Buffett's Three Favorite Stocks Worth Holding Forever
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: NASDAQ.COM
- Apple's Ecosystem: Apple's iPhone sales surged 21% year-over-year in Q2 2026, while its high-margin services segment grew by 17%, indicating strong customer loyalty and recurring revenue streams, solidifying its status as a 'forever' stock.
- Coca-Cola's Resilience: Coca-Cola achieved a 12% year-over-year increase and a 19% rise in operating income in Q1 2026, showcasing its pricing power and product adaptability in a high-inflation environment, reinforcing its status as a 'Dividend King' with a 64-year streak of dividend increases.
- American Express's Unique Model: American Express differentiates itself with a closed-loop model and membership system targeting affluent clients, ensuring revenue stability across economic conditions, while its growing dividend and strong brand loyalty position it as a premium blue-chip stock for long-term investment.
- Buffett's Investment Philosophy: Buffett's admiration for Apple, Coca-Cola, and American Express reflects his focus on excellent management, strong cash positions, and durable competitive advantages, making these stocks valuable for long-term investment.
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Analyst Views on AAPL
Wall Street analysts forecast AAPL stock price to fall
27 Analyst Rating
17 Buy
9 Hold
1 Sell
Moderate Buy
Current: 312.510
Low
239.00
Averages
306.89
High
350.00
Current: 312.510
Low
239.00
Averages
306.89
High
350.00
About AAPL
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, Wearables, Home and Accessories. Its services include advertising, AppleCare, cloud services, digital content, and payment services. The Company operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. It also offers digital content through subscription-based services, including Apple Arcade, Apple Fitness+, Apple Music, Apple News+, and Apple TV+. Its wearables include smartwatches, wireless headphones, and spatial computers. Its products include iPhone 16 Pro, iPhone 16, iPhone 15, iPhone 14, iPhone SE, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, Mac Pro, iPad Pro, iPad Air, AirPods, AirPods Pro, AirPods Max, Apple TV, Apple Vision Pro and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- iPad Trade-In Adjustments: The trade-in value for the iPad Pro has been raised from $670 to $690, and the iPad Air from $445 to $460, aiming to encourage consumers to upgrade and enhance market competitiveness.
- Mac Device Trade-In Changes: The trade-in value for the MacBook Pro increased from $685 to $690, while the iMac Pro decreased from $325 to $315, reflecting Apple's dynamic adjustments based on market demand to optimize inventory management.
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See More
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- Capex and Free Cash Flow: Alphabet's projected capital expenditures for this year are between $180 billion and $190 billion, which will reduce free cash flow from over $73 billion last year to about $26 billion this year; however, Abel's investment decision reflects recognition of Alphabet's long-term growth potential.
- Market Share and Competitive Advantage: Alphabet holds an 85% to 90% market share in the traditional internet search market, and its large language model, Gemini, is believed to help protect its market position, suggesting that Abel's investment may further solidify Berkshire's competitive edge in this area.
- Divergent Choices Among Hedge Fund Managers: While other prominent hedge fund managers like Bill Ackman and Stanley Druckenmiller opted to reduce their stakes in Alphabet, Abel's strategy of increasing investment demonstrates his unique perspective on the company's future performance, potentially influencing overall market confidence in Alphabet.
See More
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- Leadership Transition: Greg Abel took over as CEO of Berkshire Hathaway at the beginning of this year, and despite the immense pressure of succeeding Warren Buffett, he quickly adjusted the investment portfolio in his first quarter, demonstrating decisive leadership.
- Increased Stake in Alphabet: In the first quarter, Berkshire increased its stake in Alphabet to 6.7%, making it the fifth-largest holding in the portfolio, indicating Abel's confidence in the artificial intelligence sector, which contrasts with Buffett's traditional investment style.
- Market Share Advantage: Alphabet commands an 85% to 90% share of the traditional internet search market, and Abel's investment strategy may aim to leverage this strong market position and future growth potential, particularly driven by advancements in AI technology.
- Contrasting Investor Sentiments: While Abel was accumulating shares of Alphabet, other prominent hedge fund managers like Bill Ackman and Stanley Druckenmiller opted to reduce their stakes, reflecting differing views on Alphabet's future, and Abel's decisions may prove to be prescient in the long run.
See More
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- Market Potential Assessment: Analysts believe Apple is well-positioned in the agentic AI sector, with its robust ecosystem providing a competitive edge, potentially generating $15 billion to $30 billion in AI-related revenue by fiscal 2030, which, while modest relative to Apple's overall revenue, indicates significant growth potential.
- Product Innovation Capability: Apple typically adopts a cautious approach when launching new technologies, innovating on existing models to attract users, as evidenced by the success of the iPhone and AirPods, suggesting it could similarly lead in the AI space.
- User Base Advantage: With over 2 billion devices in circulation, Apple can rapidly deploy new AI features, enhancing user retention and leveraging data to boost network effects, thereby strengthening its market competitiveness.
- Long-term Investment Value: Despite facing tariffs and regulatory scrutiny, Apple's strong customer loyalty and expanding high-margin services segment position it as a solid long-term investment, especially as AI technology matures, with future profit potential looking promising.
See More
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- Analyst Optimism: As Wall Street recognizes Apple's potential in the AI sector, Bank of America analyst Wamsi Mohan raised the stock's price target from $330 to $380, reflecting expectations of $15 billion to $30 billion in future AI revenue, which, while modest compared to Apple's over $400 billion annual sales, indicates significant growth potential.
- Product Innovation Strategy: Apple is not typically the first to market with new technologies, but rather innovates on existing ones, as seen with the success of AirPods and the iPhone, demonstrating a robust strategy that could similarly apply to AI advancements.
- User Base Advantage: With over 2 billion devices in circulation, Apple's vast user base allows for rapid customer reach upon launching new AI features, while also increasing switching costs and enhancing customer loyalty, laying a solid foundation for future AI developments.
- High-Margin Services Growth: Apple is ramping up its high-margin services segment, which is expected to account for a larger share of revenue in the future, further boosting profitability, alongside an impressive 89.5% increase in dividends over the past decade, highlighting its attractiveness as a quality stock.
See More
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See More
