Investing in growth stocks can help you significantly grow your savings over many years, but it’s important to choose the right stocks. Following are two outstanding businesses that are about as rock-solid as they come. Here’s why investors can’t go wrong with Amazon (AMZN 0.24%) and Warren Buffett’s Berkshire Hathaway (BRK.A 2.50%) (BRK.B 2.48%).
1. Amazon
Amazon is one of the most valuable companies in the world, with a market cap of $2.46 trillion at the time of writing. It might be difficult to understand how the stock can continue to climb, but Amazon is still going after massive opportunities that could drive growth for a long time.
Amazon has over 200 million Prime members who provide repeat revenue as loyal customers. Prime memberships accelerated in Q3 as the company achieved its fastest delivery speeds yet, stemming from its large investment in expanding same-day delivery. Revenue from the online store came to $242 billion over the last year, but that is a small share of a global e-commerce market worth over $6 trillion and still growing, according to eMarketer.
But Amazon is much more than e-commerce these days. Its cloud computing division makes up only 17% of revenue but drives most of its operating profit. Revenue from cloud services accelerated in 2024, following investments the company has made in offering new artificial intelligence tools for organizations to build their own applications.
Considering Amazon’s dominance in online shopping and cloud services, it is a solid stock to hold in your retirement account. According to Yahoo! Finance, analysts expect revenue to increase by 11% in 2025. Over the next several years, improving margins should fuel 22% annualized earnings growth, based on analysts’ estimates. Amazon investors could be looking at a stretch of outstanding returns over the next five years.
2. Berkshire Hathaway
There’s not a more unstoppable stock to park your money in than Berkshire Hathaway. Warren Buffett originally acquired a controlling stake in this former textile business over 50 years ago. Using his investing skills, he carefully assembled the world’s greatest collection of businesses under one corporate umbrella.
Since 1965, Buffett has turned the once-struggling textile mill into one of the largest companies in the world today. Berkshire held just $920,000 of cash on the books in 1964, but at the end of the third quarter, it held $320 billion of cash and U.S. treasury bills.
That pile of cash gives Buffett plenty of dry powder to go bargain hunting when the next opportunity arises. Meanwhile, Berkshire’s operating businesses, spanning insurance, railroad, energy, and retail, generated $37 billion of operating earnings in 2023.
Berkshire also continues to hold large stakes in Apple, Coca-Cola, and American Express. At the end of the third quarter, the value of its investments in these three stocks was $139 billion out of a total equity portfolio worth $271 billion.
Berkshire shares doubled in value over the past five years. But investors are probably wondering what happens after the 94-year-old Buffett is gone.
Buffett has tapped Greg Abel, who is already running all Berkshire’s non-insurance businesses, to take over. Buffett has said that Abel is ready to take over tomorrow if needed and will have the final say on all Berkshire’s investing decisions.
When you invest in Berkshire Hathaway, you’re not just investing in a group of businesses but also the talented people who run them. This is why Berkshire stock will continue to reward investors long after Buffett’s tenure.
American Express is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
