“I made the wrong decisions on Google and Amazon,” hedge fund guru Warren Buffett told shareholders at the annual Berkshire Hathaway 2018 meeting on Saturday. “We’ve looked at it. I made the mistake in not being able to come to a conclusion where I really felt that at the present prices that the prospects were far better than the prices indicated.”
So what other key investing insights can we drive from the Oracle of Omaha? And what does the Street have to say about Buffett’s take on Amazon and Google. Is it really too late to invest? TipRanks tracks over 4,700 Wall Street analysts. This allows us to discover the latest investing advice from the Street’s best-performing analysts. Let’s take a closer look now.
What’s hot
1. Amazon (NASDAQ:AMZN)
Of Jeff Bezos, CEO of Amazon, the 87-year-old billionaire revealed: “I had a very very very high opinion of Jeff’s ability when I first him, and I underestimated him.” Under Bezos’ guidance, Amazon is shaking up the retail world and the IT world simultaneously.
“I’ve watched Amazon from the start. I think what Jeff Bezos has done is something close to a miracle … The problem is when I think something will be a miracle, I tend not to bet on it. It would have been far better obviously if I had some insights into certain businesses.”
Indeed, Amazon is one of the Street’s most popular stocks right now. We can see from TipRanks that 36 out of 37 analysts are bullish. Although Buffett finds shares pricey, these analysts still see AMZN as a compelling investment opportunity with 16% upside potential.
Five-star Monness analyst Brian White is even more bullish than consensus. He has just ramped up his price target to $2,200 (39% upside) on the back of AMZN’s ‘truly exceptional’ Q1 results.
“Amazon continues to expand its reach across new areas and disrupt industries… Given the company’s minuscule market share in the global retail market, we believe the company can continue to grow at a rapid clip for years to come” concludes White. You can click on the screenshot below for further AMZN insights:
2. Alphabet (NASDAQ:GOOGL)
Buffett also regrets not buying Google parent Alphabet. In hindsight, Buffett believes he should have realized Google’s potential because Berkshire subsidiary Geico was paying Google “a lot of money”. According to Buffett, it was actually Bill Gates that told him to switch from search engine Altavista to Google.
However, the Street still sees big potential for GOOGL stock. Like Amazon, Alphabet has a ‘Strong Buy’ rating from the Street. This comes with an average price target of $1,264 indicating still sizeable upside potential of 20%.
Growth remains robust and extraordinarily consistent says RBC Capital’s Mark Mahaney. And good news: “the company’s investments in Cloud, Internet-connected Homes, and Autonomous Vehicles potentially set the company up for more years of premium growth & profits.” He sees shares reaching $1,285 (22% upside potential).
3. Apple (NASDAQ:AAPL)
Shares in Apple are popping to record-highs on the news that his Berkshire Hathaway fund snapped up 75 million AAPL shares in Q1. This is in addition to the whopping 165.3 million shares the fund already held.
The market is wrong to obsess over iPhone X demand. “The idea that you’re going to spend loads of time trying to guess how many iPhone X … are going to be sold in a 3 month period totally misses the point,” Buffett says. “It’s like worrying about the number of BlackBerrys 10 years ago.”
Instead he told investors: “It is an unbelievable company… If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States.” It looks like these feelings are mutual. Apple CEO Tim Cook said in a statement: “On a personal level, I’ve always greatly admired Warren and have always been grateful for his insight and advice.”
Apple is now trading at a record high of $183.83- up 14.5% over the last three months. As we can see from the screenshot below, the Street is cautiously optimistic on AAPL right now- with some analysts calling shares ‘fairly valued’ at current levels.
What’s Not
Bitcoin (BTC)
You can forget about crypto investing. Bitcoin is “probably rat poison squared,” Buffett told shareholders. Meanwhile Berkshire vice-chairman Charlie Munger didn’t seem that impressed by the crypto craze either. During the meeting he stated that trading in cryptocurrencies is “just dementia.”
This isn’t the first time Buffett has shared such bearish views. Back in January he told CNBC: “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” before adding, “If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”
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