Warren Buffett has been outperforming the stock market for many years. Along the way, he’s shared valuable tidbits with investors, such as buying when others are fearful and waiting for your pitch instead of investing just for the sake of it. Warren Buffett stocks have also been analyzed by Wall Street to determine which can be rated as a “strong buy.”
Many investors look at Warren Buffett’s portfolio and recent moves for stock picks. As the logic goes, if Warren Buffett has been outperforming the stock market for so long, chances are many of his stock picks should outperform the S&P 500.
However, some of Warren Buffett’s stock picks are better than others. Investors shouldn’t buy a stock just because it’s in the investing legend’s portfolio, but it’s still good to get additional ideas. Wall Street analysts also look at Buffett’s portfolio for some ideas, and some of them have a lot of good things to say about his picks. These are some of the top Warren Buffett stocks that have received “strong buy” ratings from Wall Street.
Visa (V)
Visa (NYSE:V) has been around for decades and looks like it will be around for centuries. That type of stability is a key theme for many of Buffett’s picks. Rather than chasing speculative stocks, Buffett focuses on stocks like Visa that have high-profit margins and respectable growth.
The fintech firm reported 10% year-over-year (YOY) revenue and net income growth in Q2 FY24. Cross-border transactions drove growth and played a big role in the company’s successful quarter. Visa closed out the quarter with a 53.1% net profit margin and returned $3.8 billion to its investors through stock buybacks and dividends.
Visa has generated steady gains over the years. It’s up by 6% year-to-date (YTD) and has gained 58% over the past five years. Visa also has a 0.76% yield and a double-digit dividend growth rate over more than a decade. Visa is currently rated as a “strong buy” and has a projected 16% upside.
Nu Holdings (NU)
Buffett loves corporations in the financial sector, and Nu Holdings (NYSE:NU) is no exception. The Brazilian digital bank has been growing at a rapid pace while expanding its profit margins. Investors have noticed, resulting in a 50% YTD gain. Wall Street is also clamoring over the stock and rated it as a “strong buy.” The average price target suggests a 17% upside, while the highest price target of $15 indicates that a 28% gain is possible.
Nu Holdings is achieving strong growth in all of the areas that matter for the business. The company went from 79.1 million customers in Q1 2023 to 99.3 million customers in Q1 2024, marking a 26% YOY increase. More than 80% of the company’s customers were active on the platform.
Nu Holdings offers bank accounts, brokerage accounts, loans, credit cards and other financial products. This diversified product mix contributed to 69% YOY revenue growth in the quarter. Net income also surged, going from $141.8 million in Q1 2023 to $378.8 million in Q1 2024. These healthy growth rates suggest more gains can be in store for the stock.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is one of the few big tech companies in Warren Buffett’s portfolio. The stock has proven to be a good pick with a 26% YTD gain and a 97% gain over the past five years. The company offers almost every product you’ll ever need from the convenience of your home. That’s been Amazon’s selling point for decades, and it continues to work wonders.
Revenue increased by 13% YOY in the first quarter. North American and international sales both had double-digit growth rates. Amazon’s online marketplace contributes to most of the company’s revenue, but the tech giant has several exciting revenue streams to monitor.
Amazon Web Services sales accelerated and were up by 17% YOY. Amazon’s cloud computing segment should receive a boost from the artificial intelligence boom. Groceries, advertising and streaming are additional segments that investors should monitor. Amazon has quietly become one of the largest advertisers on the planet, and its ad placements will help with profit margins.
The firm has received steady praise from numerous Wall Street analysts. It’s rated as an unanimous “strong buy” with a projected 21% upside from current levels. Recent ratings have been more bullish, with the highest price target of $246 per share implying a potential 34% gain.
On this date of publication, Marc Guberti held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.