Recent stock filings revealed that Berkshire Hathaway He made a huge investment in a computer and printer maker HP. By purchasing nearly 121 million shares, the investment group led by Warren Buffett immediately became HP’s largest shareholder – with an approximately 11% stake in the business.
While Buffett’s big bet on HP is generating a lot of headlines and is certainly interesting, HP isn’t the only tech stock in the Berkshire portfolio worth buying this month. Read on to find out why a group of Motley Fool contributors are identified Amazon (AMZN -1.45% )And Verizon (VZ 1.14% )And snowflake (snow 1.82% ) As the top Berkshire-backed technology stock to buy in April.
Amazon is at the top of its game
Daniel Foilber (Amazon): Amazon stock fell more than 5% last week and is down 17% from its all-time high as broader market volatility collided with growth fears and threats of unionization. Amazon, like other companies, deals with workers who ask to join unions for better benefits and higher wages. However, Amazon has a history of paying its workers well and was one of the first companies to implement a higher minimum wage. In October 2018, Amazon raised its minimum wage to $15 an hour, setting the tone for many other companies in various industries to follow suit. Given its track record of fairly compensating employees, Amazon appears to stand a good chance of working with its employees to better meet their needs and avoid hostile outcomes.
During raging bull markets, sometimes a company will report an average or even weak quarter, and the stock will go up anyway. The opposite is true during heavy selling in the market, where large quarters are often largely ignored. That’s exactly what happened in the last quarter of Amazon.
The company set a record for largest single-day market cap gain on February 4 when its share price rose 13.5% after reporting fourth-quarter and full-year 2021 results. However, Amazon stock has since fallen from that rally, giving investors a chance to get some of that good news and guidance at a discount.
Amazon is an excellent company with an incredibly sophisticated supply chain, pricing power, and an absolute cash cow from the high margin Amazon web services business. Buying Amazon shares for sale has been one of the best ways to beat the stock market for almost 20 years. There is no reason to believe that this trend will change anytime soon.
The right technology in the right place at the right time (almost)
James Bromley (Verizon): I know most people consider it just a telecom service company, and it is. But one of the things that make Verizon (VZ 1.14% ) One of Berkshire’s long-standing possessions is the fact that the organization ensures that the core technology that underpins its service is unparalleled.
Take the company’s 5G network, for example. For years, a cross section of investors questioned his huge investment in optical fibers which – at the time – was not worth it. Now he does. As it turns out, there isn’t enough wireless bandwidth to handle the data load being generated by millions of wireless devices. Verizon’s technology offloads a significant amount of enhanced data transmission to the company’s fiber network.
It works. Verizon received top honors in last year’s review of all US wireless networks by JD Power. The company’s 5G network technology is so powerful and high capacity, in fact, that it can be used to deliver broadband service in the home as well as turn consumers’ smartphones into web-connected devices. Verizon believes it will be able to offer 5G connectivity to 175 million people by the end of this year. The advent of the data-intensive metaverse should truly materialize this opportunity.
This of course sets the stage for growth of more than 4% starting in 2024, and given the company’s cadence of earnings growth, there is every reason to expect Verizon to use this growth to support continued earnings increases.
This innovative technology company can crush the market
Keith Noonan (Snowflake): With the company currently unprofitable and sporting a market capitalization of approximately $65.5 billion and trading at roughly 32 times expected sales for the year, Snowflake has one of the most atypical valuation profiles in Berkshire Hathaway’s portfolio, we’d probably say. On the other hand, I think the stock can deliver massive gains for risk-taking investors.
Business operations are increasingly moving to and relying on digital channels, and companies are sifting through huge sets of data in hopes of generating valuable insights. However, in order to get the full picture, it is important to access the full data picture. Snowflake provides data warehousing services that allow companies to gather information from cloud platforms that are otherwise isolated from one another, and help companies keep pace with the rapid pace of change in the information age.
According to various surveys, more than 90% of companies are already using multiple cloud service providers or otherwise planning to pursue a multi-cloud strategy, and there is an incredibly strong forecast for the long-term demand for Snowflake. In addition to the company’s data storage offerings, Snowflake also provides a marketplace that allows businesses and organizations to buy and sell data sets, and appears poised to take advantage of the strong network influence as more users join the service.
The company’s revenue was up 106% annually in 2021 to nearly $1.14 billion, and the company posted non-GAAP free cash flow (adjusted) of $149.8 million. While Snowflake is still very forward-looking, the stock is down about 38.5% year-to-date and about 48.5% from last year’s high, and I think the stock has what it takes to deliver huge returns for the long-term shareholders.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.