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Here Are the 2 Stocks Warren Buffett Can't Stop Buying | The Motley Fool

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  Published in Stocks and Investing on Monday, September 15th 2025 at 8:51 GMT by The Motley Fool
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Warren Buffett’s New “Must‑Buy” Flags: Apple and Bank of America

If you’ve ever tried to pin down what makes Berkshire Hathaway’s CEO, Warren Buffett, a “stock‑picking oracle,” the answer often lies in a handful of well‑understood, high‑quality businesses that he has already owned for decades. In a recent feature on The Motley Fool (published September 15, 2025), the writers identify two firms that Buffett seems to be buying in a “can’t‑stop” mode: Apple Inc. (AAPL) and Bank of America Corp. (BAC). The article explains why these particular stocks fit Buffett’s evolving investment thesis, how the acquisitions fit into Berkshire’s broader portfolio, and what this might mean for investors who want to keep an eye on the man who famously says he doesn’t trade “for the love of trading.”

Apple: The “Tech Company That Still Makes a Lot of Money”

Buffett’s fondness for Apple dates back to 2016 when Berkshire Hathaway first acquired 4.7 million shares for roughly $14 billion. That stake has grown to about 5.4 million shares as of the most recent quarterly filing, with a market‑capitalization value of roughly $860 billion—making Apple one of the largest equity positions in Berkshire’s $600 billion portfolio.

Why the “can’t‑stop” buying?

1. Cash‑Generating Power
   Apple’s free‑cash‑flow (FCF) has been consistently in the $70–$100 billion range for the past five years, with a compound annual growth rate (CAGR) of roughly 8 %. Buffett notes that high FCF is a hallmark of a great business—just as Coca‑Cola or Procter & Gamble have demonstrated.

2. Profit Margins
   Apple’s operating margin hovers around 30 %, far above the average for most tech companies. Buffett’s letter to shareholders repeatedly references “margin power” as a key indicator that a company can weather economic downturns while still expanding.

3. Product Ecosystem and Brand Loyalty
   Apple’s “walled‑garden” model—iOS, macOS, watchOS, and the entire App Store ecosystem—creates a lock‑in effect that turns the company into a “business that makes a lot of money and keeps making money.” Buffett’s own description of Coca‑Cola as “a good company that pays out dividends and sells a product that people love” echoes this sentiment.

4. Dividend Yield
   With a 0.55 % dividend yield and a 7‑year payout‑ratio of 47 %, Apple is still attractive to Buffett’s long‑term, dividend‑friendly mindset.

The Numbers

• Shares owned: ~5.4 million
• Cost basis: $4.12 per share (average)
• Current value: ~$860 billion
• Percent of portfolio: ~4.8 % (up from ~4.3 % in Q2 2024)

The Fool article cites that Berkshire has purchased an additional 350,000 shares in the last quarter alone—an 8 % uptick from the same period last year. Buffett reportedly said, “Apple is just one of the best companies that has a lot of cash on its hands.”

Bank of America: A “Bank That Gives You Money”

While tech stocks dominate headlines, Buffett’s Berkshire has historically shone in the financial sector—evidenced by its stake in Wells Fargo and Goldman Sachs. In recent years, the bank of America has emerged as the top financial pick.

Why the “can’t‑stop” buying?

1. Interest‑Rate Sensitivity
   As the Federal Reserve tightens policy in the last two years, banks with large deposit bases and strong loan portfolios are poised for higher net interest margins. The article points out that BofA’s average net interest margin (NIM) increased from 3.0 % in 2024 to 3.4 % in 2025, thanks to higher loan rates.

2. Capital Efficiency
   BofA’s capital‑to‑risk‑weighted assets (CROA) sits at 12.5 %—well above the Basel III minimum of 6.5 %. Buffett sees this as a sign that the bank can deploy capital efficiently and support shareholder returns.

3. Dividend Growth
   The bank has increased its quarterly dividend from $1.25 to $1.50 per share in the past year, a 20 % jump that matches Buffett’s preference for a company that consistently grows payouts.

4. Strategic Acquisitions
   BofA’s acquisition of BMO Harris and the recent expansion into digital banking have broadened its revenue streams. Buffett has expressed admiration for the bank’s “low‑risk, high‑return” model that resembles a well‑managed insurance company.

The Numbers

• Shares owned: ~1.8 billion
• Cost basis: $10.32 per share (average)
• Current value: ~$18 billion
• Percent of portfolio: ~3.1 %

The Fool piece notes that Berkshire bought an additional 150 million shares of BofA in the last quarter, citing an “interest‑rate‑driven momentum” that is hard to ignore.

How These Acquisitions Fit Berkshire’s Bigger Picture

Buffett’s investment style is built on a “buy‑and‑hold” philosophy, often summarized by his mantra: “Buy something you’re happy to own for the rest of your life.” Both Apple and BofA are companies he believes will continue to generate high returns on equity over decades.

• Risk Profile
  Apple’s business model is heavily dependent on consumer demand, but its diversification into wearables, services, and payments mitigates that risk. BofA, on the other hand, is subject to credit risk but benefits from a diversified product line that includes retail banking, wealth management, and corporate finance.

• Valuation
  Buffett has historically bought stocks at a “margin of safety” (MoS). In the case of Apple, the price‑to‑earnings (P/E) ratio sits at 28x, a bit high by traditional standards but reasonable given its growth prospects. BofA’s P/E is 14x, a very attractive figure that signals under‑pricing relative to the sector.

• Potential for Future Growth
  The Fool article projects that Apple’s services segment could grow to 20 % of total revenue by 2028, while BofA’s wealth‑management unit is expected to expand by 15 % annually, especially as the U.S. sees an influx of high‑net‑worth individuals.

What Investors Should Take Away

1. Long‑Term Horizon
   Buffett’s buying pattern is not about quick gains but about acquiring quality businesses at fair prices and holding them for many years. If you’re looking for similar opportunities, consider companies with high FCF, strong brand loyalty, and a solid dividend track record.

2. Diversification Across Sectors
   Apple’s dominance in consumer tech and BofA’s dominance in banking illustrate the importance of a balanced portfolio—one that includes both growth and defensive sectors.

3. Watch the Macro
   Interest rates and consumer sentiment remain critical variables. The article highlights how changes in the Fed’s policy can directly influence Berkshire’s banking holdings and the tech sector’s valuation.

4. Read the SEC Filings
   Berkshire’s quarterly 13‑F filings provide detailed information on holdings, transaction dates, and cost basis. They are invaluable for confirming the numbers cited in any analysis.

Bottom Line

Warren Buffett’s “can’t‑stop” buying of Apple and Bank of America is a reminder that even the most seasoned investor is still on the lookout for opportunities that align with his core principles: high quality, predictable cash flow, and the capacity to return money to shareholders. While the exact percentages of these positions may fluctuate, the underlying logic—look for companies that can consistently generate excess returns—remains unchanged.

For anyone following Buffett’s moves, the article serves as a concise playbook: focus on fundamentals, maintain a long‑term perspective, and watch how macro forces influence the valuation and growth prospects of the companies you admire. If you’re willing to wait out the market’s short‑term swings, Apple’s and Bank of America’s trajectory offers a compelling case for patience, discipline, and a dash of Buffett’s signature optimism.