Warren Buffett is no longer running day-to-day operations at Berkshire Hathaway, but he remains on as board chairman and built much of the company’s existing portfolio of stocks and investments, although his successor, Greg Abel, made some wholesale changes in his first quarter as CEO.
The current portfolio is a mix of “Magnificent Seven” tech stocks, banks and financial giants, consumer staples, and energy leaders. But there are two Buffett stocks that stand out right now as terrific buys in the month of May.
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Gas prices have been soaring since the war in Iran began and the Strait of Hormuz closed. Without getting into the mechanics, the closure has created a supply deficit, which, in turn, has led to higher oil prices and higher consumer costs.
In the first quarter, Chevron(NYSE: CVX) only saw about a 2% increase in revenue and a 37% decline in earnings. But the pedestrian numbers are mostly due to the timing effects related to shipping and accounting.
The true telltale sign that Chevron had a great quarter was its production, which increased by some 500,000 barrels per day, including 388,000 barrels per day in the U.S., mostly in the Permian Basin and the Gulf, and 117,000 per day internationally. Overall, it’s about a 15% increase year over year.
This jump is reflected in its guidance, which calls for 7% to 10% production growth this fiscal year — and higher production means there is more to sell, and that leads to higher revenue. In addition, Chevron gets more of its oil from the U.S. than from the Middle East, so there is the potential for less disruption while the war in Iran drags on.
These factors, along with its strong adjusted free cash flow of $4.1 billion in Q1 2026, has helped spike Chevron’s stock price some 28% year to date. And with its robust earnings outlook, the forward price-to-earnings (P/E) is just 14, while the five-year price/earnings-to-growth (PEG) ratio is in value territory at 0.84.
Finally, there is the dividend. With an abundance of free cash flow and a robust outlook, Chevron has been adding to its already excellent dividend.
It increased its dividend for the 39th straight year in 2026, paying out a quarterly dividend of $1.78 per share at a yield of 3.63%. At a time of significant uncertainty over valuations and the economy, Chevron stock, a Buffett favorite, is a good defensive play.
2. Apple
Apple(NASDAQ: AAPL) has long been Buffett’s largest holding, but he had been consistently shedding shares for the past few years. In Q1, Abel did not sell any more Apple stock, keeping its roughly 228 million shares intact. Apple remains the largest position in Berkshire’s portfolio, accounting for about 22% of the $263 billion portfolio.
That could certainly be viewed as a vote of confidence for Apple stock, which is up about 10% year to date and 42% over the past 12 months (at the time of this writing).
Apple is coming off a great quarter where it delivered record fiscal Q2 revenue fueled by demand for the iPhone 17. Revenue increased 17%, while earnings spiked 22%. And for the June quarter, Apple’s fiscal Q3, Apple anticipates revenue rising 14% to 17%, which is better than analysts’ expectations.
May is a particularly good time to buy Apple shares because these are the weeks leading up to its annual Worldwide Developers Conference (WWDC) on June 8. Apple stock typically gets a boost leading up to the WWDC, its biggest event of the year where it often rolls out new products and services.
This year, it is introducing several new AI-related features for the iPhone and other products to improve accessibility. These features include voiceover, magnifier, voice control, reading summaries, video captions, and the ability for users to control wheelchairs with their eyes, among other features.
Also, Bloomberg reported that Apple is reorganizing its hardware development business to accelerate the launch of new products.
While Apple typically gets a buy-the-rumor boost leading up to WWDC, there is sometimes the knee-jerk sell-the-news reaction. But with its reasonable valuation, sales increases, and the transition to new CEO John Ternus in September, who comes from the hardware engineering department and should signal a shift toward product development, there is a lot of positive momentum at Apple.
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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Chevron. The Motley Fool has a disclosure policy.
