2 Growth Stocks in Warren Buffett's Portfolio for Long-Term Investors

Warren Buffett is widely known for his value investing strategy, yet in recent years he has been steering Berkshire Hathaway towards a more growth-oriented investment approach. With nearly half of Berkshire's stock portfolio invested in tech giant Apple, it's clear that Buffett sees potential in growth stocks. However, savvy investors looking to emulate the investing mogul should note that Apple isn't the only big player in Berkshire's holdings with the potential for explosive growth.

Amazon Dominates E-commerce

Amazon stands out as a top contender for those interested in long-term growth investments. Having evolved from a simple online bookstore to a comprehensive everything-store, Amazon has secured a sustainable competitive edge in the realm of online shopping. Customers flock to its platform, enticed by a vast product selection and the speedy, often free, delivery that comes with Prime membership. Amazon's impressive sales growth, from $136 billion in 2016 to $514 billion in 2022, highlights its dominance in the e-commerce space.

Perhaps what's more impressive is Amazon's Operating profit surge from $4.2 billion to $12.2 billion over the same period, likely a key factor in Buffett's interest. This profitability spike owes much credit to Amazon Web Services (AWS), a leading force in cloud computing with the highest market share. In terms of valuation, Amazon seems reasonable, sporting a PEG ratio under 1, hinting at an attractive investment opportunity.

Snowflake: A Unique Addition to Berkshire's Portfolio

Snowflake represents the only IPO stock Berkshire Hathaway has invested in since Buffett took the helm in 1965. As a pioneer in data-warehousing and analytics services, Snowflake empowers businesses to harness and interpret extensive data from various cloud services, an essential capability in today's AI-driven competitive landscape.

The versatility of Snowflake's Data Cloud platform allows organizations to integrate, analyze, and leverage data across multiple cloud providers, a critical advantage in a data-centric world. This innovative approach has catapulted the company’s growth, with product revenue up 34% year over year in the third quarter, and a 52% increase in customers generating over $1 million in product sales in the last twelve months.

Snowflake's promising trajectory is reflected in its soaring non-GAAP free cash flow, which surged 70% compared to the previous year. Despite the shares being down from their peak, the potential for substantial returns makes Snowflake an enticing pick for investors with an eye for growth stocks that carry Buffett's seal of approval.

Amazon, Snowflake, Buffett