of growth targets might be prudent.
• Given the author's cautious stance on both Apple and Domino's Pizza due to valuation concerns and specific operational headwinds, investors should weigh these factors against broader market sentiment and consider if current prices adequately reflect the growth outlook and execution risks highlighted.