1 Stock to Buy Now That Warren Buffett's Silver Prediction Has Come True

Warren Buffett’s 2023 arithmetic-based warning that global silver demand outpaced mined supply by roughly 150 million ounces has materialized: silver prices have rallied about 150% while mine production rose less than 1% and the market ran a ~149 million-ounce deficit last year, creating a sustained bull market. First Majestic (NYSE: AG) is highlighted as one of the closest pure-play silver exposures—57% of revenue from silver, a record quarter of 3.9 million ounces produced (+96% y/y), all-in sustaining costs of $14.80–$15.80/oz and a Q revenue bump ($139m) split roughly equally between higher output and higher prices—giving it strong operational leverage to ongoing structural demand from solar, EVs and semiconductors. Investors should weigh that leverage against valuation risk (P/E ~113); the company’s growth profile may justify a lofty multiple if deficits persist, though Motley Fool’s Stock Advisor did not include First Majestic in its top-10 recommendations.

Analysis

In 2023 Warren Buffett noted an annual global shortfall of roughly 150 million ounces of silver; since then silver prices have rallied approximately 150% while mine production rose by less than 1% in 2024 and the market ran a roughly 149 million-ounce deficit last year, a structural imbalance reflected in the iShares Silver Trust (SLV). First Majestic (NYSE: AG), a Vancouver-based, ~$7.8 billion miner, is presented as the closest pure silver play with 57% of revenue from silver and a record quarter producing 3.9 million ounces, a 96% year-over-year increase. The company reports all-in sustaining costs of $14.80–$15.80 per ounce and delivered a $139 million revenue increase in the quarter, where $73 million derived from higher production and $66 million from higher prices—demonstrating clear operational leverage to rising silver prices. Structural demand drivers cited include solar, electric vehicles and semiconductors supporting multi-year deficits, but valuation and concentration risk are material: First Majestic trades at a price-to-earnings ratio near 113 and was not included in the Motley Fool Stock Advisor top-10 list, and the author acknowledges the possibility of a future price reversal even if they see a crash as unlikely in 2026 or this decade.

Key Decisions for Investors

• Consider adding modest, tactical exposure to silver via SLV for market-level exposure or to First Majestic for leveraged upside given its 57% silver revenue and recent 96% production growth,
• Size any position in First Majestic conservatively and monitor all-in sustaining costs ($14.80–$15.80/oz) versus spot silver price because profitability is sensitive to price moves despite current operational leverage,
• Track supply-demand indicators—annual deficit magnitude, quarterly mine production trends, and company production guidance—and reduce exposure if deficits narrow materially or mine production accelerates,
• Use position limits and consider protective hedges (e.g., collars or options) to manage valuation risk given First Majestic's ~113 P/E and the inherent cyclicality of precious-metals equities