You may have heard the slogan, “This, not that.” The mantra encourages people to think about their decisions. Something popular might not benefit you, so consider a similar, better alternative.

It’s a fun game that came to mind when thinking about some of Warren Buffett’s investments, which are held in Berkshire Hathaway, his holding company. Some of Berkshire’s most significant and best-performing stocks aren’t always right for everyone. Fortunately, you don’t need to go off the beaten path to find that good alternative.

The Unstoppable Amazon

Though it’s not a massive position at just 0.4%, e-commerce and cloud leader Amazon (NASDAQ: AMZN) has been a holding of Berkshire Hathaway since 2019. Most people are familiar with Amazon’s e-commerce business, which dominates the U.S. with a 38% market share. Some may also know that Amazon’s cloud platform, AWS, is the global leader, with roughly a third of the worldwide market. Even fewer likely know that Amazon is quickly becoming an advertising powerhouse.

What should attract buyers to the stock today is a valuation that’s sneakily attractive even as the stock trades near its highest price in a year. Amazon’s business has many moving parts, and e-commerce requires investments to expand to accommodate growth. So I like looking at Amazon’s operating cash flow (revenue minus expenses from running the company) to understand how much of a bargain the stock is. Comparing its price to its operating cash flow per share, you’ll see that the stock is near its cheapest valuation in a decade.

That’s a great launch pad for future investment returns. After all, e-commerce and cloud computing are massive industries that should still have many years of growth ahead. Being a market leader, Amazon will almost surely capture a solid piece of these growth trends over the coming years. Analysts believe that could translate to annualized long-term earnings growth averaging 24%. This setup makes Amazon a “Magnificent Seven” stock you can continue buying confidently.

The Pitfalls of Apple

Seeing iPhone maker Apple (NASDAQ: AAPL) here might be jarring. After all, it’s Berkshire’s largest stock investment by a wide margin, nearly half of its entire portfolio. Buffett himself has even called Apple the best business Berkshire owns. But this ultimately boils down to timing.

Apple is undeniably one of the world’s most significant financial and cultural companies. People, myself included, love their iOS devices. But the company has gotten so big that growth is getting harder. Apple’s revenue growth has slowed dramatically in recent years since it brought 5G iPhones to the market. There doesn’t seem to be a big motivator for many consumers to switch as often, and there are already over 2 billion active iOS devices worldwide. Naturally, slowing revenue growth has caused analysts to continue lowering their long-term expectations for earnings.

Ironically, the stock continues to thrive. Shares are at all-time highs, and the stock’s valuation has increased to over 28 times estimated 2024 earnings. The risk to new buyers is that sentiment might cool on the stock if Apple can’t increase the growth to justify such a lofty price tag. Its current PEG ratio is roughly 3, indicating that shares are pretty pricey for their expected growth. I like to see this ratio under 1.5.

Those who own the stock can feel free to hold it because Apple is a remarkable company. It’s just run high enough that new buyers may find better alternatives like Amazon. The stock will again be a fantastic buy-and-hold idea once the valuation makes more sense.

Should you invest $1,000 in Amazon right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.