Berkshire Hathaway, led by Warren Buffett, holds stakes in more than 40 companies. As we step into 2025, several stocks within this portfolio appear particularly promising. One stock that Berkshire has been increasingly investing in is Sirius XM Holdings.
Currently, Berkshire possesses close to 35% of this satellite radio service, which ranks as the second-largest investment in their portfolio, excluding companies they own outright. Sirius XM monopolizes the satellite radio market.
This dominance translates to a lucrative business model. Although the company has experienced limited revenue growth, its subscriber count hit a peak six years ago.
Nevertheless, Sirius XM is implementing strategic initiatives that could foster future expansion. For instance, they have rolled out an ad-supported version of their service. With shares selling at under eight times their projected earnings, Sirius XM represents a potentially rewarding long-term investment.
Despite having divested several major bank stocks following the 2023 banking crisis, Buffett has maintained a considerable stake in Capital One Financial. Berkshire’s holdings in this stock are valued at approximately $1.6 billion.
Capital One’s credit card division imposes high interest rates on borrowed funds, resulting in substantial profitability. Their net interest margin exceeds 7%.
Buffett’s Approach to Sirius XM Investments
This margin outperforms many of its large banking counterparts. Furthermore, Capital One is eyeing a purchase of Discover Financial Services.
If finalized, this acquisition would significantly enhance Capital One’s credit card operations and lessen its dependency on other payment platforms. Trading at a mere 1.12 times book value, Capital One remains an attractive investment opportunity.
While Berkshire’s noteworthy investment in Amazon garners significant attention, it’s crucial to recognize Amazon’s robust dual business model.
Amazon reigns supreme in e-commerce, with its platform exceeding the total size of its next ten rivals combined. Currently, only 16% of retail sales in the U.S. come from online transactions.
This indicates substantial potential for growth. Additionally, Amazon Web Services (AWS) leads the cloud computing sector and accounts for the lion’s share of Amazon’s profitability.
The cloud computing industry is projected to triple by 2032, positioning AWS to facilitate significant profit growth in the years ahead. The ideal stock to invest in will depend on your individual financial situation and investment strategy.
Nonetheless, Sirius XM Holdings, Capital One Financial, and Amazon are among the most promising investments within Berkshire Hathaway’s portfolio. As 2025 progresses, each provides substantial opportunities for long-term growth.
