Warren Buffett is regarded as one of the greatest stock pickers in the world. However, not even his selections are without flaw. Buffett’s holding firm, Berkshire Hathaway (BRK.A -1.74%), has occasionally hit a wall with one of its holdings. And sometimes, that barrier is clearly too high for far too long.

With that in mind, let’s see two Buffett/Berkshire equities that are down but not out.

Stock to buy: Citigroup

55.1 million shares, valued at $2.9 billion, are owned by Warren Buffett’s Berkshire Hathaway (NYSE:BRK-B).

Citigroup (C -1.32%) is the fourth-largest bank in the United States based on assets. The last several months have been difficult for all banking industry’s stocks. The increasing interest rates are causing more would-be borrowers to refuse new loans. Demand for mortgages dropped to its lowest level since 2018 during the final full week of May, according to the Mortgage Bankers Association.

Yes, Citigroup will face difficulties in the future. It may do so, especially because CEO Jane Fraser is certain that a recession is on the way, and she has already taken steps to prevent any damage. Even better, if Citigroup just meets its targets this year and 2023’s projected per-share earnings, there’s plenty of room for the stock to rise.

Stock to buy: Paramount Global

Berkshire Hathaway’s stake: 2.6 billion dollars worth of 68.9 million shares.

Why invest in a dying industry like television when you can get the same thing for much less money through streaming? Because Paramount is not only poised to profit from cord-cutting, but also helped cause it. The media group’s name is Pluto TV, and it has significant popularity with on-demand streaming service Paramount+.

According to the most recent statistics, Pluto TV is utilized by 68 million individuals each month, while Paramount+ has around 40 million paying subscribers. The firm has 62.4 million on-demand streaming customers, who have driven Paramount’s direct-to-consumer revenue up 82% year over year during the first three months of 2022. Given all of this, it’s surprising that stock prices aren’t increasing more.

Market corrections may be frightening to new investors. These, on the other hand, are excellent times to acquire shares of firms that appear expensive. This year, the Nasdaq Composite Index has fallen by around 21%.

EV stocks have likewise taken a beating. Let’s take a look at two EV firms that appear to be undervalued right now.

1. Tesla

Tesla’s investors had been divided for some time about the company’s prospects as an EV maker. The firm, nevertheless, has reduced several of those debates in recent quarters with growing revenue, profits, and margins.

Tesla has carved out a niche in a capital-intensive industry with extensive barriers to entry. Furthermore, it is presently producing industry-leading margins. Elon Musk, Tesla’s CEO, announced plans to cut staff anticipating a recession. This move again might be an attempt to preserve margins if one occurs as predicted. Finally, Tesla has a number of growth opportunities beyond electric vehicles. What it demonstrates is that even if Tesla stock does not return to its historical P/S or P/E ratios, there is still potential for considerable expansion from current levels. Furthermore, sales and earnings growth will support the share’s value, even if the multiple doesn’t improve from current levels.

Overall, Tesla stock appears to be considerably more appealing today than it did at the start of the year. Now might be a good time to invest in Tesla stock if you’ve been waiting to do so.

2. Rivian

The price of the (RIVN 0.27%) stock has dropped roughly 69% thus far in 2022. Because investors are deserting more speculative firms, this young EV maker has taken a greater hit than other comparable enterprises owing to a broader market downturn. Soon after debuting in November of last year, Rivian’s hype sent the stock’s value to unsustainable heights.

Rivian has yet to achieve profitable operations. Furthermore, supply chain difficulties and higher material costs have compounded the company’s problems. Scaling up profitably is still a significant challenge for the company. Obviously, investors are worried, which has resulted in a sell-off of the stock.

Rivian, on the other hand, has several significant benefits that the market is overlooking. The firm is a pioneer in the electric pickup truck market and its products have received largely positive reviews. It has also placed an order for Amazon-delivery vans in excess of 200 vehicles. As a new EV manufacturer, Rivian will face challenges; nevertheless, it may overcome them over time.

Overall, Rivian stock has dropped to more appealing levels. The forward P/S ratio for Rivian, according to estimated sales for 2023, is around 4. Although it appears to be high, the firm is still relatively new and has years ahead of it.

Given the stock’s wild swings and lack of profitability, it’s vital to remember that the stock is best suited for those who are prepared to take a lot of risk.

According to investing legend Warren Buffett, “be greedy when others are fearful.” It’s a mentality I’ve adopted with the stock market enduring two substantial pullbacks since the start of 2020. In the last 29 months, I’ve added nearly three dozen new investments to my portfolio, as well as increased existing holdings.

My objective is to allow time to perform its magic, just as the Oracle of Omaha does. Even if my investments do not all turn out successful, allowing them to run can lead to significant financial gains. I intend to keep the following two surefire stocks for the next 20 years.

1. Amazon

For more than two years, I’ve owned Amazon (AMZN -1.43%), the e-commerce behemoth.

According to eMarketer, Amazon will account for 39.5 percent of all online retail sales in the United States this year, according to a recent survey. That’s 8.5 percentage points over numbers 2 through 15 combined. Despite unimpressive retail margins, Amazon’s primary marketplace is the springboard that allows it to compete on price and invest in higher-growth channels like Prime subscription services and advertising. For example, Amazon collects annual subscriptions from its 200 million Prime members each year, allowing it to undercut rivals on pricing while also funding higher-growth activities.

What’s more thrilling for the future of the company is Amazon Web Services (AWS). The world’s major cloud infrastructure service provider is AWS. Enterprise cloud spending is still in its early innings, which means the high-margin area could more than double Amazon’s operating earnings flow many times over the next two decades.

Amazon has a long history of being considered a bargain. Since 2010, Wall Street and investors have paid Amazon an average of 23 to 37 times cash flow. I’m looking forward to seeing what the future holds after Amazon is valued at approximately 10 times Wall Street’s predicted cash flow in 2024.

2. Mastercard

I added payment processor Mastercard (MA 1.08%) to my portfolio in March 2020, when the coronavirus epidemic hit.

I like Mastercard for its cyclical links the most. Even though recessions are unavoidable and financial shares take a beating when the economy contracts, expansions last far longer than recessions. It’s a straightforward arithmetic problem; and Mastercard spends far more time in the sun than under the rain.

Mastercard also avoids lending. Although it would probably have no trouble producing interest income and costs as a lender, doing so may expose the organization to loan losses during economic downturns. Mastercard’s not-so-subtle secret to high profit margins and swiftly recovering from recessions is to stick to payment processing alone.

Mastercard also has a lot of runway to grow its payment reach. Most payments in the world still happen in cash, allowing Mastercard to expand into underbanked developing countries and maintain a high growth rate.

There are several high-growth technology firms now available at favorable valuations. It’s difficult to predict when the IT industry will recover, but long-term investors can disregard this short-term noise and focus on the fundamentals of these businesses.

Here are two high-tech growth stocks with tremendous potential that traders should consider investing in today.

1. SoFi Technologies

SoFi Technologies (SOFI 0.00%) is down 55% since the beginning of the year, so you may think it’s having a tough time. However, this isn’t the case. In Q1, SoFi’s adjusted revenue rose 49% annually to $321.7 million, and its adjusted EBITDA increased 110 percent to $8.7 million, continuing a trend of seven consecutive quarters in which the metric has ended in the green. The company’s adjusted EBITDA margin of 3% also surpassed management’s guidance range of 0 percent to 2%.

SoFi’s fintech platform grew by 408,000 new members in the first quarter, increasing 70% year over year to 3.9 million users. SoFi launched 689,000 new items in the same period, which represents a growth of 84% compared with the same quarter last year.

Even after the continuing growth of the moratorium on student loans, which is now scheduled to expire in August, the fintech firm is making progress. Despite present headwinds, management increased guidance for the full 2022 financial year. As a result, analysts anticipate SoFi’s top line to reach $1.5 billion next year, up from $1 billion this year, and its EPS to decline by $0.44 against positive earnings of $0.69 in this year’s numbers (EPS).

SoFi’s greatest drawback is its lack of profitability, but because of its continuous gains and low price-to-sales ratio of 4.5, daring investors should gamble on this stock right now.

2. UiPath 

UiPath (PATH 5.21 percent) employs software robots to automate daily office activities, and despite its success, the stock has tumbled 62% this year. On June 1, UiPath announced a Q1 top line of $245.1 million, up 32% year over year and ahead of the negative $0.03 adjusted earnings estimate. The company’s GAAP gross margin of 82% also topped last quarter’s 74%, which was better than the same period in 2017 when it was 74%.

The firm’s yearly run-rate on renewals, which is vital to software as a service (SaaS) businesses with subscription contracts, increased 50% to $977.1 million. As a result of the excellent start in the first quarter, management boosted expectations for the whole year. The organization now expects revenue to be between $1.085 billion and $1.090 billion throughout the entire fiscal year, implying roughly 22% growth year over year if UiPath can achieve the higher threshold.

Despite the fact that UiPath’s solid performance has lifted its share price, it still trades at less than 10 times sales. This does not make the stock cheap, but its price-to-sales ratio is currently 2.5 times lower than it was at the start of the year. Given that it is a secular growth sector that it participates in, investors should anticipate to pay a greater price. Despite maintaining strong expansion, it has dropped over 50%, suggesting that UiPath might be worth considering right now.

Microsoft (MSFT -1.66%) shares are under pressure on Thursday after the software company lowered expectations for the current quarter. It will reveal these findings in July.

Microsoft has a healthy balance sheet, and this appears to be only a minor hiccup in what is already an outstanding business success story. However, the reason for the warning is likely to ripple through a wide range of businesses during the second quarter. Microsoft is raising the alarm about how a strong U.S. dollar will affect results.

Lost in translation

Microsoft cut its fiscal fourth-quarter earnings per share forecast to $2.24 to $2.32 per share, down from $2.28 to $2.35, and revenue guidance to $51.94 billion from $52.74 billion, which was decreased from $52.4 billion to$53.22 billion in a market update published Thursday morning. Analysts had been anticipating numbers that were above the current range, with the average forecast prior to the announcement being $2.33 per share in earnings on $52.87 billion in sales.

Microsoft blames the anticipated deficit on the rates it is receiving as it converts proceeds earned in other countries to U.S. dollars, according to Business Insider. The ongoing conflict between Ukraine and Russia has prompted investors to favor the greenback over foreign currencies by a considerable margin. Historically, the United States dollar has been known as a secure haven during tumultuous times, and rising interest rates only enhance its appeal as an attractive location for money to go.

A strong dollar is credited with assisting U.S. consumers, who may now buy foreign-produced goods at cheaper rates. However, it makes US products more expensive in other countries and limits the amount of money earned by American firms for items that they export.

Microsoft is still an attractive buy

Long-term Microsoft investors need not be concerned about this change. The lowered targets are less than a 2% decrease on the low end, and even at $2.24 per share would indicate 3% growth over the same three months last year.

Microsoft has over $130 billion in cash and investments on its books, and it generated over $20 billion in free cash flow during the most recent quarter.

The big question is whether or not foreign exchange rates, and specifically the pound’s decline, will have an impact on the quarter. This is a mature, developing technology giant with a price-to-sales ratio of ten. Any market downturn resulting from concerns would be good for a buy-and-hold investor looking out years rather than quarters.

Coinbase Global (COIN 4.02%) has been hit hard by the broader crypto sell-off, with asset values in popular cryptos dropping due to waning investor enthusiasm when compared to previous periods. Coinbase’s stock price has generally tracked Bitcoin since its IPO a year ago. However, this may be an indication that some people have little knowledge of Coinbase’s full offering. While the primary goal of Coinbase is to trade cryptocurrencies, it offers a variety of other services, which include crypto wallets, non-fungible tokens (NFTs), and advanced trading tools like derivatives.

Coinbase’s stock has lost roughly half of its value over the previous month. However, after a negative Q1 earnings report, the firm has seen a small recovery as a result of institutional and insider purchases.

Investors are divided 

Wall Street is extremely split about Coinbase’s future following the company’s Q1 financial results.

Cathie Wood, the CEO of Cathie Wood Asset Management, owns close to 8 million shares in Coinbase. While the tech investor has been steadily purchasing the stock since Jan., Wood increased her crypto position after the earnings report by acquiring almost 1 million additional shares.

Following the Q1 earnings report, board member and co-founder Frederick Ehrsam acquired roughly $75 million of stock.

Despite the fact that Wood and one insider are positive about Coinbase’s long-term prospects, traditional Wall Street banks remain undecided regarding the firm’s future. During an interview with CNBC, Dan Dolev recently warned that Coinbase might not be able to capture and sustain more market share, the future adoption of crypto, and the company’s enthusiastic recruitment. In contrast, analyst Owen Lau thinks that Coinbase is currently trading at favorable levels for longer-term investors, noting growing engagement from major institutions as it pertains to crypto.

While investors were given a front-row seat to how much money has been invested in developing the firm’s NFT platform, as well as its efforts to develop more sophisticated products such as derivatives, which are also offered by Coinbase competitors Gemini and FTX, executives made it known that these applications would be crucial for the development of crypto. Since April, when the NFT function was introduced, and throughout Q1 when some of Coinbase Wallet’s newer features were introduced, investors haven’t had much data to go on.

Despite the fact that Coinbase’s near-term prospects for Q2 are lower than those of Q1 due to decreasing trading volumes and transacting users, as well as high operational expenditures linked with hiring and management, the company informed investors that its spend is tracked and that it is needed in order to be the leader in the crypto market. Despite shaky Q2 expectations, the firm’s full-year 2022 forecasts have not changed because it believes crypto will recover if investor sentiment in the larger market improves.

While the rest of the crypto market is suffering heavy selling, long-term investors may see this as an opportunity to add or start a position in Coinbase stock.