Three Buffett-Backed Stocks for the Long Term: A Value Investor's 2026 Look

The enduring value philosophy is not a theory; it is a proven practice, most famously executed by Warren Buffett and his partner Charlie Munger. At the heart of this approach is the patient accumulation of businesses with durable competitive advantages, often referred to as a "moat." This is the blueprint Berkshire Hathaway has followed for decades, and it remains the defining characteristic of the portfolio. As of the third quarter of 2025, the portfolio is valued at $267 billion and is dominated by five stocks that together represent nearly 65% of its holdings. These are not speculative bets but the core of Buffett's strategy: Apple, American Express, Bank of America, Coca-Cola, and Chevron.

Each of these holdings embodies the principle of a "wonderful business" that can compound value over long cycles. Buffett has described American Express and Coca-Cola as companies he would own "indefinitely," a testament to their enduring brand power and customer loyalty. Apple's massive ecosystem and Bank of America's scale in financial services are other examples of businesses with wide moats. Even Chevron, a traditional energy company, provides a steady stream of income and is viewed as a reliable, cash-generative asset. The portfolio's structure is a direct reflection of this philosophy: concentration in a few, high-quality businesses rather than diversification for its own sake.

The transition of leadership has not altered this foundation. While Buffett has stepped down as CEO, the portfolio remains his due to his control and the expectation that new CEO Greg Abel will maintain the status quo. Every stock in the portfolio was acquired under Buffett's stewardship, and he retains 30.4% of the voting power of the company. The consensus among analysts is that Abel is unlikely to make significant changes to these core positions, particularly the top holdings. This continuity is critical. It means the market is not pricing in a radical shift in investment philosophy, but rather a continuation of a strategy that has delivered exceptional long-term results. The blueprint is intact.

Analyzing the Core Holdings: Moats, Margins, and Management

The heart of Berkshire Hathaway's portfolio is a collection of businesses that embody the value investing philosophy: durable competitive advantages, pricing power, and management that acts like owners. These are not speculative bets but long-term holdings built on a foundation of trust and proven economics.

Apple remains the crown jewel, representing 21.1% of the portfolio. While Buffett has drastically reduced Berkshire's position in Apple over the last couple of years, the iPhone maker is still the conglomerate's largest holding. The rationale is clear: a powerful ecosystem that fosters remarkable customer loyalty. The recent trim suggests Buffett is taking some profits from a position that has delivered extraordinary returns, but it does not signal a loss of faith in the business model. The company's reported development of smart glasses points to a potential new frontier, keeping the long-term growth story intact.

The other three of the five largest holdings are described by Buffett as "wonderful businesses" that Berkshire intends to hold indefinitely. American Express, at 18.3% of the portfolio, is a prime example. Its strong brand moat and deep customer relationships provide a wide margin of safety. Similarly, The Coca-Cola Company, Berkshire's fourth-largest holding, is a timeless brand with global reach and a long history of shareholder returns. Both companies exemplify the "stick with it" principle Buffett advocates.

Bank of America, valued at more than $31 billion, presents a different, yet compelling, case. It trades at an attractive forward price-to-earnings ratio of 12.7, a valuation that suggests the market may be undervaluing its earnings power. This is a classic value setup: a large, well-managed financial institution with a solid franchise trading at a discount to its intrinsic worth. The portfolio's continued ownership, despite Buffett's waning enthusiasm for banks in recent years, signals a belief in the current price offering a margin of safety.

The bottom line is that Berkshire's core holdings are a masterclass in concentration and conviction. They are businesses with wide moats that generate predictable cash flows, allowing the conglomerate to compound capital over decades. For a value investor, the lesson is to look past short-term price movements and focus on the durability of the business model and the quality of its management. These are the companies that can weather cycles and deliver returns over the long term.

Catalysts, Risks, and What to Watch in 2026

The investment thesis for Berkshire Hathaway hinges on the continuity of its strategy. The primary risk is a shift in investment philosophy by new CEO Greg Abel. However, the evidence suggests significant changes are unlikely. The portfolio remains Buffett's portfolio, as he retains 30.4% of the voting power and controls the board. Most of Berkshire's top holdings were acquired under his leadership, and his successor is expected to maintain the focus on high-quality businesses with durable moats. The key catalyst for the stock is the execution of this broader strategy, including any potential acquisitions and the performance of smaller, more volatile holdings like Ally Financial.

For investors, the watchlist should include several specific catalysts. First, monitor the performance of the five largest holdings, which make up nearly 65% of the portfolio. While a major sale of any is improbable, any significant trimming of a position like Apple or Chevron would signal a strategic pivot. Second, watch for the execution of cost-cutting and new projects at key holdings. For example, Chevron's valuation is supported by optimism around its aggressive cost-cutting plans and its strategy to build natural gas power plants for AI data centers, despite current commodity price headwinds. A successful rollout of these initiatives could unlock value. Third, track the recovery of smaller, cyclical positions like Ally Financial. The bank has already shown resilience, with shares rising nearly 30% in 2025 as auto loan conditions normalized. Continued earnings improvement, with forecasts calling for a 44% jump in earnings per share, is the key to its rebound.

The bottom line is that Berkshire's 2026 setup is one of cautious continuity. The market is pricing in a smooth transition, betting that Abel will stick to the playbook. The real catalysts are internal: the successful integration of new projects at holdings like Chevron, the sustained recovery of cyclical businesses like Ally, and the disciplined execution of any new acquisitions. Investors should watch these operational levers, not just the headline valuation.