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.

Image source: Getty Images.

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

• Ripple, the company that issues XRP, uses blockchain technology to move money around the world.

• It's aiming to compete with SWIFT, which processes about $150 trillion per year in global payments volume.

• Greater adoption of Ripple's payment services could lead to more usage of XRP.

• 10 stocks we like better than XRP ›

Even after a recent pullback, XRP (CRYPTO: XRP) is up 397% over the last year. Much of that growth is due to the crypto-friendly political climate and the winding down of a lawsuit between the SEC and Ripple, the company that issues XRP.

XRP has been one of many cryptocurrencies to explode in value over the years. Doing that again will be challenging, but there's a path for XRP to deliver tenfold 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 »

Image source: Getty Images.

Cutting into SWIFT's market could unlock substantial growth for XRP

Ripple provides payment solutions for financial companies. In particular, it focuses on cross-border payments. Ripple's blockchain-based network moves money instantly while reducing fees.

It also offers an on-demand liquidity (ODL) feature, which is where XRP comes into play. Instead of needing pre-funded accounts with foreign currencies, banks can instantly send payments abroad using XRP as a bridge currency.

SWIFT is the current default option for international money transfers, but it's not fast or cheap. Transfers can take several days to arrive to the recipient and cost as much as $50.

Ripple CEO Brad Garlinghouse believes XRP could capture 14% of SWIFT's global payments volume (about $150 trillion) within five years. That would be $21 trillion per year. If Ripple can establish itself as a major payments platform, it will likely lead to much more usage of XRP from financial institutions in need of instant liquidity in foreign currencies.

10x returns are challenging, but not impossible

XRP's market cap is currently about $170 billion. If it increases tenfold, it would be worth $1.7 trillion. Bitcoin is the only cryptocurrency that has reached that value, so it's no small feat.

Because of its role in cross-border payments, XRP is a compelling cryptocurrency investment. While I'm doubtful it delivers tenfold returns over the next decade, simply because of how much growth would be required, I still think it's a quality cryptocurrency to have in your portfolio.

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

Before you buy stock in XRP, 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 XRP 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. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy.

Key Points

• Cryptocurrency started with Bitcoin, which is now one of the most successful digital stores of value.

• Ethereum opened up new ways to use blockchain technology by introducing smart contracts.

• Stablecoins could gain widespread adoption as a digital currency, and Tether is the leading U.S. dollar stablecoin.

• 10 stocks we like better than Bitcoin ›

Entering the world of crypto investing can be a daunting experience. A massive number of cryptocurrencies exist -- over 15 million, according to CoinMarketCap data. Because of how easy it is to launch a new cryptocurrency, the number is only growing.

But most of them have little to offer for investors. Crypto is a top-heavy market, and it's full of scams and projects with no legitimate use or value.

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 »

So, which cryptocurrencies are worth your time? Start with these three to better understand the use cases for crypto and the top investment opportunities.

Image source: Getty Images.

1. Bitcoin

Launched in 2009, Bitcoin (CRYPTO: BTC) is the first cryptocurrency and the most successful. Remember how I said that the crypto market is top heavy? Well, with a market cap of $2.4 trillion (as of Aug. 14), Bitcoin makes up 56% of the entire market.

Bitcoin's purpose was to be a decentralized currency, meaning one that wasn't beholden to banks or any governing body. To accomplish that, it uses a blockchain -- a digital transaction ledger that's maintained and updated by a network of computers. Anyone who wants to participate in the Bitcoin mining process can become part of this computer network and help verify transactions.

While Bitcoin was originally intended as a currency, most people don't actually use it that way. It's too volatile, and transactions are slow and expensive compared to newer cryptocurrencies.

Bitcoin has instead become a digital store of value. There's a limited number of Bitcoin available, as it has a maximum supply of 21 million. Bitcoin proponents believe that the built-in scarcity will lead to continued growth.

2. Ethereum

Early cryptocurrencies used blockchains solely to record transactions. Ethereum (CRYPTO: ETH) changed that when it launched in 2015. Ethereum was unique because it could run smart contracts, which are programs built into a blockchain.

The introduction of smart contracts significantly expanded what could be done with blockchain technology. Smart contract blockchains aren't just transaction ledgers; they're platforms where developers can build decentralized apps (dApps) and launch projects.

One of the notable use cases for smart contract blockchains is decentralized finance (DeFi). DeFi refers to financial systems built on blockchain technology, such as crypto borrowing and lending protocols. For example, Aave is a peer-to-peer crypto loan service that was originally built on the Ethereum blockchain (it's also now available on other blockchains). The Aave protocol is able to facilitate crypto loans entirely with smart contracts.

Many blockchains now have smart contract capabilities, but Ethereum was the first and has the most activity. There's $154 billion of total value locked into DeFi protocols across the entire crypto market, according to DeFiLlama. Over 60% of that value is locked into the Ethereum blockchain.

3. Tether

Tether (CRYPTO: USDT) is the largest stablecoin by market cap. A stablecoin is a cryptocurrency designed to stay pegged to another asset, meaning it mimics that asset's value. Tether is a U.S. dollar stablecoin, so 1 USDT should ideally maintain a value of $1 at all times.

Even though stablecoins aren't an investment, they play a crucial role in the crypto market. Most cryptocurrencies are volatile, which poses a problem when you want to use them as a currency. The value can change quite a bit between the time you purchase a cryptocurrency and when you're ready to use it.

Since they aren't volatile, stablecoins are better for this role. They haven't reached widespread adoption yet, but it could be a matter of time. The U.S. passed the Genius Act last month, a landmark piece of legislation that regulates stablecoins. In addition, several top financial companies are developing or considering their own stablecoins, including JPMorgan Chase, Bank of America, and PayPal.

Tether is one of many stablecoins, but since it's the biggest, it serves as a good starting point. It also demonstrates the potential risks involved. The issuer, Tether Limited, paid a $41 million fine in 2021 for misleading statements about the reserves backing its USDT tokens. Even though stablecoins are supposed to be stable, they're really only as safe as the issuer and the reserves backing them.

Managing risk as a crypto investor

While exciting, cryptocurrency is an extremely risky asset class. Bitcoin, Ethereum, and most other top coins have gone through periods where they've lost 50% or more of their value.

If you're going to invest in crypto, it should ideally be a small portion of your portfolio. A good rule of thumb is to have anywhere from 1% to 5% of your portfolio in cryptocurrency and the rest in more established investments, including stocks and bonds. Also, only invest money you can afford to lose so you're not tempted to sell if the crypto market drops.

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

Before you buy stock in Bitcoin, 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 Bitcoin 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 $668,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,106,071!*

Now, it’s worth noting Stock Advisor’s total average return is 1,070% — a market-crushing outperformance compared to 184% 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 13, 2025

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Lyle Daly has positions in Bitcoin, Ethereum, and Tether. The Motley Fool has positions in and recommends Aave, Bitcoin, Ethereum, JPMorgan Chase, and PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short September 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

Key Points

• IonQ is far from profitability, but its trapped-ion technology is unique among quantum computing companies.

• IBM has released several powerful quantum computers and plans to invest $30 billion in its quantum program.

• 10 stocks we like better than IonQ ›

Quantum computing could be the next area of explosive growth in the tech sector. The consultants at McKinsey Digital have estimated that the industry could be worth as much as $1.3 billion by 2035, though there's a lot of uncertainty.

If that huge number becomes reality, successful quantum computing companies are going to make their investors very happy. Here are two picks to consider buying this month.

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 »

Image source: Getty Images.

IonQ is a high-risk, high-reward company

Quantum physics experts Christopher Monroe and Jungsang Kim started IonQ (NYSE: IONQ) in 2015. Six years later, it became the first pure-play quantum computing company to go public.

Since the technology is still in the early stages, and it's IonQ's only business, the company isn't profitable yet. Its revenue nearly doubled to $43.1 million last year, but its costs also increased, leading to a net loss of $331.6 million.

Profitability is likely still several years away. CEO Peter Chapman believes it will happen by 2030 and is projecting sales near $1 billion at that point. Fortunately, IonQ has a strong balance sheet and recently sold $1 billion in common stock, giving it nearly $1.7 billion in cash and equivalents it can tap.

What makes IonQ unique compared to other quantum computing companies is its trapped-ion technology. These computers store data using quantum bits, or qubits for short. The most widely used quantum computing method is superconducting qubits. IonQ's computers use trapped ions that are controlled with precise laser pulses.

Trapped-ion technology has a few notable advantages. It delivers high fidelity, a term that refers to the accuracy of a quantum computer. One of the major quantum computing challenges is eliminating errors. No company has solved this yet, but IonQ achieved a significant breakthrough in September 2024, when it reported it had the first trapped-ion quantum system to surpass 99.9% fidelity.

Trapped-ion qubits also have longer coherence times. Qubits decay over time and lose their quantum properties. Coherence time refers to the amount of time a qubit can maintain its quantum state. With solid-state quantum computing systems, coherence time is normally measured in microseconds to milliseconds. Trapped-ion systems measure coherence time in seconds to minutes, so it's a sizable difference.

This doesn't necessarily mean that IonQ has the best quantum computing method; if so, everyone would be using trapped ions. But it has something different that delivers extremely low error rates. It has also picked up several high-profile contracts, including multiple deals with the U.S. Air Force Research Lab and one with the Department of Defense, making it worth a look for investors.

IBM is a pioneer in quantum computing

Cloud services, software, and artificial intelligence (AI) may be the core businesses of International Business Machines (NYSE: IBM), but the company also has a long history with quantum computing. It started developing quantum computers over 30 years ago and has been responsible for notable advancements.

It released IBM Eagle, the first processor to surpass 100 qubits, in 2021. Its IBM Condor is currently the second-largest quantum computer in the world as measured by qubits.

The company has released a quantum development road map with ambitious milestones. It plans to demonstrate an example of quantum advantage in 2026, which refers to a quantum computer solving a problem faster than any classical computer can. By 2029, it plans to develop Quantum Starling, a fault-tolerant quantum computer -- one that can operate even in the presence of errors.

Because of its size and financial strength, the company can invest much more in quantum computing than a start-up like IonQ can. In April, it announced plans to spend $30 billion on the technology and mainframes as part of a five-year, $150 billion pledge to invest in U.S. computer manufacturing.

IBM reported $14.5 billion in revenue and $8 billion in gross profit for the first quarter of 2025, both slight improvements year over year. Its increase in gross profit margin was more impressive, from 53.5% to 55.2%. The tech company ended the quarter with $17.6 billion in cash and cash equivalents, so it's well equipped to continue building its quantum computing program.

Its share price has already jumped 29% this year, so it has gotten more expensive. However, it trades at less than 27 times adjusted forward earnings estimates, a reasonable valuation.

Quantum computing investments are still speculative. We don't know when or if such machines will become widely used. With that kind of uncertainty, it wouldn't be wise to bet the farm on quantum computing, but you may want to add some exposure by picking up shares of IonQ, IBM, or both.

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

Before you buy stock in IonQ, 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 IonQ 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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% 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 July 15, 2025

Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines. The Motley Fool has a disclosure policy.

Key Points

• Keep your crypto allocation small to reduce risk.

• Invest in large cryptocurrencies that have survived bear markets.

• Take a long-term outlook and don't spend too much time monitoring crypto prices.

• 10 stocks we like better than Bitcoin ›

Cryptocurrency investing is a wild ride. If you had bought one Bitcoin (CRYPTO: BTC) on Nov. 10, 2021, it would've cost you about $67,000. As of July 8, 2025, your investment would be worth $109,000 for an impressive 62% return -- if you held on while the price dropped as low as $16,000 in 2022.

It's hard to stay calm with that kind of volatility. No one likes to see their investments plummet in value, but that's par for the course with crypto. If you've decided to invest in digital assets, there are a few ways to make the experience less stressful.

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 »

Image source: Getty Images.

1. Limit crypto to a small part of your portfolio

The best way to invest in crypto worry-free is to limit how much money you put into it. You may want to start by setting aside 1% or 2% of your investment portfolio for cryptocurrency. If you feel comfortable going higher later, you could bump that up to 3%, 5%, or as high as 10%. Personally, I wouldn't allocate more than 10% of my portfolio to crypto because of the risk involved.

A reasonable asset allocation makes those inevitable price swings much easier to manage. If you have a $100,000 portfolio, and $3,000 of it is in crypto, a 50% plunge in your crypto holdings isn't a huge issue. If you have $50,000 in crypto, it's a different story.

Since cryptocurrencies have the potential to rapidly increase in value, you can still get excellent returns this way. Just remember that if your crypto investments take off, you may need to rebalance your portfolio so it doesn't become too crypto-heavy.

2. Invest in the biggest coins

I've invested in quite a few cryptocurrencies, both large and small, over the years. If I could go back and change one thing, I would've avoided the smaller altcoins and invested more of my money in Bitcoin (ideally in 2010 or 2011, given the option).

It's tempting to skip the big names and invest in coins that haven't caught on yet. Everyone wants to find a cryptocurrency that's going to explode, deliver 1,000 times growth, and turn early investors into multimillionaires.

The problem is that the crypto market has a massive number of scams, meme coins, and low-quality projects. You're far more likely to lose most or all of your money when you invest in smaller, unproven coins. Out of nearly 7 million cryptocurrencies listed on the GeckoTerminal tracking tool since 2021, 3.7 million have stopped trading. That's a 52.7% failure rate, and it doesn't include cryptocurrencies that are still trading but have lost most of their value.

To improve your odds of success, stick with large cryptocurrencies that have been around for several years or longer. Bitcoin, Ethereum, XRP, and Solana all fit this description. They're still volatile, but they've proven to be serious projects and have survived bear markets.

3. Don't micromanage your crypto holdings

Spending too much time monitoring your investments can be stressful. This is true with any type of asset, stocks included, but it's worse with cryptocurrency due to how much prices can fluctuate.

There's nothing wrong with staying up to date with the cryptocurrencies you own and the market as a whole. But try not to pay too much attention to the everyday price movements. Hopefully, you've chosen cryptocurrencies you believe have long-term value. If so, you could end up holding them for five to 10 years or longer -- more than enough time to ride out the occasional dip.

If you implement these three strategies, you can invest in crypto without any trouble sleeping at night. Limiting how much money you put into crypto is a simple and effective way to cap your downside. When you invest in proven coins, your portfolio is unlikely to be wiped out in a bear market. And if you avoid checking price charts every day, you'll save yourself a lot of unnecessary stress.

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

Before you buy stock in Bitcoin, 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 Bitcoin 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% 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 July 7, 2025

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

The rapid growth of artificial intelligence (AI) has already had a massive impact on the stock market. Many AI companies have seen their valuations skyrocket. And according to recent research, this is just the beginning.

A report released by UN Trade and Development (UNCTAD) earlier this year projects that the global AI market will grow from $189 billion in 2023 to $4.8 trillion by 2033. Given that growth, there's a strong possibility that quality AI stocks will outperform the market over the next five to 10 years.

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 »

Here are two that could be poised for explosive growth.

Image source: Getty Images.

1. Applied Digital

Applied Digital (NASDAQ: APLD) builds and buys data centers where companies can rent space and install their own servers. When it started out, Applied Digital catered to blockchain companies, but it later switched its focus to the high-performance computing (HPC) and AI industries.

It's a straightforward business model, although Applied Digital did take a stab at offering AI cloud services through a subsidiary it launched in 2023, Sai Computing. Earlier this year, it announced plans to close that chapter by selling its cloud segment and transforming itself into a real estate investment trust (REIT).

Getting back to what it does best could be a positive move for Applied Digital. Its data center hosting business is now in the black, with a profit of $8.8 million in its fiscal 2025 third quarter, which ended on Feb. 28. The cloud services business isn't. It booked a loss of $10.3 million in the quarter, despite being the faster-growing segment.

On the data center front, Applied Digital announced two lease agreements with AI hyperscaler Coreweave on June 2. The agreements will last approximately 15 years and are expected to generate about $7 billion in revenue. Applied Digital stock has been soaring since then -- it's up 51% since the start of June.

The top tech companies are spending heavily on data centers and AI infrastructure. Applied Digital is well-positioned to capitalize on that spending, especially as it transitions to a REIT model and focuses on its data center business.

2. Lemonade

At first glance, Lemonade (NYSE: LMND) might not seem like an AI stock. It's an insurance company offering renters, homeowners, car, pet, and term life policies. But Lemonade has made AI a key part of its business since it launched in 2015.

It uses AI at every stage of its processes. New customers can quickly get quotes on policies through the company's AI chatbot, Maya. It uses AI during the underwriting process to calculate people's premiums and to assign a lifetime value (LTV) to each customer based on their likelihood of filing a claim, switching insurance providers, or bundling multiple insurance products.

The claims process also has built-in AI, allowing Lemonade to fully automate about 55% of its claims, according to Chief Claims Officer Sean Burgess. In addition, Burgess says that Lemonade handles over 40% of customer service tickets with AI.

Lemonade isn't profitable yet, but it beat expectations in its most recent quarter. Revenue rose 27% year over year to $151.2 million in the first quarter. Its in-force premium (IFP), which is the total premium value across all active policies, also increased by 27% to $1.0 billion.

That made it the sixth consecutive quarter where Lemonade's IFP has grown, and management has set an ambitious goal of growing its IFP to $10 billion in the coming years. In another good sign, its gross loss ratio -- the share of its premiums that get paid out as out claims -- is declining. It went from 88% in the third quarter of 2023 to 73% in the first quarter of 2025.

While investing in young businesses that are losing money can be risky, it also gives you an opportunity to get in on the ground floor. I think that's where we're at with Lemonade. This company's high-tech business model has been great for attracting customers, particularly younger customers -- 70% of its customer base is under 35. Based on Lemonade's financial growth and embrace of AI technology, it could be poised to take off.

Should you invest $1,000 in Applied Digital right now?

Before you buy stock in Applied Digital, 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 Applied Digital 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 $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% 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 June 23, 2025

Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lemonade. The Motley Fool has a disclosure policy.