You don’t have to be Nostradamus to predict what Warren Buffett will have as his top position in the US. Berkshire Hathaway‘s portfolio next year. I think it will almost certainly be cash, including cash equivalents and short-term investments in treasuries.
Berkshire’s cash reserves stood at nearly $277 billion at the end of the second quarter of 2024. Buffett would struggle to spend enough of that money over the next 16 months, meaning cash reserves would no longer be Berkshire’s most important position by the end of next year.
Predicting Buffett’s top stocks isn’t so easy, though. I do have my ideas. I predict that these will be the top five stocks in Berkshire’s portfolio in 2025.
1. Apple
Apple (NASDAQ: AAPL) has reigned as Berkshire’s largest holding for years. It’s still No. 1, despite Buffett selling off about half of his company’s stake in Apple in recent months. I expect the stock to still be at its peak in 2025.
Although Buffett has sold a significant portion of Berkshire’s position in Apple, there’s no reason to believe he doesn’t still like the stock and the company. At Berkshire Hathaway’s annual shareholder meeting in May, he praised Apple’s business.
2. American Express
American Express (NYSE: AXP) is currently Berkshire’s third-largest holding, accounting for 11.8% of the conglomerate’s portfolio. I don’t expect Buffett to buy additional Amex shares, but I do think it will move up a spot.
There are two reasons behind my prediction on American Express. One is that I believe the stock will perform well over the next year or so (assuming no recession). What’s the other reason? I’ll discuss that next.
3. Bank of America
Bank of America (NYSE: BAC) trails Apple as Buffett’s second-largest stock holding right now. But it’s not far ahead of American Express, with Berkshire’s stake in BofA worth about $36 billion and its stake in Amex worth $35.4 billion.
I think American Express can outperform Bank of America in the short term. But more importantly, Buffett sold over $3.8 billion worth of stock in Q2. I wouldn’t be surprised if his sale isn’t complete yet.
4. The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is now Berkshire’s fourth-largest stock holding. I don’t think that will change in 2025.
Coke’s stock price could rise over the next 16 months. However, I wouldn’t count on it rising enough to be ranked No. 3. And while Buffett loves the company and the stock, he hasn’t bought additional Coke shares in years and probably won’t anytime soon.
5. Occidental Petroleum
Chevron is currently ranked #5 in Berkshire’s portfolio. But I expect another oil stock to replace it sometime next year: Occidental Petroleum (NYSE: OXY).
I’m not sure Occidental will deliver bigger gains than Chevron. The two stocks often move in tandem. However, I’d be willing to bet that Buffett will add to his position in Oxy. Berkshire currently owns 28.8% of Occidental, but has received regulatory approval to increase its stake to 50%.
Top Picks From These Predicted Top Five Stocks
I think all five stocks I predict will make Buffett’s top five in 2025 could be long-term winners. Two stand out to me, though.
To borrow a slogan from years ago, Coca-Cola is it — for income investors, at least. Coca-Cola is a Dividend King with a forward dividend yield of over 2.8%.
What’s the group’s top pick for growth investors? I’d pick Apple. The company plans to launch its first generative AI feature soon. Apple could see a big boost in sales if its new Apple Intelligence features encourage consumers to upgrade their iPhones. I predict they will.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
Prediction: These Will Be Warren Buffett’s Top 5 Stocks in 2025 was originally published by The Motley Fool
