Berkshire Hathaway’s Future with Buffett and His Investment Choices

Warren Buffett continues to steer the helm at Berkshire Hathaway, but he’s expected to pass on the reins of investment decisions to executive Greg Abel by the end of 2025. However, as of now, there’s been no official leadership transition, which means that Buffett still has the final say, as reflected in the company’s latest 13F filings due on May 15.

Consider this: there are thousands of public companies globally, yet Berkshire Hathaway maintains only about 40 positions in its equity portfolio. This means that if a stock makes it into Buffett’s portfolio, he likely has a strong preference for it. And if he recently acquired more shares of certain stocks, well, you can bet he really likes them.

Among those stocks, Apple and American Express are relatively small positions. Yet, I believe that Amazon, Domino’s Pizza, and Pool Corporation are three noteworthy investments Buffett believes in for the long haul.

Right now, Amazon’s stock has dropped by about 17% from its peak. Historically, those dips have turned out to be good times to buy, and given the ongoing growth of Amazon Web Services (AWS), I think this might be another prime opportunity.

In the first quarter of 2025, AWS reported an impressive $117 billion in annual revenues. If AWS were a standalone business, it would rank among the largest globally. There’s potential for even more growth. Amazon’s CEO, Andy Jassy, pointed out that a staggering 85% of IT spending is still on-site. This could shift dramatically to cloud computing platforms like AWS in the next decade.

This transition in spending has already got Amazon’s management excited about possibly doubling AWS’s size. Plus, with the rising trend in artificial intelligence, AWS stands to benefit significantly as businesses look to leverage AI more efficiently.

It’s worth noting that AWS is also Amazon’s most profitable division, boasting an operating margin that approaches 40%. This growth translates into increased profits for Amazon, solidifying the belief that its stock is a compelling long-term investment.

Berkshire’s stake in Amazon is more substantial than its investments in Domino’s and Pool, although this past quarter, it only bought minimal shares. For Domino’s, Berkshire ramped up its investment in the leading pizza chain by 10%. This makes sense, considering Buffett once joked that he’d prefer to invest in chewing gum—something consistently in demand—rather than tech that changes rapidly. The constant appeal of pizza remains, and Domino’s is well-positioned to remain a leader in the industry.

Despite being a slower-growing business, Domino’s generates steady free cash flow, allowing it to buy back shares and consistently boost dividends for its shareholders. The management remains focused on keeping franchisees satisfied, which is crucial for maintaining profitability.

On the other hand, while Pool Corporation saw a significant rise in its investments, it hasn’t been performing well lately. Issues like a decline in new swimming pool installations caused sales to drop, with expectations of earnings per share falling notably compared to previous years. Still, there’s predictability in its revenue since around 60% comes from existing customers who require ongoing services.

In the first quarter, Pool provided over $100 million to shareholders through buybacks and dividends—a significant figure for an $11 billion company. They continue to enhance dividends and share buyback programs, similarly to Domino’s, indicating potential future rewards.

So, while the industry does face challenges, it’s reasonable to expect a rebound in new pool installations sometime ahead.

In my opinion, Amazon, Domino’s, and Pool are solid Buffett stocks for long-term investors. However, if you’re looking to invest right now, Amazon stands out with its potential, especially given its AWS segment. Domino’s and Pool are also stable choices, but I believe Amazon’s growth trajectory has a much higher ceiling.

That’s certainly something to consider before buying Amazon’s stock. But it’s important to do your research and make informed decisions based on your financial goals.