Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Analytics and Moody's Investors Services. The Moody's Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and SaaS solutions supporting banking, insurance, and know your customer workflows. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as structured finance securities. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody's Corporation in September 2000. Moody's Corporation was founded in 1900 and is headquartered in New York, New York.

Moody's Corporation демонстрирует сильные финансовые показатели с высоким уровнем прибыли и устойчивым ростом выручки. Показатель ROE на уровне 56.79% значительно превышает медиану отрасли, что указывает на высокую рентабельность капитала. Тем не менее, компания имеет высокие мультипликаторы, такие как P/E на уровне 34.05, что на 144.8% выше медианы, что может говорить о переоцененности акций. Долговая нагрузка также вызывает опасения, так как коэффициент долга к собственному капиталу составляет 1.70, что на 264% выше медианы, что увеличивает риск финансовой устойчивости. В то же время, динамика прибыли и выручки демонстрирует устойчивый рост, что является позитивным сигналом для инвесторов. Важно отметить, что отсутствие дивидендов может снизить привлекательность для некоторых инвесторов. В целом, несмотря на сильные операционные показатели, высокие мультипликаторы и уровень долговой нагрузки создают риски для оценки компании, что необходимо учитывать при принятии инвестиционных решений.

Moody's Corporation

Key Points
Berkshire Hathaway received Moody's stock when it was spun off from Dun & Bradstreet in 2000.
The ratings agency's stock may have a low yield today, but over time the dividend keeps growing.
Warren Buffett loves dividend stocks, and even though he's no longer at the helm of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), these investments remain a core group of its equity positions.
Many investors are familiar with Buffett's admiration for his trio of favorite stocks: Coca-Cola, American Express, and Apple, but less so with some of his smaller positions, like Moody's (NYSE: MCO). Moody's stock makes up 3.6% of Berkshire's whole portfolio, and it fits the Buffett schema for its dominant position in an industry that can withstand economic turbulence, as well as its dividend.
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At the current stock price, Moody's dividend yields only 0.85%, but investors should look at the bigger picture when considering dividend stocks. Features like reliability and growth are important for dividends, and you don't have to look further than how much money Berkshire Hathaway makes from Moody's dividends to see why.
Berkshire Hathaway received shares of Moody's stock in 2000 when it was spun off from Dun & Bradstreet. Although it originally had 48 million shares, it has sold off shares at different times and currently owns almost 25 million, worth about $11 billion. The cost basis for the position was $248 million, which means the investment itself has increased 4,400%. But Berkshire Hathaway has gained much more than that in annual dividends.
Moody's annual dividend right now is $4.12, and the cost basis per share is $10, making the yield on cost basis 41.2%. Berkshire Hathaway made $93 million in dividends from Moody's stock in 2025, which means it makes back its entire investment in dividends every few years. As management continues to raise the dividend, the yield on the cost basis will increase, too.
Should you buy stock in Moody's right now?
Before you buy stock in Moody's, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Moody's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $514,000!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,029!*
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*Stock Advisor returns as of March 14, 2026.
American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express and Apple. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's and is short shares of Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

You Won't Believe How Much Money Berkshire Hathaway Gets From Moody's Dividends

Key Points
Greg Abel took over for Warren Buffett at the start of 2026, managing the bulk of Berkshire's portfolio.
Abel said there are nine stocks where Berkshire will exhibit limited trading activity.
Many of those stocks look like good opportunities for investors right now.
Warren Buffett once wrote, "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever." While Buffett constantly aimed to buy only wonderful businesses, few met the criteria for becoming the stocks Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) would hold forever.
In his first letter to shareholders, Buffett's successor at Berkshire, Greg Abel, called out nine companies he describes as core holdings in the company's equity portfolio. Combined, they account for over 60% of the company's portfolio. Investors should expect "limited activity in these holdings," Abel said. Many of the stocks Abel mentioned align with previous comments from Buffett, but not all of them. Here are the nine stocks Abel plans to hold forever.
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1. Apple (19% of marketable equities)
Apple (NASDAQ: AAPL) is Berkshire Hathaway's largest marketable equity position. That's despite Warren Buffett's decision to sell more than three-quarters of its shares over the last two years of his tenure as CEO. Abel's comments in his shareholder letter suggest that the selling spree could be over.
Apple's lower capital intensity compared to its big-tech peers has made it stand out so far in 2026. While hyperscalers are spending over $700 billion in combined capital expenditures to build out artificial intelligence (AI) data centers this year, Apple is on track for another year of free cash flow exceeding $100 billion.
Despite delays in its revamped Siri, meant to introduce more powerful AI features to its devices, Apple saw strong sales growth last quarter across both devices and services. iPhone sales, in particular, stood out, up 23% year over year, bolstered by strength in Greater China. If the Siri revamp is a success, it could post another strong year of iPhone sales this year as it spurs a major upgrade cycle.
While the stock may seem expensive at 30 times forward earnings, its share repurchase program, solid revenue growth, and expanding margins make it a fair price for the stock.
2. American Express (15%)
American Express (NYSE: AXP) has been a core holding for Berkshire for over 30 years, and Abel intends to continue to hold the stock indefinitely.
Amex is successfully executing on its efforts to attract high-end consumers and small businesses with its card portfolio. It refreshed the Platinum card last year for both consumers and businesses, and it was met with praise despite the increase in annual fees. Those fees are growing quickly, but they're now just a small part of the business. Net interest income is also climbing, as Amex has shifted to offering more credit lines instead of charge cards paid off in full each month. Still, the majority of revenue comes from the interchange fees it collects from payment processors on each transaction.
Amex is well-positioned to capitalize on the continued shift to digital payments. It's using its flagship cards to attract young, high-income customers to its product and keep them for the long run. That enables it to generate strong operating leverage, driving earnings growth faster than its top line. As such, its forward P/E ratio of just 17 looks like a great value right now.
3. Coca-Cola (10%)
Coca-Cola (NYSE: KO) is another longtime holding established by Buffett. The company's moat stems from its global brand recognition. That enables it to raise prices in established markets and use its existing products to introduce new ones and expand its addressable market. The result is steady revenue growth and margin expansion.
Management targets mid-single-digit revenue growth over the long run, and it achieved just that last year. Its 5% organic revenue growth for the year was primarily driven by price increases. Investors can expect similar growth in 2026 with slightly better earnings-per-share growth from margin improvements and share repurchases.
With the stock trading at 24 times forward earnings, it might be a bit overpriced given the slow-and-steady nature of the business. But considering Berkshire's sitting on $29.5 billion worth of capital gains on its original investment of $1.3 billion, it's unlikely Abel wants to sell those shares anytime soon.
4. Moody's (4%)
Buffett never called out Moody's (NYSE: MCO) as one of his forever stocks, but Abel made it clear that it's a core position in his letter to shareholders. Berkshire originally acquired the stock in 2000 and sold off roughly half of it in 2009 and 2010. But Buffett didn't touch the stock after 2013.
Moody's is a credit rating agency that's trusted worldwide. That's important for investors and bond issuers alike. Bond investors want to know whether debt issued by one company is safer or riskier than a bond issued by a completely different company. To do that, they need to be rated by the same agency. That creates a network effect, giving Moody's a wide moat for its Investors Service business, which accounts for about two-thirds of its income. The rest of the company's earnings come from its Analytics business, which is growing faster. Moody's is using acquisitions to help scale, expanding its market and services.
Pricing power for the ratings business and operating leverage in its analytics business should help push earnings per share up double digits next year. Management guided for 9% revenue growth. With shares trading for 28 times forward earnings estimates, it looks like a fair price to pay for the stock.
5-9. Japanese trading houses (14%)
In 2019, Buffett and Charlie Munger established positions in each of the five Japanese trading houses: Mitsubishi (OTC: MSBHF) (OTC: MTSU.Y), Mitsui (OTC: MITSY) (OTC: MITSF), Itochu (OTC: ITOCF) (OTC: ITOCY), Sumitomo (OTC: SSUMF) (OTC: SSUMY), and Marubeni (OTC: MARUF) (OTC: MARUY). He added to them over the years, exceeding 10% stakes in several last year.
These five companies all operate in a similar manner to Berkshire Hathaway. As such, Abel sees them not just as investments but also as potential partners for international investments. With the five trading houses, Abel has a wealth of experts to consult across multiple industries.
Many of the stocks continue to trade at attractive valuations. Berkshire has borrowed yen equal to the amount of its cost basis, hedging some of the currency risk of the investment while taking advantage of the country's low interest rates. Meanwhile, the dividends paid by the businesses more than cover the interest paid on the loan.
Abel said other companies could eventually become core holdings, but for now he may be focused on trimming non-core positions and on the biggest and best investments in Berkshire's portfolio.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $522,791!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,132,678!*
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*Stock Advisor returns as of March 11, 2026.
American Express is an advertising partner of Motley Fool Money. Adam Levy has positions in Apple. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's and is short shares of Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Greg Abel Has Over 60% of Berkshire Hathaway's Stock Portfolio Invested in 9 Forever Stocks

Key Points
Berkshire ended 2025 with a huge cash pile.
The company continued to be a net seller of stocks in Q4 and didn't buy back any of its own shares.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
When Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) reported its Q4 results over the weekend, the conglomerate was once again flush with cash on its balance sheet. The market had a strong 2025 and is hanging in there thus far in 2026, so it makes you wonder if Berkshire is being too patient with its cash.
The company ended the year with a whopping $373.3 billion in cash. That was down from the record $381.6 billion in cash the company had at the end of Q3, as it spent $9.7 billion to acquire OxyChem, the chemical subsidiary of holding Occidental Petroleum.
However, Berkshire was once again a net seller of stocks for the 13th straight quarter. Its main source of funds continues to be from the sales of Apple and Bank of America, two stocks it has been selling pretty consistently.
Apple, however, remains Berkshire's largest holding, and new CEO Greg Abel pointed to it as being a long-term core holding, along with American Express, Coca-Cola, and Moody's in the U.S. He also highlighted several Japanese companies that fell into this bucket, as well.
Berkshire once again decided not to repurchase any of its own shares. It was the sixth straight quarter that the company has decided not to do a buyback. However, the company did start to buy back shares earlier this month.
In the past, Berkshire would repurchase its shares when they were trading at 1.1 times book value or below, before later increasing it to 1.2 times. More recently, it stopped using price-to-book ratio (P/B) altogether, with former CEO Warren Buffett saying the metric wasn't always reflective of the stock's intrinsic value. The stock has come down from the 1.8 P/B it had reached and is now around 1.4 times, which is a bit more in line with where the stock has traded over the past several years.
In his first annual letter as CEO, Abel preached patience with Berkshire's huge cash hoard, saying the company needed to remain disciplined and wait for its pitch in the heart of the zone.
He also emphasized the importance of risk management, including outside its large insurance businesses.
Is it time to buy Berkshire stock?
Investors seem to have started to become a bit frustrated with Berkshire's lack of action, and with Buffett no longer at the helm, they may not have the same patience with its new CEO. However, taking a large stake in a stock in which Berkshire doesn't have conviction or buying its own stock at an unattractive valuation also aren't smart moves. That said, in a world where technology is quickly coming to dominate, Berkshire's lack of expertise in this area is notable.
I think Berkshire will be a good long-term investment and that the stock is finally starting to approach a more attractive valuation. Meanwhile, with the recent buyback, the company finally finds its own stock valuation attractive enough to buy its own shares, so investors can begin to follow suit.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $534,008!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,073!*
Now, it’s worth noting Stock Advisor’s total average return is 949% — a market-crushing outperformance compared to 190% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 9, 2026.
Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Berkshire Hathaway Being Too Patient With Its Cash?

Key Points
Berkshire Hathaway's now-former billionaire boss was a net seller of stocks for 13 consecutive quarters leading up to his retirement.
Warren Buffett spent a staggering $78 billion purchasing shares of a stock that's near and dear to his heart from July 2018 to June 2024 -- but went cold turkey for his final 19 months as CEO.
Successor Greg Abel's investment philosophy is modeled after Buffett, meaning patience should pay off handsomely.
It's truly the end of an era on Wall Street. After he transformed Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) into a trillion-dollar business over roughly six decades, billionaire Warren Buffett hung up his proverbial work coat for the final time on Dec. 31 and stepped down as the company's CEO (although he's still chairman of the board of directors).
But even though the Oracle of Omaha is no longer overseeing Berkshire's day-to-day operations or its $318 billion investment portfolio, his legacy is still being felt. For instance, the quarterly filing of Form 13Fs on Feb. 17 gave investors a look at the stocks Buffett bought and sold in his final quarter as CEO.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
However, Berkshire Hathaway's full-year operating report is even more telling. The company's full-year results, released on Feb. 28, show that its now-former billionaire boss retired without having purchased his favorite stock -- a company he once spent $78 billion buying over the course of six years -- in 19 months!
Selling was the norm for Warren Buffett's final three years as CEO
Although Berkshire Hathaway owns around five dozen companies, and these businesses, including insurer GEICO and railroad operator BNSF, generate tens of billions in annual income, it's the investment portfolio the Oracle of Omaha oversaw that typically drew the most attention.
Warren Buffett had a knack for identifying value that was hiding in plain sight. Long-term holdings in Coca-Cola, American Express, and Moody's, along with significant stakes in Apple and Bank of America, account for a large share of Berkshire's unrealized investment gains.
But Wall Street's most famous long-term investor wasn't much of a buyer of equities leading up to his retirement. According to Berkshire Hathaway's consolidated cash flow statements, Buffett was a net seller of stocks for 13 consecutive quarters (Oct. 1, 2022 – Dec. 31, 2025) until his departure. Collectively, nearly $187 billion in net stock was sold over this period.
The actions of Berkshire's former chief can be explained in one word: valuation.
Buffett was unwavering in his desire to get a good deal and would willingly sit on his hands and be patient until equity valuations made sense before deploying Berkshire's capital. His persistent net selling reflects how historically expensive the stock market has become over the last couple of years, and how challenging it's been to locate a good deal.
This is especially true of Warren Buffett's favorite stock.
The Oracle of Omaha went cold turkey on his favorite stock to buy
Based on several years of Berkshire's quarterly 13F filings, you might venture a guess that a core holding, such as Apple, Occidental Petroleum, or perhaps Chevron, is Buffett's favorite stock to buy. But no company in the $318 billion investment portfolio comes remotely close to matching the nearly $78 billion he spent from July 2018 to June 2024 buying shares of the company he holds nearest and dearest to his heart... Berkshire Hathaway.
Before July 2018, it was virtually impossible for Buffett or his now-late right-hand man, Charlie Munger, to green-light share buybacks. In order to buy back shares, Berkshire Hathaway stock had to dip to or below 120% of book value -- a level that was never reached.
However, on July 17, 2018, Berkshire's board amended the share repurchase covenants to give its billionaire boss more freedom to act. The new criteria enabled Buffett to repurchase his company's shares without any limitation as long as:
Berkshire Hathaway has at least $30 billion in combined cash, cash equivalents, and U.S. Treasuries on its balance sheet; and
Buffett viewed his company's shares as intrinsically cheap.
This last point was intentionally left vague to allow the Oracle of Omaha to buy shares of his favorite company when he saw value.
But between June 1, 2024, and Dec. 31, 2025, value has been nonexistent. Over this 19-month stretch, leading into his retirement, Warren Buffett didn't spend a dime to repurchase his company's stock.
When Berkshire's billionaire investor was deploying close to $78 billion over six years, his company's stock was rangebound at a 20% to 50% premium to book value. In the 19 months leading up to Buffett's departure, Berkshire Hathaway's premium to its book value rose to between 60% and 80%.
Buffett is unwavering when it comes to value -- even with his favorite stock!
Greg Abel aims to pounce on price dislocations just like his predecessor
While it's probably disappointing for investors to see one of Wall Street's premier money managers enter retirement as a net seller of stocks for three years, and having not purchased his favorite stock for 19 months, being a disciplined investor and waiting for price dislocations was Warren Buffett's recipe for success.
With longtime Berkshire Hathaway executive Greg Abel succeeding Buffett as CEO, investors should expect more of the same: patience producing profits.
Abel's investment philosophy is modeled after that of his predecessor, with value being of utmost importance. In Abel's first annual letter to shareholders, he discussed share buybacks as a tool to create value, but also emphasized the importance of getting proper value for Berkshire's investments:
Share repurchases are another important capital allocation option. We will buy back Berkshire shares when they trade below our estimate of intrinsic value, conservatively determined, ensuring that repurchases enhance per-share value for continuing owners.
Following the modest swoon in Berkshire's stock on March 2, its Class A shares were trading at a 44% premium to book value. This effectively marks a two-year low and aligns with a level when Buffett was previously a buyer of his favorite stock.
Perhaps unsurprisingly, on March 5, investors learned via regulatory filings and an interview on CNBC with Abel that he had recommenced share repurchases. With $373.3 billion in cash, cash equivalents, and U.S. Treasuries on Berkshire's balance sheet, Abel has the flexibility to follow in his predecessors' footsteps and deliver value to his company's shareholders when price dislocations arise.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $534,008!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,073!*
Now, it’s worth noting Stock Advisor’s total average return is 949% — a market-crushing outperformance compared to 190% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 9, 2026.
Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Chevron, and Moody's. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Warren Buffett Retired Having Not Purchased His Favorite Stock -- a Company He Spent $78 Billion Buying Over 6 Years -- in 19 Months

Key Points
New Berkshire Hathaway CEO Greg Abel provided details on how he plans to run the company.
Over 18 pages, Abel discussed Berkshire's corporate structure and broader business.
He also discussed the company's massive equity portfolio and plans for capital distributions.
New Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) CEO Greg Abel officially kicked off his tenure as the large conglomerate's new chief with an 18-page letter to shareholders, officially replacing the annual letter that former CEO Warren Buffett had penned for decades. Abel provided many details, including how he plans to run the company, an overview of its current state, and an unprecedented look at how Berkshire views many positions in its roughly $315 billion equities portfolio.
Here are three things investors need to know.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
1. Berkshire Hathaway's corporate structure moving forward
Berkshire is comprised of many businesses, including insurance, energy, mortgages, and railroads, to name a few. In total, Berkshire has 51 noninsurance operating divisions.
Abel said the company will maintain its decentralized model in which the leaders of each Berkshire business have greater autonomy, less bureaucracy, and, of course, accountability, a combination that Abel and the company have seen great results from and believe is a "competitive advantage."
The insurance business will, of course, be led by Berkshire veteran Ajit Jain, who is highly praised by Buffett and Abel. Adam Johnson, who has served as the president and CEO of Berkshire subsidiary NetJets and worked at Berkshire for three decades, will become president of all of Berkshire's consumer products, services, and retailing businesses, comprising 32 noninsurance operating companies.
Interestingly, Abel noted he will ultimately be responsible for allocating capital in the company's large equities portfolio, which is how Berkshire invests the float generated by the insurance operations. Abel has never served as a portfolio manager or officially helped run the equities portfolio. Top investing lieutenant Ted Weschler will continue to manage about 6% of the portfolio.
2. Most of Berkshire's equities portfolio is expected to have "limited activity" moving forward
For those who follow Berkshire's equities portfolio, Abel's letter provided details about the company's plans that Buffett rarely provided. The new CEO said that four stocks in Berkshire's portfolio, Apple, American Express, Coca-Cola, and Moody's, will likely see "limited activity in these holdings." This surprised many because Berkshire has significantly trimmed its Apple position, something Buffett rarely does when he plans to hold a stock long term.
Abel described these four companies as "businesses we understand well, have a high regard for their leaders, and expect will compound over decades," though he did not rule out changing the concentration of one of these holdings if "we see fundamental changes in its long-term economic prospects." Abel also said the "same criteria" would apply to Berkshire's investments in five Japanese trading houses.
Collectively, these nine stocks made up about two-thirds of Berkshire's portfolio when Abel wrote the letter. This was arguably the greatest insight from Abel, because I don't think the market expected Berkshire's investment philosophy to be this rigid moving forward, even though Berkshire does like to buy stocks it can hold forever.
Furthermore, Buffett has often said in recent years that Berkshire's massive size makes it difficult for the company to move in and out of investments as it once did or to find anything big enough that makes sense to invest in. However, Abel's comments have led some to wonder whether Berkshire's time of active investing may be coming to an end.
3. How dividends and share repurchases will be handled
With Buffett gone, it's going to take a while for Abel to command the same premium for Berkshire's stock that Buffett, arguably the greatest investor of all time, once did. This has led investors to wonder if Berkshire might consider more aggressive capital distributions to shareholders. After all, the company has a war chest of $370 billion in cash and short-term U.S. Treasury bonds.
Some analysts and experts believed Berkshire might start paying a dividend for the first time. However, Abel said the company's approach to dividends remains the same: It will not pay them so long as it believes it can continue to create value by investing in the business. However, Abel did not completely rule out a dividend, noting that the company's board of directors reviews this policy annually.
Berkshire also hasn't been very aggressive with share repurchases in recent years. Abel reminded shareholders that the company's policy is to repurchase shares when they trade below what Berkshire's management team believes to be the company's intrinsic value, thereby increasing shareholder value. Abel noted the company will also consider purchasing large blocks of shares from major investors when possible.
Should you buy stock in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $534,008!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,073!*
Now, it’s worth noting Stock Advisor’s total average return is 949% — a market-crushing outperformance compared to 192% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 8, 2026.
American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

New CEO Greg Abel's 18-Page Letter to Shareholders Is an Unprecedented Look Into the Future of Berkshire Hathaway. 3 Things Investors Should Know

Key Points
In a letter to shareholders, new CEO Greg Abel provided a detailed overview of how Berkshire Hathaway is positioned and how he plans to run the company.
Abel also touched on Berkshire's massive, roughly $318 billion equities portfolio, providing details that former CEO Warren Buffett rarely has.
Abel specifically called out four stocks in Berkshire's portfolio where he expects to see "limited activity."
New CEO Greg Abel just delivered his first annual letter to Berkshire Hathaway's (NYSE: BRKA)(NYSE: BRKB) shareholders, a tradition that former CEO Warren Buffett carried out for the past six decades. The letter was 18 pages and provided a ton of details on how Abel plans to run the company, a detailed overview of all of Berkshire's operating businesses, and, of course, comments on Berkshire's massive, roughly $318 billion equities portfolio.
Interestingly, Abel called out four stocks that Berkshire owns, which together account for a large portion of the portfolio. These are "businesses we understand well, have a high regard for their leaders, and expect will compound over decades." Abel also said he expects "limited activity in these holdings," providing big clues about Berkshire's investment strategy that Buffett rarely did.
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Here are the four stocks Abel referenced that he expects to compound for decades.
Apple -- 18.9% of portfolio
The iconic consumer tech giant Apple (NASDAQ: AAPL) has long been the largest position in Berkshire's portfolio, at one point accounting for 40% of it. Buffett reportedly got interested in the company, which Berkshire first bought in 2016, when Buffett saw how distraught his friend became when he thought he'd lost his iPhone.
Still, some might have been a bit surprised to see Abel include Apple on this list, since Berkshire has trimmed its stake in Apple by about 75% in recent years. As Buffett has said in the past, Berkshire usually does not trim positions, but will eventually sell the entire stake once it starts selling. Apple could be a unique case, given how large the position has become and how well large tech and artificial intelligence stocks have performed in recent years. At the time, Buffett may have thought it made sense to take gains and lower exposure after such a strong run.
Apple has received some criticism in recent years for not having as strong an AI strategy as its peers in the "Magnificent Seven." But it also hasn't devoted hundreds of billions to AI-related capital expenditures, a conservative approach that the team at Berkshire probably appreciates. The company also continues to buy back stock, another attribute Buffett and the team have frequently looked for in their holdings.
American Express -- 14.7%
No stock has been more of a constant in Berkshire's portfolio than the payments and credit card company American Express (NYSE: AXP). Buffett actually first purchased American Express in 1964, when the company was struggling. It added significantly to its stake in the 1990s and hasn't touched it since. During the pandemic's height, Buffett referred to American Express' brand as "special" and urged the company to protect it at all costs.
Buffett is absolutely right. How many companies do you know that can charge a nearly $900 annual subscription to one of their platinum cards? American Express is not just a regular consumer lender, but the cream of the crop. The company attracts higher-income borrowers who tend to be more resilient during a recession.
But the real differentiator is its closed-loop payment network, which facilitates payment transactions between merchants and their customers and generates steady, recurring fee revenue. Investors love payment networks because setting up the network takes time and creates a strong moat. AmEx is another company that buys back a lot of stock, and that has also grown earnings tremendously over the years.
Coca-Cola -- 10.2%
The iconic beverage company Coca-Cola (NYSE: KO) is another stock Berkshire has owned for decades, and it's proven to be one of the top defensive consumer staple stocks in the market. Unlike many other hedge funds, Berkshire's team likes to think long term and buy stocks that it can own forever. While Coca-Cola is not your fast-growing AI stock, it also has advantages.
Coca-Cola is a company that will endure for decades because AI can't replicate physical beverages, at least as far as I know. Sure, AI may play a role in making Coca-Cola's products. It's no surprise to see the stock up over 17% this year. This is why you buy defensive stocks -- for when there are structural concerns about the economy or significant geopolitical concerns.
Coca-Cola is also a Dividend King, meaning it has paid and increased its annual dividend for at least 50 years. In fact, Coca-Cola has achieved this feat for 63 years. The company also still has an attractive 2.6% dividend yield, despite the surge in share price.
Moody's -- 3.7%
The financial services, software, and ratings company Moody's (NYSE: MCO) gets much less attention than the three stocks mentioned above, so it may have been a little surprising to see it make Abel's exclusive list. However, Berkshire first bought the stock back in 2000, and it is the eighth-largest holding in Berkshire's portfolio.
One of Moody's key businesses is providing ratings on companies' debt. These ratings are imperative because they help determine how risky that debt is and, therefore, how it is priced. Virtually anyone raising debt needs a rating. Moody's is one of three main players that control about 95% of this market, which is also heavily regulated, an attribute that tends to keep out competition.
Moody's has another strong, growing unit that provides data and analytical tools that businesses use to make critical decisions. AI could affect this business, but the company has a deep foothold, making it likely that it can adapt and use AI to its advantage rather than being totally replaced by it.
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $534,008!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,073!*
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*Stock Advisor returns as of March 7, 2026.
American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

4 Berkshire Hathaway Stocks That New CEO Greg Abel "Expect Will Compound Over Decades"

Key Points
In his letter to shareholders, new Berkshire Hathaway CEO Greg Abel listed four companies that he views as "core holdings" in the large equities portfolio.
What's more interesting is the companies he didn't list.
Some of the omissions included stocks in the portfolio's current top five holdings.
New Berkshire Hathaway CEO Greg Abel launched his tenure as the company's new chief with an 18-page letter to shareholders that shed light on many details regarding how Abel plans to run the sprawling company, how Berkshire is currently performing, how it is positioned for the future, and other, perhaps more surprising comments about plans for Berkshire's massive $318 billion equities portfolio.
For instance, Abel cited four key positions in Berkshire's portfolio -- Apple, American Express, Coca-Cola, and Moody's -- that he expects "will compound over decades" and will experience "limited activity," barring any fundamental changes in their long-term prospects. What's equally interesting is that Abel did not include two of Berkshire's current top-five positions in the group. Are these two stocks now on the chopping block?
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Bank of America -- 8.1% of portfolio
One stock not mentioned by Abel as a "core holding" is Bank of America (NYSE: BAC), the second-largest bank by assets in the U.S. and the fourth-largest position in Berkshire's portfolio. While dumping many of its bank stocks during the pandemic, Berkshire loaded up on Bank of America, signaling that it would be its preferred large bank. While Buffett and Berkshire have a long history with the banking sector, they have also clearly soured on the industry.
Berkshire has also cut its stake in Bank of America in half over the past few years. In 2011, following the Great Recession, Berkshire injected $5 billion of capital into Bank of America, in return for preferred stock and warrants that allowed it to acquire 700 million common shares at a price of $7.14 each in 2017, so Bank of America has undoubtedly been a terrific investment for Berkshire.
However, Berkshire may not consider banks as much of a long-term trade as they once were. The sector has faced numerous issues since the Great Recession and has lagged the broader market on a pure returns basis. If Berkshire is concerned about a recession, which it seems to be based on its hoard of cash and lack of buying activity in recent years, it may also want to pare its bank holdings.
Now, this doesn't mean Berkshire will necessarily eliminate Bank of America, but the fact that it didn't mention the company among its core holdings and has sold a significant amount definitely puts it on the chopping block. The stock trades at roughly 175% Bank of America's tangible book value, or net worth, which is toward the higher end of its 10-year valuation range, although not the highest, so Berkshire may eventually prefer to find banks with cheaper valuations.
Chevron -- 6.5%
The large U.S. oil and gas player Chevron (NYSE: CVX) is another stock Abel did not specifically name. This surprised me somewhat, considering that Berkshire has loaded up on U.S. energy assets in recent years and that Abel ran Berkshire Hathaway Energy. Based on its recent purchases, Berkshire seemed to believe that traditional fossil fuels, or power in general, would be quite valuable going forward, especially those produced by U.S.-based companies.
Until concerns about the recent conflict between the U.S., Israel, and Iran, oil prices had fallen below $60 per barrel. Still, Chevron stock had performed relatively well, maintaining a strong balance sheet, despite taking on more debt to acquire Hess. Berkshire did actually sell quite a bit of Chevron back in 2022, but has only increased its position since the second quarter of 2023.
Chevron is doing many things that one would think the Berkshire team would approve of. The acquisition of Hess provides the company with a premier upstream portfolio that it believes will deliver industry-leading margins. Meanwhile, the company's net debt-to-cash flow ratio remains very solid at 1x. Chevron repurchased $12 billion of stock in 2025. Based on the company's first-quarter guide for this year, it will remain on a similar pace. Chevron's trailing-12-month dividend yield is also very strong, nearly 3.8%.
Chevron is also arguably the best-positioned oil stock to benefit from changes in Venezuela, given its existing infrastructure there. The company has said it plans to triple production in March from December levels. Finally, the stock serves as a hedge against tensions in the Middle East because rising oil prices benefit it, so while I find it odd that Abel didn't include it as a core holding, I'm less likely to believe it is on the chopping block at this time.
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*Stock Advisor returns as of March 7, 2026.
Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Chevron, and Moody's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

New CEO Greg Abel Did Not List 2 of Berkshire Hathaway's Largest Equity Positions as "Core Holdings." Are They on the Chopping Block?

Key Points
Two years ago, Berkshire's now-retired billionaire boss, Warren Buffett, labeled eight stocks as "indefinite" holdings in his annual letter to shareholders.
Successor Greg Abel's first letter to shareholders introduced two existing investments as forever holdings -- one of which is generating an annual yield on cost of 41%!
Meanwhile, Abel's other forever stock is a surprise, given that Buffett sold 75% of its shares in the nine quarters leading up to his retirement.
On Jan. 1, a new era began for trillion-dollar conglomerate, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB). With Warren Buffett retiring from the CEO role on Dec. 31, Berkshire's day-to-day operations and its $319 billion investment portfolio are now the responsibility of successor Greg Abel.
For the most part, Abel has vowed to follow in the Oracle of Omaha's footsteps, which includes holding near and dear the eight existing stocks Buffett described as "indefinite" holdings in a February 2024 letter to shareholders. This includes Berkshire's two longest-tenured stocks, Coca-Cola and American Express, as well as Occidental Petroleum and all five Japanese trading houses.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
But just two months into his new role as CEO, Abel is leaving an indelible mark by adding two more stocks to Berkshire's "forever" list.
The Oracle of Omaha's successor plans to hold these two stocks indefinitely
In Abel's first letter to shareholders, under "equity investments," he had this to say:
A large portion of our portfolio is concentrated in a small number of American companies, such as Apple (NASDAQ: AAPL), American Express, Coca-Cola, and Moody's (NYSE: MCO) -- businesses we understand well, have a high regard for their leaders, and expect will compound over decades.
The addition of rating agency Moody's to the ranks of Berkshire Hathaway's forever holdings isn't a surprise. It's the third-longest tenured stock in the portfolio (since 2000) and sports one of the highest yields on cost. Berkshire's cost basis of approximately $10.05 per share in the company, compared to Moody's base annual dividend of $4.12/share, works out to a 41% annual yield, relative to cost. There's no incentive to ever sell.
Furthermore, Moody's is ideally positioned to navigate any economic climate. Moody's Investors Services is primed to benefit if interest rates decline and corporate/government debt issuances increase. Meanwhile, periods of economic uncertainty favor Moody's Analytics, which is used by businesses for financial risk management and economic research.
However, Apple's addition to the ranks of the forever holdings is a surprise.
Is Apple really a forever holding for Berkshire's new CEO?
Abel's mention of Apple as a potential multidecade compounder is an eyebrow-raiser, given that the now-retired Warren Buffett had sold 687,642,574 shares of Apple -- 75% of Berkshire's total stake -- in the nine quarters leading up to his retirement.
On the surface, Apple checks several boxes that Buffett and Abel would typically look for in a long-term investment. It has an exceptionally loyal customer base, a trusted management team, and an unmatched share repurchase program. Since initiating a buyback program in 2013, Apple has spent more than $841 billion to retire over 44% of its outstanding shares. This has had a markedly positive effect on its earnings per share.
But Apple isn't a cheap stock, and Greg Abel is just as much a stickler for value as his predecessor. When Buffett initially opened a position in Apple in early 2016, it was trading at a price-to-earnings (P/E) ratio of between 10 and 15. Apple now commands a P/E ratio of 33.4 and is coming off a three-year stretch (2022-2024) in which its physical device sales growth completely stalled.
Although Abel has made clear that Apple stock isn't going anywhere, don't be surprised if Berkshire's stake in its current No. 1 holding is further whittled down.
Should you buy stock in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $526,889!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,103,743!*
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*Stock Advisor returns as of March 4, 2026.
American Express is an advertising partner of Motley Fool Money. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In 2024, Warren Buffett Highlighted 8 "Forever" Holdings -- and His Successor, Greg Abel, Just Added 2 New Stocks to the List

Financial technology (fintech) represents a transformative investment space in a hybrid sector merging finance and technology. The companies featured on the screen encompass a variety of services, like online banking, peer-to-peer payments, insurance, cryptocurrency and cybersecurity, among others.
The performance of the fintech space is inversely related to the movement of interest rates. A low-interest-rate regime will be beneficial for this space as a higher interest rate significantly affects technological improvement and product innovation of fintech companies.
Fintech's innovative nature positions it as a fascinating choice in the evolving financial landscape. With the expansion of mobile and broadband networks, fintech is poised for significant growth. The rise of artificial intelligence (AI) technologies and machine learning further revolutionizes banking, payments, and investments, offering efficient and secure financial solutions.
At this stage, we recommend investing in five financial technology bigwigs to tap into the digital finance revolution in 2026. These are: Interactive Brokers Group Inc. IBKR, Moody's Corp. MCO, LPL Financial Holdings Inc. LPLA, Paychex Inc. PAYX and Jack Henry & Associates Inc. JKHY.
These stocks have significant short-term price upside potential. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Interactive Brokers Group Inc.
Zacks Rank #1 Interactive Brokers Group’s product suite expansion initiatives, along with efforts to broaden its emerging-market customer base and develop proprietary software, are expected to support top-line growth and improve its market share.
Lower compensation expenses as a percentage of net revenues remain a major positive catalyst, which provides IBKR a competitive edge. Furthermore, a solid liquidity position is likely to support continued capital distribution activities.
IBKR has been undertaking several product diversification efforts to expand the reach of its services. In February 2026, the company expanded its crypto futures offerings with the launch of Coinbase Derivatives, LLC.
In January 2026, the company announced that eligible clients can now fund their brokerage accounts using stablecoin, providing near-instant processing and 24/7 availability, enabling clients to deposit funds and begin trading across global markets within minutes of initiating a transfer.
Interactive Brokers Group has an expected revenue and earnings growth rate of 6.1% and 7.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 5.4% in the past 60 days.
The short-term average price target of brokerage firms for the stock represents an increase of 25.5% from the last closing price of $69.40. The brokerage target price is currently in the range of $75-$91. This indicates a maximum upside of 31.1% and a downside of 8.1%.
Moody's Corp.
Zacks Rank #2 Moody's dominant position in the credit rating industry, along with opportunistic acquisitions and restructuring efforts to diversify revenues and footprint, will support top-line expansion.
MCO has been meaningfully growing through strategic acquisitions, increasing scale and cross-selling opportunities across products and vertical markets. In August 2025, it announced plans to secure a majority equity ownership in Middle East Rating & Investors Service. In June 2025, MCO fully acquired ICR Chile, solidifying its presence in Latin America’s domestic credit markets.
A solid rebound in bond issuance volume is expected to drive MCO’s growth. A strong balance sheet position and earnings strength are likely to keep MCO’s capital distributions sustainable.
Moody's has an expected revenue and earnings growth rate of 7.7% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1% in the past 30 days.
The short-term average price target of brokerage firms for the stock represents an increase of 18.6% from the last closing price of $464.30. The brokerage target price is currently in the range of $460-$660. This indicates a maximum upside of 42.1% and a downside of mere 0.9%.
LPL Financial Holdings Inc.
Zacks Rank #2 LPL Financial Holdings continues to benefit from efforts to increase its client base. Opportunistic acquisitions of Commonwealth Financial and Investment Center, combined with solid advisor productivity and recruiting efforts, are expected to bolster LPLA’s advisory revenues.
LPLA considers acquisitions a core part of its business expansion strategy. Given a strong balance sheet position, it has accomplished several opportunistic deals over the years. Additionally, a solid balance sheet and robust liquidity position will likely facilitate sustainable capital distribution activities, through which, LPLA will keep enhancing shareholder value.
LPL Financial Holdings has an expected revenue and earnings growth rate of 25.7% and 19%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.9% in the past 30 days.
The short-term average price target of brokerage firms for the stock represents an increase of 45.6% from the last closing price of $306.22. The brokerage target price is currently in the range of $378-$543. This indicates a maximum upside of 77.3% and no downside.
Paychex Inc.
Zacks Rank #2 Paychex gains from an expanding cloud computing market and rising client adoption of cloud computing solutions. PAYX has been able to retain 83% of clients across the past three years, beating industry standards and facilitating steady revenues. This, along with improving employee productivity, is resulting in solid cash flows and liquidity, in turn, facilitating consistent dividends.
Paychex’s rise in Revenues Per Employee (RPE) by 7% from 2021-2025 shows workforce efficiency and operational productivity. This points to the company's ability to optimize its talent utilization and adapt to challenges, indicating efficient management and resource allocation. The rising RPE is viewed by investors as a positive indicator of value creation and financial health.
It indicates that PAYX’s workforce is delivering higher output, boosting the potential for profitability, and reinforcing the company’s growth narrative, encouraging long-term investment in the stock.
Paychex has an expected revenue and earnings growth rate of 16.7% and 9.2%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% in the past 60 days.
The short-term average price target of brokerage firms for the stock represents an increase of 26.5% from the last closing price of $95.56. The brokerage target price is currently in the range of $98-$150. This indicates a maximum upside of 57% and no downside.
Jack Henry & Associates Inc.
Zacks Rank #2 Jack Henry & Associates is benefiting from growing services, support and processing revenues. The rise in data processing and hosting fees is contributing well. Strength in its card processing solutions due to expanding transaction volumes is a plus.
Growing payment processing and digital revenues are major upsides for JKHY. Strong momentum across the Core, Payments, Complementary and Corporate segments is positively impacting JKHY’s top-line growth.
Solid demand for the company’s AI-powered fraud detection platform is acting as a tailwind. JKHY’s growing initiatives to incorporate AI into select client solutions are expected to boost its revenues in the near term.
Jack Henry & Associates has an expected revenue and earnings growth rate of 5.9% and 5.5%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.6% in the past seven days.
The short-term average price target of brokerage firms for the stock represents an increase of 18.1% from the last closing price of $168.75. The brokerage target price is currently in the range of $158-$220. This indicates a maximum upside of 30.7% and a downside of 6.4%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

5 Large-Cap Fintech Stocks to Buy to Tap Huge Near-Term Upside

Key Points
On Dec. 31, after more than half a century at the helm, Warren Buffett stepped down from the CEO role at Berkshire Hathaway.
The stock market is historically expensive, as evidenced by Berkshire's enormous cash pile and Buffett's persistent net selling of stocks leading up to his retirement.
However, patience has paid off handsomely throughout Buffett's investing career.
For more than half a century, billionaire Warren Buffett manned the wheel at Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), ultimately turning his conglomerate into a trillion-dollar business. During his tenure as CEO, the Oracle of Omaha oversaw a greater than 6,000,000% cumulative return in his company's Class A shares (BRK.A), which absolutely crushes the returns of the benchmark S&P 500 (SNPINDEX: ^GSPC), ageless Dow Jones Industrial Average (DJINDICES: ^DJI), and growth-fueled Nasdaq Composite (NASDAQINDEX: ^IXIC).
But on Dec. 31, 2025, Berkshire Hathaway's pillar hung up his proverbial work coat for the final time and retired as CEO (though he remains chairman of Berkshire's board).
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Although Warren Buffett is no longer responsible for Berkshire's day-to-day operations or its $319 billion investment portfolio, we're still witnessing the lasting impact of his actions, as evidenced in his company's fourth-quarter operating results, released on Feb. 28.
While most investors tend to focus on headline figures, such as sales, profits, and margins, it's Warren Buffett's final $373 billion warning that's sending shockwaves through Wall Street.
The Oracle of Omaha enters retirement with a $373 billion warning for investors
Although Berkshire Hathaway acquired roughly five dozen companies across a variety of sectors during Warren Buffett's tenure as CEO, it's the Oracle of Omaha's investing prowess that was most lauded.
Apple and Bank of America have been among Berkshire's biggest winners on a nominal-dollar basis, while Moody's, Coca-Cola, and American Express are some of Buffett's greatest long-term success stories. The Buffett name is practically synonymous with value-focused, long-term investing.
But in all 13 quarters (Oct. 1, 2022 – Dec. 31, 2025) leading up to Warren Buffett's retirement as CEO, he was a net seller of stocks. Accounting for the $3.16 billion in net stock sales overseen during Buffett's final quarter, he sold an aggregate of $186.7 billion more in stocks than he purchased over a 39-month stretch.
Persistently selling stock, coupled with the operating profits that Berkshire's owned businesses have generated (e.g., BNSF and GEICO), has dramatically boosted his company's cash on hand (including cash equivalents and U.S. Treasuries). Since Buffett's selling streak began, Berkshire Hathaway's cash has more than tripled to a near-record $373.3 billion, as of Dec. 31, 2025.
If perennial value investor Warren Buffett is sitting on his hands and not putting his cash to work, this $373 billion serves as a warning to Wall Street.
The stock market is historically expensive -- and Berkshire's boss knew it!
For years, the stock market has been relatively unstoppable. With the exception of the 2022 bear market, the S&P 500 has gained at least 16% in six of the last seven years. We've also witnessed the Dow Jones Industrial Average hit 50,000 and the Nasdaq Composite briefly top 24,000.
Catalysts have been abundant for Wall Street, with the rise of artificial intelligence, the advent of quantum computing, a Federal Reserve rate-easing cycle, and better-than-expected corporate earnings fueling gains.
But the stock market is also historically expensive -- and the Oracle of Omaha knew it.
Warren Buffett Indicator hits an all-time high of 224%, the most expensive stock market valuation in history 🚨🚨 pic.twitter.com/BgIiOkFlfl
-- Barchart (@Barchart) January 11, 2026
Although value is subjective (i.e., there isn't a perfect blueprint to value all stocks), Warren Buffett's favorite valuation metric, the market cap-to-GDP ratio, now commonly known as the Buffett indicator, cuts through the heart of this subjectivity.
In a 2001 interview with Fortune magazine, Berkshire's boss referred to the market cap-to-GDP ratio as "probably the best single measure of where valuations stand at any given moment." This ratio, which has been back-tested to December 1970, has averaged approximately 87% over the last 56 years. In other words, the cumulative value of all publicly traded companies has averaged 87% of U.S. gross domestic product (GDP) over the long term.
In January 2026, the Buffett indicator hit an all-time high of more than 221%! Historically, when the Buffett indicator has pushed well beyond its average, a significant decline in equities has eventually followed.
It's a similar story for the S&P 500's Shiller Price-to-Earnings (P/E) Ratio, which is also known as the Cyclically Adjusted P/E Ratio (CAPE Ratio). Whereas the Shiller P/E has averaged roughly 17.3 when back-tested to January 1871, it's been vacillating between 39 and 41 over the last four months.
While Buffett was known to bend or break some of his unwritten investing rules on rare occasions, he was unwavering when it came to value and getting a good deal.
Patience paid off handsomely for Warren Buffett and Berkshire's shareholders
Although Buffett's $373 billion warning to Wall Street foreshadows significant corrections to come in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, Buffett's long-term approach to investing has conclusively shown that patience can be highly rewarding.
As an investor of more than eight decades, Berkshire's boss fully understood that stock market corrections, bear markets, and elevator-down crashes are inevitable events and akin to the price of admission to the world's greatest wealth creator. But rather than try to time when these events would occur, Buffett always positioned Berkshire Hathaway for future success.
The reason? Warren Buffett was keenly aware of the disproportionate nature of stock market cycles. Whereas corrections, bear markets, and crashes tend to resolve quickly, bull markets commonly extend for years. Buffett knew that stock market downturns can lead to short-term price dislocations in great businesses, allowing him to take stakes in great companies at an attractive price point.
Long-winded bull markets have occasionally led Buffett to sit on his proverbial hands and wait for stock valuations to come back into his wheelhouse. This is what we witnessed in the 13 quarters leading up to the retirement of Berkshire's billionaire boss.
History teaches us that valuations are, eventually, going to become attractive again. When they do, Buffett's successor, Greg Abel, is going to have a treasure chest of capital to pounce on potential price dislocations.
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Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Moody's. The Motley Fool has a disclosure policy.
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