Warren Buffett Invests $25 Billion in 2 Stocks, Predicting 37% and 14% Growth in 2024, Says Wall Street

Warren Buffett Places Big Bets on Amazon and Coca-Cola – Anticipating Healthy Returns in 2024

Jan 1, 2024 - 09:43
Jan 1, 2024 - 09:44
 0  175
Warren Buffett Invests $25 Billion in 2 Stocks, Predicting 37% and 14% Growth in 2024, Says Wall Street
Warren Buffett Invests $25 Billion in 2 Stocks, Predicting 37% and 14% Growth in 2024, Says Wall Street

If you want your investment portfolio to do as well as Warren Buffett's, holding onto stocks for a long time, just like he does, is key. When asked how long he thinks people should keep stocks in Berkshire Hathaway's portfolio (NYSE: BRK.A)(NYSE: BRK.B), Buffett confidently says "forever."

The price you pay for a stock matters, no matter how long you keep it. To invest like Buffett, you need to buy stocks at the right times.

Right now might be a great time to consider two of Buffett's stocks. Recently, $24.6 billion from Berkshire's portfolio went into two companies that Wall Street thinks could grow by 37% and 14% in the next year, according to analysts at Citi.

1. Amazon:

Buffett sold some of Berkshire's Amazon (NASDAQ: AMZN) shares in the third quarter but kept 10 million. Analyst Ronald Josey from Citi believes Buffett should have kept them all. Despite Amazon's shares going up by 83% this year, Josey thinks they could go even higher. He raised his price target to $210, suggesting a 37% gain in the next 12 months.

Josey likes Amazon's strong position in America's e-commerce. Other businesses selling on Amazon stick with it, leading to more ad sales. Amazon Web Services (AWS), their cloud service, also did well, with Q3 revenue rising by 12% to $23 billion. The global cloud services market is expected to grow by 14.1% every year through 2030.

2. Coca-Cola:

Coca-Cola (NYSE: KO) is now Berkshire Hathaway's fourth-largest holding, with over $23 billion invested. Coca-Cola shares fell by about 8% in 2023, but Citi analyst Filippo Falorni thinks they'll go up in 2024. He increased his price target to $67 per share, suggesting a 14% gain in the next 12 months. The main attraction is Coca-Cola's increasing dividend payments, which have gone up for 61 years in a row.

Berkshire holds 400 million Coca-Cola shares, expecting over $736 million in dividends in 2024 if they keep their streak.

Worries about popular weight management drugs affecting soda sales have put pressure on Coca-Cola's stock. However, the fear seems exaggerated, as North American sales were stable in Q3.

Analysis:

While Amazon offers a chance for big gains with its strong e-commerce and cloud services, its stock is already expensive, trading at 94 times trailing free cash flow. If earnings don't rise fast in the next few years, the stock could drop. If you're not comfortable with high risks, it's probably safer to watch from a distance.

Coca-Cola, with its well-known brands, can overcome the trend of fewer people drinking sugary sodas. Despite concerns, Q3 revenue rose by 11% year over year. With a 3.1% yield and potentially higher dividends, Coca-Cola is a good choice for most investors to add to their portfolios in 2024 and keep for the long run.

Also Read: Warren Buffett Eventful Year: Wins, Losses, and Important Moments

iShook Opinion Curated by iShook Opinion and guided by Founder and CEO Beni E Rachmanov. Dive into valuable financial insights at ishookfinance.com for expert articles and latest news on finance.