Warren Buffett and tech stocks go together like... Well, they usually don't go together. Buffett famously avoids investing in areas he thinks are outside of his wheelhouse. He readily admits that he has passed on buying great tech stocks in the past simply because he didn't understand their business well enough.

However, Buffett is more heavily invested in technology than his well-known reluctance about the sector might reflect. Over 25% of his $300 billion Berkshire Hathaway portfolio is invested in four tech stocks. 

Buffett's four favorite tech stocks

Granted, that percentage is skewed by one tech stock -- Apple (AAPL 0.46%). Buffett has slashed Berkshire's stake in the iPhone maker in recent quarters. However, Berkshire still owns 300 million shares of Apple worth roughly $70.5 billion. That's enough to rank Apple as the conglomerate's largest holding by far, making up 23.5% of its total portfolio. 

VeriSign (VRSN 0.29%) is Buffett's second-biggest technology position, but it's a distant second. Berkshire Hathaway owns around $2.8 billion of the domain name registry services and internet infrastructure provider. This stake comprises 0.9% of Berkshire's total holdings. 

Amazon (AMZN -0.45%) trails narrowly behind VeriSign with Berkshire's nearly $2.4 billion position making up 0.8% of its portfolio. Yes, Amazon is generally viewed as a consumer cyclical stock. However, when a company reigns as the biggest cloud service provider and is a top developer of artificial intelligence (AI), it deserves to be seen as a tech stock too.

Buffett's smallest tech stock position also warrants an asterisk. Nu Holdings (NU -0.71%) is a special kind of tech stock; it's a fintech stock. The company operates the largest digital bank platform in Latin America. Berkshire owns a little over $1 billion of Nu stock, enough to comprise around 0.4% of its portfolio.

How these stocks compare

The size gap between these stocks is substantial. Apple is the world's biggest company with a market cap of $3.6 trillion. Amazon's market cap of $2.5 trillion ranks it among the top 5 largest companies. Nu and VeriSign are much smaller with market caps of roughly $59 billion and $21 billion, respectively.

Buffett might not be the purist value investor he once was, but valuation is still a paramount consideration for him in buying stocks. None of these four tech stocks in Berkshire's portfolio are especially cheap right now. Amazon's forward price-to-earnings (P/E) ratio is a lofty 37.6. Apple trades at nearly 30 times forward earnings. Verisign's forward earnings multiple is 23.9. Nu is the relative "bargain" of the group with a forward P/E ratio of 20.9.

The growth stories for these stocks also vary considerably. Nu is the clear growth winner based on the latest quarterly results. The Latin American fintech leader's revenue soared 44.9% year over year with its earnings skyrocketing 82.6% higher. Amazon's earnings growth also looked great in its last quarter with the company reporting 55.2% higher earnings compared to the prior year period. While Amazon's revenue growth of 11% was much smaller, it still topped the numbers for Apple and VeriSign. 

Income investors don't have much to like with any of Buffett's tech stocks. Amazon, Nu, and VeriSign don't pay dividends at all. Apple does have a dividend program, but its forward dividend yield is a puny 0.42%.

The best of the bunch

Which of Buffett's four tech stocks is the best of the bunch? I think all of them could be solid winners over the long term. However, two especially stand out.

I really like Nu's business model. The company established a strong position in its home country of Brazil, with more than 50% of adults there using its financial services platform. It's leveraging that success to conquer the markets in other Latin American countries and has exceptionally great prospects in Mexico. 

If I had to choose only one of these four stocks, though, it would be Amazon. The company's moat in e-commerce is rock-solid. Its cloud unit, Amazon Web Services, is driving tremendous growth. Amazon's initiatives in other areas, including healthcare and robotaxis, also hold major potential.

Buffett might not add to Berkshire's position in Amazon anytime soon. However, I predict buying this stock now will pay off nicely over the next five to 10 years.