How Warren Buffett Diversifies with International Stocks: One Clear Winner Emerges

When most investors think about Warren Buffett’s portfolio, they picture American companies. But the legendary investor has quietly built a fascinating collection of international stocks that deserves closer attention. While U.S.-based enterprises dominate the global stage—accounting for roughly 70% of the world’s top 100 companies by market capitalization—Buffett recognizes that compelling investment opportunities exist well beyond America’s borders. His international holdings tell a story worth understanding.

Warren Buffett’s Global Portfolio: More Than Meets the Eye

Through Berkshire Hathaway’s 13F regulatory filings and recent disclosures, we can see that Buffett maintains positions in seven international stocks across multiple continents. Two of these companies—digital banking innovator Nu Holdings and IT solutions provider StoneCo—are headquartered in Brazil but incorporated in the Cayman Islands. Another interesting case is Liberty Latin America, a telecommunications firm based in Bermuda that operates extensively throughout the Caribbean and Latin American regions.

Beyond the Americas, Buffett has positioned Berkshire in Diageo, the London-headquartered beverage alcohol giant, giving him European exposure. His massive Taiwan Semiconductor Manufacturing stake represents a significant bet on the semiconductor sector. Additionally, Buffett has maintained a long-term stake in Chinese electric vehicle manufacturer BYD since 2008, while Berkshire owns 6.2% of Japanese trading company Itochu—positions that showcase his commitment to diversification across multiple geographies.

Screening for Quality: Which International Stocks Deserve Attention?

Not all of these international stocks are equally attractive from an investment perspective. When examining profitability trends, several companies showed inconsistent results. Nu Holdings and StoneCo both posted losses in certain periods, while Liberty Latin America alternated between profitability and losses quarter by quarter. BYD demonstrated consistent profitability but carries elevated risk exposure given geopolitical uncertainties.

This screening process naturally narrows the field to three standouts: Diageo, Itochu, and Taiwan Semiconductor Manufacturing. Each represents a different sector and geography, yet all caught Buffett’s attention for substantive reasons.

The Three Contenders: Comparing Growth, Valuation, and Buffett’s Conviction

Growth Prospects: Taiwan Semiconductor Manufacturing takes the lead in expansion. The company’s revenue growth trajectory outpaces both Diageo’s steady performance and Itochu’s more modest expansion rates. For growth-oriented investors, this distinction matters significantly.

Valuation Analysis: All three trade at relatively reasonable multiples. Itochu offers the cheapest entry point with shares trading at just 7.4 times trailing-12-month earnings. However, Taiwan Semi presents compelling value at a forward price-to-earnings multiple of 13.7 times, particularly considering the significant price decline the stock has experienced—down over 30% from recent highs, creating a more attractive entry point.

The Buffett Test: Perhaps most tellingly, Taiwan Semiconductor Manufacturing occupies 1.4% of Berkshire’s total portfolio, making it the conglomerate’s largest position in any non-U.S. company. This concentration level, combined with Buffett’s recent initiation of this stake, signals his genuine enthusiasm about the company’s long-term prospects and the semiconductor industry’s structural advantages.

Taiwan Semi Emerges as the Winner

When weighing all three candidates through the lens of growth acceleration, valuation attractiveness, and Buffett’s demonstrated conviction, Taiwan Semiconductor Manufacturing stands out clearly. The company combines reasonable valuations with superior growth dynamics and sits at the heart of a secular industry trend—semiconductors’ essential role in powering global technology advancement.

For Warren Buffett fans and international stock investors alike, understanding his selections and the reasoning behind them offers valuable insights. While each of these seven international stocks could warrant consideration by serious investors, Taiwan Semi represents the strongest case for why Buffett continues to find exceptional opportunities beyond traditional U.S. markets.