The Best Warren Buffett Stocks to Buy With $3,000 Right Now

Source The Motley Fool

Key Points

  • Patience has turned the company’s sizeable position in Coca-Cola into an impressive cash cow.

  • Tech giant Alphabet doesn’t bring the same sort of risks to the table that Buffett was trying to avoid by steering clear of tech stocks many years ago.

  • Ally Financial is a seemingly unlikely Buffett pick, but one that works in most investors’ growth portfolios.

  • 10 stocks we like better than Coca-Cola ›

There's no denying that Berkshire Hathaway's (NYSE: BRKA) (NYSE: BRKB) new CEO Greg Abel is doing things at least a little differently than his predecessor, Warren Buffett.

In just his first quarter at the helm, Abel exited 16 different stock positions that had been accumulated during the 55 years Buffett led the company. None of them were particularly big holdings. Still, it's a lot of change in a short amount of time.

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It's the stocks that Abel stuck with, however, that are arguably of most interest now. He and Buffett agree that they're worth holding for the long haul.

Here's a closer look at three of the best investments Buffett selected when he was in charge, and that Abel didn't exit even when he had a chance to do so.

Warren Buffett walking down a hallway.

Image source: Getty Images.

1. Coca-Cola

It's such a commonly suggested Buffett pick that it's almost become a cliché. Nevertheless, the fact that it's grown to become Berkshire's third-biggest position speaks volumes about what Buffett and Abel both think of The Coca-Cola Company (NYSE: KO).

There's also little doubt as to what the two like most about the holding that was first established in the late 1980s and early 1990. That's its reliable dividend payment, and dividend growth. Although this wasn't the case back then, with 64 consecutive years of continued annual dividend growth under the company's belt, the 400 million shares of KO that Berkshire Hathaway currently owns are generating roughly $800 million in annual dividend income. (For perspective, all of Berkshire's privately held cash-generating businesses -- like railroad BNSF, Duracell batteries, Dairy Queen, and Fruit of the Loom -- produce on the order of $40 billion worth of operating profits per year.)

These Coca-Cola shares, of course, also produce modest capital gains.

The secret to this stock's persistent success isn't exactly a secret. The beverage behemoth makes a range of high-quality products that are perpetually marketable. Its brands include Gold Peak tea, Minute Maid juices, Powerade sports drink, Barq's root beer, Dasani water, and, of course, its namesake cola. It's got something to meet consumers' ever-changing preferences.

It also doesn't hurt that Coca-Cola's sheer size gives it some serious selling and marketing leverage.

2. Alphabet

This isn't a mistake. Berkshire Hathaway owns a piece of Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) -- a decent-sized one, in fact, after last quarter's addition.

Buffett first allowed the purchase of a modest 17.8 million shares of the technology giant during the third quarter of last year. During the first quarter of 2026, however, Abel tripled this stake to 57.8 million shares. This made Alphabet Berkshire's fifth-biggest position, now worth $26 billion.

What changed? After all, Warren Buffett famously made a point of avoiding technology stocks, saying he didn't understand them well enough to pick them.

Contrary to appearances, Abel's decision isn't meant as a defiant message to Buffett's hesitance. When Buffett first voiced his worries about picking technology stocks, his concerns were merited. The business was changing rapidly then, and any of the market's top tech names could have been upended without warning.

As time marched on and the technological revolution's dust finally began settling, it became clear which companies were the industry's leaders and laggards. Buffett was and is obviously well aware that Google's market-leading hold on the relatively simple search engine business is likely to last, for instance.

That being said, 63-year-old Abel arguably has an even better appreciation for what Alphabet is doing beyond web-search, and how it benefits the company's bottom line. These other profit centers include cloud computing, mobile operating system Android, YouTube, artificial intelligence, and more.

The irony? All that Alphabet does creates the competitive advantage and wide moat that Buffett actually looks for in the businesses he buys into.

3. Ally Financial

Finally, add Ally Financial (NYSE: ALLY) to your list of Warren Buffett stocks to buy if you've got a few thousand bucks you're ready to put to work in the market for a while.

It's a seemingly unlikely Buffett pick. While he's no stranger to banks, again, he's generally steered clear of new technology-centric industries and less-proven premises like neobanking. Nevertheless, Buffett allowed Berkshire Hathaway to scoop up 30 million shares of this online-only banking name in 2022, and it's held on to the vast majority of them ever since.

In retrospect, though, it was the right decision. While revenue has only grown modestly in the meantime, it's finally starting to accelerate. This year's top line is projected to improve roughly 20%, producing even faster per-share profit growth.

Simply put, Ally's business is at the proverbial tipping point.

The underlying tailwind is, of course, the shift away from traditional brick-and-mortar banking and toward self-service options built from the ground up to be accessed online, and accessed via a mobile app in particular. And the industry has only scratched the surface. An outlook from industry research outfit Mordor Intelligence suggests the global neobanking market is poised to grow at an average annualized rate of nearly 11% through 2031.

Ally shares haven't performed especially well of late, for the record. In fact, they've only made modest forward progress since peeling back from their 2021 pandemic-prompted peak.

It's worth noting that the analyst community isn't deterred. The majority of them currently rate this stock as a strong buy, with a consensus price target of $54.35 that's more than 30% above the ticker's present price. That's not a bad tailwind for starting a new trade.

Should you buy stock in Coca-Cola right now?

Before you buy stock in Coca-Cola, consider this:

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Ally is an advertising partner of Motley Fool Money. James Brumley has positions in Alphabet and Coca-Cola. The Motley Fool has positions in and recommends Alphabet and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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