Buffett’s Berkshire: Apple and Amex Still Shine, But Kraft Heinz Faces an Uphill Battle
Warren Buffett’s departure as CEO of Berkshire Hathaway at the end of 2025 doesn’t diminish the value of analyzing the company’s $307 billion stock portfolio for investment insights. While not every holding is a guaranteed success, certain stocks continue to demonstrate strong potential, while others face significant headwinds.
The Power of Brand Loyalty: Why Apple Remains a Core Holding
Apple currently represents 19.1% of Berkshire Hathaway’s portfolio, making it the largest single investment. Berkshire first invested in Apple in 2016, recognizing its potential even then. Despite a recent trimming of the stake – reduced by 4.3% to $61.96 billion – Apple remains a cornerstone of the portfolio.
While the iPhone still drives over half of Apple’s revenue, the company is strategically diversifying. Expansion of its services segment – including the App Store, iCloud, and subscription services – is reducing reliance on hardware sales, boosting margins, and fostering customer loyalty. Continued growth in other hardware categories, supported by the expanding software ecosystem, further strengthens Apple’s position.
Analysts project revenue and earnings per share (EPS) growth for Apple at compound annual growth rates (CAGRs) of 8% and 11%, respectively, from fiscal 2025 to fiscal 2028. With a price-to-earnings ratio of 28, the stock appears reasonably valued. Apple’s substantial cash reserves – $145 billion at the end of the latest quarter – provide flexibility for share buybacks, dividend increases, and strategic acquisitions.
American Express: A Durable Advantage in a Changing Landscape
American Express, accounting for 14.6% of Berkshire’s holdings, is another long-term winner. Unlike Visa and Mastercard, which rely on partner banks, American Express operates its own bank, issuing its own credit and debit cards. This unique model provides greater control and resilience.
American Express’s focus on attracting higher-income cardholders allows it to generate substantial cash flow. This enables consistent share buybacks – 28% of shares have been repurchased over the past decade. Analysts forecast revenue and EPS CAGRs of 9% and 15%, respectively, from 2025 to 2028. Currently valued at 15 times forward earnings, American Express appears to be a bargain.
Kraft Heinz: A Cautionary Tale of Lost Momentum
Berkshire’s 2.6% stake in Kraft Heinz represents a struggling investment. The 2015 merger orchestrated by Buffett and 3G Capital has not yielded the expected results. Consumers have shifted towards healthier options and private-label brands, leaving Kraft Heinz struggling to adapt.
Past missteps included a lack of portfolio pruning, insufficient investment in product innovation, and ineffective marketing campaigns. A $15 billion writedown of top brands in 2019, a dividend cut, and an SEC investigation into accounting practices further damaged investor confidence. While Kraft Heinz is investing $600 million in R&D and marketing, analysts still anticipate revenue decline through 2028, despite projected EPS growth of 8% through the same period.
What Berkshire’s Portfolio Shifts Signal
Berkshire Hathaway’s trimming of its Apple stake and the initiation of a position in The New York Times ($351.7 million) suggest a potential shift in investment strategy. The Apple reduction, while significant, doesn’t diminish its importance as the largest holding. It may reflect a desire to simplify the portfolio for Buffett’s successor, or a reassessment of Apple’s growth potential relative to other opportunities.
The investment in The New York Times, though relatively small, signals an interest in companies with strong brands and durable competitive advantages. This aligns with Buffett’s long-held investment principles.
Did you know?
Berkshire Hathaway initially invested in American Express in 1991, building on Warren Buffett’s personal investment in the company dating back to 1965.
Frequently Asked Questions
- Is Apple still a good investment? Analysts generally believe Apple remains a strong investment due to its brand loyalty, expanding services segment, and substantial cash reserves.
- What is Berkshire Hathaway’s largest holding? As of early 2026, Apple is Berkshire Hathaway’s largest equity holding, despite a recent reduction in its stake.
- Why is Kraft Heinz struggling? Kraft Heinz has faced challenges due to changing consumer preferences, a lack of innovation, and past accounting issues.
- What does Berkshire Hathaway’s investment in The New York Times signify? It suggests an interest in companies with strong brands and durable competitive advantages.
American Express is an advertising partner of Motley Fool Money. Leo Sun has positions in Apple. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Mastercard, and Visa and is short shares of Apple. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.
