Forget the “Magnificent Seven”: Warren Buffett has invested $73.6 billion in these stocks since 2019.
‘The Magnificent 7’ is their nickname. bank of america Coined by analyst Michael Hartnett to describe a group of America’s largest technology stocks, it is S&P 500 2023 Index. The Magnificent Seven includes:
- apologize
- microsoft
- nvidia
- Amazon
- alphabet
- meta platform
- tesla
Last year, Magnificent Seven stock returned an average of 112%, offsetting a 24% gain. S&P 500. Considering that most of these companies are at the forefront of the artificial intelligence (AI) revolution, we cannot help but pay attention to these companies.
But let’s put this group aside for a moment and talk about Warren Buffett, who is considered one of the most successful investors in history. he is Berkshire Hathaway (BRK.A 0.69%) (BRK.B 0.19%) He has been running the investment firm since 1965, and in the last five years alone, he has invested more money in certain stocks than in any other during his 58-year tenure.
Image source: The Motley Fool.
The Magnificent Seven are contributing to Buffett’s success.
Before we talk about mystery stocks, it’s important to recognize that much of Berkshire’s success over the past few years has been attributed to this. one Member of the Magnificent Seven. Buffett likes to invest in companies with steady revenue growth, solid profitability, and strong management teams. He especially likes companies that return money to shareholders through dividends or stock buybacks.
It’s no surprise, then, that Berkshire has spent about $38 billion buying Apple stock since 2016. At the time of this writing, Apple’s position is worth a whopping $163 billion, making up 42.2% of its total value, so it’s a respectable performance. It is part of Berkshire’s $362.4 billion portfolio of publicly traded stocks and securities.
It’s worth noting that Berkshire owns a small stake in Amazon, another Magnificent Seven component. Buffett has repeatedly expressed regret for not recognizing Amazon’s potential sooner, but its holdings are currently worth just $1.7 billion.
Berkshire’s $38 billion investment in Apple was a home run, but Berkshire has spent nearly twice that amount since 2019 accumulating stock in the Magnificent Seven or other companies that have nothing to do with the tech sector. I did.
Buffett’s Favorite Flashy Stocks
As mentioned earlier, Buffett is widely regarded as one of the best investors of all time. Berkshire Hathaway transformed the struggling textile company it acquired in 1965 into the successful conglomerate it is today.
Berkshire’s portfolio includes 47 publicly traded stocks and securities, including Apple, but it also fully owns several private companies, including GEICO Insurance, Dairy Queen, and Duracell. Berkshire reported 2023 revenue of $364.4 billion and earnings per share of $96.2 billion, both record highs.
For some perspective, Berkshire only had $49.3 million in sales and $2.3 million in profits during Buffett’s first year in office.
Berkshire stocks returned an incredible 4,384,748% from 1965 to 2023, which equates to an average annual return of 19.8% over 58 years. That means a $1,000 investment could be turned into $43.8 million. By comparison, $1,000 invested in the S&P 500 in 1965 would be worth only $312,230 today.
So it shouldn’t come as a shock to learn that Berkshire Hathaway is the stock to which Buffett has allocated $73.6 billion since 2019. great. Large corporations have spent more money on stock buybacks over the past five years than on any other investment in history.
Berkshire could join the trillion-dollar club this year
Berkshire’s share buybacks will reduce the number of shares outstanding, which will increase earnings per share as well as existing investors’ ownership stake in the company. It’s a popular way for companies to return money to investors, but it’s also a clear signal of Buffett’s confidence in himself and his team.
Berkshire’s current market value is approximately $870 billion, and if the stock continues to deliver 19.8% annual returns, it will cross the $1 trillion threshold in 2024. Berkshire would become the first non-tech company in U.S. history to reach that milestone. Currently, only Apple, Microsoft, Nvidia, Amazon, Alphabet, and Meta Platform are part of this exclusive club.
Investors looking for opportunities beyond the Magnificent Seven might consider betting on Buffett, but there’s one caveat. In his 2023 letter to shareholders, Buffett warned investors not to expect any more stellar performance from Berkshire. That’s because large companies have grown so large that they’re having a hard time finding quality investment opportunities that can move the growth needle.
Still, considering the scale of Berkshire’s share buybacks, it’s clear he still thinks his conglomerate is the best investment he could make.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development, Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an Alphabet executive, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Alphabet, Amazon, Apple, Bank of America, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: Buy Microsoft’s January 2026 $395 call and sell Microsoft’s January 2026 $405 call. The Motley Fool has a disclosure policy.
