3 Top Buffett Stocks to Buy and Hold for the Next 20 Years

Warren Buffett has built a fortune for Berkshire Hathaway shareholders. Buffett’s success at buying stocks of great businesses and holding them for the long term has inspired many investors to follow his style.

Berkshire held a stock portfolio worth $271 billion at the end of 2024. Three Fool.com contributors combed through the holdings and selected one stock each that would be a great investment for the next 20 years. They picked Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Domino’s Pizza (NASDAQ: DPZ). Here’s why.

Jennifer Saibil (Amazon): Amazon is a surefire stock for growth over the next 20 years as it dominates two high-growth sectors. It has no match in e-commerce, where it controls around 40% of the market in the U.S. E-commerce is expected to continue growing as a percentage of retail sales, and Amazon is investing to keep its top position and capture market share.

It’s always adding new brands and products to its website, expanding its assortment and raising its cachet, like Estee Lauder and Armani Beauty in 2024. It also continues to raise its own bar in delivery speed and cost efficiency. It completely overhauled its distribution network a few years ago to reach more geographic areas faster, and now it’s changing its inbound network to keep the flow of merchandise moving and become more efficient.

Investors, however, are fixated on Amazon’s artificial intelligence (AI) opportunities. The company was an early entrant into generative AI, and it offers a huge assortment of tools for clients of Amazon Web Services (AWS).

It has three levels of services, which include developer services for clients to create their own custom foundation models, the Bedrock system for simple semi-custom solutions, and many cheaper turnkey solutions for smaller businesses. It releases new upgrades and features on a regular basis and more frequently than competitors, and although it offers Nvidia‘s chips for its users, it’s creating its own line of efficient chips for clients who need budget options.

AI is already a multibillion-dollar business, and it’s generating greater interest in AWS from clients who want to explore generative AI. AWS sales growth had been slowing, but it’s accelerating again and was Amazon’s highest-growth segment in 2024’s fourth quarter, up 19% year over year.

The stock is down 26% from recent highs and trades at a price-to-earnings ratio (P/E) of 35, which is near its lowest level in more than a decade. Now is an excellent time to buy shares of this forever Buffett stock.

John Ballard (Apple): Buffett has made a lot of brilliant investments over his career. Some of his more rewarding stock picks have been those with powerful consumer brands, such as Coca-Cola and Apple.

The iPhone is one of the most valuable products in the world. Apple generates $395 billion in trailing-12-month revenue, with iPhone revenue comprising around half that amount. The device’s sales reached $69 billion last quarter, setting new records in several regions worldwide.

The company has delivered stellar returns to shareholders over the last decade. It earns a high return on capital employed of 61%, which indicates how well management turns investments in new products into profits. Buffett is a big fan of investing in companies that earn high returns on capital, since it usually indicates a business that can deliver strong earnings growth and returns to shareholders.

The high customer satisfaction scores for Apple products have fueled solid growth in its services segment. Sales of apps and subscriptions through the App Store continue to grow, up 14% year over year last quarter. Services now generate $100 billion of annualized revenue and earn higher margins than devices, which also bodes well for earnings.

Apple is a solid stock for the long haul. Great businesses have a tendency to surprise to the upside over time. If you’re looking for a Buffett-approved stock to buy and hold for the next 20 years, I would start with Berkshire’s largest holding.

Jeremy Bowman (Domino’s Pizza): Buffett is known for investing in timeless businesses. He prefers straightforward ones like banking and insurance, or big consumer brands like Coca-Cola and Apple. He also popularized the phrase “economic moat,” referring to businesses that have defensible, sustainable competitive advantages like the BNSF railroad Berkshire owns.

One such business is Domino’s Pizza, the fast-food franchise that has spread around the world and is now the biggest pizza chain with more than 21,300 locations in over 90 countries. Like other dominant fast-food chains, the Domino’s brand has become well entrenched globally with a reputation for convenient delivery, tasty food, and low prices. It also has a low-priced, small-footprint franchise model, making it an attractive partner for franchisees.

The business has delivered strong results over its history, and it has an impressive track record of increases in comparable-store sales (comps). In fact, it just reported its 31st straight year of comps growth in its international business, rising 1.6% for the year. That’s a remarkable streak that spans the pandemic, the financial crisis, and other disruptions over the last 31 years.

Looking ahead, the chain still has a lot of growth potential after adding 775 new stores in 2024. The popularity of pizza will almost certainly endure over the next 20 years, as will the brand’s promise of convenient delivery and good value. And that makes Domino’s a great stock to buy and hold for the next two decades.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has positions in Apple. Jeremy Bowman has positions in Amazon and Nvidia. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, Domino’s Pizza, and Nvidia. The Motley Fool has a disclosure policy.

3 Top Buffett Stocks to Buy and Hold for the Next 20 Years was originally published by The Motley Fool