Warren Buffett, the legendary investor and chairman of Berkshire Hathaway (NYSE:BRK.B), has built his fortune on a disciplined approach to value investing. His portfolio is packed with household names, from consumer staples to financial services, but what stock does he favour above all others?
AI’s take
Curious to get an artificial intelligence (AI) perspective, I turned to ChatGPT and asked: “What do you think is Warren Buffett’s favourite stock?”
The response was immediate: Apple.
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According to ChatGPT, Apple has become Berkshire Hathaway’s largest holding, at times accounting for as much as 50% of its stock portfolio. Buffett himself has praised Apple’s brand loyalty, its ecosystem-driven business model, and its ability to generate massive amounts of cash. While historically hesitant about technology stocks, Buffett has repeatedly stated that Apple is more of a consumer goods company than a traditional tech firm, making it an ideal fit for his investment philosophy.
A second choice
Of course, Apple isn’t the only stock that could hold a special place in Buffett’s heart. ChatGPT was quick to point out another long-time Buffett favourite: Coca-Cola.
Buffett has held shares in the soft drink giant since the late 1980s and has often spoken about his love for the brand. With its strong pricing power, global reach, and consistent dividends, Coca-Cola epitomises the kind of stable, cash-generative business that Buffett admires. What’s more, given consistent dividend hikes, Buffett’s Berkshire Hathaway now receives 60% of its original investment back in dividend payments each year.
So, is Buffett’s favourite stock Apple or Coca-Cola? According to ChatGPT, if measured by portfolio weight and financial importance, Apple takes the crown. But if sentiment and longevity matter more, Coca-Cola might still be his most cherished holding.
There’s a third option
Personally, I’d suggest Buffett’s favourite stock could be Berkshire Hathaway — the conglomerate he runs. However, the company did not repurchase any of its own shares during the third quarter of 2024, which is notable as it’s the first time since the third quarter of 2018 that Berkshire hasn’t bought back its own stock.
This lack of share repurchases, combined with the record cash reserves, has led to speculation about why Berkshire is accumulating so much cash and whether it might be preparing for a major acquisition or anticipating a market correction.
Interestingly, this growing cash reserve of $325bn, coupled with Buffett’s outstanding track record, has raised my interest in the shares. However, I’ve been following closely for some time, and must admit, the conglomerate’s top holdings don’t interest me massively. What’s more, several of them are American stalwarts which currently have rather frothy valuations.
Nonetheless, I’m intrigued as to how Buffett might put that $325bn to work. Berkshire Hathaway might be an option for my daughter’s pension.
