The Nasdaq-100 was sizzling hot in 2023, skyrocketing nearly 54%. It marked the best performance for the index since 1999.
Warren Buffett's Berkshire Hathaway (BRK.A -0.57%) (BRK.B -0.41%) wasn't as hot. Sure, shares of the giant conglomerate jumped 15%. That wasn't enough to keep up with any of the major market indexes, though.
But Buffett's portfolio includes six Nasdaq-100 stocks. Here they are -- and which one is the best pick to buy right now.
Warren Buffett. Image source: The Motley Fool.
All the Nasdaq-100 stocks Buffett owns
Apple (AAPL -0.83%) ranks as the largest holding by far in Buffett's Berkshire Hathaway portfolio. It has also held the top position in the Nasdaq-100 for quite a while, although that could be in jeopardy with Microsoft's market cap gaining ground.
Buffett's stake in Amazon (AMZN 0.47%) is much smaller. The e-commerce and cloud services leader is a biggie in the Nasdaq-100, though, with its weight in the index lagging behind only Apple and Microsoft.
Berkshire's portfolio also includes another top 20 stock in the Nasdaq-100 -- T-Mobile US (TMUS 0.31%). The telecommunications company is a relatively small position for Buffett, with Berkshire's stake currently worth around $850 million.
Next up is Charter Communications (CHTR). The weight for this communications stock ranks it at No. 56 in the Nasdaq-100. Berkshire owns over 3.8 million shares of Charter worth roughly $1.4 billion.
Kraft Heinz (KHC 0.92%) is the No. 60 stock in the Nasdaq-100 and has been a key holding for Buffett for years. Berkshire owns 26.5% of the food company. Kraft Heinz is even included on Berkshire's website's list of subsidiaries.
Last -- and, in this case, least -- is Sirius XM Holdings (SIRI 0.26%). The satellite radio company barely made the Nasdaq-100. It's also a really small position in Berkshire's portfolio, with the conglomerate's stake in Sirius XM currently worth only around $50 million.
A process of elimination
Which of these six Nasdaq-100 stocks that Buffett owns is the best pick? It depends on what your investment priorities are. If you're looking for income, Kraft Heinz offers the highest dividend yield. But most investors are interested in Nasdaq-100 stocks for growth, so let's focus on which stock is likely to deliver the most growth. We can use a process of elimination.
I think we can immediately rule out Kraft Heinz. A consumer defensive stock usually won't generate inspiring growth.
T-Mobile probably has some upside potential this year. However, the company continues to face significant competition in the wireless market. I wouldn't pick it as the most likely to succeed among these Buffett stocks.
Sirius XM has done a whole lot of nothing over the last five years. There are some reasons to be cautiously optimistic about the stock. Podcasting especially could be a growth driver. Still, I don't view Sirius XM as the stand-out winner among these Nasdaq-100 stocks.
What about Charter Communications, which -- like T-Mobile -- provides wireless services? Wall Street thinks the stock could take off this year. The average 12-month price target is nearly 25% above Charter's current share price. I think the stock is possibly a contender, but cord-cutting could still weigh on the company's cable business.
Buffett's favorite stock (other than Berkshire) is no doubt Apple. I wouldn't bet against Apple over the long run. However, its valuation is kind of steep right now with no rock-solid catalysts on the way. Sure, the company's new Vision Pro mixed-reality device could make a splash. With its hefty price tag, though, I wouldn't bank on it moving the needle all that much for Apple right out of the gate.
Buffett's best Nasdaq-100 stock to buy right now
That leaves only one Nasdaq-100 stock in Buffett's portfolio -- Amazon. I think that Amazon is the best stock to buy now of the group. There are some good reasons why it was the best performer by far over the last 12 months among the six stocks.
The company's profitability has increased sharply (earnings more than tripled year over year in the latest reported quarter). I fully expect this trend to continue as a result of Amazon's renewed focus on its bottom line.
Amazon continues to find new markets to enter. Healthcare, online car sales, and supply chain management services are three relatively recent examples. The company has also made a big push into advertising, which makes perfect sense.
Most importantly, in my view, Amazon has a massive opportunity with the increased adoption of generative AI. Amazon Web Services (AWS) is the top cloud services provider based on market share. CEO Andy Jassy argued in the company's third-quarter conference call that customers want to run their AI models where their data is. I agree. That bodes well for AWS.
There are a handful of stocks that I think every investor should seriously consider owning. Amazon definitely makes that list.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon, Apple, Berkshire Hathaway, and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway, and Microsoft. The Motley Fool recommends Kraft Heinz and T-Mobile US. The Motley Fool has a disclosure policy.
