Potential of Buffett's Smaller Holdings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7h ago
0mins
Source: NASDAQ.COM
- Holding Overview: As of February 4, Berkshire Hathaway owns $2.7 billion in Visa and $2.2 billion in Mastercard shares, making up 1.5% of its $324 billion portfolio; while this is a small percentage, the dominance of these companies in the payment industry is significant.
- Network Effect Advantage: Visa and Mastercard cards are widely used globally, accepted at over 150 million merchant locations, and their powerful network effects enhance the platform's value, making replication of this model a daunting task and ensuring their competitive edge.
- Strong Financial Performance: Over the past decade, both Visa and Mastercard have achieved double-digit annualized revenue and diluted earnings-per-share growth, and although they have lagged the S&P 500 in the last five years, their growth prospects remain robust, particularly with the ongoing adoption of cashless transactions.
- Valuation and Investment Advice: Despite Visa's price-to-earnings ratio of 30.9 being slightly lower than Mastercard's 32.9, both valuations are still not cheap; investors should keep an eye on these stocks as a solid foundation for their portfolios, even though outsized returns should not be expected.
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Analyst Views on MA
Wall Street analysts forecast MA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MA is 684.13 USD with a low forecast of 525.00 USD and a high forecast of 1088 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
24 Analyst Rating
20 Buy
4 Hold
0 Sell
Strong Buy
Current: 551.890
Low
525.00
Averages
684.13
High
1088
Current: 551.890
Low
525.00
Averages
684.13
High
1088
About MA
Mastercard Incorporated is a technology company in the global payments industry. The Company connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide by enabling electronic payments and making those payment transactions secure, simple, smart and accessible. It provides a range of payment solutions and services using its brands, including Mastercard, Maestro and Cirrus. It operates a payments network that provides choice and flexibility for consumers, merchants and its customers. Through its proprietary global payments network, it switches (authorizes, clears and settles) payment transactions. Its additional payments capabilities include automated clearing house (ACH) transactions (both batch and real-time account-based payments). It offers security solutions, consumer acquisition and engagement, business and market insights, gateway, processing and open banking, among other services and solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Rapid Market Growth: Stablecoins grew by 49% last year, reaching a total market cap of $250 billion, indicating strong momentum in the cryptocurrency space despite skepticism from traditional payment giants.
- Enhanced Payment Convenience: Operating on blockchain technology, stablecoins offer 24/7 settlement, reducing payment times from days to seconds, which could attract more attention from banks and payment networks amid increasing demand for fast transactions.
- Attractive Yields: Some stablecoins provide appealing yields to consumers, with predictions that nearly $500 billion in bank deposits will flow into stablecoins by 2028, highlighting their potential as a high-yield alternative that could alter consumer saving habits.
- Diverse Market Participants: In addition to Tether and USDC, stablecoins from companies like PayPal and Ripple showcase the diversity and competitiveness of this sector, and while Visa and Mastercard express doubts about demand, support from market participants may drive further development.
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- Stablecoin Market Overview: Currently, there are nine stablecoins with market caps exceeding $1 billion, led by Tether and USDC, which together account for a total market cap of $250 billion, indicating rapid growth in the crypto space, despite Visa and Mastercard's view of a lack of product-market fit in developed markets.
- Limitations of Payment Methods: Executives from Visa and Mastercard stated in earnings calls that consumer demand for stablecoins is limited, believing their usage is primarily confined to cross-border payments, which may hinder broader adoption among retail customers.
- Attractive Yield Appeal: The high yields offered by stablecoins have attracted many investors, with Standard Chartered predicting that nearly $500 billion in bank deposits will flow into stablecoins by 2028, suggesting that stablecoins could serve as a viable alternative to traditional bank deposits with significant market appeal.
- Blockchain Technology Advantages: Stablecoins, operating on blockchain technology, provide 24/7 settlement and payment speeds measured in seconds; although Visa and Mastercard express skepticism, this technological edge may prompt banks and payment networks to reconsider the potential value of stablecoins.
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Potential of Buffett's Smaller Holdings
- Holding Overview: As of February 4, Berkshire Hathaway owns $2.7 billion in Visa and $2.2 billion in Mastercard shares, making up 1.5% of its $324 billion portfolio; while this is a small percentage, the dominance of these companies in the payment industry is significant.
- Network Effect Advantage: Visa and Mastercard cards are widely used globally, accepted at over 150 million merchant locations, and their powerful network effects enhance the platform's value, making replication of this model a daunting task and ensuring their competitive edge.
- Strong Financial Performance: Over the past decade, both Visa and Mastercard have achieved double-digit annualized revenue and diluted earnings-per-share growth, and although they have lagged the S&P 500 in the last five years, their growth prospects remain robust, particularly with the ongoing adoption of cashless transactions.
- Valuation and Investment Advice: Despite Visa's price-to-earnings ratio of 30.9 being slightly lower than Mastercard's 32.9, both valuations are still not cheap; investors should keep an eye on these stocks as a solid foundation for their portfolios, even though outsized returns should not be expected.
See More
Buffett's Safe Investments: Visa and Mastercard
- Portfolio Overview: As of February 4, Berkshire Hathaway holds $2.7 billion in Visa shares and $2.2 billion in Mastercard shares, together representing 1.5% of its $324 billion portfolio, indicating the strong positions these companies hold in the payment industry despite their small percentage.
- Network Effect Advantage: With billions of cards in use globally and acceptance at over 150 million merchant locations, Visa and Mastercard benefit from a powerful network effect that enhances the platform's value, making it difficult to replicate and providing investors with stable confidence.
- Robust Financial Performance: Despite ongoing innovations from fintech companies and stablecoins, both Visa and Mastercard have achieved double-digit annualized revenue and diluted earnings-per-share growth over the past decade, underscoring their unshakeable competitive positions and providing peace of mind to shareholders.
- Future Growth Potential: Although both companies have underperformed relative to the S&P 500 over the past five years, their durable growth prospects from the ongoing shift towards cashless transactions suggest they will generate significantly higher revenues and profits in the future, making them a solid foundation for any investment portfolio.
See More
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- Successful Platinum Card Launch: Despite the annual fee increase from $695 to $895, the newly launched Platinum card has been a hit among consumers, with retention rates remaining stable and modest initial incentives for new cardholders, indicating robust demand for premium services.
- Significant Travel Booking Growth: The relaunch of the Platinum card, combined with the travel experience planning app, has driven a 30% year-over-year increase in travel bookings, directly reflecting the heightened engagement of cardholders as noted by CEO Stephen Squeri, further solidifying American Express's position in the luxury market.
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- Coinbase Market Performance: Coinbase has an RSI of about 14, with shares down 25% this week linked to a plunge in Bitcoin prices; however, it regained some ground on Friday, and analysts remain optimistic, expecting the stock to double over the next year, reflecting confidence in digital assets.
- KKR Oversold Risk: KKR's RSI is below 20, with shares tracking down more than 13% this week amid fears that AI could disrupt the application software industry, yet most analysts maintain a buy rating, projecting a 53% increase in stock price over the coming year, showcasing investor confidence in its long-term potential.
- Market Sentiment Volatility: Following significant market swings, many stocks have RSIs below 20, indicating widespread overselling, as investors may be looking for buying opportunities at lower prices, reflecting expectations for a future rebound.
See More
Stablecoins Experience Rapid Growth Amid Skepticism from Visa and Mastercard
- Rapid Market Growth: Stablecoins grew by 49% last year, reaching a total market cap of $250 billion, indicating strong momentum in the cryptocurrency space despite skepticism from traditional payment giants.
- Enhanced Payment Convenience: Operating on blockchain technology, stablecoins offer 24/7 settlement, reducing payment times from days to seconds, which could attract more attention from banks and payment networks amid increasing demand for fast transactions.
- Attractive Yields: Some stablecoins provide appealing yields to consumers, with predictions that nearly $500 billion in bank deposits will flow into stablecoins by 2028, highlighting their potential as a high-yield alternative that could alter consumer saving habits.
- Diverse Market Participants: In addition to Tether and USDC, stablecoins from companies like PayPal and Ripple showcase the diversity and competitiveness of this sector, and while Visa and Mastercard express doubts about demand, support from market participants may drive further development.
See More
Visa and Mastercard Dismiss Stablecoins in Developed Markets
- Stablecoin Market Overview: Currently, there are nine stablecoins with market caps exceeding $1 billion, led by Tether and USDC, which together account for a total market cap of $250 billion, indicating rapid growth in the crypto space, despite Visa and Mastercard's view of a lack of product-market fit in developed markets.
- Limitations of Payment Methods: Executives from Visa and Mastercard stated in earnings calls that consumer demand for stablecoins is limited, believing their usage is primarily confined to cross-border payments, which may hinder broader adoption among retail customers.
- Attractive Yield Appeal: The high yields offered by stablecoins have attracted many investors, with Standard Chartered predicting that nearly $500 billion in bank deposits will flow into stablecoins by 2028, suggesting that stablecoins could serve as a viable alternative to traditional bank deposits with significant market appeal.
- Blockchain Technology Advantages: Stablecoins, operating on blockchain technology, provide 24/7 settlement and payment speeds measured in seconds; although Visa and Mastercard express skepticism, this technological edge may prompt banks and payment networks to reconsider the potential value of stablecoins.
See More
Potential of Buffett's Smaller Holdings
- Holding Overview: As of February 4, Berkshire Hathaway owns $2.7 billion in Visa and $2.2 billion in Mastercard shares, making up 1.5% of its $324 billion portfolio; while this is a small percentage, the dominance of these companies in the payment industry is significant.
- Network Effect Advantage: Visa and Mastercard cards are widely used globally, accepted at over 150 million merchant locations, and their powerful network effects enhance the platform's value, making replication of this model a daunting task and ensuring their competitive edge.
- Strong Financial Performance: Over the past decade, both Visa and Mastercard have achieved double-digit annualized revenue and diluted earnings-per-share growth, and although they have lagged the S&P 500 in the last five years, their growth prospects remain robust, particularly with the ongoing adoption of cashless transactions.
- Valuation and Investment Advice: Despite Visa's price-to-earnings ratio of 30.9 being slightly lower than Mastercard's 32.9, both valuations are still not cheap; investors should keep an eye on these stocks as a solid foundation for their portfolios, even though outsized returns should not be expected.
See More
Buffett's Safe Investments: Visa and Mastercard
- Portfolio Overview: As of February 4, Berkshire Hathaway holds $2.7 billion in Visa shares and $2.2 billion in Mastercard shares, together representing 1.5% of its $324 billion portfolio, indicating the strong positions these companies hold in the payment industry despite their small percentage.
- Network Effect Advantage: With billions of cards in use globally and acceptance at over 150 million merchant locations, Visa and Mastercard benefit from a powerful network effect that enhances the platform's value, making it difficult to replicate and providing investors with stable confidence.
- Robust Financial Performance: Despite ongoing innovations from fintech companies and stablecoins, both Visa and Mastercard have achieved double-digit annualized revenue and diluted earnings-per-share growth over the past decade, underscoring their unshakeable competitive positions and providing peace of mind to shareholders.
- Future Growth Potential: Although both companies have underperformed relative to the S&P 500 over the past five years, their durable growth prospects from the ongoing shift towards cashless transactions suggest they will generate significantly higher revenues and profits in the future, making them a solid foundation for any investment portfolio.
See More
American Express Stock Soars with Successful Premium Strategy
- Outstanding Stock Performance: As of February 5, 2026, American Express's stock has surged 20% over the past six months, doubled in three years, and tripled in five years, showcasing its strong performance in the financial services sector, significantly outpacing rivals Visa and Mastercard.
- Successful Platinum Card Launch: Despite the annual fee increase from $695 to $895, the newly launched Platinum card has been a hit among consumers, with retention rates remaining stable and modest initial incentives for new cardholders, indicating robust demand for premium services.
- Significant Travel Booking Growth: The relaunch of the Platinum card, combined with the travel experience planning app, has driven a 30% year-over-year increase in travel bookings, directly reflecting the heightened engagement of cardholders as noted by CEO Stephen Squeri, further solidifying American Express's position in the luxury market.
- Flexible Strategic Planning: American Express operates without long-term financial goals, instead adapting through five core strategic pillars focusing on premium services, data-driven technology investments, international expansion, and refreshing existing products, ensuring strong returns for shareholders even in challenging economic conditions.
See More
Market Rebound Signals Emerge as PayPal and Others Become Oversold
- PayPal Oversold Status: PayPal's RSI is below 11, with shares plummeting over 24% this week, marking its worst weekly performance ever, primarily due to a weak 2026 profit outlook and CEO replacement, indicating market concerns about its future profitability.
- Coinbase Market Performance: Coinbase has an RSI of about 14, with shares down 25% this week linked to a plunge in Bitcoin prices; however, it regained some ground on Friday, and analysts remain optimistic, expecting the stock to double over the next year, reflecting confidence in digital assets.
- KKR Oversold Risk: KKR's RSI is below 20, with shares tracking down more than 13% this week amid fears that AI could disrupt the application software industry, yet most analysts maintain a buy rating, projecting a 53% increase in stock price over the coming year, showcasing investor confidence in its long-term potential.
- Market Sentiment Volatility: Following significant market swings, many stocks have RSIs below 20, indicating widespread overselling, as investors may be looking for buying opportunities at lower prices, reflecting expectations for a future rebound.
See More
