Real Estate
The Motley Fool

Warren Buffett Says Buy This S&P 500 Index Fund. It Could Soar by 139%, According to a Top Wall Street Analyst

July 18, 2025
03:55 AM
7 min read
AI Enhanced
investmenteconomymoneystockstradingfinancialtechnologyfinancials

Key Takeaways

Warren Buffett is one of the world's top investors (which is quite significant). In 1965, he acquired a controlling stake in a struggling textiles enterprise called Berkshire Hathaway (BRK. 59%),...

Article Overview

Quick insights and key information

Reading Time

7 min read

Estimated completion

Category

real estate

Article classification

Published

July 18, 2025

03:55 AM

Source

The Motley Fool

Original publisher

Key Topics
investmenteconomymoneystockstradingfinancialtechnologyfinancials

Warren Buffett is one of the world's top investors (which is quite significant)

In 1965, he acquired a controlling stake in a struggling textiles enterprise called Berkshire Hathaway (BRK. 59%), and converted it into a holding company which is now worth over $1 trillion

Nevertheless, Berkshire owns a number of subsidiaries GEICO Insurance and Dairy Queen, in addition to a $288 billion portfolio of publicly traded stocks and securities which Buffett and his team oversee

On the other hand, Had you invested just $500 in Berkshire stock in 1965, it would have grown to a whopping $22. 3 million at the end of 2024, thanks to Buffett's incredible ability to pick stocks

But he is a full-time fessional with decades of experience, so he knows the average investor would struggle to replicate his results

That's why he often recommends they buy an exchange-traded fund (ETF) that tracks the performance of a diversified index the S&P 500 (^GSPC 0, amid market uncertainty

What the data shows is Vanguard S&P 500 ETF (VOO 0. 65%) is one Buffett has by name in the past, and it's for its extremely low cost

According to Wall Street analyst Tom Lee from Fundstrat Global Advisors, the S&P 500 could soar by 139% by 2030, so investors who buy the Vanguard ETF today could earn a very nice return over the next five years

Image source: The Motley Fool (this bears monitoring)

The most diversified major U

Furthermore, Stock market index The U

Meanwhile, Is to several stock market indexes, but these three receive the lion's of the attention: The Dow Jones Industrial Average (DJINDICES: ^DJI), the Nasdaq Composite (NASDAQINDEX: ^IXIC), and the S&P 500, in today's market environment

This leads to the conclusion that Dow is made up of just 30 stocks, and the Nasdaq is very nology-heavy, so the S&P 500 tends to be the benchmark for most investors

The evidence shows S&P 500 hosts 500 companies from 11 different sectors of the economy

However, So it's highly diversified, but it still offers ample exposure to the high-growth segments of the market

Information nology is the largest sector in the index, with a weighting of 33. 4%, and it's to the world's three largest companies: Nvidia, Microsoft, and Apple, which have a combined value of $10, in light of current trends

Additionally, 9 trillion

Below is a list of each S&P 500 sector, its weighting, and a few of its most noteworthy stocks

Additionally, S&P 500 Sector Sector Weighting Noteworthy Stocks Information nology 33. 4% Nvidia, Microsoft, Apple Financials 13. 9% Berkshire Hathaway, JPMorgan Chase, Visa Consumer Discretionary 10, in light of current trends. 4% Amazon, Tesla, McDonald's Communication Services 9. 5% Alphabet, Meta Platforms, Netflix Health Care 9

Additionally, 3% Eli Lilly, Johnson & Johnson, UnitedHealth Group Industrials 8. 6% GE Aerospace, Uber nologies, Boeing Consumer Staples 5. 4% Walmart, Costco, and cter & Gamble

Furthermore, Meanwhile, 1% ExxonMobil, Chevron, Kinder Morgan Utilities 2 (an important development), in today's financial world. 4% NextEra Energy, Vistra Corp, American Electric Power Company Real Estate 2% logis, American Tower Corporation, Equinix Materials 1. 9% Linde Plc, Sherwin-Williams, Newmont Corporation Data source: State Street

At the same time, Sector weightings are accurate as of July 10, 2025, and are subject to change, amid market uncertainty

Conversely, Getting into the S&P 500 isn't easy, given current economic conditions

On the other hand, Companies must have a market capitalization of at least $22 (noteworthy indeed)

Moreover, 7 billion, and the sum of their earnings (fits) must be positive over the most recent four quarters

A special committee meets once per quarter to decide which companies make the cut, giving investors confidence that only the highest-quality names make it into the index

The Vanguard S&P 500 ETF is one of the cheapest ways to invest in the index

In contrast, With an expense ratio of 0. 03%, an investment of $10,000 would incur an annual fee of just $3

Vanguard says that competing funds across the industry charge an average expense ratio of 0

Moreover, 75%, an eye-popping 25 times higher (this bears monitoring), in today's market environment

This can dent investors' returns over the long run

Tom Lee predicts 139% upside by 2030 No Wall Street analyst is right all the time, so investors should take every forecast with a grain of salt

But Lee has made a string of extremely accurate predictions over the last couple of years, so it's always worth taking his viewpoint into consideration

Lee predicted that the S&P 500 would climb to 4,750 in 2023, while many other analysts were still cautious because of the bear market the year before

Furthermore, The index wound up closing the year at 4,769, almost exactly as he forecasted

Lee then issued five predictions for the S&P 500 throughout 2024, telling investors it could hit 5,200, 5,500, 5,700, 6,000, and 6,300

Conversely, The index hit the first four of those targets, only just falling shy of the last one

Then, after the Trump administration's tariff-induced 19% collapse in the S&P 500 in April this year, Lee was one of the only analysts on Wall Street predicting a V-shaped recovery (a rapid rebound back to new highs) (something worth watching)

The index ceeded to set a new record high in June, given the current landscape

Furthermore, But Lee isn't just focused on the near term, in today's financial world

Last year, he forecasted that the S&P 500 will hit 15,000 by 2030, which implies a return of 139% from where it's trading as of this writing (July 14), in this volatile climate

That's the return investors can expect from the Vanguard S&P 500 ETF over the next five years if he's right, in this volatile climate

On the other hand, Lee believes artificial intelligence (AI) will play a major role in that upside, as companies could invest trillions of dollars in automation to offset labor shortages, in light of current trends

Additionally, He also thinks the S&P 500 will benefit from a demographic shift as millennials and Gen Zers enter their highest-earning years (between ages 30 and 50), which is when they make important life decisions

The S&P 500 has always climbed to new highs since it was established in 1957, despite experiencing several corrections and bear along the way, so reaching 15,000 seems inevitable, given current economic conditions

However, Even if it doesn't happen by 2030, it's ly to happen at some point in the future, so ing Buffett's advice by buying the Vanguard S&P 500 ETF is bably a smart decision

JPMorgan Chase is an advertising partner of Motley Fool Money

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors

Additionally, Additionally, Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors

Anthony Di Pizio has no position in any of the stocks mentioned

Nevertheless, However, The Motley Fool has positions in and recommends Alphabet, Amazon, American Tower, Apple, Berkshire Hathaway, Chevron, Costco Wholesale, Equinix, JPMorgan Chase, Kinder Morgan, Meta Platforms, Microsoft, Netflix, NextEra Energy, Nvidia, logis, Tesla, Uber nologies, Vanguard S&P 500 ETF, Visa, and Walmart, considering recent developments

The Motley Fool recommends GE Aerospace, Johnson & Johnson, Linde, Sherwin-Williams, and UnitedHealth Group and recommends the ing options: long January 2026 $180 calls on American Tower, long January 2026 $395 calls on Microsoft, long January 2026 $90 calls on logis, short January 2026 $185 calls on American Tower, and short January 2026 $405 calls on Microsoft

The Motley Fool has a disclosure policy.