Three Warren Buffett Tech Stocks To Buy: AMZN, AAPL, STNE

Berkshire Hathaway’s (NYSE: BRK-A) (NYSE: BRK-B) owner Warren Buffett is the most popular investor who built his $89.9 billion net worth by investing in value companies. He was among the few who profited from the 2008 crisis. In the current Covid-19 crisis, he is holding a lot of cash as most companies are not prepared for a pandemic-like crisis. Many companies have frozen their global operations and paused stock buybacks and capital spending to save money for the pandemic-driven recession.

How Warren Buffett Deals With COVID-19 Crisis?

One sector which has emerged as a clear winner in the pandemic is technology. As people stay at home, they are spending more time online doing activities like shopping, working, video streaming, and gaming. Warren Buffett is not quite into tech stocks but he has invested in tech companies related to finance and consumer goods.

Buffett selects his stocks using the value investing approach in which he looks at a company’s financials like revenue, earnings, cash flow, and debt. He also looks at a company’s business model, brand value, its target market, and competition. Combining Buffett's expertise and tech sector’s growth momentum, here are three tech stocks, the Oracle of Omaha has exposure to.

Warren Buffett-Owned Tech Stocks

It comes as no surprise that a value investor like Warren Buffett has holdings in trillion tech dollar companies Apple and Amazon.

Apple - A Company With Strong Fundamentals

Apple (AAPL) has proved to be Buffett’s most successful investments of all time. Berkshire Hathaway holds a 5.7% stake in Apple which is currently valued at ~$71 million, the highest valued stock in Buffett’s portfolio. According to Visual Capitalist, Apple was the world’s third most valuable brand of 2020 with a brand value of $140 billion.

Apple is known for its premium products like iPhones, MacBook, and iPad. However, sales of these products have been slowing. Hence, the company has been increasingly focusing on its services segment which generates recurring cash flows. It earns 18% of its revenue from services such as Apple Music, Apple Pay, and Apple TV Plus. In fiscal 2019, Apple’s revenue fell 2% YoY (year-over-year) as a 16% growth in service revenue was partially offset by a 5% decline in product revenue.

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