Warren Buffett's 3 favorite Robinhood stocks

The Oracle of Omaha might not like Robinhood, but he definitely likes several Robinhood stocks.

Warren Buffett

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Warren Buffett clearly doesn't like the Robinhood trading platform very much. At Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) annual shareholder meeting in May, the famous investor said that Robinhood has "become a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half." 

That doesn't mean that Buffett doesn't see eye-to-eye with Robinhood investors at times, though. Several of the stocks most widely held by investors on the no-commission trading platform are also in Berkshire's portfolio. Here are Buffett's three favorite Robinhood stocks based on the size of Berkshire's stake in each stock. 

Apple

The second-most popular stock on Robinhood is literally the Apple (NASDAQ: AAPL) of Buffett's eye. Apple is by far the largest holding in Berkshire's equity portfolio. Last year, Buffett said that Apple was "probably the best business I know in the world." 

Why does the legendary investor like Apple so much? For one thing, Buffett has always preferred businesses that generate high margins and return on equity. At Berkshire's latest shareholder meeting, he listed Apple first as one of a handful of "terrific examples" of such businesses.

The Oracle of Omaha also likes that Apple markets "sticky" products. This is a reference to the company's ability to retain customers in its ecosystem built around the iPhone. Companies such as Apple that have loyal customer bases also tend to have strong pricing power. 

It seems likely that Buffett and Robinhood investors will be proven right about prizing Apple stock so highly. The increased adoption of 5G networks should continue to fuel higher iPhone sales. Apple's focus on augmented reality (AR) apps and devices could also pay off handsomely over the next few years.

Bank of America

Bank of America (NYSE: BAC) is without question the most popular bank stock among Robinhood investors. It's also clearly Buffett's favorite bank stock, ranking behind only Apple as the largest position in Berkshire's portfolio.

Buffett has long liked bank stocks, in general, in large part because of their ability to deliver a strong return on equity. However, over the last few quarters he has significantly trimmed Berkshire's stakes in bank stocks -- with the notable exception of Bank of America (BoA). 

There are probably three key reasons why Buffett remains such a big fan of BoA. He respects the company's management team, led by CEO Brian Moynihan. Buffett likely thinks that BoA will continue to generate increasing profits. He also almost certainly views the big bank's strong capitalization as a major plus. 

Those three attributes could very well translate to solid gains for Buffett and for many Robinhood investors. The Federal Reserve Board has already indicated that interest rate increases will be on the way in the not-too-distant future. Bank of America ranks as one of the top stocks set to benefit from these coming rate hikes.

Coca-Cola

Coca-Cola (NYSE: KO) might be a somewhat surprising member of Robinhood's top 100 most popular stocks. The beverage giant hasn't delivered impressive returns in recent years. However, there's no surprise whatsoever that Coca-Cola is a Buffett favorite. The stock ranks as Berkshire's fourth-largest holding.

Buffett thinks so highly of Coke primarily because of the company's strong moat -- the Coca-Cola brand. He understands that most customers won't go for a rival product even if it's priced lower. 

Of course, Buffett also knows that the best businesses are built to last. Coca-Cola, founded in 1892, has been the world's leading soft drink maker for longer than most people have been alive. 

Coca-Cola stock might not deliver the biggest returns for Buffett or Robinhood investors going forward. However, it's still a solid pick and remains a dividend investor's dream. Buffett, who has publicly stated that he drinks five of the company's soft drinks each day, will probably have a Coke and a smile for years to come as those dividends flow in.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Keith Speights owns shares of Apple, Bank of America, and Berkshire Hathaway (B shares). Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple and Berkshire Hathaway (B shares). The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

Prediction: Nvidia's recent unobtrusive maneuver could signal a big growth move ahead.

Let's take a look.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
International Stock News

Prediction: This artificial intelligence (AI) stock could be the next Nvidia — and it's not what you think

Let's take a closer look at that name and see why it could turn out to be a solid addition…

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

Worried about Tesla's Robotaxi? These two words from Nvidia CEO Jensen Huang might change your mind.

Investors are on the edge of their seats as Tesla's robotaxi launch is reportedly around the corner.

Read more »

AI written in blue on a digital chip.
International Stock News

Warren Buffett has 23% of Berkshire Hathaway's portfolio invested in 2 AI stocks up 600% and 900% in the last decade

Here's what investors should know about these two stocks.

Read more »

Happy woman working on a laptop.
International Stock News

Want to invest in quantum computing? 3 stocks that are great buys right now.

They all give investors direct exposure to quantum computing, but aren't the all-or-nothing bets that some investors may regret going…

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
International Stock News

Billionaire Dan Loeb just sold Meta and Tesla stocks and piled into this hot AI stock up 1,500% over the past 5 years

Let's see what investors are thinking about these stocks today.

Read more »

A head shot of legendary investor Warren Buffett speaking into a microphone at an event.
International Stock News

Warren Buffett just spent $1.8 billion on 7 stocks. Here's the best of the bunch

Buffett's relatively small investments could be big opportunities for individual investors.

Read more »

Woman and man calculating a dividend yield.
International Stock News

This monster streaming stock has quietly crushed Netflix in 2025. Could a stock split be on the horizon?

Streaming stocks have crushed the market this year, and one name in particular has blown Netflix out of the water.

Read more »