Is Bank of America Corporation (BAC) the Best Stock to Buy According to Billionaire Warren Buffett?

We recently published a list of 10 Best Stocks to Buy According to Billionaire Warren Buffett. In this article, we are going to take a look at where Bank of America Corporation (NYSE:BAC) stands against other best stocks to buy according to billionaire Warren Buffett.

Known and admired for his success, wealth and philanthropy, Warren Buffett is still at the helm of his diversified holding company. From a struggling New England textile company in the 1960s, Buffett has grown Berkshire to a firm boasting a range of businesses from Geico insurance to BNSF Railway, an equity portfolio exceeding $267 billion, and a cash reserve of $334.20 billion at the end of 2024.

Given his success on the investment horizon – a result of decades of strong returns – it doesn’t come as a surprise that Buffett is often touted as one of the greatest investors of all time.  In an attempt to mirror his trading activity, many investors search for what stocks is Warren Buffett buying today.

READ ALSO: Warren Buffett’s Portfolio: 15 Longest Held Stocks and 10 Stocks Warren Buffett and Insiders Are Crazy About.

The Oracle of Omaha focuses on companies with strong economic moats and undervalued assets, applying his well-known investment strategy – long-term value investing. Buffett is not that fond of diversification, as he is investing in businesses instead of stocks, picking those he understands.

While diversification as a risk mitigation technique is popular among those who are at the start of their investing journey, Buffett believes diversification could limit knowledge. He also doesn’t consider money the greatest investment tool, given his statement that “the best investment by far is anything that develops yourself, and it’s not taxed at all.”

Despite the strong market performance throughout much of 2024, Buffett appears to have taken a more cautious approach. With overinflated valuations due to high interest rates and deteriorating economic conditions in mind, he opted to sell off substantial stakes in companies whose valuations have become too high.

Buffett is also not fond of President Donald Trump’s tariffs on imports that sent shockwaves through global stock markets, even though his company’s Class B shares dipped 1.4% only on April 3, outperforming the broader market.

In the fourth quarter, Buffett’s 13F portfolio was comprised of a total of 38 security holdings and was worth roughly $267 billion, slightly up from $266 billion in the third quarter. Given that Buffett doesn’t like to diversify much, his top ten holdings account for nearly 90% of his 13F portfolio.

Our Methodology

To make the list of Warren Buffett’s top portfolio holdings we reviewed Berkshire’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Berkshire Hathaway and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373% since May 2014, beating its benchmark by 218 percentage points (see more details here).

That said, please see if there are overlaps between our compilation of the 10 longest-held stocks by The Oracle of Omaha wrapped up in November, and a new list of Warren Buffett’s top portfolio holdings.

Bank Of America Corporation (NYSE:BAC)

Portion of portfolio: 11.18%

Value of holdings: $29,896,266,149  

Bank of America Corporation (NYSE:BAC) is a global banking powerhouse providing various financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations and governments, garnering significant revenue from interest income on loans and mortgages. It boasts a client base of 68 million, operating 3,900 branches, 16,000 ATMs and serving 56 million digital users.

Buffett cut his holdings of Bank Of America by 15% sequentially to 680,233,587 of its shares.

Hardman Johnston Global Equity Strategy highlighted in its fourth quarter 2024 investor letter that Bank of America Corporation’s management sees a big opportunity going forward in growing and monetizing its mass retail client base.

The company is expected to announce its fiscal first-quarter earnings for 2025 before the market opens on Tuesday, Apr. 15. Analysts expect this financial giant to report a profit of $0.80 per share, down 3.6% from $0.83 per share in the year-ago quarter, according to Barchart.com. In 2024, the company’s financial performance demonstrated resilience, with revenue rising 11.94% year-over-year to $192.4 billion, while net income increased 2.6% to $25.5 billion. In the fourth quarter, the company posted a net income of $6.7 billion, or $0.82 per share, while revenue climbed 15% to $25.3 billion.

According to a bullish thesis on Bank of America Corp on Substack by Easy Trader, Bank Of America, as one of Warren Buffett’s top portfolio holdings, stands out compared to peers like JPMorgan Chase and Citigroup, due to its leadership in digital banking, sustainable finance and robust deposit growth. Favored by 18 billionaire investors as of first quarter of 2024, Bank of America is one of the best financial stocks to invest in.

On April 3, the company’s shares decreased 5.3% to $39.63 on the heels of President Donald Trump’s unveiling of global reciprocal tariffs during a Wednesday event at the White House. Bank of America shares traded at $39.54 per share on April 24 at the time of writing. Year-to-date the share price lost 10% in its value.

Overall, BAC ranks 3rd on our list of best stocks to buy according to billionaire Warren Buffett. While we acknowledge the potential of BAC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.