Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) is perhaps best known for its enormous stock portfolio, which currently holds around 30 publicly traded positions worth more than $300 billion.
Berkshire’s leaders have long focused on companies with clear competitive advantages, buying them at valuations that offer a meaningful margin of safety for long-term investors.
Three holdings in particular stand out as compelling opportunities right now, including one that Berkshire actually reduced its position in during the second quarter.
The first is American Express (NYSE: AXP), Berkshire’s second-largest investment and a stock the firm has held for decades across multiple market cycles.
Unlike most financial companies, Amex operates as both the lender and the payment network, a dual-role model shared by only a handful of companies globally.
This structure allows Amex to earn interest income on balances carried and fee income on every dollar spent, giving it a diversified and resilient revenue base.
Amex’s affluent cardholder base is a particular strength right now, as higher-income consumers tend to pull back on spending far less aggressively during economic downturns.
The second stock is Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which is currently the holding Berkshire is buying most aggressively, making it the firm’s fourth-largest investment after additional purchases in the second quarter.
Both Google Services and Google Cloud generate strong cash flow, with Google Cloud posting 82% revenue growth in its latest quarter alongside a $514 billion backlog, outpacing larger rivals.
Despite that rapid growth and strong profitability, Alphabet trades at a notably reasonable earnings multiple compared to its mega-cap technology peers, making the valuation case straightforward.
The third stock is Ally Financial (NYSE: ALLY), which Berkshire trimmed by approximately 7% in the second quarter, alongside reductions in Bank of America (NYSE: BAC) and a 58% cut to its Capital One (NYSE: COF) stake.
Ally is arguably the most successful branchless bank in the United States, holding well over $100 billion in retail deposits and standing as the country’s largest auto lender not owned by an automaker.
In a higher-for-longer interest rate environment, Ally’s net interest margin tends to widen as loan rates rise faster than deposit costs, which benefits earnings meaningfully.
Ally has also been trading at a significant discount to book value despite solid business results, creating an appealing entry point for investors willing to accept some economic sensitivity.
The 7% trim by Berkshire most likely reflects a position-sizing decision rather than a bearish view, since Berkshire holds roughly 9% of Ally and aims to stay below the 10% threshold that triggers increased regulatory scrutiny.
Because Ally regularly repurchases its own shares, Berkshire’s stake could drift above 10% over time without any new buying, making the trim a proactive move to manage that risk.
Taken together, all three stocks offer distinct risk-reward profiles: Amex provides financial sector stability, Alphabet offers a reasonably priced entry into AI infrastructure growth, and Ally delivers a leading lending franchise at a discounted valuation.
