Warren Buffett is arguably one of the best investors of all time. He’s created fortunes for Berkshire Hathaway shareholders during the more than five decades he’s overseen the conglomerate’s investments. And he continues to find new ways to grow his fellow shareowners’ wealth.
Unsurprisingly, investors pay close attention to the moves Buffett and his team make in Berkshire’s massive $345 billion stock portfolio. Here are two of Buffett’s biggest bets in the stock market — both of which are still attractive buys today.
Warren Buffett loves this energy stock
Geopolitical turmoil in the Middle East and Europe makes clear the crucial need for reliable sources of affordable energy. CEO Vicki Hollub is positioning Occidental Petroleum (OXY 0.66%) to help meet the global demand for dependable energy — specifically, in the form of oil and natural gas — for decades to come.
Many analysts believe that constrained supply resulting from the overall energy industry’s underinvestment in new projects and infrastructure, combined with rising demand from developing economies, could drive oil prices higher in the coming years. Occidental derives a larger percentage of its revenue from oil production operations than many of its peers, so it’s poised to profit handsomely from these trends.
Yet Occidental is far more than just an oil driller. This Buffett favorite is also a leader in the exciting field of carbon capture, utilization, and storage (CCUS).
In August, Occidental struck a deal to acquire Carbon Engineering, a pioneer in direct air capture (DAC) technology that removes carbon dioxide from the atmosphere. The $1.1 billion purchase should allow Occidental to accelerate its plans to create a network of up to 1,000 DAC facilities in the U.S. and international markets in the coming decades. Occidental expects its Stratos facility to be capable of capturing 500,000 tons of carbon dioxide annually after it comes online in mid-2025.
Demand for carbon capture solutions is projected to grow rapidly as more businesses and governments strive to achieve their net-zero emissions goals. For its part, ExxonMobil estimates that the carbon capture market could soar to a stunning $4 trillion by 2050. Hollub, in turn, expects Occidental to eventually make more money from its carbon management business than it does from its oil and gas operations today.
Notably, Buffett has been adding to Berkshire’s stake in this innovative energy provider. Following his recent buys, Berkshire Hathaway owns more than a quarter of Occidental’s shares, a massive stake valued at roughly $14 billion.
This is Warren Buffett’s favorite tech company
Like Occidental, Apple (AAPL 2.32%) is set to benefit from powerful long-term trends. With high-speed connectivity and seamless mobility likely to only grow in importance, the iPhone maker’s unrivaled profitability is set to become even more impressive.
More than 2 billion Apple devices are in use around the world. In addition to the massive profits the tech giant earns from the sale of these devices, Apple also generates a fast-growing stream of recurring revenue. With over 1 billion paid subscriptions, Apple’s booming services business already produces $85 billion in annual sales — a figure that appears set to head even higher.
Apple is raising prices on several of its popular services, including Apple TV+, Arcade, News+, and its bundled offering, Apple One. The price hikes should bolster the company’s revenue and profits from this already high-margin segment.
Additionally, Apple recently unveiled its new line of M3 processors. The faster, more efficient chips are expected to boost sales of iMac desktop computers and MacBook Pro laptops. Higher Mac sales would help to further expand Apple’s thriving device and services ecosystem.
These growth catalysts should help to propel Apple’s nearly $100 billion in annual profits to new heights in the years ahead. Buffett is certainly bullish on the tech titan’s prospects. Apple is Berkshire Hathaway’s largest holding by far. Buffett’s company has amassed a staggering $167 billion stake in Apple’s stock.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.