2 No-Brainer Warren Buffett Stocks to Buy Right Now

Berkshire Hathaway's portfolio includes Amazon and Domino's Pizza, which are highlighted as potential buys for 2025 and beyond. Amazon, a smaller position for Berkshire, is considered reasonably valued at 19 times its trailing 12-month operating cash flow, despite slower online sales growth compared to competitors like Walmart and Costco. Domino's, a more recent addition to Berkshire's portfolio, has demonstrated resilience and growth, with Berkshire continuing to increase its stake, though the stock trades at a higher multiple of 28 times earnings.

Analysis

Berkshire Hathaway's sustained investment success, evidenced by a cumulative stock return exceeding 5,500,000% over 60 years, underscores its strategy of acquiring stakes in robust businesses, with Amazon (AMZN) and Domino's Pizza (DPZ) being notable examples for potential long-term growth. Amazon, a Berkshire holding since 2019, constituted a $1.9 billion position at Q1 end, characterized by strong competitive positioning and diverse revenue streams; its non-retail services, including cloud and advertising, contributed 60% of revenue last quarter and offer higher margins, while its core online retail accounted for 37%. Despite facing accelerated online sales growth from competitors like Walmart and Costco, Amazon's U.S. e-commerce market share in 2023 was reportedly six times that of its closest competitor. The stock trades at a potentially attractive multiple of 19 times trailing twelve-month operating cash flow, near the low end of its historical valuation. Domino's Pizza, a more recent addition with Berkshire initiating a position in Q3 2024 and increasing it in the subsequent two quarters, has delivered nearly 400% total return over the last decade, with 19% annualized EPS growth. The company demonstrated brand resilience with only a minor sales dip in 2022 amidst peak inflation, operates with a healthy 13% profit margin, and commands the leading global brand position with $19 billion in retail sales. Despite its market leadership, Domino's holds less than 25% of the U.S. pizza market, suggesting substantial expansion opportunities from its base of over 21,000 stores, though its stock trades at a higher 28 times earnings and could be susceptible to economic downturns and tariff-related uncertainties.

Key Decisions for Investors

• Investors may find Amazon (AMZN) appealing due to its dominant e-commerce market share, expansion in high-margin non-retail services, and a current valuation at 19 times trailing operating cash flow, which is at the lower end of its historical range.
• Domino's Pizza (DPZ) warrants consideration based on Berkshire Hathaway's increasing investment, its proven brand resilience, significant potential for market share gains in the U.S., and consistent profitability, although its valuation at 28 times earnings and sensitivity to economic conditions should be factored into investment decisions.
• Key factors to monitor include Amazon's ability to sustain its e-commerce leadership against rapidly growing competitors and Domino's capacity to effectively execute its store expansion strategy and maintain margins, particularly if economic headwinds or tariff uncertainties materialize.