2 Trump-Proof Stocks That Are Long-Term Buys

How will the economic policies of the Trump administration -- centered around tariffs, trade wars, and vast government spending cuts -- play out? That's anyone's guess. The only thing that's not uncertain is that economic uncertainty is poison for most businesses. The unpredictability surrounding tariffs, an unknown impact of government spending cuts as they ripple through the economy, and the effects of an aggressive immigration policy could potentially lead to an economic downturn.

While there are no truly safe stocks, some companies are poised to perform better than others during and after periods of economic uncertainty. For investors worried about the Trump economy, International Business Machines (NYSE: IBM) and Berkshire Hathaway (NYSE: BRK.B) are great long-term bets.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

International Business Machines

Very few companies would be completely untouched by an escalating trade war and a potential recession. IBM will likely feel some pain as businesses pull back on IT spending in the face of growing uncertainty. However, demand could increase for tech projects that have a clear return on investment for clients in terms of cutting costs and boosting productivity.

Even before the Trump administration began, IBM was handling a mixed-demand environment. The company's clients have been pulling back on discretionary spending and deprioritizing non-critical projects, while boosting spending on transformation efforts and artificial intelligence (AI). Economic uncertainty in 2025 could supercharge those trends.

When cost-cutting becomes the priority for IBM's clients, the company's hybrid cloud and AI platforms, coupled with its consulting arm, offer attractive solutions. Moving from a legacy on-premises infrastructure to a hybrid cloud setup can deliver meaningful cost and productivity benefits, and tapping IBM's watsonx AI platform to deploy fine-tuned, specialized AI applications and agents can automate tasks and, ultimately, reduce spending.

IBM expects its revenue growth to accelerate to at least 5% in 2025, and free cash flow is expected to grow to $13.5 billion. A deteriorating economy could throw a wrench in that forecast, but IBM is still well-positioned to power through by helping clients weather the storm. IBM stock won't be immune from a broad sell-off, but the company itself should hold up better than many of its peers if economic conditions take a turn for the worse.

Berkshire Hathaway

There's no question that Warren Buffett's Berkshire Hathaway is exposed to the threat of trade wars and worsening economic conditions. The company owns a massive stock portfolio that will be hit hard by a stock market sell-off and operates businesses in a wide variety of industries, including railroads, energy, and consumer goods, which will suffer in a recession.

However, Berkshire also has a mountain of cash, and Buffett is legendary for having nerves of steel and finding incredible deals at times when others are running away. Multiple transactions he made during the financial crisis that threw lifelines to struggling companies, for example, paid off in the form of billions of dollars in gains. When the world was panicking, Buffett was making deals.

Berkshire ended 2024 with a whopping $334 billion in cash and short-term investments, like U.S. Treasury bills. This gives the company an incredible amount of resources to buy stocks that become attractively priced, acquire companies outright, or make other types of deals that ultimately enrich Berkshire shareholders. This cash also provides a huge buffer against deteriorating results for the company's businesses.

Many companies appear robust until a crisis hits, only to be revealed as fragile when things go sideways. Berkshire is "antifragile," a term coined by Nassim Taleb. The company is built to not only withstand extreme economic shocks, but also to grow stronger as it makes the types of investments that almost everyone else becomes afraid to make. No matter what happens during the Trump administration, Berkshire is almost certain to come out the other side a stronger company.

Should you invest $1,000 in International Business Machines right now?

Before you buy stock in International Business Machines, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and International Business Machines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $709,381!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 10, 2025

Timothy Green has positions in Berkshire Hathaway and International Business Machines. The Motley Fool has positions in and recommends Berkshire Hathaway and International Business Machines. The Motley Fool has a disclosure policy.