Warren Buffett’s Portfolio: 3 Stocks Poised for Success in 2025
As we enter a new year, it’s natural to wonder which stocks in Warren Buffett’s portfolio will shine brightest. While no one can predict the future with certainty, I’m taking a calculated risk to identify three Buffett stocks that could be the biggest winners in 2025.
A Bright Future Ahead for Nu Holdings
Nu Holdings, the Latin American digital bank, was one of Buffett’s top performers in 2024, with shares surging as high as 88% at one point. Although Berkshire’s sale of nearly 20% of its stake in Nu led to a pullback, I believe the stock’s prospects look promising in the new year. With shares trading at just 17.5 times forward earnings, Nu’s growth opportunities make it an attractive investment. The company’s revenue soared 53% year over year in Q3 2024, and its costs to serve active customers continue to trend downward.
Ally Financial: A Valuation Play
Ally Financial’s comments at an industry conference in September may have dampened its stock performance in 2024, but I think the financial services company is poised for a rebound in 2025. With a forward earnings multiple of just 8 times, Ally’s valuation is compelling. The company’s price/earnings-to-growth (PEG) ratio based on five-year earnings growth projections is a low 0.57, according to LSEG. Wall Street analysts expect Ally’s stock to rise around 16% over the next 12 months.
Lennar: A Homebuilder with Upside Potential
Lennar, the homebuilder, was one of the few losers in Buffett’s portfolio in 2024. However, I believe the stock’s current valuation is too low, trading at just 9.6 times forward earnings. With pent-up demand for housing remaining strong and limited supply, any interest rate cuts that lead to lower mortgage rates should benefit Lennar. Additionally, concerns about potential tariffs imposed by the incoming administration may be alleviated in 2025, leading to a rally for the stock.
These three Buffett stocks have the potential to outperform in 2025, but it’s essential to remember that investing always involves risk. As Warren Buffett himself would caution, no one can predict the future with certainty.
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