Berkshire Hathaway and Mastercard Offer Iowa Investors Steady Growth Beyond the AI Hype

For Iowa investors looking past the artificial intelligence frenzy, two familiar names stand out as reliable growth stories through 2030: Berkshire Hathaway and Mastercard. Neither company depends on AI chip sales or cloud computing to drive profits, yet both are growing earnings at a double-digit clip.

Berkshire's four major operating units posted an 11% earnings increase in the first half of 2026 compared to the same period last year. Mastercard's second-quarter earnings per share jumped 22% year over year. For a portfolio meant to weather the next four years, that kind of steady performance matters, especially if AI spending cools.

Why Berkshire Hathaway Remains a Rock-Solid Iowa Favorite

Berkshire Hathaway is the kind of stock Iowa investors have trusted for generations because its earnings come from dozens of everyday businesses that grow with the economy, not from a single technology bet.

The company's insurance underwriting, BNSF railroad, Berkshire Hathaway Energy, and manufacturing, service and retailing divisions together earned roughly $16.1 billion after tax in the first half of 2026, up 11% from a year earlier. Manufacturing, service and retailing led the way with around $7.7 billion, a 15% gain. BNSF's earnings rose 10%, helped by second-quarter freight volume that grew nearly 7%. The energy business added an 11% increase.

Berkshire's Limited AI Exposure in Iowa

The energy arm is where Berkshire touches AI. CEO Greg Abel told CNBC in September that data centers made up about 8% of the load at its Iowa utility last year. But energy accounts for only about 12% of those four groups' earnings in the first half. In plain terms, data-center demand is a small slice of a segment that is itself a small slice of Berkshire's overall profit picture.

Interest on Berkshire's massive cash pile is the weaker link, as lower short-term rates cut its insurers' interest and other investment income by 12% from the first half of 2025. But that $365 billion in cash and Treasury bills at the end of June also gives Berkshire the firepower to buy if an AI slowdown drags stock prices down.

For the four quarters through June, operating earnings hit about $48 billion, above the $47.4 billion Berkshire earned in 2024 before a dip in 2025. At roughly $511 per Class B share, the stock trades at about 23 times operating earnings. That is not a bargain, but it is a fair price for earnings this dependable.

Mastercard's Simple Formula: A Fee on Global Spending

Mastercard's case for holding through 2030 is even more straightforward. Its network takes a small fee on a huge and growing volume of payments worldwide.

Mastercard's net revenue rose 16% in 2025 to about $32.8 billion, and second-quarter 2026 net revenue remained up 14% year over year. Gross dollar volume, the total value of purchases and cash withdrawals on its cards, increased 8% on a local-currency basis to $2.9 trillion in the quarter. Cross-border assessments, the fees Mastercard charges when a card is used outside its home country, jumped 21% to roughly $3.5 billion.

Cross-border growth has slowed somewhat, with volume up 12% in the second quarter on a local-currency basis, down from 15% for 2025 and 18% in 2024. But the deceleration has been gradual. Value-added services, including fraud prevention, data, and authentication tools, grew 20% to about $3.8 billion, roughly 41% of revenue.

Mastercard also avoids heavy capital spending. It spent about $813 million on capital expenditures, including capitalized software, in the first half of 2026, below 5% of revenue, while buying back about $8.9 billion of its shares.

The stock is not cheap, though. At around $575, Mastercard trades at about 32 times earnings, well above the 23 times operating earnings Berkshire commands.

What Happens If AI Spending Slows?

Neither stock is immune to a recession. Berkshire's railroad and manufacturers need a healthy economy, and Mastercard's payment volume depends on consumer spending.

But a slowdown in AI spending alone should not strip away what drives either company's earnings. Berkshire still collects insurance premiums and moves freight. Mastercard still takes its cut on everyday purchases.

Mastercard costs more but grows faster. Berkshire is the cheaper option, with a cash pile that lets it buy if prices drop.

Both deserve consideration for a portfolio built to last through 2030, perhaps purchased gradually given Mastercard's premium valuation.

Frequently Asked Questions

Is Berkshire Hathaway a good long-term investment for Iowa retirees?

Berkshire Hathaway offers diversified earnings from insurance, railroads, energy, and manufacturing, making it a stable choice for retirees seeking reliable growth without heavy reliance on any single technology sector.

How does Mastercard make money?

Mastercard earns fees on payment transactions processed through its network, including cross-border fees and value-added services like fraud prevention and data analytics, generating revenue from global consumer spending.

Should Iowa investors worry about AI spending cuts affecting these stocks?

Minimal. AI-related demand represents a small fraction of both companies' earnings. Berkshire's energy business serves data centers, but that is a minor part of its overall profit, and Mastercard's growth depends on consumer payments, not AI infrastructure.