Warren Buffett is widely regarded as the greatest stock market investor of all time. So I like to keep an eye on his holdings.
Here, I’m going to discuss two Buffett stocks I’ve bought for my ISA. I see immense long-term potential in these two companies, so I plan to stay invested for at least the next decade.
Buffett’s largest holding
Let’s start with Apple (NASDAQ: AAPL). This is Buffett’s largest holding. Currently, he owns $132bn worth of Apple stock.
There are a few reasons I’ve bought Apple for my ISA. One is the company’s ecosystem. The fact that all of its products connect with each other provides a strong competitive advantage as it keeps consumers coming back for more.
It’s worth noting that Buffett has said that one of the key reasons he invested in Apple was because of the value of its ecosystem and how “permanent” it could be.
Another is the long-term growth potential. Apple is in the process of moving into a number of high-growth industries, including digital payments and healthcare.
It’s the healthcare space that excites me the most. Apple has made huge strides here in recent years with its Watch. This can analyse blood oxygen levels, monitor sleep levels, take an ECG, alert family if you fall over, and more.
But I feel that Apple is just scratching the surface here. I think we’re likely to see a whole lot more from the company in the next decade.
If you zoom out into the future, and you look back, and you ask the question, ‘What was Apple’s greatest contribution to mankind?’ It will be about health.
Apple CEO Tim Cook
Now, Apple stock is not without risk, of course. Supply chain challenges, technological disruption, and lower consumer demand are issues that could potentially hurt the stock in the near term.
However, I’m confident it will deliver attractive returns between now and 2033. So I’m going to hold it for the long run.
Huge potential
A second Buffett stock I’ve bought with the intention of holding for the next 10 years is Amazon (NASDAQ: AMZN). This is a smaller holding for the legendary investor, but he still owns more than a billion dollars worth of stock.
To my mind, Amazon is only likely to get bigger over the next decade. I still believe there’s a lot of growth left in its online shopping division. I think a lot of people are yet to realise how much time Amazon can potentially save them when it comes to shopping (it saves me hours a week).
Meanwhile, its network of 200m+ Prime users provides a competitive advantage here. These users tend to shop on the platform frequently to validate the annual fee.
The real growth driver here looks set to be the cloud computing division. Between now and 2030, the cloud market is forecast to grow around 16% a year as organisations shift online. And Amazon is the leader in the industry with a near-40% market share. So I reckon there’s a lot of growth to come.
Now, I bought Amazon stock at higher prices. So I’m currently sitting on a paper loss. However, I’m not fazed by this. I reckon the stock will generate attractive returns for me over the next decade.
