Warren Buffett’s Berkshire Hathaway has made a massive $99 billion bet on just two stocks: Apple and Coca-Cola. Buffett’s investment firm has put half of its equity holdings into Apple, and has held onto Coca-Cola shares since the late 1980s. Buffett’s strategy focuses on companies with strong brands and consistent financials.
Apple’s stock has surged 31% this year, and many see it as Buffett’s smartest move yet. However, some worry that relying so heavily on one tech company could be risky, given the threat of changing consumer trends and market shake-ups. Despite these concerns, Morgan Stanley analyst Erik Woodring believes Apple could rise another 20% to $273 per share.
Apple’s growing services business, which includes the App Store, streaming, and cloud services, has helped boost profit margins and catch Wall Street’s attention.
Buffett’s big bets on icons
Meanwhile, Coca-Cola remains a classic Buffett choice.
His initial investment in the late ’80s has grown to a $27.67 billion stake. Although the stock has dropped 12% from its September peak, investors still see value in the company’s dependable growth and steady dividends. Coca-Cola just raised its dividend for the 62nd straight year, offering a 3% yield.
Morgan Stanley’s Dara Mohsenian predicts Coca-Cola could climb 19% to $76 per share. The company’s revenue rose 5% in the first nine months of 2024, and management expects 10% organic sales growth for the year, showing the brand’s enduring appeal. While tech stocks can be volatile, Coca-Cola’s simple, proven business model provides stability that’s hard to match.
Buffett’s big bets on these two iconic companies reflect his confidence in their long-term potential, even as some question the risks of such a concentrated portfolio.
