• Donald Trump’s Scottish golf resorts, Turnberry and Trump International, have long struggled with profitability and now carry more than $239 million in loans owed solely to the Trump Organization and other Trump enterprises. But both properties have maintained their prestige, despite some financial turbulence, and are home to extensive development projects.

When President Donald Trump went to Scotland in July, he did so not only as commander-in-chief but as the controversial proprietor of some of Britain’s most scrutinized golf resorts. His three-day stop at Trump Turnberry, a hotel and golf resort that is one of the president’s two properties in the country, drew attention when U.K. Prime Minister Keir Starmer joined him to discuss a trade deal between the nations and the ongoing wars in Ukraine and Gaza. He was followed by European Commission President Ursula von der Leyen, who announced the framework of a trade deal with the E.U. from the luxurious property. 

Trump hosting Starmer at Turnberry broke with diplomatic tradition. American presidents are usually invited to foreign countries by their leaders and hosted at diplomatic residences. But it follows his pattern of abandoning presidential norms, especially when it comes to his family business. According to Michael Cohen, former vice president of the Trump Organization and Trump attorney, the president’s habit of hosting at his properties plays into having a home court advantage. Not only is Trump most comfortable at his properties, where everyone around him is “at his beck and call,” but it also offers Trump the opportunity to show off his brand’s visible presence, Cohen told Fortune.

“The name Trump is plastered everywhere, whether it’s inside of an elevator, whether it’s on a wall with photos of him, whether it’s pulling up to the facility where it says Trump Turnberry. The same holds true, whether it’s Doral, whether it’s Aberdeen, whether it’s Bedminster, Briarcliff, it makes no difference,” he said. “So there’s definitely a power play. It’s an impressive place, and so anybody pulling up sees the value of the property.”

Both of Trump’s Scottish resorts—Turnberry and Trump International Scotland near Aberdeen—are run by Eric Trump and held in a trust managed by the president’s children.

“There is an old expression that land can neither be created nor destroyed, and it’s what made kingdoms, kingdoms. Donald clearly sees himself in that role.”

Michael Cohen, former vice president of the Trump Organization and Trump attorney

Beneath Turnberry and Aberdeenshire’s manicured fairways and breathtaking seascapes, however, lies a perplexing story. Despite being among the most prestigious courses in the world—Turnberry is a four-time host of the Open Championship—this has not translated into meaningful profits. A similar fate has befallen Trump’s other international golf courses, all 15 of which lost over $315 million in the two decades prior to 2021. 

And combined, the two courses in Scotland, as of 2023, were carrying a debt-load that dwarfs the size of their underlying businesses: $239.32 million between them. This debt is owned by and contained within the Trump Organization.  

Despite the properties’ meager profits—as shown on the financial statements filed with the U.K. regulator Companies House—Cohen explained that the value of Trump’s golf businesses aren’t exclusive to the sport itself. “There’s also a future land value that gets assigned to the properties,” he said, “Take Turnberry as an example. What’s the chance that you’re ever going to be able to build another golf course like Turnberry? The answer is, you’re not.”

A resort buoyed less by golfers than by favorable forex

Trump Turnberry was one of Trump’s most expensive properties. He spent $67 million to purchase the resort in 2014 and a further $144 million on renovations. In the decade since being acquired, the business has struggled to turn a profit. The most recent period for which financials have been disclosed is 2023, which is the first fiscal year that it did not report substantial losses (prior to 2019, however, Turnberry’s revenue showed consistent growth). During the pandemic, the enterprise reported more than $27 million in losses when the hospitality industry took a beating due to COVID-19 restrictions. Since then, the resort’s finances appear to have stabilized. Turnberry’s parent company, Golf Recreation Scotland, reported $28.6 million in sales, and $5.15 million in profits for the 2023 financial year, according to U.K. government filings. In 2022, turnover at the company was $29.56 million but profits reached just $252,582. Figures for 2024 are expected soon.

Eric Trump told Fortune that these rebounding figures are evidence of Turnberry’s rise and success, namely the course becoming the U.K.’s most expensive game of golf, costing over $1,286 for a round on the property’s famed Ailsa green during peak times. A night at the property is similarly pricey—rooms start at $527 per night. 

Despite sales falling in 2023, the company’s operating costs rose by approximately $2.03 million. Eric, in the filings, attributed strained profitability, in part, to “rising regional utility costs, supplier expenses and minimum wage increases.” Scotland’s national living wage (the minimum hourly rate for those 23 and older) rose from $12.08 in 2021 to $14.13 in 2023. When speaking with Fortune, Eric further explained rising operating expenses as part of the business’ expansion. 

CHRISTOPHER FURLONG—Getty IMAGES

Meanwhile, Turnberry has sizable debt. The parent company owes $168.15 million in zero-interest loans to an unnamed creditor. Eric told Fortune, however, that all of this debt is owed to the Trump Organization, not an external source. 

“When we bought Turnberry, we bought the note that they had, and we bought the assets that they had. So it’s just a structure, but that’s all within the Trump Organization,” he explained. 

Turnberry’s debt decreased in 2023, from $177.24 million. Alan Jagolinzer, co-director of the Centre for Financial Reporting and Accountability at the University of Cambridge told Fortune, this reduction was “reportedly from favorable exchange rate changes” rather than debt paydown.

Exchange rate fluctuations, Jagolinzer noted, play a large role in the golf resort’s earnings year-to-year. “As a whole, it seems exposed to foreign currency risk,” he said, namely exposure to the weakening U.S. dollar on the business’s loans.

Debt risk has seldom fazed Trump, who once dubbed himself the “king of debt” and has spent his career building businesses using troves of borrowed cash. 

Bogeys on the balance sheet

Trump’s second golf course in Aberdeenshire is a significantly smaller operation than its Turnberry sister. The president bought the property in 2006, but it only began operating fully in 2012 after drawn-out spats with local residents and environmentalists. As of 2023, the resort had only ever operated at a loss. Its current profitability remains unknown. Aberdeenshire reported $5.02 million in revenues in 2023, according to disclosures by its parent company Trump International Golf Club Scotland Limited. Its losses were $1.9 million, up from around $1 million the financial year prior. And while revenue was up slightly in 2023, Trump International’s operating costs, much like at Turnberry, were significantly higher—up approximately $1 million.

Despite these losses in 2023, Eric pointed to consecutive increases in sales across all revenue streams, especially retail and food and beverage, of the business. And while operating costs rose, Trump’s son said in the filings that the sizable increase in tournament and marketing expenditures are expected  to “deliver elevated levels of revenue performance in 2024 and beyond.” Future factors, such as the property’s unveiling of its newest course in July 2025, stand to further drive the financial future of the Aberdeenshire club. The new course, he told Fortune, would also add to operating costs. 

For Eric, Trump International’s growing pains are par for the course in cultivating a property from the ground up. “A property this size is a massive, long-term commitment. A project like that could take two decades to fully develop,” he told Fortune. 

JEFF J MITCHELL—Getty Images

Trump International’s debt is similarly large. The parent company owes upwards of $71.19 million in interest-free loans as of 2023. These loans are owed to US-entities tied directly to the Trump family and Trump himself. According to the filings, $55.06 million of the Aberdeenshire course’s debt is owed to Trump, with an unspecified rolling repayment term, and $16 million of the debt is owed to DJT Holdings LLC. DJT Holdings also advanced $6.37 million in funding to Trump International’s parent company in 2023.

Its previous lack of profitability, according to Jagolinzer, suggests the course “appears to be operating on an assumption it can continue to borrow.”

“It’s not clear how this operation can continue without persistent debt funding available,” he added.

These factors, Jagolinzer said, could become a basis for auditors to offer a negative opinion on “going concern,” meaning the auditor has substantial doubt about the company’s ability to continue operating as a business entity for a reasonable period of time, typically one year after the financial statement date. Of course, the fact that the debt is owed to the Trump Organization softens that risk considerably.

Currently, both of Trump’s Scotland properties are audited by BDO’s Ireland branch. However, prior to 2021, both businesses were audited by the firm Johnston Carmichael.

Forensic accountant Paul Barnes told Fortune the change in auditors raised a potential red flag for him. Changing auditors, he explained, can indicate deeper financial issues, disagreements on accounting principles, or a lack of transparency in a company’s financial reporting. 

A spokesperson for Johnston Carmichael refused to comment on why they no longer represent the golf properties. “As a regulated organisation, the firm adheres to its obligations and does not discuss client business, whether past or present,” they said in a written statement to Fortune.

According to Eric, the company moved auditing firms to BDO to consolidate their business. The Trump Organization’s Ireland property was already a BDO client prior to 2021. He dismissed any other explanation for the change. 

But ultimately, the only creditor that Trump International has to answer to is Trump, making the debt risk low and squarely in the Trump family’s purview. “If they were borrowing from banks in the U.K., the politicians and the government may well put pressure on the banks to call in the money. But the money has come from him in the US. And so he’s got full control,” Barnes said. 

Developments stuck in the rough

The strategy behind Trump’s golf ventures may very well be unrelated to his beloved sport. In 2016, the then-presidential candidate told Reuters his resorts were real-estate “development deals” rather than golf investments. 

“It’s pretty simple,” he said. “My golf holdings are really investments in thousands, many thousands of housing units and hotels. At some point the company will do them.”

These promised developments have yet to fully materialize. 

Cohen predicted that the Trump Organization is likely in no rush to complete all of the promised projects. “There’s only so many projects that they want to handle at any given time right now,” he said. 

Since purchasing the 1,400-acre Menie Estate in Aberdeenshire, Trump has made sweeping promises for residential and job development including a 450-room luxury hotel (scaled back to just 19 rooms), 950 holiday apartments, 500 single-family residences, 36 golf villas, 6,000 jobs, an additional golf course, and a total promised investment of $1.36 billion. But today the property only employs 84 people and the investment was reduced to around $1 billion.

“A property this size is a massive, long-term commitment. A project like that could take two decades to fully develop.”

Eric Trump

Despite receiving outline planning permission in 2008 and detailed approval in 2010, only two golf courses have been completed, the newest of which opened in July 2025.

In February 2022, Aberdeenshire Council granted permission in principle for up to 550 residential properties. Under this arrangement, Trump’s organization agreed to pay $1.04 million toward affordable housing in the area for the first 77 homes, with payments increasing by $135,601 for each additional home. While Eric Trump acknowledged in the 2023 filings that these housing plans “remain a big priority,” he claimed they would come only after completion of a second golf course at the site. He estimated the full development could take up to 10 years to complete.

He told Fortune that he remains committed to seeing the project through. “I’ve been buying and buying and buying,” he said. “I just bought 300 acres that connect to the property. In the last year, I’ve probably bought 10 to 12 houses on the surrounding property.” These purchases, he explained, are part of expanding the property and completing the promised projects.

“Aberdeen is something we’re really proud of,” he added. 

Trump’s acquisition of Turnberry came with similarly ambitious residential development plans—87-200 luxury properties, including shops and cafes, holiday cottages and retirement homes across 48-120 hectares, and properties described as providing “permanent tranquillity and respite.” Local authorities, however, have repeatedly pushed back on these initiatives, consistently citing environmental concerns, infrastructure limitations, and lack of demonstrated housing need as reasons for the rejections. (The course sits on an isolated, rural coastline where the nearest town of any size, Ayr, is a 30-minute drive away.) Eric, however, rejected any potential roadblocks in developing Turnberry when speaking to Fortune.  A Turnberry executive promised that the company would continue to pursue development applications “in due course.”

These development promises have reported financial implications for the businesses and were showcased in the New York civil fraud case against the president, in which he was found liable for using inflated valuations to obtain favorable loan terms. (On Aug. 21, a New York appeals court removed the nearly half-billion-dollar penalty levied on Trump.) Court documents alleged that the Trump Organization made the misleading claim that 2,500 homes could be developed, despite having approval for fewer than 1,500 units. The $267 million valuation attributed to residential development accounted for more than 80% of the total property valuation, the documents said. Trump has repeatedly denied any wrongdoing and previously called the case against him a political “witch hunt.”

Regardless of the Scotland golf properties’ development prospects, both businesses face an almost insurmountable battle to make a dent in their sizable debts. But without the threat of banks and government pressure, Barnes said, “they may just carry on, but they’re not going to make a great deal of money for Donald Trump.”

Regardless, Cohen argued that it’s not simply about the money for Trump. The president’s net worth, according to the New York Times, is upwards of $10 billion, and as Cohen noted, his financial prosperity has put him in a position where he is no longer dependent upon banks for his real estate empire, his golf properties included. 

“So you can’t look at these as merely just golf courses,” said Cohen. “There is an old expression that land can neither be created nor destroyed, and it’s what made kingdoms, kingdoms. Donald clearly sees himself in that role.”

This story was originally featured on Fortune.com

© ANDREW HARNIK—Getty Images

• Moody’s Analytics chief economist Mark Zandi continued to sound the alarm on the risk of a downturn, warning that states accounting for nearly a third of U.S. GDP are already in a recession or at high risk of slipping into one. Meanwhile, another third is treading water, while the last third is still expanding.

After saying that the U.S. is on the precipice of a recession earlier this month, Moody’s Analytics chief economist Mark Zandi continued to add more granularity to his warning.

In social media posts on Sunday, he said his assessments of various datasets indicate that states accounting for nearly a third of U.S. GDP are already in a recession or at high risk of slipping into one. Another third is treading water, while the last third is still expanding.

“States experiencing recessions are spread across the country, but the broader DC area stands out due to government job cuts,” Zandi added. “Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn.”

For now, the Atlanta Fed’s GDP tracker points to continued nationwide growth, though it’s expected to decelerate to 2.3% in the third quarter from 3% in the second quarter.

Here’s how the states—and one federal district(*)—break down:

• Recession/high risk (22): Wyoming, Montana, Minnesota, Mississippi, Kansas, Massachusetts, Washington, Georgia, New Hampshire, Maryland, Rhode Island, Illinois, Delaware, Virginia, Oregon, Connecticut, South Dakota, New Jersey, Maine, lowa, West Virginia, District of Columbia*.
• Treading water (13): Missouri, Ohio, Hawaii, New Mexico, Alaska, New York, Vermont, Arkansas, California, Tennessee, Nevada, Colorado, Michigan.
• Expanding (16): South Carolina, Idaho, Texas, Oklahoma, North Carolina, Alabama, Kentucky, Florida, Nebraska, Indiana, Louisiana, North Dakota, Arizona, Pennsylvania, Utah, Wisconsin.

Last week, Zandi also put a finer point on his forecast. He said Moody’s machine-learning-based leading recession indicator put the odds of a downturn in the next 12 months at 49%.

While tax cuts and government spending on defense should help growth, that won’t come until next year. The base case is that the economy avoids a recession, “but not by much,” Zandi said.

“The economy will be most vulnerable to recession toward the end of this year and early next year,” he added. “That is when the inflation fallout of the higher tariffs and restrictive immigration policy will peak, weighing heavily on real household incomes and thus consumer spending.”

With the economy facing many threats, it wouldn’t take much to push it into recession, Zandi said, singling out a selloff in the Treasury bond market that would send long-term yields soaring. 

And before that, he pointed out that more than half of industries are already shedding workers, a sign that’s accompanied past recessions.

Payrolls expanded by just 73,000 last month, well below forecasts for about 100,000. Meanwhile, May’s tally was revised down from 144,000 to 19,000, and June’s total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000.

Because recent revisions have been consistently much lower, Zandi said he wouldn’t be surprised if subsequent revisions show that employment is already declining.

“Also telling is that employment is declining in many industries. In the past, if more than half the ≈400 industries in the payroll survey were shedding jobs, we were in a recession,” he explained. “In July, over 53% of industries were cutting jobs, and only health care was adding meaningfully to payrolls.”

This story was originally featured on Fortune.com

© Getty Images

Key Points

• Several market indicators mirror that of the dot-com bubble of late 1999.

• When that tech bubble popped, the Nasdaq plunged 78% over three years.

• Here's what's similar about today's AI-crazed market, what may be different, and what investors should do now.

• 10 stocks we like better than NASDAQ Composite Index ›

Investors have ridden an incredible recovery from the April 2 "Liberation Day" tariff surprises. Since the April 8 low, the Nasdaq Composite (NASDAQINDEX: ^IXIC) has appreciated an incredible 40%. And of course, that recovery has taken place amid a decade-long bull market in technology growth stocks.

It's easy to understand why. Society is becoming more digital and automated. The last 10 years have seen the emergence of cloud computing, streaming video, digital advertising, the pandemic-era boom in electronic devices and work-from-home, all topped off by the introduction of generative artificial intelligence (AI) marked by the unveiling of ChatGPT in late 2022.

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However, after a long tech bull market, technology growth stocks have reached a worrying valuation level relative to other stocks, and today's relative overvaluation mirrors an infamous period in stock market history.

Echoes of the dot-com era?

In several ways, technology stock performance and valuations are currently mirroring the extremes of the dot-com boom of the late 1990s. Unfortunately, we all know how that period ended, with a terrible "bust" that sent the Nasdaq tumbling three years in a row, eventually culminating in a 78% drawdown from the March 10, 2000, peak.

QQQ data by YCharts.

How frothy are tech stocks?

Technology innovation can be very exciting; however, that excitement often finds itself in the form of high valuations. According to data published on Charlie Bilello's State of the Markets blog, the technology sector's recent outperformance has now exceeded that of the height of the dot-com bubble:

Image source: Charlie Bilello's State of the Markets blog.

The relative outperformance isn't the only mirror to the dot-com era. Back then, tech stocks also became very large, leading to an outperformance of large stocks relative to small stocks. Similarly, tech stocks are often growth stocks with high multiples, reflecting enthusiasm over their future prospects. This is in contrast to value stocks, which trade at low multiples, usually due to their more modest growth prospects.

As you can see below, the outperformance of large stocks to small stocks, as well as growth stocks to value stocks, is at highs last seen during the dot-com boom.

Image source: Charlie Bilello's State of the Markets blog.

Is it time to worry?

Given that higher-valued tech stocks now make up a larger portion of the index, the Schiller price-to-earnings (P/E) ratio, which adjusts for cyclicality in earnings over 10 years, while not quite at the levels of 1999, has crept up to the highest level since 1999, roughly matching the level from 2021:

S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted P/E ratio.

As we all know, 2022 was also a terrible year for tech stocks. While it didn't see a multiyear crash akin to the dot-com bust, 2022 saw the Nasdaq decline 33.1% on the year. Of course, at the end of 2022, ChatGPT came out, somewhat saving the tech sector as the AI revolution kicked off.

Counterpoints to the bubble thesis

Thus, when compared to history, tech stocks are at worrying levels. Given the similarities to the 1999 dot-com bubble and the 2021 pandemic bubble, some may think it's time to panic and sell; however, there are also a few counter-narratives to consider.

The first is that, unlike in 1999, today's technology giants are mostly truly diversified, cash-rich behemoths that account for a greater and greater percentage of today's gross domestic product (GDP). While the late 1990s certainly had its leaders -- including Microsoft (NASDAQ: MSFT), the only market leader that is in the same position today as then -- they weren't really anything like today's tech giants, with robust cloud businesses, global scale, diversified income streams, and tremendous amounts of cash.

While market concentration in the top three weightings tends to occur before market downturns, index weighting concentration appears to be somewhat of a long-term trend now, increasing beyond prior highs in 1999 and 2008 since 2019.

Thus, it seems a higher weighting of the "Magnificent Seven" stocks could be a feature of today's economy, rather than an aberration.

While it's true that some of today's large companies are overvalued, given their underlying strength and resilience, it's perhaps not abnormal for them to garner higher-than-normal valuation multiples.

What investors should do now

It's important to know that while taking note of market levels is important, it is extremely difficult to time market downturns. Famed investor Peter Lynch once said, "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves."

So, one shouldn't abandon one's long-term investing plan just because overall market levels may be frothy. That being said, if you need a certain amount of cash in the next one to two years, it may be a good idea to keep that money in cash or Treasury bills until then, rather than the stock market.

Furthermore, if you have a regular, methodical investing plan, stick to it. But if you are consistently adding to your portfolio every month or quarter, you may want to look at small caps, non-tech sectors, and value stocks today, rather than adding to large technology companies.

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Billy Duberstein has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Netflix’s strong fundamentals have helped the stock soar in the past several years.

• The company dominates the streaming industry with over 300 million subscribers.

• There's a good chance that Netflix’s lofty P/E ratio will come down by 2030.

• 10 stocks we like better than Netflix ›

Netflix (NASDAQ: NFLX) has fast-forwarded investor returns. In the past five years, the global media pioneer's share price has soared 150% as of this writing. Ongoing subscriber, revenue, and operating profit growth have been the key ingredients for this perennial winner.

But where will this top streaming stock be in five years?

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Higher stock price

Netflix continues to fire on all cylinders. During the second quarter (ended June 30), the company reported 15.9% year-over-year revenue growth. Even better, free cash flow jumped 86.9%. Netflix is an extremely profitable enterprise these days, something many bears believed would never happen due to the company's massive content budget.

The business dominates the streaming landscape. According to Nielsen data, 8.8% of all U.S. TV viewing time in July happened on Netflix. The only other streaming platform with a greater share is YouTube, which isn't a an apples-to-apples comparison due to its user-generated content.

There's no reason to believe that Netflix's fundamentals will weaken anytime soon. In 2030, revenue and earnings should be higher than they are today. That supports a rising stock price.

Beating the market

Netflix shares should be higher five years from now, but more importantly, will the stock be able to beat the market between now and 2030? That's a different story.

Valuation is the main concern I have. Shares trade at a price-to-earnings (P/E) ratio of 51.7. The bulls will argue that Netflix's monster success warrants the premium valuation. However, the company's growth going forward isn't going to resemble the past. There's a good chance the P/E multiple will contract over the next five years as the business continues to mature, offsetting some of the stock's gains in that time.

Netflix has been a market-beating stock in the past, but looking ahead to 2030, it wouldn't surprise me if the stock lags the S&P 500.

Should you invest $1,000 in Netflix right now?

Before you buy stock in Netflix, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

Key Points

• Some of the biggest beneficiaries of the artificial intelligence (AI) boom have been semiconductor stocks.

• At the heart of the chip landscape is Nvidia, whose chips are in demand from trillion-dollar hyperscalers and governments across the globe.

• While Nvidia has already witnessed significant valuation expansion, several catalysts suggest the company still has meaningful long-term growth ahead.

• 10 stocks we like better than Nvidia ›

There are only so many moments in investing when a company becomes so impactful that it transcends its peers and evolves into something greater -- a true generational wealth opportunity.

In the 1980s and 1990s, Microsoft and Berkshire Hathaway were prime examples. Microsoft pioneered the personal computing era with its Windows operating system, which became the backbone of the internet age. Berkshire, under Warren Buffett's leadership, compounded capital that consistently outperformed the broader market.

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Today, I think the most compelling opportunity at the intersection of growth and value is none other than semiconductor powerhouse Nvidia (NASDAQ: NVDA).

The reason is simple: Nvidia isn't just riding a single trend. Instead, it has positioned itself as the core power source at the heart of multiple revolutions, each unfolding against the backdrop of the artificial intelligence (AI) movement.

The AI infrastructure boom is a multi-year growth arc for Nvidia

Nvidia's rapid rise in recent years comes down to one thing: its graphics processing units (GPUs). These chips have become the gold standard of generative AI development, powering everything from large language models (LLMs) to mission-critical applications across every industry.

AMZN Capital Expenditures (TTM) data by YCharts.

Cloud hyperscalers and big tech giants have poured hundreds of billions of dollars into capital expenditures (capex) -- much of which they directed toward chips and networking infrastructure.

This spending spree doesn't appear to be slowing down, either. According to management consulting firm McKinsey & Company, AI infrastructure spend could reach $6.7 trillion by next decade -- with chips continuing to capture a good portion of this investment.

What makes the infrastructure narrative even more compelling is that it extends beyond the private sector. The U.S. government is supercharging its AI ambitions through Project Stargate -- a $500 billion initiative to invest in data centers and AI infrastructure over the coming years. Meanwhile, countries in the Middle East are rolling out their own sovereign AI initiatives.

Nvidia sits at the center of this activity. Its GPUs are not exclusive to powering today's data centers -- they are enabling a global race to build the foundation of tomorrow's AI economy.

AI-powered software applications are coming into focus

Beyond infrastructure, Nvidia is also quietly shaping the rise of AI-powered software applications. Over the last few years, developers mainly focused on securing GPUs to build next-generation data centers and train LLMs. Now, however, AI investment is swiftly moving downstream and becoming a critical component of consumer and enterprise applications.

Take Perplexity's unsolicited $34.5 billion bid to acquire Google Chrome. While the deal is unlikely to materialize, it underscores an important point: AI is moving beyond hardware and into the application layer for businesses and consumers. Nvidia enjoys a rare advantage at this intersection because the company profits not just from hardware demand, but also from its software ecosystem.

Nvidia's CUDA software program serves as a foundation for developers, enabling them to build and deploy AI applications efficiently and at scale.

Emerging market opportunities are a sleeping giant

Where things get most exciting for Nvidia is its untapped potential across emerging markets.

For years, Nvidia's footprint in China has been constrained by strict export controls and fierce competition from rivals like Huawei.

These dynamics have begun to shift. Nvidia recently reach an agreement with the Trump Administration that allows it to remit 15% of its China sales back to the U.S. government in exchange for continued access to the key market -- which Jensen Huang estimates could be worth $50 billion annually.

Beyond geographic expansion, Nvidia is poised to ride the wave of more advanced AI use cases in areas such as quantum computing, robotics, and autonomous systems.

A recent example underscores how central Nvidia has become: Elon Musk told investors that Tesla is putting its internally built Dojo supercomputer ambition to the side in favor of a new technology stack, dubbed AI6. At the core of this new stack is none other than Nvidia.

Is Nvidia stock a buy?

At first glance, the chart below may look contradictory. Nvidia's forward price to earnings (P/E) multiple of 41 is well-above its three-year average. Yet at the same time, the stock trades at a discount to the peak forward earnings levels reached earlier in the AI revolution. What could this mean?

NVDA PE Ratio (Forward) data by YCharts.

In my eyes, it could suggest that investors are struggling to assign a fair value to Nvidia.

The premium over its historical average reflects ongoing optimism, while the discount to prior highs implies that some view Nvidia as a maturing business at risk of decelerating growth.

I think this interpretation could be misguided. Even if Nvidia's growth rates moderate in percentage terms, those percentages will be applied to a significantly larger revenue and profit base -- fueled by data center expansion, AI software applications, and new markets.

Taken together, this suggests that Nvidia is quietly undervalued. At the very least, the company appears to have significant runway for years to come -- supported by a host of growth levers that are not yet fully priced in.

For these reasons, I see Nvidia as an opportunity trading at a reasonable price point relative to the company's potential -- making it a compelling long-term investment to buy and hold.

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Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Realty Income stock has been under pressure in a poor real estate market, and it's been looking like a bargain.

• It works with the world's top retail chains, making it reliable for stability and growth.

• Realty Income pays a monthly dividend with a high yield.

• 10 stocks we like better than Realty Income ›

Top dividend stocks aren't always market beaters; the benefits of dividends are in their passive income. It's a little bit of a dance, with dividend yield usually working conversely with the potential gains for the stock. The higher the yield, the less likely you're looking at high-growth potential.

Realty Income (NYSE: O) is one of the best dividend stocks you can buy, with a high yield and an incredible track record. Even though it's still under pressure from a sour real estate market, it's beating the market this year -- even without its famous dividend. Let's see why.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Oversold and undervalued

Realty Income is a real estate dividend trust (REIT), a classification of stocks that own and lease properties and pay out 90% of their earnings as dividends. Realty Income is one of the biggest REITs in the world, with more than 15,600 global properties.

It makes more money by purchasing more properties, often through acquiring smaller REITs, and creating long-term lease contracts. The model requires a long funding pipeline to buy properties and new properties to buy, and as you might imagine, it's more challenging to do that profitably and successfully when interest rates are high. That's led to market pessimism, and Realty Income stock is about 25% off of its all-time highs.

However, as interest rates have started to decline and the economy demonstrates resilience, the market is climbing, and investors are feeling more favorably disposed toward some of the best real estate stocks. Realty Income has been performing well despite the pressure, with adjusted funds from operations (AFFO) of $1.05 in the 2025 second quarter, a penny less than last year, but an increase in AFFO-per-share guidance for the full year.

Realty Income has been looking more like a bargain, and smart investors have been scooping up shares. Realty Income stock is now outpacing the market, with and without dividends included.

^SPX data by YCharts

A business model that works

Realty Income is a retail REIT, and it leases its properties to 1,600 different tenants in 91 different industries. It works primarily with well-known and established retail chains that are large and reliable, and it signs long-term leases that create a recurring revenue stream.

Although the focus on solid retailers that sell essentials is touted as an advantage, it has recently branched out to other industries, which offers its own advantages in diversification. It's also becoming more diversified by region. Its top three tenants are 7-Eleven, Dollar General and Walgreens, and grocery and convenience stores account for about 20% of paid leases. But other top-10 tenants include Life Time Group Holdings and Wynn Resorts, and U.K. supermarket chain Sainsbury's is No. 11.

There's plenty of opportunity to keep growing. Management has identified an $8.5 trillion market in leasable properties in its current markets and $14 trillion in an addressable market as it expands into new verticals like data centers.

You can't beat this dividend

Realty Income has been paying a dividend for more than 55 years, and it pays the dividend monthly. It raises it quarterly, and it's raised it for the past 111 quarters. That puts it in a league of its own, and it's on track to keep it up.

Often, dividend stocks that are that reliable don't have a high yield; the benefit is in the dependability and the track record. Realty Income's dividend yields 5.4% at today's price, an excellent yield that's more than 3 times higher than the S&P 500 average.

If interest rates come down and the real estate market improves, Realty Income will be in an even better position to deliver value for shareholders. There are bound to be ups and downs over many years, but long-term investors seeking an excellent dividend stock will find it with Realty Income.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.

Key Points

• Nvidia should hold onto its leading position in the GPU market.

• Taiwan Semiconductor is involved with the production of 85% of all semiconductor start-up prototypes globally.

• Nearly 3.5 billion people use Meta Platforms' products every day.

• 10 stocks we like better than Nvidia ›

As a buy-and-hold investor, I closely follow my long-term investments through exchange-traded funds and retirement accounts. I've always followed a Warren Buffett-style of investing, in which I look for strong, profitable companies to hold over the long term.

However, I also recognize that tech stocks are way too important -- and profitable -- to miss out on. Tech stocks represent companies that are at the forefront of innovation and development, leading the world's charge into the future. Without tech companies, we wouldn't have a host of massively significant advances that we take for granted today -- things like personal computers, online banking, 5G wireless service, the internet, smartphones, and GPS technology. Nor would we have the incredible types of tech that companies are still making rapid progress on today -- such as cloud computing, the Internet of Things, generative AI, and autonomous vehicles.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Including strong, profitable tech stocks in your portfolio is one of the best ways to give yourself an opportunity to outperform the market. Consider that the tech-heavy Nasdaq Composite is up nearly 18% in the last 12 months, handily outperforming the Dow Jones Industrial Average and the S&P 500.

Three tech stocks that I think would be great choices for any retail investor's portfolio are Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM), and Meta Platforms (NASDAQ: META).

1. Nvidia

Semiconductor maker Nvidia is the biggest company in the world by market capitalization, so it naturally gets the top position on this list, too. While a recent pullback has driven the market cap from $4.4 trillion down to $4.2 trillion, the tailwinds that have propelled Nvidia's upward over the last few years are still present -- and they won't be going away any time soon.

Nvidia designs graphics processing units (GPUs) that are used by data centers to provide the computing power required by a host of advanced computing tasks, such as training and running large language models (LLMs) and artificial intelligence (AI) systems. Nvidia's GPUs are designed to be deployed in clusters of hundreds or thousands, boosting the parallel processing power they can apply to workloads. In addition, Nvidia's CUDA platform provides libraries and tools for developers who are working on software that will be powered by its GPUs. It's a popular platform with developers, and it's only compatible with Nvidia's chips. That added competitive advantage is one reason why I'm confident that it will continue to control the lion's share of the GPU market for years to come.

Nvidia will release its results for its fiscal 2026 second quarter on Aug. 27, and I think it's going to be another sterling report. I'll also be looking carefully at management's guidance, as the company is expected to resume selling its H20 AI chips to customers in China after being blocked from exporting them to that country earlier this year.

2. Taiwan Semiconductor

As the company that fabricates the advanced chips designed by Nvidia (as well as an array of other chip companies), Taiwan Semiconductor benefits from many of the same tailwinds as the GPU leader. But there are some differences between their businesses that make TSMC stock even more appealing.

As the world's leading third-party chip foundry, Taiwan Semi manufactured nearly 12,000 products for 522 customers in 2024, employing 288 separate process technologies. It's involved in about 85% of all semiconductor start-up product prototypes. In short, this is an ideal stock to own if you believe that the semiconductor business broadly will continue to grow, but you want to hedge some of your exposure away from Nvidia.

Taiwan Semi is also moving to limit its exposure to the trade war between Washington and Beijing, and to expand its manufacturing footprint further beyond the island of Taiwan, which China has designs on. The company is in the midst of spending $165 billion to expand its new manufacturing and R&D facility in Arizona and bring some of its most advanced fabrication processes to the U.S.

3. Meta Platforms

Meta Platforms, which operates Facebook, Instagram, WhatsApp, and Messenger, is the unquestioned king of the social media companies. On average, 3.48 billion people use its platforms every day -- and that number is increasing. Its daily active user count was up by 6% in June from a year earlier.

The company leverages that massive audience -- and the mountain of information it collects about them -- into an impressive revenue stream. Ad impressions were up 11% in the second quarter from the previous year. Overall, Meta reported $47.5 billion in revenue in the second quarter, up 22% year over year.

Meta's own artificial intelligence platform, Meta AI, has been driving a lot of its recent success. Meta AI's chatbot can generate content, answer questions, and create images. The company also provides AI-powered tools to advertisers to help them reach the customers they want, making their ads on its social media platforms more effective.

Tech stocks to buy and hold

Companies in the tech sector must constantly innovate in their efforts to stay relevant, and their stocks can sometimes be volatile. But Nvidia, Taiwan Semiconductor, and Meta Platforms aren't merely chasing trends -- they're shaping them. I expect that these companies will remain at the forefront of their industries as we move into the second half of the decade, and I view them as good bets to continue outperforming the market. That's why I like them for any buy-and-hold portfolio.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Patrick Sanders has positions in Nvidia. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Key Points

• The Ten Titans have contributed more than half of S&P 500 gains in the last decade.

• Avoiding stocks just because they have run-up is a mistake.

• The S&P 500 should be viewed more as a growth index than a balanced index.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

The largest growth-focused U.S. companies by market cap are Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), Broadcom (NASDAQ: AVGO), Tesla (NASDAQ: TSLA), Oracle (NYSE: ORCL), and Netflix (NASDAQ: NFLX).

Known as the "Ten Titans," this elite group of companies has been instrumental in driving broader market gains in recent years, now making up around 38% of the S&P 500 (SNPINDEX: ^GSPC).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Investment management firm Vanguard has the largest (by net assets) and lowest cost exchange-traded fund (ETF) for mirroring the performance of the index -- the Vanguard S&P 500 ETF (NYSEMKT: VOO). Here's why the fund is one of the simplest ways to get significant exposure to the Ten Titans.

Ten Titan dominance

Over the long term, the S&P 500 has historically delivered annualized results of 9% to 10%. It has been a simple way to compound wealth over time, especially as fees have come down for S&P 500 products. The Vanguard S&P 500 ETF sports an expense ratio of just 0.03% -- or $3 for every $10,000 invested -- making it an ultra-inexpensive way to get exposure to 500 of the top U.S. companies.

The Vanguard S&P 500 ETF could be a great choice for folks who aren't looking to research companies or closely follow the market. But it's a mistake to assume that the S&P 500 is well diversified just because it holds hundreds of names. Right now, the S&P 500 is arguably the least diversified it has been since the turn of the millennium.

Megacap growth companies have gotten even bigger while the rest of the market hasn't done nearly as well. Today, the combined market cap of the Ten Titans is $20.2 trillion. Ten years ago, it was just $2.5 trillion. Nvidia alone went from a blip on the S&P 500's radar at $12.4 billion to over $4 trillion in market cap. And not a single Titan was worth over $1 trillion a decade ago. Today, eight of them are.

S&P 500 Market Cap data by YCharts.

To put that monster gain into perspective, the S&P 500's market cap was $18.2 trillion a decade ago. Meaning the Ten Titans have contributed a staggering 51.6% of the $34.3 trillion market cap the S&P 500 has added over the last decade. Without the Ten Titans, the S&P 500's gains over the last decade would have looked mediocre at best. With the Ten Titans, the last decade has been exceptional for S&P 500 investors.

The Ten Titans have cemented their footprint on the S&P 500

Since the S&P 500 is so concentrated in the Ten Titans, it has transformed into a growth-focused index, making it an excellent way to double up on the Ten Titans. But the S&P 500 may not be as good a fit for certain investors.

Arguably, the best reason not to buy the S&P 500 is if you're looking to avoid the Ten Titans, either because you already have comfortable positions in these names or you don't want to take on the potential risk and volatility inherent in a top-heavy index.

That being said, the S&P 500 has been concentrated before, and its leadership can change, as it did over the last decade. The underperformance by former market leaders, like Intel, has been more than made up for by the rise of Nvidia and Broadcom.

So it's not that the Ten Titans have to do well for the S&P 500 to thrive. But if the Titans begin underperforming, their sheer influence on the S&P 500 would require significantly outsized gains from the rest of the index.

Let the S&P 500 work for you

With the S&P 500 yielding just 1.2%, sporting a premium valuation and being heavily dependent on growth stocks, the index isn't the best fit for folks looking to limit their exposure to megacap growth stocks or center their portfolio around dividend-paying value stocks.

The beauty of being an individual investor is that you can shape your portfolio in a way that suits your risk tolerance and investment objectives. For example, you use the Vanguard S&P 500 ETF as a way to get exposure to top growth stocks like the Ten Titans and then complement that position with holdings in dividend stocks or higher-yield ETFs.

In sum, the dominance of the Ten Titans means it's time to start calling the Vanguard S&P 500 ETF what it has become, which is really more of a growth fund than a balanced way to invest in growth, value, and dividend stocks.

Investors with a high risk tolerance and long-term time horizon may cheer the concentrated nature of the index. In contrast, risk-averse investors may want to reorient their portfolios so they aren't accidentally overexposing themselves to more growth than intended.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Intel, Meta Platforms, Microsoft, Netflix, Nvidia, Oracle, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• The world's largest financial stocks cover a lot of ground, but banks make up the bulk of the list.

• The best investment opportunity on the list may not be in a bank, but in a company that helps banks.

• Visa's payment processing business is growing strongly, and the stock still looks fairly valued.

• 10 stocks we like better than Visa ›

The Motley Fool just updated its report on the largest financial companies in the world. The list is filled with banks, but there are a couple of other names in the mix, including diversified conglomerate Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), which is the No. 1 name on the list. But your best investment opportunity might actually be No. 3, Visa (NYSE: V). Here's why.

What does Visa do?

Visa is what's known as a payment processor. You probably think of it as a credit card company. But it really provides the technology that allows credit and debit cards to be safely used for payments. It connects buyers and sellers on behalf of card issuers, which are often the banks that fill up The Motley Fool's top financial stocks list.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The interesting thing about Visa is that no single transaction it facilitates is really all that important. That's because it only charges a small fee for the use of its payment network. It's the volume of transactions that flow through its network that's important. In the fiscal third quarter of 2025, payment volume increased 10% year over year, with Visa handling 65.4 billion transactions. On a dollar basis, volume rose 8%.

These are gigantic numbers and highlight just how deeply entrenched Visa is in the financial markets. But it is also deeply entrenched on Main Street. You probably have a credit card or debit card (or both) with a Visa logo on it. Most stores you shop at likely trust Visa to act as an intermediary for them. Don't forget online shopping, where most e-commerce sites allow Visa cards to be used as a safe payment option.

The world is increasingly moving away from paper money and toward card and digital payments. To be fair, Visa isn't the only company benefiting from this trend. But it is one of a very small number of companies that have an effective oligopoly in the space. That's kind of like a monopoly, but the industry dominance is shared across a small number of companies.

Visa is doing well, but it's not shockingly overpriced

As you might expect, Visa is performing well as a business. In the fiscal third quarter of 2025, revenues rose 14%, and adjusted earnings jumped 23%. Investors are aware of how well Visa is doing today, and the stock isn't cheap.

But the real attraction here is that Visa's shares don't look outlandishly expensive, either. Some numbers will help here. The price-to-sales (P/S) ratio is currently around 16.8x, versus a five-year average of 17.7x. The price-to-earnings (P/E) ratio is 33.5x, compared to a longer-term average of 34.1x.

The P/S ratio and the P/E ratio are not low by any stretch of the imagination, suggesting that value-focused investors might want to watch from the sidelines. But if you are a growth-minded investor, this strongly growing business looks fairly reasonably priced, historically speaking. That puts it into the growth at a reasonable price, or GARP, camp, which is probably a good place to be as the S&P 500 (SNPINDEX: ^GSPC) flirts with all-time highs.

Visa isn't perfect, but it is attractive

Visa is doing well as a business. Wall Street knows that and has placed a high price tag on the shares. But that price tag isn't ridiculous when you look back at the company's recent valuation history. Given the ongoing success of the business and the likely future of more digital and card payments, long-term investors looking for an investment opportunity among the largest financial companies should probably make Visa their starting point.

Should you invest $1,000 in Visa right now?

Before you buy stock in Visa, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Visa wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Visa. The Motley Fool has a disclosure policy.

Key Points

• The S&P 500's rising yield is similar to what happened before the dot-com bubble burst.

• This time, the S&P 500 is being driven by earnings growth.

• Taking out the 20 largest S&P 500 components would push the index's yield close to 2%.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

The S&P 500 (SNPINDEX: ^GSPC) yields just 1.2% at the time of this writing. According to data by Multpl, that is the lowest monthly reading since November 2000 when the S&P 500 yielded 1.18% -- before the sell-off in the Nasdaq Composite (NASDAQINDEX: ^IXIC) accelerated as the dot-com bubble burst. Many top growth stocks would go on to suffer brutal losses that took years or even over a decade to recover.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here's what the S&P 500's current low yield says about the state of the U.S. stock market and what you can do about it.

There's a clear explanation for the S&P 500's falling yield

With 500 holdings, the S&P 500 seems like a great way to invest in hundreds of top U.S. companies at once. But the index has become less diversified in recent years.

Just 4% of S&P 500 components make up 48% of the Vanguard S&P 500 ETF (NYSEMKT: VOO), an exchange-traded fund that closely tracks the index. Since the S&P 500 is weighted by market cap, massive companies can really move the index in a way smaller companies cannot.

Single companies are now worth the equivalent of entire stock market sectors, or multiple sectors. Nvidia (NASDAQ: NVDA) plus Microsoft (NASDAQ: MSFT) make up more than the combined value of the materials, real estate, utilities, energy, and consumer staples sectors -- illustrating the top-heavy nature of the index.

The following table shows the 20 largest S&P 500 components by market cap and their dividend yields as I write on Aug. 18. The "weighted yield" column is the dividend yield multiplied by the percentage weighting in the Vanguard S&P 500 ETF -- which shows the impact each stock has on the index's yield.

Company	Percentage of Vanguard S&P 500 ETF	Dividend Yield	Weighted Yield
Nvidia	8.06%	0.02%	0.002%
Microsoft	7.37%	0.62%	0.046%
Apple	5.76%	0.44%	0.025%
Amazon	4.11%	0%	0%
Alphabet	3.76%	0.4%	0.015%
Meta Platforms	3.12%	0.26%	0.008%
Broadcom	2.57%	0.75%	0.019%
Berkshire Hathaway	1.61%	0%	0%
Tesla	1.61%	0%	0%
JPMorgan Chase	1.48%	1.82%	0.027%
Visa	1.09%	0.69%	0.008%
Eli Lilly	1.08%	0.83%	0.009%
Netflix	0.92%	0%	0%
ExxonMobil	0.89%	3.72%	0.033%
Mastercard	0.85%	0.64%	0.005%
Walmart	0.79%	0.91%	0.007%
Costco Wholesale	0.78%	0.51%	0.004%
Oracle	0.77%	0.89%	0.007%
Johnson & Johnson	0.74%	2.84%	0.021%
Home Depot	0.62%	2.28%	0.014%
Sum	47.98%	N/A	0.25%

Data sources: Vanguard, YCharts.

The key takeaway is that 48% of the S&P 500 contributes just 0.25% of the index's yield. Meaning that if you took out the 20 largest stocks, the S&P 500 would yield around 2% -- just like it did a decade ago.

So it's not that companies have stopped paying dividends, it's just that low- or no-yield megacap growth stocks like the "Ten Titans" now make up such a large share of the index that the overall S&P 500 yield is lower.

A justified rally

The S&P 500 and Nasdaq Composite underwent massive surges heading into the turn of the millennium that made stock prices go up faster than dividends. Similar to today's market, many of the top holdings in these indexes shifted to growth companies that prioritize reinvesting in their underlying businesses rather than distributing a portion of profits to shareholders through dividends.

The S&P 500's low yield illustrates the extent to which growth stocks dominate the stock market. But unlike the lead-up to the dot-com bust, this rally is much healthier because it is being driven largely by earnings growth and positive sentiment rather than euphoria.

Nvidia is a good example of a company with both a surging stock price and earnings that have compounded several-fold in just a few years. Investors aren't betting on what Nvidia could do in the future if everything goes right. Rather, they are betting on sustained momentum for what Nvidia is delivering right now.

As of Aug. 1, the forward price-to-earnings (P/E) ratio of the S&P 500 was 22.2 -- which is about a 20% premium to its 10-year average. However, the quality of the S&P 500's earnings and growth rate is arguably better today than over that 10-year average. So buying the S&P 500 still makes sense if you agree that the quality is worth paying up for. By this metric, the S&P 500 is pricey, but it's not remotely at nosebleed levels like we saw during the dot-com bubble.

Achieving a more balanced portfolio

The S&P 500 can still be a great tool for building long-term wealth. However, risk-averse investors may be looking for stocks at less expensive valuations and higher dividend yields.

The simplest way to counteract the S&P 500's premium valuation and low yield is to allocate other portions of your portfolio to help fulfill value and income objectives. That can be done by investing directly in top dividend-paying value stocks or value-focused ETFs.

It's important to understand what makes up the S&P 500 and let the index work for you rather than accidentally investing too much in the index and taking on more exposure to growth stocks than you're comfortable with.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Costco Wholesale, Home Depot, JPMorgan Chase, Mastercard, Meta Platforms, Microsoft, Netflix, Nvidia, Oracle, Tesla, Vanguard S&P 500 ETF, Visa, and Walmart. The Motley Fool recommends Broadcom and Johnson & Johnson and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Berkshire Hathaway is the investment vehicle of Warren Buffett and his team.

• The company's stock has vastly outperformed the broader market, thanks to the way in which Buffett invests.

• Berkshire Hathaway is about to see a huge change in the way it's run.

• 10 stocks we like better than Berkshire Hathaway ›

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is an interesting name. Today it represents the conglomerate that Warren Buffett built. But, before Buffett bought the company, it was a failing clothing business. That clothing business ultimately closed under Buffett's watch, representing one of his most prominent failed investments.

A long run of good investments has turned that failure into a huge success. However, in one year's time, there's going to be a very big change at Berkshire Hathaway.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

What does Berkshire Hathaway do?

Berkshire Hathaway is a conglomerate. Conglomerates often operate in a few different business lines, sometimes with each business having its own brand identity. Berkshire Hathaway took that model and ran with it. At the end of 2024, Berkshire Hathaway had 189 subsidiary companies!

But that's not the whole story. That list of 189 companies includes a couple of large insurance businesses. Insurance companies collect insurance premiums up front and they pay out money to cover losses in the future. The premiums get invested until the cash is needed to fund payouts. This is what's known as "float" on Wall Street. Insurance companies can keep whatever they earn on the float.

Berkshire Hathaway has long invested the float in the stock market, with a large portfolio of stocks augmenting its owned businesses. Some of the company's long-term holdings include Coca-Cola (NYSE: KO), American Express (NYSE: AXP), and Chevron (NYSE: CVX). That diversity is replicated in the company's owned investments, in a wide-ranging investment portfolio.

Essentially, Berkshire Hathaway is something like a mutual fund. When you buy the stock, you are, effectively, investing alongside CEO Warren Buffett. As the chart below highlights, doing so has worked out very well for investors over the long term.

BRK.A Total Return Level data by YCharts.

Things are about to change at Berkshire Hathaway

So, from a big-picture perspective, buying Berkshire Hathaway is really buying into Buffett's investment approach. To briefly summarize that approach, Buffett likes to buy well-run companies while they are attractively valued and then hold them for the long term to benefit from the growth of their businesses. Simple to say, hard to do. Yet, clearly, Buffett has executed his investment approach incredibly well over time.

At the end of 2025, he is going to retire as CEO of Berkshire Hathaway, handing the reins to Greg Abel. Since Abel isn't Buffett, the company will inherently be different one year from now. The question is: How different?

The good news on this front is that Buffett isn't cutting and running. He is slated to remain as the chairman of the board of directors. So Abel is, technically, still Buffett's employee. Buffett generally takes a hands-off approach, but if Abel is struggling, it's likely Buffett will step in to help.

There's also the fact that Abel has worked for Berkshire for over two decades. So he is steeped in the Oracle of Omaha's approach. Because he is a different person, there will inherently be differences in the way he approaches the CEO role. But given his long association with such a successful CEO, it also seems likely that he will try his best to heavily incorporate Warren Buffett's teachings into whatever he does.

Different, but not that different

As an investor, if you're worried that Buffett stepping down will lead to Berkshire Hathaway dramatically changing the way it is run, that's probably not going to happen. Still, the CEO change is material, so investors should keep a regular eye on the business. The company will be different in an important way in a year, with Abel stepping in to fill Buffett's very large shoes. But the basic approach taken at the top of the company probably won't be so different that Berkshire Hathaway will become a completely different company overnight.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

American Express is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool has a disclosure policy.

Key Points

• Based on the potential growth the business offers, Nvidia's stock may be too richly valued to buy now.

• Shares of Adobe have been beaten down over the past year and a half due to fears that AI will diminish the need for its popular software tools.

• The market isn't giving Adobe enough credit for its own AI efforts.

• 10 stocks we like better than Nvidia ›

OpenAI launched ChatGPT on Nov. 30, 2022, kicking off a frenzy of excitement about generative AI -- and a flood of spending on it. Few companies have benefited more from that than Nvidia (NASDAQ: NVDA). The chipmaker's graphics processing units (GPUs) have proven essential hardware for training and running generative AI applications.

Since ChatGPT's launch, Nvidia's stock price has increased more than tenfold. It's now the most valuable company in the world with a market cap exceeding $4 trillion.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

But the next three years are bound to look different from the previous three. And one AI stock looks poised to outperform the leading GPU maker through 2028, based on their current valuations and competitive forces.

Can Nvidia stock keep climbing?

Nvidia's financial results over the past three years have been nothing short of incredible. And as the generative AI boom continues, it continues to put up extremely high revenue and earnings growth.

The company reported a 73% year-over-year increase in data center revenue during its fiscal 2026 first quarter, which ended April 27, as big tech companies looked to outfit their data center servers with Nvidia's latest chips. That led to a 33% increase in the company's earnings per share. However, that EPS number included a $4.5 billion writedown on its inventory of H20 GPUs meant for the Chinese market. Without that, its earnings per share would've been up 57%. President Trump has since lifted the U.S. ban on selling to China. As part of that policy shift, Trump is requiring the company to pay 15% of its China sales to Washington -- but it does mean that the writedown can be reversed, as the H20s now have value again.

All that said, Nvidia still faces some headwinds to its continued growth. Competitors are starting to make progress in catching up to Nvidia with their own AI accelerator chips. AMD (NASDAQ: AMD) recently unveiled its MI400X, which is competitive with Nvidia's Blackwell Ultra platform. While the MI400X is slower than the Rubin architecture chips that Nvidia expects to launch in the second half of 2026, it sports a significant advantage in memory capacity, which has become a significant bottleneck in AI training. Still, some data center customers will likely bring some of their business to AMD due to its price performance, and also to keep their biggest GPU supplier in check.

On top of that, the biggest Nvidia customers are all developing custom AI accelerators. Over the long run, custom silicon could reduce demand for Nvidia's general-purpose GPUs for AI training and inference, at least among the tech giants. That said, smaller businesses will likely rely on cloud providers offering access to Nvidia GPUs for their AI processing needs.

These headwinds make it hard to justify Nvidia's forward P/E ratio of 40. While the stock deserves to trade at a premium, investors who expect that it can continue to put up results like it has for the past few years may be overestimating its position in the market. As a result, I expect that its valuation multiple will be compressed over the next few years, which will drag on the stock's gains.

The AI stock that's poised to grow faster than Nvidia

While Nvidia has been and will remain a clear winner from the boom in AI spending, not every business that's exposed to the trend has as much clear-cut potential. For some companies, AI is as much a threat as it is an opportunity. One such business is Adobe (NASDAQ: ADBE).

Adobe's Creative Cloud suite is the leading software for creative professionals. Because generative AI makes it easier for anyone to create and edit photos, images, and graphics, many expect the developing tech to undermine the need for Adobe's tools. On the other hand, Adobe has invested in building its own AI model, Firefly, which it trained on its library of stock images and videos. Firefly is capable of generating images and videos, and helps creatives get the most out of Adobe's powerful tool set.

Right now, the market overwhelmingly views the threats of AI as outweighing the benefits for Adobe. The stock is down by more than 40% from the all-time high it touched at the start of 2024. But that sell-off may be a huge opportunity for investors.

Creative professionals who don't use Adobe's software put themselves at a disadvantage. It's an industry standard. Any designer, photographer, or videographer who is looking for work had better have familiarity with how to get the most out of Adobe's Creative Cloud because the entire industry uses it. That means there are extremely high switching costs to moving away from it, which should help Adobe retain its core customer base.

Moreover, Adobe is building on top of a strong customer base across its Creative, Document, and Digital Experience platforms. The generative AI tools it is embedding in its software are helping it boost revenue per user and are improving retention rates. The Firefly app that it released in June is credited with drawing in many new users to the Adobe franchise, which saw a more than 30% year-over-year increase in first-time subscribers in its last fiscal quarter, which ended May 30.

Overall, management expects revenue from AI products to more than double this year, although it remains a small portion of the company's total revenue. But when you consider the indirect effect, there's a clear impact. The company reported 12% growth in annual recurring revenue last quarter, and it expects 11% for the fiscal year. Despite its already high margins, growing into its AI investments should result in some margin expansion over time.

Management uses the steady free cash flow generated by Adobe's subscription revenues to buy back shares. It bought back 8.6 million shares last quarter. Assisted by its steadily shrinking share count, the company should be able to produce consistent double-digit percentage earnings per share growth over the next three years. But right now, the stock trades at just 17 times earnings. I expect that multiple to expand over time as Adobe continues to produce consistent earnings growth. That should lead the stock to outperform Nvidia through 2028.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Adam Levy has positions in Adobe. The Motley Fool has positions in and recommends Adobe, Advanced Micro Devices, and Nvidia. The Motley Fool has a disclosure policy.

Key Points

• Lucid Group is ready to tackle a $10 trillion opportunity.

• There's another growth catalyst that could generate even more near-term growth.

• 10 stocks we like better than Lucid Group ›

Lucid Group (NASDAQ: LCID) investors are ecstatic about the company's recent deal with Uber Technologies. Another electric vehicle (EV) stock, Tesla, has been aggressively ramping up its robotaxi efforts this year. Some experts believe this could eventually be a $10 trillion opportunity. So when Uber and Lucid partnered to launch their own robotaxi businesses, Lucid stock soared by more than 40% on the news.

While autonomous driving is an exciting pillar of growth, there's actually another growth catalyst that will matter even more in the near future. In fact, this catalyst could help Lucid grow sales by more than 400% over the next five years alone.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Tesla has already shown Lucid Group how to grow rapidly

When it comes to scaling a $1 trillion electric vehicle business, Tesla has already shown the way. In fact, CEO Elon Musk detailed his master plan for growth all the way back in 2006 when he wrote up his strategy for the coming years. First, he wanted to build a sports car. That goal was achieved with the Roadster, a powerful but very expensive initial use case. From that, Musk wrote that he would use the money from that car's sales "to build an affordable car." This was achieved with the launch of the Model X and Model S. Those two, however, were still often priced above $100,000.

This brings us to Musk's final step in his master plan for growth: Use the money earned from Model X and Model S sales "to build an even more affordable car." This was first achieved in 2016 with the unveiling of the Model 3, and then again in 2019 when the Model Y was revealed. Both models had options that cost under $50,000. Crossing this threshold finally made Teslas affordable to tens of millions of new buyers.

What happened after Tesla launched its two most affordable models? In the years that followed, sales doubled and then tripled. Today, the Model 3 and Model Y alone account for more than 90% of Tesla's car sales. If an EV maker wants to grow rapidly, it must deliver affordable mass-market vehicles. This is exactly what Lucid Group plans to do starting in 2026, when management expects to begin launching three new mass-market vehicles. If Tesla's history is any indication, sales could double and then triple over the next five years. That could create more than 500% in potential sales upside.

Is it time to load up on LCID stock?

There are some very important caveats to this story, even if the growth potential is clearly laid out.

First, there haven't been any significant updates on Lucid's mass market vehicle program since last year when CEO Peter Rawlinson announced a "new high-volume mid-size electric SUV with a starting price around $48,000," during a conference call. But Rawlinson isn't even the CEO anymore. He departed the company earlier this year. And while the Uber deal brought fresh cash and enthusiasm, Lucid is still losing money every quarter, bringing into question the massive capital investment it would take to get new models on the road.

Second, these types of projects almost always face delays. Tesla has been notorious for overpromising on delivery timelines. But it's not just because its CEO is too optimistic. Bringing new vehicles to market takes a ton of money and new infrastructure. If Lucid grows sales by 500% over the next five years, it will be because it manages to stay surprisingly on schedule for production and delivery.

Finally, there is no guarantee that the market will love new Lucid models as much as it loved Tesla's Model 3 and Model Y. At the time, Tesla faced far less competition in the EV space, and it also enjoyed greater name recognition. But with a market cap of just $6.4 billion, the bull case for Lucid remains clear. Sales could grow immensely over the next five years if it can manage to launch and scale its affordable models similar to what Tesla achieved.

Should you invest $1,000 in Lucid Group right now?

Before you buy stock in Lucid Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lucid Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.

Key Points

• Apple has yet to launch a widely adopted breakthrough in the artificial intelligence (AI) landscape, instead opting for incremental iPhone updates and grand visions for products not yet launched.

• Tesla has built an autonomous driving system and a humanoid robot, but neither business is moving the needle financially for the company.

• Apple and Tesla were rumored to have explored a tie up about a decade ago; now may be even more compelling than ever for the two trillion-dollar behemoths to explore a partnership again.

• These 10 stocks could mint the next wave of millionaires ›

One of Silicon Valley's most famous "what-if" stories centers on a rumored deal that never happened. According to reports, Apple (NASDAQ: AAPL) had the chance to acquire Tesla (NASDAQ: TSLA) roughly a decade ago -- but the deal never materialized.

In the years since, Tesla has cemented itself as a global leader in electric vehicles (EV), while Apple has remained a dominant force in consumer electronics. Yet despite their respective clout, both companies share a surprising weakness: Unlike Microsoft, Alphabet, Amazon, and Meta Platforms, neither Apple nor Tesla has built a truly scaled artificial intelligence (AI) business.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Apple's foray into the AI arena has been relatively muted, relying on incremental iPhone upgrades rather than a bold, stand-alone AI platform -- a departure from its decorated history of innovation. Tesla, on the other hand, has ambitious plans for its humanoid robot, dubbed Optimus, and its robotaxi network, but these initiatives remain unproven at scale.

This is what makes the prospects of a strategic partnership between Apple and Tesla so intriguing right now. Each could help cover the other's blind spots, and in doing so, build the foundation of scaled AI platforms that their rivals already enjoy.

Why Apple needs Tesla

Apple's legacy has always been rooted in consumer devices, pioneering category-defining products such as the iPod, iPhone, and iPad. For years, the company was seen as the undisputed master of uncovering latent needs and turning them into must-have innovations.

In recent years, however, Apple's push into advanced hardware has struggled to live up to the company's historic track record.

Last year, the company scrapped its car initiative, Project Titan, after years of research and development. The ambitious project ended without a formal product launch -- leaving Apple with no presence in the automotive market despite years of speculation.

More recently, Apple unveiled its Vision Pro headset, a foray into augmented and virtual reality. The device has widely been viewed as a disappointment -- a high-end luxury gadget rather than a mass-market breakthrough, limiting its adoption among everyday consumers.

Now, as rumors swirl around a Siri-powered robot in Apple's pipeline, management faces a critical decision: pursue yet another hardware moonshot from scratch and risk billions in capital expenditures (capex), or align with a partner that's already in production.

In my view, Apple doesn't need to reinvent the wheel by sinking more time and money into developing products that may never launch. Instead, Apple could thrive by positioning itself as the software and services layer powering intelligent hardware that already exists in the market.

By joining forces with Tesla, Apple could leverage the company's expertise in autonomous driving systems and robotics while integrating its own AI-powered software ecosystem and consumer marketing prowess.

Such a collaboration could allow Apple to leapfrog into both consumer and enterprise adoption of smart devices -- staking a claim in the robotics and autonomous era of AI, without repeating costly mistakes of the past.

Why Tesla needs Apple

Tesla's robotaxi and Optimus both carry transformative potential. But bringing these projects to life requires massive investments in compute power and AI infrastructure.

While Tesla's balance sheet boasts a healthy cash cushion, it's worth noting that, like Apple, the company has also made some controversial capital allocation decisions in recent years.

TSLA Cash and Short Term Investments (Quarterly) data by YCharts

Case in point: Tesla recently scaled back its in-house Dojo AI supercomputer project, opting instead to revert to proven infrastructure from Nvidia and Advanced Micro Devices. Similar to Apple's Project Titan, the recent moves around Dojo underscore how costly and uncertain it can be to build proprietary systems at scale.

This is where a joint venture with Apple could reshape Tesla's financial trajectory. Apple sits on more than $132 billion in cash, equivalents, and marketable securities, and it commands unmatched global distribution channels. By partnering with Apple, Tesla could accelerate the commercialization of Optimus and robotaxi without overplaying its hand financially.

Moreover, Apple's unparalleled brand equity could help transform Tesla's AI-driven machines from prototype concepts into mainstream products -- bridging the gap between Musk's futuristic vision and tangible household and enterprise adoption.

A second chance that no one sees coming

Apple's decision not to acquire Tesla is often portrayed as a missed opportunity. But having spent a decade working in mergers and acquisitions as an investment banking analyst, I can say with confidence that deals rarely unfold as neatly as the financial models suggest. In many cases, strategic partnerships can unlock far greater, more accretive opportunities than an outright acquisition.

As the last of big tech to scale an AI business, both Apple and Tesla now sit at a pivotal crossroad. A collaboration between the two would represent a rare second chance for trillion-dollar innovators to join forces and reshape the future of the technology landscape.

By combining Apple's ecosystem with Tesla's progress in robotics and autonomous systems, the companies could fast-track the commercialization of next-generation AI applications -- moving them from research labs and into the hands of consumers worldwide.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $461,605!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,287!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $649,657!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of August 18, 2025

Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Investing in the Nasdaq's top growth stocks can help you build up a large nest egg by the time you retire.

• Growth stocks may experience volatility, but they have been terrific investments in recent years.

• The market could be due for a slowdown in coming years, and investors need to temper their expectations accordingly.

• 10 stocks we like better than Invesco QQQ Trust ›

If you have a portfolio worth $1 million by the time you retire, you could be in a great position to control your postwork financial future. Even if that may not be enough to retire comfortably in every area of the country, it could give you plenty of options to consider. You could withdraw some of the money or perhaps choose dividend-generating investments that give you some recurring income without having to deplete your nest egg.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

To get to $1 million, a good strategy is to invest in quality growth stocks, since they can increase the chances that you'll be able to achieve market-beating returns in the long run.

Below, I'll show you how much you would need to invest in the Invesco QQQ Trust (NASDAQ: QQQ) today, based on various ages, to be on track to reach at least $1 million by the time you retire. This exchange-traded fund invests in 100 large nonfinancial companies.

Why the QQQ ETF is ideal for long-term investors

If you're investing for the long haul (e.g., at least 10-plus years), then you'll probably want to consider prioritizing growth stocks for your portfolio. That's because while growth stocks can be volatile in any given year, over a long time frame they generally do well and can outperform the S&P 500, a leading index of how the overall market is doing.

The Invesco QQQ Trust can be ideal for this purpose. It doesn't track the S&P 500 but instead mirrors the Nasdaq-100, which is a collection of the top 100 nonfinancial stocks on the Nasdaq Stock Market. It is a more selective and exclusive club than the S&P 500.

In the past 10 years, the Invesco QQQ Trust has generated total returns (which include dividends) of 460%, versus 266% for the S&P 500. That means the Invesco Trust has averaged an annual return of nearly 19% over that stretch, while the S&P 500 has grown by close to 14% per year.

How much would you need to invest in the Invesco QQQ Trust to help ensure you're on track to retire with $1 million?

The market has been red hot in recent years, and the danger for investors is to assume that it will continue to be hot. Realistically, there may be more-tepid growth in upcoming years. Setting expectations too high may lead to disappointment later on.

A more conservative approach could be to assume that the Invesco fund slows down and perhaps falls in line with the S&P 500 average annual return of around 10%, or perhaps even lower than that. Stock returns are never guaranteed. With tariffs potentially affecting companies and the economy being far from ideal, businesses may experience a slowdown in the near future.

However, assuming annul growth rates of between 8% and 11% -- which, again, are not guaranteed -- here is how much you would need to have invested today, in a fund such as the QQQ ETF, to be on track to retire with $1 million or more (assuming you retire at age 65).

Age	Years to Retirement	8% Growth	9% Growth	10% Growth	11% Growth
55	10	$463,193	$422,411	$385,543	$352,184
50	15	$315,242	$274,538	$239,392	$209,004
45	20	$214,548	$178,431	$148,644	$124,034
40	25	$146,018	$115,968	$92,296	$73,608
35	30	$99,377	$75,371	$57,309	$43,683
30	35	$67,635	$48,986	$35,584	$25,924

Calculations by author.

What you can do if you're not on track

The above numbers can seem intimidating and it may not be likely for the vast majority of people to have such large sums of money available to invest right now. But the table can help serve as a guide. It also underscores the importance of investing on an ongoing basis, to add to your balance over time, for it to become as large as possible. Knowing whether you're on track can at least allow you to set realistic expectations and possibly adapt, by either trying to save and invest more money, or planning to retire a bit later, to allow for more growth.

In the end, a lot is going to depend on the growth rate you end up averaging over the long run. There's no guarantee what it might be, but by targeting growth stocks with the Invesco QQQ Trust and similar types of ETFs, you can make the most of the money you invest in the stock market.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

Key Points

• Amazon has not only a massive online marketplace, but also a huge cloud-computing platform.

• Lennar is positioned to profit from America's need for more housing, especially if interest rates drop.

• Consider investing in Berkshire itself, which is passing the baton to longtime Buffett lieutentant Greg Abel.

• 10 stocks we like better than Amazon ›

Who wouldn't be interested in some Warren Buffett stocks to consider for their portfolio? After all, Buffett's investing chops have not been exaggerated. He increased the value of his company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) by 5,500,000% (nearly 20% annually) over 60 years. In contrast, the S&P 500 index of 500 of America's biggest companies gained about 39,000% (10.4% annually, on average) over the same period.

Here, then, are some stocks in the Berkshire Hathaway portfolio that you might want in your own. Do note, though, that the days of Buffett himself making all the investment decisions (often in consultation with his late business partner Charlie Munger) are over. He now has two investing lieutenants, Ted Weschler and Todd Combs, so some stocks in the portfolio may be their picks.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

1. Amazon

You might know that Berkshire Hathaway owns multiple insurance and energy operations, along with companies such as Dairy Queen International, See's Candies, Fruit of the Loom, and the entire BNSF railroad. Buffett has long avoided many high-tech companies, but yes, his company now owns shares of Amazon.com (NASDAQ: AMZN) -- some 10 million shares, in fact, per the latest disclosure.

You might want to consider buying Amazon stock, too, because it still has enormous growth potential. It features a hugely dominant online marketplace, but it's also home to a major cloud computing platform, Amazon Web Services (AWS). Its shares are appealingly valued at recent levels, too, with a recent forward-looking price-to-earnings (P/E) ratio of 34, well below the five-year average of 46.

2. Lennar

You may not be very familiar with Lennar (NYSE: LEN), but it's a major homebuilder in America, and its future is promising because America needs many more homes -- especially affordable ones for young first-time home buyers. If interest rates drop in the near future, that could spur home buying, though a recession could thwart that trend.

Near term, it's hard to know what will happen, but Lennar's long-term outlook is promising. Patient investors can collect a dividend that recently yielded 1.5% -- and that has grown by an annual average rate of 33% over the past five years.

Lennar shares are reasonably priced at recent levels, too, with a price-to-sales ratio of 1, on par with its five-year average, and a forward P/E of 13 above the average of 9. It's a new holding for Berkshire, and Berkshire already owns 3% of the company.

3. Chevron

Chevron (NYSE: CVX) is Berkshire's fifth-largest stock holding, and Berkshire now owns close to 7% of the energy giant. It's another dividend-paying stock, with a recent fat 4.5% yield. It's also been a big stock repurchaser, with its reduced share count leaving each remaining share more valuable.

Why might you buy Chevron stock? Well, thanks to various investments (such as its purchase of Hess), it stands to collect a lot of free cash flow in the years ahead -- which can be used to pay dividends and increase dividends. Chevron is also well positioned to profit from both traditional energy sources as well as alternative energies.

Chevron's forward P/E was recently 20, a bit above its five-year average of 14, suggesting it's somewhat overvalued. You might wait for a lower price, or buy into it incrementally, or just buy anyway -- as long as you plan to remain invested for many years.

4. UnitedHealth Group

Berkshire was in the news recently, for buying into the beleaguered health insurer UnitedHealth Group (NYSE: UNH). It's a new holding for Berkshire, and was recently the 18th-largest position in the portfolio

Shares of the insurer were recently down 39% year-to-date, in part due to the fact that it's being investigated by the Department of Justice for possible Medicare fraud. Also, its CEO has just stepped down. For those who see such issues as temporary and surmountable, this is a good buying opportunity.

You can be sure the company's management is working to turn things around, and simple demographics paint a promising future, too, as our growing and aging population will continue to need healthcare -- and medications. (UnitedHealth includes the pharmaceutical specialist Optum.)

5. Berkshire Hathaway

A last Berkshire Hathaway stock to consider is Berkshire Hathaway itself. It's built to last, after all, and is likely to keep growing over time, though not at the breakneck speeds of yore, perhaps. Buffett is stepping down at the end of the year, but he'll still be around, and his successor, Greg Abel, is a promising choice.

Berkshire Hathaway doesn't pay a dividend, but when it's under new management, that might change. It has all depended on whether there were more productive ways to deploy the company's cash. So far there have been, but Abel might decide differently. Investing in Berkshire means you'll always be a part-owner of any stock in Berkshire's portfolio.

Give any or all of these companies some consideration for your own portfolio. And know that you can always take the easier (and also effective) path, recommended by Buffett himself, of opting for a simple, low-fee index fund.

Should you invest $1,000 in Amazon right now?

Before you buy stock in Amazon, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Selena Maranjian has positions in Amazon and Berkshire Hathaway. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Chevron, and Lennar. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Key Points

• Shiba Inu has built a blockchain ecosystem with a variety of applications, including a decentralized exchange and games.

• There's only $1.7 million in value locked into its blockchain.

• It would need to leapfrog most of the crypto market to be a millionaire maker again.

• 10 stocks we like better than Shiba Inu ›

Even by cryptocurrency standards, the early returns on Shiba Inu (CRYPTO: SHIB) are hard to believe. Its price increased by over 40 million percent in 2021, meaning if you had bought merely $3 of Shiba Inu on Dec. 31, 2020, that small purchase would've ended up being worth $1.3 million at the end of that year.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Shiba Inu has lost quite a bit of value since that incredible run. It's down over 80% from its all-time high on Oct. 28, 2021, and it's down 41% on the year as of Aug. 21. To its credit, this meme coin has bounced back before. Let's look at what's currently going on with Shiba Inu, to see if it could be a millionaire maker again.

From meme coin to crypto ecosystem

As you may have guessed from the name, Shiba Inu (which is the name of a breed of dog) didn't start out as a serious cryptocurrency. It was essentially a new version of Dogecoin, the original meme coin that used the "doge" meme (featuring a Shiba Inu dog) as its logo.

An anonymous founder, Ryoshi, created Shiba Inu as a crypto token on the Ethereum blockchain with a supply of 1 quadrillion tokens. Ryoshi then sent about half of those tokens to Ethereum co-founder Vitalik Buterin in what was deemed a show of trust and vulnerability -- or as a publicity stunt. Buterin would eventually donate a portion of his SHIB tokens and burn (destroy) the rest.

Shiba Inu's initial success had nothing to do with fundamentals or any specific utility it had. It was simply one of many crypto tokens launched on Ethereum. Meme coins were popular at the time, and Shiba Inu managed to build a passionate following known as the SHIB Army.

But Shiba Inu's developers wanted it to be more than just a meme coin. Their goal was a full-fledged crypto ecosystem of decentralized applications and services. They started with a decentralized crypto exchange, ShibaSwap. In 2023, they launched Shibarium, a Layer-2 blockchain built on top of Ethereum. The SHIB Ecosystem now has a variety of applications and services, including ShibaSwap, blockchain games, a metaverse with digital real estate, and non-fungible tokens (NFTs).

Shiba Inu's ecosystem may be all bark and no bite

A blockchain ecosystem can lead to a price increase in that blockchain's native cryptocurrency if people are using the ecosystem as they need the cryptocurrency to pay gas fees (transaction fees) on the blockchain. On-chain activity is also a metric that many investors check to evaluate cryptocurrency investments.

Despite Shiba Inu's popularity, there's not a lot of money on its blockchain or in its ShibaSwap exchange. The total value locked (TVL) into Shibarium is $1.7 million, according to DeFiLlama. ShibaSwap's TVL is $15.3 million (most of that value is locked into the Ethereum blockchain, not Shibarium). Those are very small numbers compared to Shiba Inu's market cap of nearly $8 billion.

Compare that with Ethereum, which has $90.7 billion in TVL and a market cap of $527 billion. Solana is another example, as it has $10.5 billion in TVL and a market cap of $100 billion. Those are legitimate blockchain platforms generating fee revenue from the money locked into their applications.

Don't expect to get rich with Shiba Inu

Shiba Inu's highest market cap on record was $36 billion in 2021, almost five times more than its current value. If Shiba Inu managed to get back to its all-time high, a $1,000 investment now would turn into about $4,800. That's nothing to complain about, but it's a long way from $1 million.

In all likelihood, Shiba Inu is past its millionaire-maker stage. It's one of the 25 largest cryptocurrencies, and at its current size, it's probably not going to deliver explosive growth. To achieve a 10,000% return (which would turn a $10,000 investment into $1 million), Shiba Inu would need to reach a value of $750 billion, significantly more than every cryptocurrency outside of Bitcoin.

Even if you don't have such high expectations, Shiba Inu wouldn't be my first pick as a crypto investment. It hasn't demonstrated any competitive advantages or shown any signs it will be a long-term winner. Ultimately, this is a meme coin that's well past its glory days.

Should you invest $1,000 in Shiba Inu right now?

Before you buy stock in Shiba Inu, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shiba Inu wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Lyle Daly has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.

Key Points

• One of these monster stocks has gained 385% in the past year.

• Another offers a growing dividend that recently yielded 6.1%.

• 10 stocks we like better than Palantir Technologies ›

I'm about to suggest some very promising "monster" stocks you might want to hold over the coming decade. They're not all monster-ish in the same way, as you'll see, but they each have great potential to deliver a monstrously wonderful performance in the years ahead.

Read on, to see which one(s) seem like they'd be a good fit for you and your long-term portfolio.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Palantir Technologies

Let's start with Palantir Technologies (NASDAQ: PLTR), a specialist in artificial intelligence (AI) software. The most monstrous thing about it is its performance in recent years. For example, despite having sunk some 15%-plus in the past week, its average annual gain over the past three years is 165%! Over the past year, its shares have gained an incredible 385%. And year-to-date (it's only August), they've more than doubled.

That's enough to make anyone want to jump into the stock, but hold on -- because its valuation is also monstrous. Yes, if everything goes to plan, it could still serve investors well. But it's priced for perfection, and things don't always turn out perfectly. So I can't recommend buying it now, but if you already own it, you might hold -- or, to play it safer, perhaps sell part of your position to lock in those gains.

In your deliberations, know that Palantir, co-founded by Trump ally Peter Thiel, has been favored by the Trump administration and its software may be helping it collect and process data on Americans and immigrants. The U.S. military is a big customer, too.

2. DoorDash

DoorDash (NASDAQ: DASH) also sports impressive trailing returns, averaging annual gains of 56% over the past three years. It, too, has seen its valuation grow quite high, with a recent price-to-sales ratio of 9.3, well above its five-year average of 4.2.

It's been growing well and now operates in some 30 countries. Its second-quarter earnings report featured total orders growing by 20% year over year to 761 million, and revenue rising by 25%. Management noted that "...solid execution helped us make our consumer experience more personalized, attract tens of thousands of new merchant partners, and reduce average delivery times. The improvements we made over the last few years continue to compound and helped drive accelerated [year-over-year] growth in monthly active users..."

3. Nvidia

Semiconductor specialist Nvidia (NASDAQ: NVDA) is another monster performer, averaging annual gains of 71% over the past five years and 77% over the past decade. Better still, it doesn't seem wildly overvalued, like some other growth stocks. Its recent forward-looking price-to-earnings (P/E) ratio of 39, for example, is on par with its five-year average -- though that number is still on the high side.

Nvidia has long been known as a gaming-chip semiconductor company, but it's gotten a lot more involved in the AI boom and it's been providing chips for data centers -- which are increasingly needed for AI and other technologies. The company has cut some deals with the Trump administration that might serve it and its shareholders well, too.

4. Altria Group

The next monster stock is perhaps an unexpected one: tobacco giant Altria (NYSE: MO). Before you hit the snooze button, know that it's up some 37% over the past year and it offers a fat dividend, recently yielding 6.1%. It's been hiking that payout, too. Its total annual payout was recently $4.08 per share, for example, up from $3.00 in 2018 and $2.17 in 2015.

This can be a great stock to buy and/or hold simply for the generous (and growing) income it provides. But it's not a stock to buy and forget. Know that smoking rates in the U.S. have fallen considerably and that doesn't bode well for Altria's future. The company has been investing in smokeless products, though, which may make up for losses in cigarettes. (It has been having success in raising prices for its offerings, too.)

5. Taiwan Semiconductor Manufacturing

Finally, there's Taiwan Semiconductor Manufacturing (NYSE: TSM). It's not just a giant semiconductor company -- it's a special one, because while most such companies only design chips, Taiwan Semiconductor Manufacturing actually manufactures them. It's the biggest chip maker by far -- with a recent market share of 67.6%.

The company's growth potential is enormous, given that semiconductors are now used in all kinds of things, including cars and refrigerators -- and AI, of course. The company expects its AI accelerator revenue to double in this year alone. But some worry that the Trump administration might want to take a bite out of its business.

Give any or all of these stocks some consideration for your long-term portfolio. They might help your money grow like gangbusters.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Selena Maranjian has positions in Altria Group, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends DoorDash, Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Key Points

• Berkshire will likely increase its holdings in five Japanese trading houses.

• The companies operate much like Berkshire, and each pay a strong dividend.

• Charter Communications isn't adding any value right now.

• 10 stocks we like better than Berkshire Hathaway ›

It will be a long, long time before someone racks up the investing credentials of Warren Buffett. The Oracle of Omaha led Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) for 60 years, and has said he plans to retire at the end of the year, a few months after celebrating his 95th birthday. Buffett's legendary career led Berkshire to amass a 19.9% compounded annual gain since 1965, compared to the S&P 500's 10.4% gain.

In that time Berkshire saw an overall gain of 5,550,000% versus the market's 39,000% gain. That's a huge return -- and it shows the absolute power of compounded returns.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Buffett's career is closely followed, and he's taken positions in some of the biggest and most well-known companies in the world -- Apple, Bank of America, Coca-Cola, ExxonMobil, and others. But he's also making some quiet, deliberate investments in some under-the-radar companies -- five of them in particular -- that could be great investment opportunities. Let's look at all five, plus a high-profile Buffett stock that I think you should avoid at all costs right now.

Buffett's five hidden gems

In 2019, Buffett and Berkshire Hathaway took out positions in five Japanese-based trading houses: Itochu (OTC: ITOCF), (OTC: ITOCF), Marubeni (OTC: MARUY) (OTC: MARUF), Mitsubishi (OTC: MSBHF), Mitsui (OTC: MITSF) (OTC: MITSY), and Sumitomo (OTC: SSUM.Y) (OTC: SSUM.F). The companies are diverse conglomerates that work in a variety of fields in Japan and China, including industrial metals, energy, real estate, financial services, healthcare, consumer, and automotive.

Each of them have a lot in common with Berkshire Hathaway itself, which got its start as a textile company before Buffett turned it into the conglomerate we know today.

Buffett wrote at length about the Japanese sogo shosha in Berkshire's 2024 letter to investors, saying:

"We simply looked at their financial records and were amazed at the low prices of their stocks. As the years have passed, our admiration for these companies has consistently grown. (Incoming CEO) Greg (Abel) has met many times with them, and I regularly follow their progress. Both of us like their capital deployment, their managements and their attitude in respect to their investors. Each of the five companies increase dividends when appropriate, they repurchase their shares when it is sensible to do so, and their top managers are far less aggressive in their compensation programs than their U.S. counterparts."

Berkshire's holdings in these companies is small compared to the full Berkshire portfolio, which has a value of $1.05 trillion. Currently, the companies have a collective market value of $28.6 billion, or only 2.7% of Berkshire's holdings.

However, that is sure to increase, even after Buffett steps down and Abel takes the helm. Buffett disclosed in his shareholder letter that Berkshire had originally promised to keep his interests in each of the Japanese trading houses below 10%, but now that Berkshire is approaching the limit in each, the sogo shosha are relaxing the ceilings, so Berkshire will likely continue to increase its shares, he says.

Each of these companies have the valued Buffett stamp of approval, providing U.S. investors with an opportunity to diversify their portfolios into Asia while also collecting a consistent dividend.

ITOCF Dividend Yield data by YCharts

A Buffett stock to avoid

Not every stock can be a winner. And right now, Charter Communications (NASDAQ: CHTR) is taking it on the figurative chin. The stock is down 21% this year, with much of the drop coming last month after the company's disastrous second quarter earnings report.

In the report, Charter reported revenue of $13.7 billion, which was up only 0.6% from a year ago. But the market pulled back abruptly as the company's earnings of $9.18 per share fell far short of analysts' expectations for $9.58 per share.

This really isn't a new problem -- Charter's is struggling to grow revenue, with sales expected to increase only 2% in the next two years. The company's biggest growth driver is its mobile service, which increased 24.9% on a year-over-year basis. But it brought in only $921 million in the quarter, which is only 6.6% of the company's quarterly revenue. Meanwhile, the company's cable service dropped 9.9% in revenue to $3.48 billion.

To add insult to injury for income investors, Charter doesn't even pay a dividend. Dividend stocks are a staple to Buffett's portfolio, but Charter doesn't do a good job of rewarding shareholders with a payout.

The bottom line

For investors, the lesson is simple: follow the principles, not the person. Buffett has always looked for undervalued businesses with strong fundamentals and management that believed in rewarding shareholders. The five Japanese trading houses fit the bill, and it's no wonder that Buffett is excited to add to his positions there. Charter isn't providing value right now -- and I am wondering how long it will take for Buffett to shed its $284 million position.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Key Points

• Palihapitiya's new SPAC focuses on four core themes: artificial intelligence (AI), energy production, crypto, and defense.

• While there are limitless candidates for the new SPAC, one software startup stands out as a compelling opportunity -- sharing some similarities with Palantir in its early days.

• SPACs have been overly risky investments for quite some time, and Palihapitiya's personal track record is mixed.

• 10 stocks we like better than Palantir Technologies ›

Remember when special purpose acquisition companies (SPACs) dominated Wall Street headlines just a few years ago?

At the center of the frenzy was Chamath Palihapitiya -- better known on Wall Street as the "SPAC king". A former executive at AOL and Meta Platforms turned billionaire venture capitalist (VC), Palihapitiya made his name taking bold bets on disruptive companies.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

For a while, SPACs seemed to fade quietly into the background of stock market activity. But just as investors began to write them off, Palihapitiya reignited the conversation with a new prospectus for his latest $250 million "blank check company": American Exceptionalism Acquisition Corp. While details are limited at the moment, Palihapitiya has hinted at the kinds of businesses he's targeting.

Let's break down what investors need to know about this SPAC, why Palihapitiya's recent move matters, and which company I think could be on his radar -- a potential candidate to become the next Palantir Technologies (NASDAQ: PLTR).

What is American Exceptionalism Acquisition Corp.?

In the S-1 filing for American Exceptionalism Acquisition Corp., Palihapitiya outlines four core pillars he believes are essential to U.S. competitiveness -- artificial intelligence (AI), decentralized finance (DeFi), defense, and energy production.

At first glance, these may look like broad, boilerplate themes. But I see something deeper -- a unifying thesis that ties together some of the biggest secular growth opportunities underpinning the American economy.

Right now, the American economy is experiencing something akin to the Industrial Revolution thanks to the booming impacts of AI. But with any megatrend comes significant trade offs.

For AI, the most pressing challenges are not software development or infrastructure manufacturing -- it's the strain on the U.S. power grid. Hyperscalers such as Microsoft, Alphabet, Amazon, Meta, Oracle, and OpenAI are pouring hundreds of billions of dollars into data centers, each requiring massive amounts of electricity to operate at scale.

And it's not just the private sector. The U.S. government is moving aggressively with initiatives like Project Stargate, a $500 billion domestic infrastructure program designed to establish America's digital transformation.

Against this backdrop, I think Palihapitiya may be eyeing a start-up sitting at the intersection of his four pillars.

What company could fit the bill for Chamath?

In my eyes, Houston-based Amperon could be a natural fit for the American Exceptionalism SPAC.

Amperon functions as an operating system for the power grid, offering AI-powered software that delivers real-time intelligence to utilities, energy traders, and large power buyers. Its platform enables decision-makers to forecast demand, renewable output, and wholesale prices with greater precision -- addressing some of the most pressing challenges in the energy economy.

In many respects, Amperon can be thought of as the Palantir of climate tech. Just as Palantir's Artificial Intelligence Platform (AIP) synthesizes massive volumes of unstructured data and turns them into actionable insights for government agencies and large private enterprises, Amperon applies the same methodology to the grid. It translates fragmented inputs -- from weather patterns or anomalies in demand surges -- into a unified model for energy stakeholders.

The company has also built strategic collaborations with Microsoft, National Grid, and Acario (part of Tokyo Gas). Much like Palantir's early contracts, these partnerships have the potential to deepen and expand over time -- embedding Amperon's tools more firmly into data workflows.

Both Amperon and Palantir demonstrate how AI-driven software layers can evolve into indispensable infrastructure. Where Palantir dominates defense and enterprise intelligence, Amperon is carving out a parallel role capturing energy, climate, and grid optimization.

And because energy touches every sector, Amperon's reach extends even further. Its intelligence platform could support crypto and DeFi protocols, where mining depends on reliable power sources, and strengthen defense applications, where resilient energy sources are critical to national security. This suggests that Amperon's total addressable market (TAM) is far broader than it might initially appear.

Ultimately, this vision aligns almost perfectly with the ethos of Palihapitiya's new SPAC: backing companies at the intersection of AI, defense, DeFi, and energy -- all rolled up and packaged into a compelling opportunity reshaping conscious capitalism.

Remember to be careful with SPACs

In the disclosure section of the prospectus, Palihapitiya reminds investors that they should only consider this SPAC if they can "embody the adage from President Trump that there can be 'no crying in the casino.'" Harsh as it sounds, the warning is well placed.

History hasn't been kind to SPACs. A University of Florida study found that SPACs across nearly every major industry have consistently underperformed the broader market over the past decade.

SPCE data by YCharts

Palihapitiya's own track record underscores this risk. Aside from MP Materials and SoFi Technologies, most of his SPACs have been financial catastrophes. As an investor, he has also backed other high-profile deals that flamed out -- including Desktop Metal and Berkshire Grey (both delisted) and Proterra and Sunlight Financial (both bankrupt).

My take is to approach the new SPAC with measured optimism, while keeping Palihapitiya's history of stewarding outside capital at the forefront of your thesis.

American Exceptionalism's converging focus on emerging themes across AI, defense, crypto, and energy might position it as a unique opportunity potentially poised for explosive growth. But smart investors understand that promise and hope are never true substitutes for prudent, disciplined investing.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

Now, it’s worth noting Stock Advisor’s total average return is 1,057% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, Palantir Technologies, and SoFi Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Oracle, and Palantir Technologies. The Motley Fool recommends MP Materials and National Grid Plc and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.