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Buffett-Approved Stocks: 3 Picks for Long-Term Growth

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  Published in Stocks and Investing on Monday, January 5th 2026 at 20:54 GMT by The Motley Fool

Three Buffett-Approved Stocks Ready for Long-Term Growth in 2026 (and Beyond)

Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, is renowned for his value investing philosophy – seeking out fundamentally strong companies trading at prices below their intrinsic worth, then holding them for the long haul. While Buffett’s investment choices are closely watched, it's important to remember that individual investors should conduct their own due diligence before making any decisions. However, understanding what principles guide his selections can provide valuable insight into potential opportunities. A recent article on The Motley Fool highlights three stocks currently favored by Buffett and Berkshire Hathaway, suggesting they remain attractive investments heading into 2026 and beyond. Let's delve into why these companies have earned the Oracle of Omaha’s trust.

1. Apple (AAPL): Still a Core Holding with Enduring Appeal

Unsurprisingly, Apple consistently appears on lists of Buffett's preferred stocks. As of late 2023/early 2024, Berkshire Hathaway holds approximately $165 billion worth of Apple stock – a significant portion of its portfolio. The Fool’s article emphasizes that despite the high price-to-earnings (P/E) ratio, Apple’s continued dominance in the premium smartphone market and its expanding ecosystem make it a compelling long-term investment.

Apple's appeal isn't solely about iPhones. The company has successfully cultivated a "moat" – a sustainable competitive advantage that protects its profitability. This moat is built on brand loyalty (consumers are fiercely attached to Apple’s products), a vast network of App Store developers, and integrated hardware and software that creates a seamless user experience. As the article points out, Apple's services business (Apple Music, iCloud, Apple TV+, etc.) is also experiencing substantial growth, providing recurring revenue streams and increasing customer lifetime value. This shift towards services helps to insulate Apple from the cyclical nature of hardware sales.

Furthermore, Apple’s foray into new areas like augmented reality (AR) and potentially electric vehicles offers significant future growth potential. While these ventures are still in their early stages, they demonstrate Apple's commitment to innovation and expanding its reach beyond its core products. The article notes that even with the current valuation, Apple’s continued profitability and innovative capabilities justify holding onto the stock for long-term gains. The key is recognizing that Apple isn't just a hardware company anymore; it's a technology and lifestyle brand.

2. Bank of America (BAC): Benefiting from Rising Rates & Economic Recovery

Bank of America represents a different facet of Buffett’s investment strategy – financial institutions. Buffett historically avoided banks, but Berkshire Hathaway has become a major shareholder in Bank of America, reflecting a change in perspective and recognizing the potential for significant returns. The Fool's article highlights several reasons why BAC remains an attractive pick.

Firstly, Bank of America benefits directly from rising interest rates. As rates increase, the net interest margin (the difference between what banks charge borrowers and pay depositors) expands, boosting profitability. While a potential economic slowdown could eventually curtail rate increases, the current environment is favorable for BAC. Secondly, the bank's diverse business lines – including consumer banking, wealth management, and investment banking – provide resilience against economic downturns in any single sector.

The article also points to Bank of America’s strong capital position and efficient operations as key strengths. BAC has consistently demonstrated its ability to manage risk effectively and generate consistent earnings. The bank's focus on technology and digital transformation is another positive factor, allowing it to streamline processes and enhance the customer experience. While acknowledging potential risks associated with a recession or increased regulatory scrutiny, the article concludes that Bank of America’s long-term prospects remain solid, particularly given its position as one of the largest and most well-capitalized banks in the United States.

3. Occidental Petroleum (OXY): A Play on Energy Demand & Shareholder Returns

Occidental Petroleum represents a more recent addition to Berkshire Hathaway's portfolio, reflecting Buffett’s willingness to adapt his investment strategy based on evolving market conditions. The Fool’s article explains that Berkshire has significantly increased its stake in OXY, now holding over 200 million shares and warrants. This bet is rooted in the expectation of continued strong demand for energy resources.

Occidental's appeal lies in its low-cost oil production, strategic assets in the Permian Basin (a prolific shale oil region), and commitment to returning value to shareholders. The article highlights that OXY has been aggressively paying down debt and increasing dividend payouts – a clear signal of management’s confidence in the company's future prospects. While acknowledging the volatility inherent in the energy sector, the article suggests that Occidental is well-positioned to benefit from both higher oil prices (driven by global demand) and increased operational efficiency.

Furthermore, Berkshire Hathaway's substantial investment in OXY signals a level of support that can provide stability for the stock. While environmental concerns surrounding fossil fuels remain a long-term challenge for the industry, Occidental’s focus on carbon capture technologies and sustainable practices could help mitigate these risks. The article emphasizes that investing in OXY is essentially betting on the continued global demand for energy and Occidental's ability to efficiently and responsibly meet that demand.

Important Considerations & Disclaimer:

It's crucial to remember that even Buffett's picks aren’t guaranteed winners. Market conditions can change, unforeseen events can impact companies, and valuations are always subject to fluctuation. The Fool's article serves as a starting point for research and should not be considered financial advice. Before investing in any of these stocks (or any other investment), it is essential to conduct your own thorough analysis, consider your individual risk tolerance, and consult with a qualified financial advisor. The long-term nature of Buffett’s strategy requires patience and discipline – expecting overnight riches is unrealistic. The key is to identify fundamentally sound companies with sustainable competitive advantages and hold them through thick and thin.