Warren Buffett is one of the most successful investors on Wall Street. The Berkshire Hathaway CEO is known for a long track record of market-beating returns, evident in the exemplary gains in Berkshire’s Class A shares since 1965. Over the past 57 years, the widely followed Berkshire Hathaway portfolio has generated returns of over 3.64 million percent. In other words, if you had invested $100 in Berkshire in 1965, that investment would be worth more than $3.64 million today. That works out to be an increase of around 20% compound annually, more than twice that of the S&P 500 over the same period. That stellar performance is why investors may want to take a page out of Buffett’s playbook and consider striking up a position in some Berkshire-held potential long-term winners. 

The 92-year-old investing legend maintains the same buy-and-hold investment philosophy that has defined much of his success over the past six decades. Historically, the Oracle of Omaha has favored reliable blue chips in industries like healthcare, consumer goods, financials, and energy and tended to avoid unprofitable, speculative, high-growth potential stocks. However, that doesn’t mean there aren’t any growth stocks in Buffett’s collection. In this list, we’ll look at three disruptive, high-growth names Buffett sees as fit for adding to Berkshire Hathaway’s $700 billion portfolio.  

It should be no surprise that Buffet owns a significant stake in Apple (AAPL) stock, considering its strong earnings, returns, and management. As the Number 1 stock in Berkshire’s portfolio by market value (worth a whopping $123.66 billion at the end of September), Apple makes up nearly 41% of Berkshire’s total equity portfolio.

In the third quarter of 2022, Buffet added to the firm’s tech investment with a sizeable stake in the world’s largest contract chipmaker Taiwan Semiconductor (TSM). Also known as TSMC, Taiwan Semi is at the top of the list when it comes to the semiconductor manufacturing group. The company makes chips for the likes of AMD (AMD), Nvidia (NVDA), and Qualcomm (QCOM), and it’s a key chip supplier to Apple.  

After hitting a two-year low due to a sharp slowdown in global chip demand, TSM’s share price jumped when Berkshire disclosed its more than $4.1 billion position in the stock. Still down more than 40% from its January 2021 peak, anyone on the sidelines might consider now an appropriate time to strike. “Only a small number of companies can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, who is bullish on Berkshire Hathaway and TSM.  

U.S. investors have been cautious when betting on the Taiwan-based chipmaker as it would lose all Western contracts in the event of a Chinese takeover of the island. However, the company is working to reduce its geopolitical risk with a new $40 billion foundry in Arizona, expected to be operational by 2024. The investment has Washington’s support as it comes amid a U.S. push to boost domestic supplies of semiconductors and Congressional passage of the $52 billion CHIPS and Science Act. 

Taiwan Semi reported earnings of $1.79 per share from $20.23 billion in revenue in the third quarter, surpassing consensus expectations of $1.41 EPS from revenue of $19.96. Management reiterated its outlook of Q4 revenue in the range of $19.9 billion to $20.7 billion. Gross profit margin is expected to be between 59.5% and 61.5%. Operating profit margin is expected to be between 49% and 51%.

TSM has a 90% Buy rating from the 38 analysts offering recommendations and zero Sell ratings. Anyone on the sidelines may want to consider striking up a position in this Buffet stock and holding on for years.  

At the end of the third quarter, Berkshire also disclosed its position in the leading Brazilian fintech company StoneCo Ltd. (STNE). The firm reported owning close to 10.7 million shares, currently valued at more than $110 million, amounting to a roughly 3.4% stake in the company.

Stoneco provides back-office software, loans, and other financial services to small and medium-sized businesses with a focus on reinvesting the cash it generates to acquire or build new financial products for its customer base. Since early 2019, the company has grown the number of small and medium business clients by 3x, revenue by 2.3x, and net income by 2.2×. 

Stoneco has developed a range of payment solutions utilized by e-commerce for businesses and merchants all over Latin America. In the third quarter, the company reported about $390 million in revenue and earnings. Small and medium-sized businesses using the platform surpassed 2.3 million, and total payment volume in the quarter grew to nearly $14 billion.

Stoneco stock is down close to 47% this year on news of rising interest rates, macroeconomic risks in Brazil, and some operational blunders. But base interest rates in Brazil seem to have peaked. A potential decline in the second half of 2023 is expected as Brazil’s inflation normalizes, reducing the margin pressure from rising financial expenses. Meanwhile, StoneCo’s revenue growth should benefit from increasing digitization of payments, higher take rates, and elevated growth in banking and software. STNE stock currently trades at roughly 1.4 times projected forward revenue and 33 times forward earnings, which seems fair for a disruptive, fast-growing company in a developing market.  

Buffet isn’t the only institutional investor who’s recently raised an investment in StoneCo.  Cathie Wood’s Ark Innovation fintech exchange-traded fund (ARKF) owns roughly 2.55 million shares of the payments company valued at more than $26.5 million. STNE has a Hold rating from the pros who cover it and a median target price of $12.20, representing a 19% increase from Wednesday’s closing price.  

Snowflake provides cloud-based ways for companies to better utilize their data over the internet. The company offers cloud-based data storage and analytics, generally termed “data-as-a-service.” Snowflake’s platform offers Data Cloud, an entire ecosystem that enables customers to consolidate and share data. They also provide a tailored version of their Data Cloud, explicitly aimed at the media and advertising industry.  

Although Snowflake is a minor constituent of Berkshire Hathaway’s portfolio, the stock has the qualities investors look for in a potentially parabolic stock. The company provides customers with crucial tech infrastructure, and its share price has plunged 65% from its peak last year. 

For the third quarter, Snowflake’s revenue surged 67% year over year, driven by the healthy growth in its customer base and increased customer spending. The company reported a 34% year-over-year spike in the total number of customers. Moreover, the number of customers who have spent more than $1 million on Snowflake products over the past year nearly doubled. The company’s pipeline of contracted future revenue that is yet to be realized also shot up 66% year over year to $3 billion. Snowflake should sustain such impressive growth, with addressable market management claims could be worth $248 billion by 2026. 

Analysts are expecting 295% annual revenue growth over the next five years. However, investors will have to pay a rich 25 times sales to own shares of SNOW. But that represents a considerable discount from last year’s price-to-sales-ratio of 97. Investors on the hunt for high-growth-potential stocks that the Oracle of Omaha owns may want to give SNOW some thought.   

Stocks rebounded last week, bouncing back from the worst week of the new year. The Nasdaq surged 4.3% for its fourth positive week in a row. Meanwhile, the S&P 500 and the Dow posted smaller gains, rebounding from declines the previous week. With only two trading sessions left in January, the Nasdaq was on track to record its strongest monthly result since July.

The week ahead will be eventful, with the FOMC’s policy meeting taking center stage. At its meeting ending on Wednesday, the U.S. Federal Reserve is expected to lift its benchmark interest rate again. Market participants are also looking forward to earnings from some of the largest companies in the world, including big tech firms Apple, Amazon, Google, and Meta Platforms.

Software stocks were among the market’s biggest losers in 2022 amid drastic shifts in Fed policy. But amid signs of cooling inflation over the past few months, interest rate hikes have slowed. With inflation collapsing, it seems likely that interest rates will continue falling through 2023. If they do, it could be up, up, and away for software stocks, such as our first of three recommendations for the week ahead. 

The next-generation data storage market is predicted to grow by 8.5% to $81 billion by 2025. All-flash data storage hardware and software products developer Pure Storage (PSTG) has upward solid top and bottom-line results, a healthy balance sheet, and growing cash flow. PSTG investors benefit from its subscription-based model, which is now at over $1 billion in annual recurring revenue. With a growing customer base in a market with substantial long-term growth potential, investors may want to take a bullish stance on this company.

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StoneCo Ltd. (STNE) provides back-office software, loans, and other financial services to small and medium-sized businesses with a focus on reinvesting the cash it generates to acquire or build new financial products for its customer base. Since early 2019, the company has grown the number of small and medium business clients by 3x, revenue by 2.3x, and net income by 2.2×. Stoneco stock lost 53% of its value in 2022 on rising interest rates and macroeconomic risks in Brazil. But base interest rates in Brazil seem to have peaked, and a potential decline in the second half of 2023 is expected as Brazil’s inflation normalizes, reducing the margin pressure from rising financial expenses.

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Drugmaker, Viatris’ (VTRS) is profitable and looking for more growth. The company is trimming its less-profitable operations, including its biosimilars, women’s health division, and over-the-counter drugs. In its place, it is adding an ophthalmology franchise through the $750 million acquisitions of Oyster Point Pharma and Famy Life Sciences. The deal is expected to close in the first quarter of 2023. Management expects the acquisition to generate at least $1 billion in sales by 2028. 

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After a positive start to the year stocks suffered their first negative week of 2023 amid mixed earnings results, big layoff announcements from major tech firms, and recession concerns. The Dow lost 2.7%, and the S&P 500 fell 0.6%. Meanwhile, the technology-focused Nasdaq Composite finished the week with a 0.6% gain.  

Last week, the 10-year Treasury yield hit a four-month low of 3.37%, fueling optimism around tech and growth stocks. Meanwhile, as Fed rate hikes appear close to a peak, hopes for an economic soft landing are growing.   The Nasdaq composite hit a bear market closing low as recently as Dec. 28. But it is up 6.4% in 2023. 

Our first of three weekly stock recommendations is a mega-cap tech name presenting an attractive opportunity as inflation subsides.

As price increases slow, consumers may spend more, boosting some battered consumer discretionary names. Amazon (AMZN) tops our list of stocks to watch this week as its share price has been nearly cut in half this year on higher inflation and rising rates.

Amazon is by far the world’s largest e-commerce company and, in 2021, surpassed Walmart as the world’s largest retailer outside of China. Without a direct competitor in the U.S., the company has experienced rapid growth through its third-party marketplace. The company operates 110 fulfillment centers worldwide, with 110 in the U.S.

Amazon’s business model has built-in advantages like its subscription service, Prime, and streaming platform. The service has more than 200 million subscribers globally and 163.5 million in the U.S. That figure is expected to continue to expand at a steady pace. According to a report by Statista, U.S. Prime members are expected to reach more than 176.5 million by 2025.    

The e-commerce market may continue to suffer in the coming months amid recession fears. Nevertheless, the $9 trillion industry is expected to expand at a CAGR of 14.7% for at least the next four years. Considering the online shopping behemoth held five times the market share of its closest rival, Walmart, its 38% leading market share, it will likely gain the most significant advantage from the market’s growth.    

The tech sector took a beating in 2022, creating opportunities in some desirable names. Citi and Goldman Sachs recently named the tech titan as one of their top picks for 2023, echoing the sentiment of many of Wall Street’s pros. Of 53 analysts offering recommendations for AMZN, 48 call it a Buy, and 4 call it a Hold. There are no Sell recommendations for the stock. A median price target of $135 represents a 57% upside from Friday’s closing price. 

Throughout 2022, established automakers like Ford, GM, and Mercedes unveiled plans for dozens of new electric vehicles. Mass production of most of these vehicles will kick into gear starting in 2023 and 2024. Our first of three stock recommendations for the week is a small cap with extreme growth potential over the next few years on the black of upcoming E.V. production.   

By 2029, electric vehicles could account for a third of the North American market and about 26% of vehicles produced worldwide, according to AutoForecast Solutions. Lithium Americas Corp (LAC) is one company hoping to ride the wave of anticipated global E.V. demand. Launched in 2007, the Canada-based firm searches for lithium deposits in the U.S. and Argentina. While the company is still a pre-revenue concern, its pipeline is brimming with potential, including one project set to enter production stages this year.

The company has full ownership of two development-stage operations in Argentina. One of which is approaching initial production, expected to come later this year. The timeline has been disrupted on LAC’s U.S. project –The Thacker Pass, Nevada lithium mine – due to ongoing legal and regulatory discrepancies. However,  a U.S. judge said on Thursday she would rule “in the next couple of months” on whether former President Donald Trump erred in 2021 when he approved the company’s right to begin mining the U.S.’s largest-known lithium resource. It seems likely that the case outcome will be positive for LAC, considering Washington’s push to boost domestic production of metals crucial to the green energy transition and wean the country off of Chinese supplies.  

The high-growth -potential small-cap has been gaining the attention of the pros on Wall Street. “We believe 2023 could be an eventful year as there could be a number of key announcements on growth projects and Argentina divesture, which could be catalysts for the share price,” explained HSBC analyst Santhosh Seshadri. To this end, Seshadri recently initiated coverage of LAC with a Buy rating, backed by a $36 price target.

Most analysts agree with Seshadri’s thesis. LAC claims a Strong Buy consensus rating, based on 13 Buys vs. 1 Hold and no Sell ratings. At $37, the average price target makes room for 12-month gains of 79%.

With shipping rates down from record levels, it’s unsurprising that many shipping stocks have been whacked hard this year, creating opportunity for investors looking for dividend stocks. According to the International Chamber of Shipping, 90% of global trade passes through the maritime shipping industry. This is a very volatile sector, but it’s essential to the world’s supply chain.

Anyone who has kept tabs on the global supply chain and shipping saga that’s been unfolding since the outbreak of covid is probably familiar with Genco Shipping (GNK). The company owns a fleet of 44 ships it leases for dry bulk transportation of goods like grain, coal, and iron ore. The going rate to rent one of Genco’s ships is no less than $27,000 per day, which provides some solid cash flow that the company uses to reward its shareholders.  

Dry bulk shipping rates, along with GNK’s share price, have fallen in recent months. Still, as China recovers from recent lockdowns and seasonal demand is expected to be strong, it’s hard to see the pullback in share price as anything less than an opportunistic bargain. This is a very volatile sector, but it’s essential to the world’s supply chain. 

GNK’s share price is up 6% over the past month. Although the company missed consensus EPS and revenue estimates in the third quarter, it remained consistent with its previously outlined value strategy. The company’s prudent cargo coverage in Q2 resulted in significant benchmark freight outperformance in Q3, allowing Genco to pass the savings onto its investors via a 56% quarterly dividend increase on a sequential basis. Over the last four quarters, the company has declared dividends of $2.74 per share, delivering on its commitment to return substantial capital to shareholders. GNK currently pays a 20% dividend yield.