2 Warren Buffett Stocks to Keep Forever

Warren Buffett’s investment career has inspired countless investors to follow his strategy. There’s no better way to start emulating the Oracle of Omaha than to watch the stock selection at Berkshire Hathaway.

Berkshire owns dozens of private businesses, but Buffett looks at buying shares the same way he would buy the whole business. Here are two Berkshire portfolio stocks to hold onto for life.

1. Coca-Cola

Coca cola (K.O 0.17%) has been a constant in Berkshire’s stock portfolio for 35 years. The stock continues to perform strongly, up 22% so far in 2024.

Despite weak trends in consumer spending this year, the beverage industry has remained resilient. Coca-Cola posted a 15% year-over-year increase in adjusted revenue in Q2, driven by balanced increases in concentrate prices and sales.

The company has a strong brand that gives the business a sustainable competitive advantage. Coca-Cola has valuable relationships with retail partners due to the brand’s ability to drive sales. For example, the company recently launched a lighter and more affordable bottle in India that has extended shelf life, which helps reach more customers and reduce costs.

Coca-Cola is also harnessing the power of artificial intelligence (AI) to adjust prices, which leads to increased revenue, but will also lead to more efficient operations over time. The company’s margins rose last quarter, and that’s a good sign of what’s to come in a stronger demand environment.

The carbonated soft drinks industry continues to show long-term growth potential. Statista expects earnings from the home market to grow 5% annually through 2028. Coca-Cola’s stock value should rise over the long term, and investors also benefit from a forward dividend yield of 2.70% to pay returns.

2. Apple

Apple (AAPL -0.44%) Shares soared to new highs after Apple Intelligence announced in June. Investors see a strong upgrade cycle for the iPhone, which generates the bulk of Apple’s $385 billion in annual sales.

While Berkshire reduced its stake massively in Q2, Buffett isn’t selling Apple. He previously called Apple a superior business to any Berkshire-owned company and noted at this year’s shareholder meeting that the stock would likely remain Berkshire’s largest investment through the end of the year.

With an installed base of over 2.2 billion active devices, Apple Intelligence is a free update coming to Apple’s software, but is expected to drive a major upgrade cycle for Apple over the next few years, as it will require devices with newer processors. AI features will undoubtedly reshape the way millions of customers interact with their devices, and that could lead to another period of strong growth.

Ultimately, the most attractive opportunity for Apple is the impact that a growing installed base of devices will have on its lucrative services business. Services revenue has already hit new records for the launch of Apple Intelligence next month, up 14% from last quarter. Apple has made investments to expand its content offering on Apple TV+ and other services, which has led to paid subscriptions exceeding 1 billion.

Apple stock trades at a higher price-to-earnings ratio than when Buffett first bought shares in 2016, but investors should expect the stock to follow Apple’s earnings growth. It is one of the most valuable brands in the world that should become more valuable in the age of AI.