If a Stock Market Crash Is Coming, History Says These 3 Industrial Stocks Are the Best Move

Former Berkshire Hathaway CEO Warren Buffett has stepped down from his role, but his investment strategies continue to influence investors. As of late 2025, the stock market had been experiencing a strong boom, with the S&P 500 delivering an average annual return of 23% between 2022 and 2025. This growth was largely attributed to the optimism surrounding generative artificial intelligence (AI), which led to increased demand for data center equipment and boosted the performance of tech giants involved in its creation and manufacturing.

However, the current market boom might be precarious, given the steep price-to-sales (P/S) multiple of AI-focused data center provider SpaceX, which stands at 68, compared to the S&P 500's average of 3.85. This extreme valuation suggests a level of excitement that may not reflect the actual value of the company. Moreover, the cyclically adjusted price-to-earnings (P/E) multiple of the S&P 500 currently sits at 41.8, significantly higher than its historical average of 17.4, and only surpassed this level during the dot-com bubble in late 1999.

In response to the current market situation, Buffett has expressed concerns, stating, "It's tough to find values when everybody is preferring gambling." As a generally cautious investor, Buffett prefers to invest in stable and low-priced businesses with clear business models, rather than speculative industries like generative AI. He has limited exposure to this sector through diversified consumer-focused tech giants such as Alphabet, Apple, and Amazon, instead of pure-play chipmakers.

Buffett's investment strategy, however, may not be solely based on skill, as many of his picks were made before the rise of ChatGPT. Nevertheless, his approach offers valuable insights for investors looking to capitalize on growth opportunities while minimizing potential downsides. By focusing on stable, profitable technology leaders and maintaining a substantial cash reserve of $365.5 billion, Berkshire Hathaway is well-positioned to make strategic moves during market downturns.

Following Buffett's lead could prove to be a prudent strategy for navigating the stock market market's current challenges.