Two Strong Stocks to Consider for Long-Term Investment

Investing in growth stocks is a smart way to grow your savings over time. However, it is crucial to select the right companies. In this article, we highlight two impressive businesses that have shown resilience and promise for the future: Amazon (AMZN) and Berkshire Hathaway (BRK.A / BRK.B).

1. Amazon

Amazon is recognized as one of the world's most valuable companies, boasting a market capitalization of $2.46 trillion. Even though it may seem challenging for the stock price to keep rising, Amazon is actively pursuing significant opportunities that promise long-term growth.

Currently, Amazon has more than 200 million Prime members, ensuring a steady stream of revenue from loyal customers. In the latest quarter, Prime memberships surged as the company achieved its quickest delivery speeds ever, a result of major investments in same-day delivery capabilities. Their online store generated approximately $242 billion in revenue last year, which is just a fraction of an expanding global e-commerce market valued at over $6 trillion according to eMarketer.

Moreover, Amazon's business extends beyond e-commerce. Its cloud computing division represents just 17% of total revenue but is responsible for the majority of operational profits. Growth in this sector has accelerated in 2024, fueled by recent investments in artificial intelligence tools designed to help organizations develop their applications.

With Amazon's strong performance in both online retail and cloud services, it positions itself as a robust option for long-term investors. Analysts anticipate an 11% revenue increase in 2025, and a projected 22% annualized earnings growth over the next few years could lead to excellent returns for Amazon shareholders in the coming five years.

2. Berkshire Hathaway

Berkshire Hathaway stands as one of the most reliable stocks for long-term investment. Renowned investor Warren Buffett gained control of this former textile company over half a century ago and transformed it into a conglomerate of exceptional businesses.

Since 1965, Buffett has skillfully turned this previously struggling textile factory into one of the largest firms globally. In 1964, Berkshire had only $920,000 in cash but has since accumulated a staggering $320 billion in cash and U.S. treasury bills by the third quarter of this year.

This cash reserve provides Buffett with substantial resources to seize new investment opportunities when they arise. Additionally, Berkshire Hathaway's diverse portfolio, including sectors like insurance, railroads, energy, and retail, generated an impressive $37 billion in operational earnings this year.

Notably, Berkshire also holds significant investments in major companies such as Apple, Coca-Cola, and American Express. By the end of the third quarter, the total value of these three investments amounted to $139 billion, part of an overall equity portfolio worth $271 billion.

Berkshire's shares have doubled in value over the past five years, raising concerns about the future once the 94-year-old Buffett is no longer at the helm.

In preparation for succession, Buffett has appointed Greg Abel, who already manages all of Berkshire's non-insurance businesses, to take over. Buffett has expressed confidence in Abel’s readiness to lead the firm and make strategic investment decisions.

Investing in Berkshire Hathaway means not only acquiring stakes in various businesses but also entrusting talented leaders who run them. This quality predicts that Berkshire's stock will continue rewarding investors long after Buffett's time as CEO.

investment, stocks, growth