We're nearly at the midway point of the year, and the S&P 500 is essentially flat through June 17, up just 1.7%.

The broad market index nearly entered a bear market in April, following the announcement of the "Liberation Day' tariffs, but has rallied back since then to recoup those losses.

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However, not every stock on the index has been a winner. In fact, one popular footwear stock is down nearly 50% for the year through June 17.

That's Deckers Outdoor (NYSE: DECK), the maker of Hoka running shoes and Ugg boots, which is down 49.5% year-to-date. Over a long time frame, Deckers is one of the best-performing stocks on the market -- it had returned more than 10,000% at one point.

After delivering strong growth in recent years, Deckers stock hit a wall in January when its guidance was worse than expected. When the company provided its following update in May, its growth was clearly slowing, and it faced a new challenge with President Donald Trump's tariffs putting pressure on the apparel and footwear industries.

Image source: Getty Images.

Deckers' current challenges

In its fiscal fourth quarter, ended March 31, Deckers' revenue rose just 6.5%, which compared to nearly 20% growth in the first three quarters of the year.

Growth at Hoka slowed from nearly 30% in the first three quarters of the year to just 10% in the fourth quarter, potentially a sign that a resurgent Nike is grabbing back market share in running. Ugg, which remains Deckers' largest brand, grew just 3.6% in the quarter compared to 13% for the full year.

What really threw investors off was the company's guidance, as management did not give full-year guidance due to macroeconomic uncertainty related to tariffs. For the first quarter, the company expects revenue of $890 million to $910 million, representing 9% growth at the midpoint. However, it expects earnings per share to fall from $0.75 to between $0.62 and $0.67.

It sees its gross margin falling 250 basis points due to higher freight costs from tariffs, increased promotional activity, and channel mix headwinds with wholesale outgrowing DTC, and it faces difficult comparisons with a year ago.

For its two core brands, Deckers expects Hoka to grow by at least low double digits while Ugg sales should increase by at least mid-single digits.

Why this could be a great buying opportunity for Deckers

A 50% sell-off in less than six months often indicates a broken business, but that isn't the case with Deckers. The company seems to face a mostly temporary setback due to pressure related to tariffs and a cooling off in the growth rate at Hoka.

With its share price cut in half, Deckers now trades at an attractive price-to-earnings valuation of just 16, meaning it trades at a substantial discount to the S&P 500. Management is also taking advantage of that by buying back stock, increasing its share repurchase authorization to $2.5 billion, which represents 16% of its market cap.

In fiscal 2025, the company repurchased $567 million worth of its stock, and bought back $85 million in the first quarter through May 9.

Deckers is well-positioned to buy back its stock as it has no debt, $1.9 billion in cash, and a reasonable assets-to-liabilities ratio of 3.5.

Over the long term, Deckers looks well-positioned to recover as its two core brands, Hoka and Ugg, have differentiated themselves, and have long track records of growth. Ugg also overcame an earlier slowdown amid concerns that its brand was a fad.

At the current valuation, even modest profit growth will be enough to make the stock a winner. The tariff-related headwinds will eventually fade, and Deckers' growth should return at that point.

Should you invest $1,000 in Deckers Outdoor right now?

Before you buy stock in Deckers Outdoor, 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 Deckers Outdoor 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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% 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 9, 2025

Jeremy Bowman has positions in Nike. The Motley Fool has positions in and recommends Deckers Outdoor and Nike. The Motley Fool has a disclosure policy.

Artificial intelligence (AI) is the defining technological innovation of our era. In just a few short years, AI is expected to reshape every corner of society.

Semi-autonomous robots may soon handle your laundry, then hop in a self-driving car to pick up groceries. Life is about to get radically different -- ideally, for the better.

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At the center of this so-called Fourth Industrial Revolution is Nvidia (NASDAQ: NVDA), the leading supplier of AI chips powering everything from data centers to robotics. Thanks to its central position within the AI value chain, Nvidia's stock has delivered a remarkable 829% return over the past 36 months, turning a $10,000 investment into $92,880.

Image source: Getty Images.

As incredible as that sounds, Palantir Technologies (NASDAQ: PLTR) has done even better. Over the same 36-month period, Palantir has returned an astonishing 1,744%, transforming that same $10,000 investment into $184,370, nearly double Nvidia's impressive gains.

Both companies are riding the same tidal wave -- but in different lanes. Nvidia builds the computational engine, while Palantir delivers the software layer that interprets the data and enables real-world decisions.

Which of these top innovation stocks is the better buy as a core AI holding?

Latest financial metrics

Nvidia's Q1 fiscal 2026 results (ended April 27, 2025) showcased both massive scale and new headwinds. Revenue hit $44.1 billion, up 69% year over year, with data center revenue specifically climbing 73% to $39.1 billion.

Still, the China situation is deteriorating rapidly. Nvidia lost $2.5 billion in H20 revenue in Q1 and expects to lose $8 billion in Q2 from new export licensing requirements. CEO Jensen Huang lamented that "the $50 billion China market is effectively closed to us," with market share in the country falling from 95% to 50% under these restrictions.

Palantir, meanwhile, is hitting "escape velocity." Q1 2025 revenue of $884 million grew 39% year over year, accelerating from previous quarters. U.S. revenue surged 55% to $628 million, with U.S. commercial revenue exploding 71% to $255 million, surpassing a $1 billion annual run rate for the first time in company history. Palantir also raised full-year 2025 guidance to $3.89 to $3.9 billion, representing projected annual growth of about 36% year over year.

Market opportunity and positioning

The global AI market is projected to surpass $826 billion by 2030, even on conservative estimates. Within this vast opportunity, Nvidia and Palantir Technologies occupy distinct positions along the AI value chain.

Nvidia leads the infrastructure layer, powering the compute backbone of AI. CEO Jensen Huang projects annual data center spending could exceed $1 trillion by 2028.

The company is evolving from a chipmaker into a builder of AI factories, with new partnerships to construct AI supercomputers across the U.S., Saudi Arabia, the UAE, and Taiwan. Its Blackwell Ultra architecture and DGX SuperPOD systems place Nvidia at the forefront of "agentic AI reasoning" -- a key step toward the emergence of autonomous, intelligent systems.

Palantir, by contrast, operates in the application layer, helping enterprises deploy AI across real-world use cases. CEO Alex Karp described the company as being "in the middle of a tectonic shift," as demand for large language models has "turned into a stampede." Unlike many AI companies focused on research or infrastructure, Palantir is already monetizing AI through government contracts and commercial deployments, giving it a practical foothold in the race to bring AI into everyday operations.

The valuation disconnect

Despite commanding massive revenue and leading the AI infrastructure space, Nvidia trades at 46 times trailing earnings, well below its five-year average price-to-earnings ratio (P/E) of 78. Its forward P/E of 30 suggests the market is accounting for China-related export risks and a natural deceleration in growth from its enormous base.

Palantir, by contrast, trades at valuation levels that challenge traditional metrics. The stock has a trailing P/E exceeding 600 and a forward ratio exceeding 230.

These elevated multiples reflect investor belief that Palantir is at a key inflection point. The market appears to be betting on the company's ability to sustain hypergrowth while expanding its margins, a high bar that leaves little room for missteps.

PLTR P/E Ratio data by YCharts.

The verdict

Palantir stock has been a phenomenal performer, but at 600 times earnings, perfection is already priced in. Any execution slip or slowdown in growth could prompt a sharp repricing. While its $3.9 billion revenue run rate is expanding rapidly, it remains relatively small, compared to the multitrillion-dollar AI market.

Nvidia offers a more compelling risk-reward profile. At 46 times earnings, roughly 40% below its recent historical average, the stock combines reasonable valuation with several powerful growth catalysts. The Blackwell product cycle is just beginning, and robotics -- a largely overlooked segment -- could become a significant driver over the next decade.

Palantir remains a compelling long-term growth story, but its current valuation demands flawless near-term execution. In this match-up, Nvidia stands out as the stronger core AI investment.

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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% 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 9, 2025

George Budwell has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.

Nvidia's (NASDAQ: NVDA) iron grip on AI chips faces a real challenger with Advanced Micro Devices' (NASDAQ: AMD). In this video, I compare the titans, break down the tech, and reveal who might rule the AI chip war over the next five 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. Learn More »

*Stock prices used were the after-market prices of June 12, 2025. The video was published on June 14, 2025.

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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% 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 9, 2025

Jose Najarro has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.

Growth and income investing may be two distinct styles, but it's possible to combine them by selecting the right stocks. Some corporations have excellent growth prospects and also offer dividend programs that seem at least somewhat reliable.

Two examples in that department are Meta Platforms (NASDAQ: META) and Booking Holdings (NASDAQ: BKNG). Although they are new dividend payers, these market leaders' strong underlying businesses mean they should reward shareholders with consistent dividends for a long time while also capitalizing on significant growth opportunities.

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Let me explain.

Image source: Getty Images.

1. Meta Platforms

Meta Platforms is the leading social media company. It boasts 3.43 billion daily active users across its websites and apps -- that's pretty close to half of the 8 billion people on Earth, a total that includes many who are too young to be on any of the company's platforms. Meta's deep ecosystem makes it an excellent target for advertisers. That's how it generates most of its sales, and that business is still booming.

In the first quarter, Meta Platforms' revenue increased by 16% year over year to $42.3 billion. The tech leader's earnings per share (EPS) came in at $6.43, 37% higher than the year-ago period.

Here's the good news for investors: Meta Platforms' business is getting even better thanks to artificial intelligence (AI). The company has used AI-powered algorithms to increase engagement on its apps. That means more time spent on Facebook and Instagram, which naturally leads to greater demand for ads and higher revenue. Meta Platforms is also utilizing AI to enhance the ad launch process. Management aims to fully automate this system by the end of 2026.

These initiatives could have a significantly positive impact on Meta Platforms' performance in the long run. That's why the company is doubling down with massive investments in AI infrastructure, to the tune of $65 billion this year, according to some reports.

The company also has other growth opportunities, including business messaging on WhatsApp. Although economic and trade concerns could continue to impact the stock -- Meta lost some ad revenue from Asia-based retailers in the first quarter -- the company should still deliver strong results thanks to the lucrative opportunities at its disposal.

Lastly, Meta Platforms initiated a quarterly dividend last year. The company offers a quarterly dividend of approximately $0.52 per share. Meta's payouts look safe, and although it doesn't have a substantial dividend history yet, investors can benefit from the growth and income it will provide in the next five years and beyond.

2. Booking Holdings

Booking Holdings helps travelers plan for their trips by providing everything from flights to accommodations, car rentals, and activities. The company operates an ecosystem of websites that includes its namesake, Priceline, as well as Kayak and others. Booking Holdings' famous brands and ecosystem grant it a network effect. The more people join one of its platforms, the more attractive it is for hotels or car rental companies, and vice versa.

That's why Booking Holdings remains one of the undisputed leaders in this niche. Financial results remain robust, too. In the first quarter, the company's revenue increased by 8% year over year to $4.8 billion. While that's not too impressive, Booking Holdings' adjusted EPS was up by a juicier 22% year over year to $24.81, while its free cash flow jumped to $3.2 billion, 23% higher than the year-ago period.

Booking Holdings' business could also be impacted by tariffs, particularly if they lead to economic issues, a decline in consumer spending, and lower travel demand. People are less likely to splurge on expensive vacations if the economy is rough. That's nothing new for Booking Holdings, though. Even if it faces some near-term uncertainty due to the state of the economy, the company's prospects are intact.

The travel and accommodation industries should maintain an upward trajectory, in the long run, thanks to factors like an increasing worldwide population and gross domestic product growth. Meanwhile, Booking Holdings is also leveraging the power of AI to enhance its business. It introduced an AI-powered travel planning tool and plans to implement many more initiatives that could make its platform even more attractive.

That's an excellent sign for the future. Booking Holdings began paying dividends last year, with an initial quarterly dividend of $8.75 per share, which has since increased to $9.60. Booking Holdings' shares aren't cheap -- they are trading for just under $5,400 apiece. Thankfully, most online brokers now offer fractional shares. Booking Holdings is worth the money for growth investors who also want some dividends on the side.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, 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 Meta Platforms 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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% 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 9, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Meta Platforms. The Motley Fool has positions in and recommends Booking Holdings and Meta Platforms. The Motley Fool has a disclosure policy.

Stocks have rallied in the last month on signs that the economy has thus far been resilient to tariffs and on hopes that the U.S. and China can negotiate a trade agreement. However, not every stock has been a winner.

Let's take a look at two of the worst-performing stocks on the S&P 500 (SNPINDEX: ^GSPC) over the last month to see if either of them is worth buying.

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. Enphase Energy

Enphase Energy (NASDAQ: ENPH), a leading maker of microinverters used with solar panels, took a dive on Tuesday, as the Senate kept cuts to wind and solar energy incentives that were in the House version of the tax and budget bill.

Enphase was one of several solar stocks that tumbled on the news, falling 24%, and as of June 17, it's down 30.7% over the last month.

That performance continues a weak run for the stock, which is down over the last five years, as solar stocks have struggled due to competition from China, a volatile regulatory environment, and falling prices.

Enphase reported first-quarter earnings in April, with solid top-line growth of 35% to $356.1 million and a profit of $29.3 million. Nonetheless, an end of regulatory credits could put significant pressure on its business.

2. Brown-Forman

Brown-Forman (NYSE: BF.B), maker of Jack Daniel's and other spirits, has also struggled due to regulatory challenges. In Brown-Forman's case, it's due to tariffs imposed on American whiskey exports, impacting its top brands, which also include Woodford Reserve. As of June 17, the stock was down 28.5% over the last month.

In its first-quarter earnings report, the company said that revenue fell 7%, or 3% on an organic basis.

Brown-Forman also said it named new distributors in 13 markets across the U.S., part of an effort to deliver a boost to domestic sales.

Still, with geopolitical pressure on American spirit brands, and broader weakness in the category, Brown-Forman seems likely to continue to struggle.

Should you invest $1,000 in Brown-Forman right now?

Before you buy stock in Brown-Forman, 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 Brown-Forman 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Enphase Energy. The Motley Fool has a disclosure policy.

Success in crypto rarely comes from chasing hype. The investors who tend to come out ahead are those who focus on enduring utility or value, which are often revealed when a blockchain starts solving real-world problems in regulated markets. Right now, XRP (CRYPTO: XRP) fits that description.

From newly unlocked markets in the Middle East to a surging wave of interest in the chain's merits as a home for real-world asset (RWA) tokenization, XRP's fundamentals are also aligning with a friendlier regulatory regime in the U.S. Each of these catalysts are potent on their own, and taken together, they form an explosive trio that could make the coin a lot more valuable than before. That's why it warrants an investment, even if it's a small one on the order of $1,000.

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 you should know about each of these developments.

1. Dubai's green light opens new paths for capital to flow

In late May, the Dubai Financial Services Authority (DFSA) formally approved XRP under its virtual assets regime, making it the first coin that's allowed for use inside the Dubai International Financial Centre (DIFC).

Licensed banks, fintech companies, and treasury desks that operate in the DIFC can now build payment, custody, and liquidity products on top of XRP without seeking separate exemptions from regulators.

That matters because the DIFC is the Middle East's biggest dollar-clearing zone. It's also a hub for multinational corporations routing billions in working capital flows every day. So if XRP can be used as the medium of exchange for even a portion of those money transfers, the coin is well-positioned to accomplish that goal.

With the requisite regulatory compliance boxes ticked already, an importer in Dubai can settle invoices in seconds instead of days, while a global bank or institutional investor can hold XRP as an on-ledger liquidity vehicle. The alternatives to XRP in these contexts are significantly more expensive and substantially slower on average.

Image source: Getty Images.

Assuming that even a small slice of the region's $400 billion in annual trade volume migrates to on-ledger settlement, incremental demand for XRP could run well into the hundreds of millions of dollars. While such an outcome is not guaranteed, the path is now legally open, which is something rival networks cannot claim -- and that's yet another bullish wrinkle to add to this bullish catalyst.

2. A $7 billion tokenized treasury boom is looking for a home

Businesses that transact on the blockchain want to hold assets on the blockchain too, because it's convenient. For that to happen, the assets need to be tokenized, which is to say that the rights to their ownership need to be traceable via a newly created crypto token.

When it comes to assets that companies need to hold the most, U.S. Treasury bills and bonds are up there. On the XRP Ledger (XRPL), tokenizing U.S. Treasuries has gone from idea to reality in under two years.

The total value of on-chain Treasuries hit $7.2 billion this week across all blockchains, up nearly 50% this year. XRP is going to be the home of an increasing proportion of that pie.

Ondo Finance just bridged its $693 million OUSG token, a short-duration Treasury fund, to the XRPL. When paired with the ledger's feature set, institutional capital will likely be enticed more than before as a result. XRP's built-in compliance features will allow asset managers to satisfy know-your-customer (KYC) and anti-money-laundering (AML) rules, which are prerequisites for their deployment of capital.

Therefore, institutions that must demonstrate airtight controls can experiment with tokenized Treasuries and other fixed income instruments (bonds) using infrastructure that looks and feels like the systems they already trust. In the long run, that'll increase the value of XRP, as it'll lead to more capital being parked on its chain.

3. The SEC is softening

Regulatory risk has long been XRP's Achilles' heel, but the tide has finally undeniably turned in its favor, and the positive effect is just starting to hit.

In March, the Securities and Exchange Commission (SEC) moved to dismiss its high-profile lawsuit against Ripple, the business that issues XRP, ending a years-long legal battle that had scared off institutional investors from approaching the coin and the chain.

A friendlier enforcement climate lowers the odds of fresh actions against Ripple and increases the likelihood that pending applications for spot XRP exchange-traded funds (ETFs) will clear the SEC's gauntlet.

To be clear, regulators could reverse course, and court battles tied to other chains still loom, so litigation could still rain on the parade a bit. Yet the balance of probabilities now favors XRP, and that is a material change from the fog that hung over it just a year ago.

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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.

Almost every state requires drivers to have auto insurance that covers both injuries and property damage that they cause in an accident. But the state minimum is usually far too low. Many states only require about $75,000 in total coverage.

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That may sound like a lot, but imagine you get into an accident where cars are totaled and multiple people are injured. You could be responsible for hundreds of thousands of dollars in medical bills and property damage -- even if you live in a no-fault state.

I'll show you why the minimum is not enough, as well as what sort of coverage can protect you from a financial disaster.

State minimum car insurance: A quick overview

Every state requires two types of coverage:

• Personal injury liability. This covers injuries you cause to other people in an accident. There's a per-person limit and a per-accident limit on your coverage.
• Property damage liability. This covers damage you cause to someone else's property (namely, their vehicle).

The minimum dollar amount of coverage varies from state to state.

Most no-fault states also require personal injury protection (PIP). When a driver is injured in an accident, their own PIP is tapped first to pay for medical bills, lost wages, and other injury-related expenses. Once PIP is used up, any remaining costs are paid for by the at-fault driver's liability insurance -- and then, potentially, by the at-fault driver.

Why the minimum is not enough

Let's say you live in a no-fault state, and your auto insurance includes:

• $10,000 in personal injury protection
• $25,000 per person in bodily injury liability insurance
• $25,000 in property damage liability insurance

Now let's say you get into a major accident with a vehicle containing two people. Both cars are totaled, and everyone is taken to the hospital for serious injuries. You're found to be at fault.

For starters, your insurer won't pay to replace your vehicle. And if you use up your personal injury protection, you'll have to pay out of pocket for additional medical costs that aren't covered by your health insurance.

The medical costs of the other car's passengers could easily exceed $100,000 (and in some cases could climb above $1 million). And the average cost of a new car today is nearly $50,000.

Depending on the auto and health insurance of the other people involved, your insurance could fall short by $50,000, $100,000, or even more. And you could be sued for the remaining costs, as well as for emotional distress.

What coverage should you have instead?

Here's a good starting point for auto insurance that actually protects you.

Bodily injury liability: $100,000 per person, $300,000 per accident

• This offers much more protection in case multiple people are seriously injured.

Property damage liability: $100,000

• That's usually enough to cover damage to multiple cars, as well as buildings, fences, and more.

Uninsured/underinsured motorist coverage: $100,000 per person, $300,000 per accident

• This coverage pays you if another driver causes an accident and doesn't have enough insurance.
• Important because many drivers carry minimum insurance -- or none at all.
• Some states require this coverage, but the minimums are too low to offer much protection.

Collision and comprehensive coverage

• This covers damage to your car, whether from an accident, theft, fire, or weather.
• Especially important if you drive a new or valuable vehicle.

And if you don't have health insurance, look into personal injury protection. Note: In some states PIP is required, in some it's optional, and in some it's not available at all.

How much more does good car insurance cost?

This depends on a lot of factors, like where you live, your driving history, your credit score, your vehicle, and more. "Full" coverage may cost you several hundred dollars more per year than minimum coverage -- or it may not.

Either way, the best car insurance policy could end up saving you way more than you pay. You'll also sleep better at night -- and feel more relaxed behind the wheel -- if you know that a single accident won't wreck your car and your finances.

The good news is that the top auto insurance companies offer great coverage and low premiums. Click here to compare quotes from top carriers and find the coverage you need at a rate you can afford.

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Apple (NASDAQ: AAPL) has been a huge winner in the smartphone era, which it pioneered with the iPhone. Now, it looks to be at risk of falling behind in the age of artificial intelligence (AI), cloud computing, and mixed reality. The tech giant failed with the launch of its Vision Pro product and has struggled to release any products related to consumer AI while the competition pushes ahead aggressively.

It is time to forget Apple stock. Here's why you should buy two AI beneficiaries, Taiwan Semiconductor Manufacturing (NYSE: TSM) and ASML (NASDAQ: ASML), for your portfolio instead.

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 lagging innovation

Revenue growth has been stagnant at Apple for many years now. The iPhone is maturing, and while it is still a great product, there are only so many dollars floating around the world that can be dedicated to buying a smartphone. In the last decade it has released some successful ancillary products such as the Apple Watch and Air Pods, but these are not large enough to move the needle for a company with a market capitalization of $3 trillion.

Management claims the company has not been resting on its laurels, but the results so far have been underwhelming. The iPhone is increasingly similar with each yearly update, minimal AI features have been added to its branded "Apple Intelligence" products, and the Vision Pro virtual reality headset was a flop. Other big technology companies such as Alphabet, Amazon, and Meta Platforms are pushing ahead with these cutting-edge technologies, leaving Apple in the dust.

Unsurprisingly, Apple's revenue growth has slowed down quite a bit as a result. This year, analysts project just 4% revenue growth for the technology giant, which will mostly come from software and services revenue. The stock trades at an expensive price-to-earnings ratio (P/E) of 31 even though it is barely growing anymore. This leaves much to be desired with the stock's valuation. There is not much upside to owning Apple stock today versus other fast-growing technology players around the world.

Image source: Getty Images.

Betting on advanced semiconductor manufacturing

Speaking of fast-growing technology companies, we have ASML and Taiwan Semiconductor Manufacturing (TSMC, for short). These are two players in the computer chip and semiconductor supply chains -- suppliers to Apple, it should be noted -- that are benefiting immensely from the rising spend on AI.

TSMC is an outsourced manufacturer of computer chips for companies like Nvidia. It is one of the only companies in the world that can build advanced computer chips at scale, meaning that companies are flocking to send in orders to get computer chips to power their datacenters, and increase capacity for AI training and inference. Last quarter, TSMC's revenue grew at a blistering 35% year over year, and revenue is expected to grow 36% year over year in 2025. Today, you can buy the stock at a P/E ratio of 28, lower than Apple.

ASML is a supplier to TSMC, with its advanced lithography machines used for semiconductor manufacturing. It is the only company in the world to crack the code on extreme ultraviolet lithography -- meaning that without ASML machines, there are no ultrafast computer chips for AI. TSMC and other computer chip manufacturers need to use ASML machines, giving the supplier huge pricing power. Last quarter, ASML's revenue grew 46% year over year to $8.38 billion. Revenue is expected to grow by 20% in 2025, and you can buy the stock at a similar P/E ratio to Apple.

ASML Revenue Growth Estimate for Current Fiscal Year data by YCharts

Sell Apple, buy ASML and Taiwan Semiconductor

The bottom line is that ASML and TSMC are both growing quickly and are trading at reasonable prices in regard to their P/E ratios. Apple is growing slowly, facing increasing competitive risks, and trading at a similar P/E ratio. ASML and TSMC are virtual monopolies in their respective fields.

We shouldn't forget lawsuits threatening Apple's services cash cow. Its huge annual payment to make Google the default search engine on Apple devices may be deemed illegal, while the App Store is now being forced to open up to other payment providers that can circumvent Apple's 30% take rate on mobile purchases. These developments could greatly impact Apple's earnings power in the years to come.

Bottom line: Drop Apple stock, and buy some ASML and TSMC stock to get technology exposure in your portfolio and ride the artificial intelligence (AI) wave.

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

Before you buy stock in ASML, 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 ASML 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 »

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends ASML, Alphabet, Amazon, Apple, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

SiriusXM Holdings (NASDAQ: SIRI) isn't exactly an investor favorite right now, and it's easy to see why. The satellite radio leader's subscriber base peaked in 2019 and isn't heading in the right direction, with a decrease of about 303,000 self-pay subscribers in the first quarter of 2025 alone. Plus, revenue has been falling recently, down by about 3% year over year in 2024. Profitability is also heading in the wrong direction, with free cash slow down by about 33% over the past two full years.

With the stock down by more than 60% since the beginning of last year, it doesn't seem investors have much faith in the company, either.

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 »

However, I have a bit of a contrarian take here. SiriusXM is a highly profitable business right now, and management isn't exactly sitting around doing nothing. With an extremely low valuation, now could be a smart time to take a closer look. In fact, I predict that over the next five years, SiriusXM will beat the S&P 500's total returns.

Image source: Getty Images.

A more efficient operation

The first phase of SiriusXM's turnaround plan was mainly focused on cost reduction, and after a couple of years, the company has done a great job in this area. In the first quarter, Sirius reported a year-over-year 19% decline in sales and marketing expenses, and a 15% decline in product and technology costs.

Between 2023 and 2024, SiriusXM achieved about $350 million in gross savings, and aims to reach $200 million in run rate savings by the end of 2025, and to continue to lower expenses in subsequent years. For example, satellite capital expenditures are estimated to be about $220 million this year, but less than half of that in 2026, which should greatly boost free cash flow generation.

Lots of opportunities to grow revenue

The cost-cutting initiatives have been impressive, but that's only one side of the turnaround efforts. In simple terms, it doesn't matter how efficient the company gets if it can't return to growth.

SiriusXM sees the ability to grow free cash flow to about $1.5 billion annually in the near term, which would be about 50% more than the current level. And there are several different initiatives that could help it get there.

For one thing, the company is getting a little more creative about the ways it sells subscriptions. Historically, SiriusXM would simply give new vehicle buyers a short trial, and hope they'd subscribe when it expires. This is certainly still part of it, but SiriusXM is trying several other ways to jump-start subscriber growth.

As an example, the company recently launched a three-year dealer-sold subscription as a new vehicle option and is seeing strong interest so far.

Although the automotive subscriber segment is the focus of the business, SiriusXM is also putting effort into boosting non-vehicle subscriptions, especially through bundles. It recently announced a new bundle of SiriusXM's All Access and the Fox Nation streaming service in app-only form for just $11.99 per month.

Advertising is another major opportunity that is starting to gain some serious traction. For example, SiriusXM recently rolled out a free ad-supported version of its service in certain new vehicles. Although Pandora, owned by SiriusXM, mainly uses an advertising revenue model, SiriusXM only gets 2.5% of its revenue from ads. In-car advertising is a largely untapped opportunity for SiriusXM at this point, but could potentially grow into a billion-dollar revenue stream.

Advertising is a major focus for SiriusXM right now, and if it can become a significant revenue driver, it would likely be a big win for shareholders. The company is doing a great job of investing in ad technology and recently partnered with AI company Narrativ to allow brands to produce high-quality ads in a cost-effective and scalable way.

A cheap stock with high total return potential

As I mentioned, the market isn't showing much faith in SiriusXM's turnaround plan. In fact, the stock trades for just over seven times forward earnings, despite excellent profitability and expected free cash flow growth in 2025. Not only that, but the company pays a generous dividend, with a yield of about 5% as of this writing, which is well covered by the company's earnings. Plus, the company started buying back stock in late 2024 and continues to do so, which could also help drive total returns.

To sum it up, while there's quite a bit of execution risk, SiriusXM has a solid plan, and is making all the right moves to capitalize on its opportunities. I recently added shares to my portfolio and believe this will be a market-beating stock over the next five years.

Should you invest $1,000 in Sirius XM right now?

Before you buy stock in Sirius XM, 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 Sirius XM 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Matt Frankel has positions in Sirius XM. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Nowhere is the Trump administration's pro-crypto stance more apparent than at the Securities and Exchange Commission (SEC). The organization shook off its crypto caution and appears fully on board. It's dropped cases against crypto exchanges and looks set to approve a slew of crypto ETFs.

But before the SEC can go to the crypto moon, it still has some issues to resolve. One of those issues centers around staking. The SEC recently announced that paying staking rewards doesn't make a crypto into a security. However, it's been more circumspect on approving staking ETFs -- though that may change very soon.

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Image source: Getty Images.

The sticky question of staking

Staking is a way that proof-of-stake cryptos like Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) reward network participants for contributing to network security. To qualify, holders need to tie up their tokens, through solo staking, delegated staking, or on a centralized exchange. At time of writing (June 16), Coinbase pays around 2% annual percentage yield (APY) on Ethereum staking, and Solana pays 5% APY. That makes it an attractive -- and relatively low-risk -- proposition for investors.

Staking is different from crypto lend-earn schemes, such as those offered by the now-defunct Celsius and Voyager Digital. These generate yield by lending out your assets, and carry a lot more risk. In contrast, staking is baked into the individual blockchains.

It was still a bone of contention for the old SEC, which brought charges against crypto exchanges like Kraken for offering staking services in 2023. The new SEC is taking a different approach. At the end of May, it announced that most staked cryptos and staking services are not securities. For U.S. investors, this paves the way for crypto holdings to generate returns.

Staking ETFs are more complicated

The SEC is still hesitating on approving staking ETFs. There's concern over potential financial and security risks. Plus, ETFs need to qualify as investment companies, which means being in the business of securities -- and the SEC has just said that staked cryptos are not securities. It is a difficult circle to square. That's why the existing Ethereum ETFs do not give staking benefits.

At the end of May, the SEC wrote to ETF Opportunities Trust, the company behind the Ethereum and Solana ETFs that would have been the first to offer staking rewards. It raised several unresolved issues, one of which was whether the funds would meet the definition of an investment company.

Even so, change is in the air. Last week, the SEC asked seven funds to update their Solana ETF filings with clarified language about staking. The SEC has not yet approved any spot Solana ETFs. Experts think approval is a stone's throw away. Indeed, Bloomberg Intelligence ETF analyst James Seyffart says staking ETFs are a "matter of when, not if."

What staking ETFs mean for investors

Crypto ETFs make cryptocurrency more accessible to retail and institutional investors alike. If you want to add a small amount of crypto to your portfolio, spot ETFs mean you can do it from most brokerage accounts. You don't need to create an account with an exchange or worry about how to store digital assets. We're likely to see SEC approval for spot altcoin ETFs in the coming months, so more digital assets will be available in ETF form.

However, if those ETFs don't pay staking rewards, investors are missing out. As such, a shift in regulatory tides could be great for U.S. crypto investors.

In the meantime, if you stake crypto, it is not the same as earning interest on a savings account or dividend-paying stocks. And there are some risks to consider.

• Slashing penalties can cost you your stake. Networks occasionally punish malicious players through something called "slashing." It is extremely rare, and centralized exchanges may reimburse slashed crypto. Even so, some (or all) of the staked crypto could be at risk.
• Centralized exchanges often use third parties for their staking. It is important to understand how your platform stakes, specifically what staking provider it will use, and how you'll be compensated if anything goes wrong.
• It can take time to unstake your crypto. Since staking is a security mechanism, blockchains enforce a buffer period on unstaking. The time varies depending on the crypto.

If you are new to crypto or don't plan to actively manage your staking, it is better to use a centralized exchange. Decentralized platforms take work and knowledge and are not set-it-and-forget-it yield generators.

Bottom line

If the SEC approves staking ETFs for Ethereum and Solana, the most obvious benefit would be that all investors could earn yield on proof-of-stake assets. Wider approval of altcoin ETFs could encourage more institutional crypto investment, as we have already seen with Bitcoin. An uptick in staking could bring a third benefit: Reduced volatility. The lockup periods and staking incentives encourage long-term holding, which can stabilize prices.

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

Before you buy stock in Solana, 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 Solana 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

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

If, historically, you've been the lower-earning spouse, you may plan to claim spousal Social Security benefits. As long as you wait until your full retirement age (FRA) to claim them, spousal benefits can provide you with Social Security benefits of up to 50% of the amount your spouse is scheduled to receive at FRA.

If you're not quite sure if you qualify, here's how you can know for certain.

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Image source: Getty Images.

Marriage requirement

You must be legally married to someone who has earned enough work credits to be eligible for Social Security benefits or be divorced from an eligible recipient (more on this in a moment). You must be married for at least one year before applying for benefits. If your spouse is deceased, you must have been married for at least nine months before their death.

Divorce

If you're divorced, you may still qualify for spousal benefits based on your ex's work record. To qualify, the marriage must have lasted at least 10 years, and your ex-spouse must be eligible for Social Security benefits. In addition, you must be currently unmarried (it's OK if your last marriage ended in divorce).

Spouse's situation

Your spouse must be eligible for benefits, either due to earning enough work credits or by being retired, disabled, or deceased. For you to collect spousal benefits, your spouse must have applied for their own Social Security benefits.

Age requirement

If your spouse has already applied for benefits, you can apply for yours as early as age 62. However, since the full retirement age is typically between 66 and 67, claiming benefits at age 62 is considered early, and your monthly benefits will be permanently reduced. There are a couple of exceptions to this rule. You can qualify for spousal benefits at any age if:

• You are caring for a child under the age of 16.
• You are caring for a disabled child, and that child is entitled to receive benefits based on your spouse's work record.

Same-sex spouses (and ex-spouses)

The rules and benefits awarded are the same for same-sex spouses as for any other married couple due to the Supreme Court's 2015 decision recognizing marriage equality.

Depending on the state in which you live, you may qualify for benefits if you are (or were) a registered domestic partner or in a civil union or common-law marriage. While you may feel as though you have to jump through hoops, it can be beneficial to work with the Social Security Administration (SSA) to determine which laws apply in your state.

Helpful hints

If applying for Social Security spousal benefits seems a little intimidating, it may help to keep these tips in mind:

• The application process is not complicated. You can apply online, by phone, or in person at your local SSA office.
• Have your marriage certificate and other relevant documents ready to streamline the application process.
• Before deciding when to claim benefits, consider your health, family history of life expectancy, and how much longer you wish to work. The right time to claim often comes down to how long you need the money you've saved for retirement to last.

If you still feel like you're in your 20s or 30s, applying for Social Security benefits can seem a bit surreal. However, for anyone fortunate enough to live long enough, the day does eventually arrive. When it does, your goal is to ensure you receive the largest monthly benefit possible.

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If you qualify for Social Security retirement benefits, you can choose to start receiving your monthly payments as early as age 62. However, if you start collecting Social Security before you reach full retirement age, you'll be penalized.

The reduced benefit is by far the biggest drawback of claiming Social Security early. There are certainly some good reasons for doing so, but it's still important to understand the financial implications of your age when you choose to apply for benefits.

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Image source: Getty Images.

When do you get your full Social Security retirement benefit?

Full retirement age for Social Security depends on the year you were born, but for most people reading this, it is 67 years old. This full retirement age applies to all American workers born in 1960 or later. Here's what it is for other workers who are at or around Social Security claiming age right now:

Data source: Social Security Administration.

To be clear, this is the age at which you would get your full, unreduced, Social Security benefit based on your work record. It is not the age of Medicare eligibility (that's 65), or other retirement-related financial issues such as being able to withdraw from retirement accounts.

What happens if you start Social Security early?

You can claim Social Security as early as age 62, but if you start collecting benefits before reaching full retirement age, your monthly payments will be permanently reduced.

The magnitude of the reduction depends on how early you start. And there are two rules.

• For every year you claim early, up to three years, your benefit will be reduced by 6 2/3%.
• For every year beyond three years, your benefit will be reduced by 5%.

So, if your full retirement age is 67, this means that your benefit reduction would look like this at different claiming ages:

Data sources: Social Security Administration, author's calculations.

A couple of notes:

• These percentages are prorated month by month. In other words, if you start Social Security at 62 years and 1 month, it would result in a slightly higher benefit than you'd get at 62.
• The reduction percentages are slightly different for spousal benefits.

It's also worth noting that if you wait until after reaching full retirement age, your benefit will be permanently increased at a rate of 8% per year, until as late as age 70. So if your full retirement age is 67, that means your benefit could grow by as much as 24% if you decide to wait.

Is it ever a good idea to start Social Security early?

Even with a reduction for early retirement, there can still be some valid reasons for claiming Social Security early. There are some obvious reasons -- you need the money, for example -- but some aren't so obvious.

For example, did you know that if you collect Social Security retirement and still have a child living at home, the child may also be able to get a benefit based on your work record? If this applies to you, it can certainly be worth starting benefits before full retirement age in some cases.

Your health and family history is another big factor to consider. If you're in relatively poor health when you reach your 60s, it can be to your financial benefit to start Social Security as soon as you can.

The bottom line is that the reduction for early retirement is certainly a factor in when you should claim Social Security, but it isn't the only factor to consider.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

A future quantum computer could potentially solve problems that are essentially impossible for even the most powerful supercomputer. The magic comes from the nature of quantum physics. While traditional computers operate on bits that can be in only one of two states, a quantum qubit is probabilistic, occupying some combination of those two states. This property opens the door to exponentially faster computations.

Today's quantum computers generally aren't capable of solving real-world problems quicker than traditional computers. They are capable of performing some types of computations faster, but these computations are more toy problems than anything else. When Alphabet's Google unveiled its Willow quantum chip last year, it claimed that Willow could perform a particular benchmark in five minutes that would take a supercomputer 10 septillion years. Unfortunately, that benchmark has no known real-world applications.

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Image source: Getty Images.

Another problem is error correction. Qubits are fragile, and errors are inevitably introduced over the course of a computation. Those errors must be prevented, corrected, or otherwise mitigated for long enough for a computation to be completed.

Microsoft made some noise on this front earlier this year with its Majorana 1 quantum chip, which uses exotic particles to create more robust qubits. However, the company is in the early stages of scaling this technology, and it could very well be many years before anything useful comes out of it.

International Business Machines (NYSE: IBM), a quantum computing pioneer, now sees a path to full-scale quantum error correction by 2029 and true quantum advantage by the end of 2026. The company has a clear roadmap, and if it can deliver, quantum computing could turn into a major business for the century-old tech giant.

The path to fault-tolerant quantum computers

IBM is taking a modular approach on its path to the holy grail of quantum computing. This year, IBM will release Nighthawk, its new quantum process with 120 qubits and 5,000 quantum gates. Over the next few years, successive versions of Nighthawk will increase the number of gates, culminating in 2028 with a 15,000-gate version that can be linked together in groups of nine. IBM believes Nighthawk will be able to achieve true quantum advantage.

Nighthawk is a stepping stone toward Starling, the fault-tolerant quantum computer planned for 2028. To build Starling, IBM will release three iterations of quantum chips over the next few years that include the necessary technology to make Starling a reality.

IBM Quantum Loon comes this year, featuring greater connectivity than the company's current quantum chips. IBM Quantum Kookaburra comes in 2026, bringing the ability to store information and process it with an attached processing unit. And IBM Quantum Cockatoo is set for 2027, allowing entanglement between modules. Starling, which will feature 200 logical qubits and 100 million quantum gates, will be built in 2028 and deliver fault-tolerance by 2029, according to IBM's roadmap.

A quantum computing leader

Plenty of companies are racing toward viable quantum computing, but IBM has two things that make it unique: a decades-long track record researching and building quantum computers, and a clear roadmap to reach fault-tolerance and true quantum advantage.

While it's impossible to predict how large of an opportunity quantum computing could be for IBM, one estimate puts the economic value generated by quantum computing at $850 billion by 2040, with the market for quantum hardware and software potentially worth $170 billion. If IBM can truly pull ahead of its rivals and deliver real-world results with its quantum computers by the end of the decade, it will be in a great position to reap the rewards of the quantum computing revolution.

IBM's valuation today looks reasonable considering the enormous potential of quantum computing. Based on the company's outlook for 2025, IBM stock trades for roughly 19 times free cash flow. While the stock isn't as cheap as it was a few years ago, IBM still looks like a solid buy. The company's hybrid cloud and artificial intelligence (AI) businesses are driving growth today, and quantum computing has the potential to drive growth in the 2030s and beyond.

Should you invest $1,000 in International Business Machines right now?

Before you buy stock in International Business Machines, 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 International Business Machines 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Timothy Green has positions in International Business Machines. The Motley Fool has positions in and recommends Alphabet, International Business Machines, and 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.

The best growth stocks are the ones you can just forget about. Buy them once and leave them alone. The road ahead may be bumpy, but these companies should be able to overcome their challenges in the long run. And since many investors don't have this unshakable long-term perspective, the stocks may be undervalued from time to time.

Here are some of these cruise-control growth stocks from my own portfolio. Some of them are cheap these days and others aren't, but I'd be happy to start brand new positions in all of them today. Except I can't, because I already own them and have no plans to sell my shares anytime soon.

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Alphabet keeps reinventing itself

I bought my first Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) share in December 2010, when the company still was called Google. By June 17, 2025, those stubs have gained 1,065%. I'm not complaining.

If anything, I only wish I had picked up some Google stock even earlier. The trillion-dollar tech giant you see today was once a little upstart with advanced technology and big ambitions. The company's mission is still to "organize the world's information and make it universally accessible and useful," and that's a goal without a time limit.

Alphabet is both very profitable and extremely flexible. That rare combination sets the company up for decades of continued business growth. The Alphabet you see in 2040 or 2050 may look very different from the online search and advertising specialist you've seen so far, and that's alright. This company does more than simply rolling with the market's punches -- Alphabet usually leads the charge into whatever new era comes next, such as high-powered smartphones and artificial intelligence (AI).

Image source: Getty Images.

Fiverr's big growth dreams

Freelance services facilitator Fiverr International (NYSE: FVRR) is a different story. My first Fiverr share has fallen a hair-raising 87% since January 2021, and the best performer among five additions to my position is down by 27% in three years.

So the stock is struggling, but have you seen Fiverr's financial results? Here's a taste of its steady revenue growth and skyrocketing cash flows over the past three years:

FVRR Revenue (TTM) data by YCharts

Top-line sales increased by 24% over this period while free cash flows tripled. I keep coming back to this stock whenever I have fresh cash to invest, because it often looks undervalued.

Like Alphabet, Fiverr has a beefy long-term target. This company wants to "change how the world works together." The effort so far has focused on matching online freelancers with unfilled gigs. Fiverr is all about digital service delivery at this point, from translation and graphic design to music recordings and effective AI prompts.

The growth opportunity is enormous. With $405 million of total revenues in the last four quarters, Fiverr controls less than 0.2% of this addressable market. Most of today's freelancing is managed offline, via traditional channels such as personal contacts, phone networks, or printed ads. That doesn't sound like a sustainable future to me, giving Fiverr a fantastic growth opportunity.

I can't wait for my Fiverr investments to turn profitable, but I also can't complain about having this exciting stock available at low prices. Fiverr's stock trades at just 12 times free cash flows and 10.8 times forward earnings estimates today.

So I keep buying Fiverr stock while it's cheap. Setting up just a single purchase of this undervalued growth stock will serve you well over time.

Netflix's evolution pays off for patient investors

Here's another classic set-and-forget investment.

The oldest Netflix (NASDAQ: NFLX) shares in my portfolio today have gained 10,120% over the years. I picked them up at a discount during the Qwikster panic of 2011. The media-streaming veteran is often misunderstood by bearish investors, who often see it as a risky play on unproven business ideas. I see long-term opportunity and innovation in the same ideas.

The company that dominated video rentals and destroyed Blockbuster moved on to a lightweight digital streaming model, later buttressed with a costly but effective content production strategy. Netflix has embraced ad-supported subscriptions more recently, focusing on profitable growth for the first time. There's still a lot of world left to conquer out there, and Netflix is still trying brand new business tactics. Yes, the stock is setting new all-time highs on a regular basis and it rarely looks cheap. But it's also the gift that keeps on giving in the long haul.

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

Before you buy stock in Alphabet, 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 Alphabet 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Fiverr International, and Netflix. The Motley Fool has positions in and recommends Alphabet, Fiverr International, and Netflix. The Motley Fool has a disclosure policy.

As Elon Musk took a figurative chainsaw to the Social Security Administration earlier this year, there were those, like U.S. Rep. John B. Larson (D-Connecticut), who suspect the move had a lot to do with a desire to privatize Social Security.

Social Security privatization refers to transforming the current Social Security system, primarily a government-run program, into a system that allows Americans to invest their Social Security contributions into private accounts rather than paying into the federal program.

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.

The challenge

If you've ever looked at a paycheck and wondered what FICA stands for, it's the Federal Insurance Contributions Act. Of your gross wages, 6.2% goes into FICA to pay for Social Security and another 1.45% goes toward covering Medicare. Your employer matches both amounts, resulting in a total contribution of 15.3% of your wages.

Contributions made today support benefits for retirees, people with disabilities, and survivors of workers who have died. Think of it as today's employees helping fund the benefits of today's retirees. Since Social Security was first established in 1935, the understanding has been that each generation of retirees will be supported by younger workers still on the job.

A perfect storm of demographic changes in the United States put the Social Security system in a vulnerable position. Between the declining fertility rate and increased life expectancies, there are fewer workers to support an ever-growing group of retirees. As of this year, 12% of the total population is 65 or older. By 2080, it will be 23%.

In other words, the worker-to-beneficiary ratio is expected to drop dramatically, potentially impacting the SSA's ability to fulfill promised benefit payments.

A move away from FICA?

Among the proposals being made is the suggestion that Americans retain the 6.2% of their wages currently allocated toward FICA. Instead, they can invest it in private investment vehicles and decide how the money should be allocated.

Supporters of Social Security privatization argue that the change would give individuals greater control over their retirement savings and potentially allow them to earn returns higher than those provided by the current system's fixed benefits. They also see it as a way to reduce the financial burden on the federal government.

On the other side are those who worry that some Americans may not have the financial literacy or resources to manage investments on their own. Not everyone has experience managing assets, and it's concerning to think about throwing millions of people into the investment pool who may never have learned to manage their finances effectively.

Another concern involves what happens to those who spend years investing for retirement only to hit a string of bad luck. That may mean making bad investment choices or even facing losses due to uncontrollable setbacks, like a recession or bear market. Opponents worry about what will happen to those who hit retirement age with little money put away through no fault of their own, and point out that the current Social Security system offers fixed benefits that retirees can count on.

Countless issues to work through

Even if Congress were able to come to a consensus and privatize Social Security, there are thorny issues that would need to be managed. For example:

• What would be done for those who enter retirement with inadequate savings?
• How would SSA manage the transition costs of shifting to a privatized system while also funding benefits for existing Social Security recipients?
• Would lower-income workers be at a disadvantage, both in terms of having enough money to invest and less access to financial professionals who can teach them the ropes of investing?

Partial privatization?

Some supporters of Social Security privatization suggest allowing workers to invest a portion of their current Social Security contributions in private accounts, with the remainder allocated to the traditional pay-as-you-go system. While this model would lower the Social Security benefits earned by workers who choose this path, they would have a safety net of some sort to look forward to in retirement.

Given how difficult it can be to get Congress to agree on anything, there's no doubt that deciding to upend the entire Social Security system will be an uphill (and long-fought) battle.

In the meantime, the more immediate goal is to find a way to shore up the current system so that retirees will receive every dollar they've been promised.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

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The price of Bitcoin (CRYPTO: BTC) is back over $100,000. But according to many experts, the run is far from over. Ark Invest CEO Cathie Wood recently reaffirmed her 2030 price target of $700,000. Long term, she believes a single Bitcoin could eventually be worth several million dollars.

Every investor should have at least a small exposure to Bitcoin, even if it's just $100. That gives you enough cash to easily buy into the two Bitcoin exchange-traded funds (ETFs) below. Just be careful: The two ETFs below provide very different exposures to Bitcoin and crypto in general.

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This is the largest Bitcoin ETF in the world

The largest Bitcoin ETF right now -- at least measured by the amount of money that has been invested into it -- is the iShares Bitcoin Trust ETF (NASDAQ: IBIT). As of last quarter, the ETF's holdings were worth roughly $70 billion -- more than triple the asset value of the next-largest Bitcoin ETF. Scale allows this ETF to charge lower expense ratios than the competition. The total management fee right now is a reasonable 0.25%. Many competing ETFs charge significantly higher fees.

The best thing about this Bitcoin ETF is that it invests solely in Bitcoin. When you buy Bitcoin directly, you need to deal with a long list of complexities. Taxes can be difficult to track manually, and security issues are commonplace, with many investors falling victim to scams or phishing attempts that drain their accounts with little to no recourse available. By investing in the iShares Bitcoin Trust ETF, all of these complexities become streamlined, just as they would by purchasing any other ETF. As the ETF's prospectus describes, packaging a Bitcoin investment vehicle as a simple ETF helps "remove the operational, tax, and custody complexities of holding bitcoin directly."

Perhaps the best news is that buying a Bitcoin ETF lets you automate your investments. So you can buy $100 today, but you can also tell your brokerage to withdraw another $100 each month, with the proceeds automatically invested in more Bitcoin. This helps you dollar-cost average your Bitcoin investment -- a huge advantage for such a volatile asset.

As you'd expect, more than 99.9% of the trust's holdings are invested directly into Bitcoin, with a tiny amount allocated to cash, mostly to meet daily liquidity needs. With such a low expense ratio, this is one of the fastest and most efficient ways to get Bitcoin exposure. But if you want to invest in more than just Bitcoin, check out the new ETF below.

Image source: Getty Images.

This crypto ETF invests in more than just Bitcoin

Launched in 2023, the Bitcoin & Ether Market Cap Weight ETF (NYSEMKT: BETH) invests primarily in Bitcoin. But as the ETF's name suggests, it also allocates some of your funds into Ethereum.

Ethereum is the second-largest crypto asset in the world today. And while it does have distinct differences when compared to Bitcoin, a very simplistic explanation is that it is essentially "programmable" Bitcoin. That is, it is a decentralized asset that allows for other things to be built on top of it, with the Ethereum virtual machine executing commands in a way that can't be controlled by any one individual. By investing in Ethereum, you're essentially betting that the wide crypto universe will also prevail, not just Bitcoin.

As of last quarter, this ETF's portfolio had 88% exposure to Bitcoin, with the remainder invested in Ethereum. Importantly, exposure is gained through futures contracts, not directly through Bitcoin holdings. This approach adds some correlation risk.

As you can imagine, this increased diversification comes with added costs. The expense ratio for this ETF is around 0.95%. For most investors, the cheaper iShares Bitcoin Trust ETF is a suitable option. But if you'd like to make sure you bet both on Bitcoin and crypto in general, this is a great all-in-one ETF to accomplish that. And as with any other ETF, you can set up automated investments to make sure you're putting more money to work on a regular basis. This way, you don't need much to get started.

Whether you go with the cheaper and arguably more effective IBIT ETF, or get fancier with the BETH ETF, both give your portfolio instant exposure to crypto markets with as little as $100.

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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

If you're seeking dividend income, bravo -- because dividends are hard to beat. Healthy and growing dividend-paying stocks will keep sending you cash, no matter whether the economy is booming or slumping. And that cash is handy not only for retirees. Younger investors can use it to just buy more shares of stock.

Image source: Getty Images.

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 »

One dividend payer to consider is UnitedHealth Group (NYSE: UNH), with a 2.8% dividend yield. Imagine you're seeking $1,000 in annual income from UnitedHealth stock. How many shares must you buy?

Well, a little math is required: Take that $1,000 and divide by the recent annual dividend amount of $8.84. You'll arrive at 114, which is the number of shares you'll need to own.

With UnitedHealth stock recently trading for about $308 per share, those 114 shares will cost you $35,112 -- a hefty sum. You may not be able to afford 114 shares right now, but if you can just buy, say, 32 shares for just under $10,000, you'll be looking at about $283 in annual income -- and that dividend is likely to grow over time, too.

The current payout of $8.84 is up from $6.60 in 2022 and $4.32 in 2019. So you may still reach $1,000 in annual income, eventually, with just 32 shares.

An important question, though, is whether you should invest in UnitedHealth. There are some pros and cons to consider. UnitedHealth has been getting a lot of bad publicity recently, especially after the murder of its CEO last year. And the healthcare environment is likely to change, with the current administration in Washington cutting medical funding and possibly eliminating pharmacy benefits managers (PBMs). (UnitedHealth owns the Optum Rx PBM.)

On the plus side is UnitedHealth's low valuation, with its shares recently near a five-year low. (Its recent forward-looking price-to-earnings (P/E) ratio of 14 is well below the five-year average of 19.) Bulls see its problems as temporary and note that the company is still a giant, generating billions in free cash flow.

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

Before you buy stock in UnitedHealth 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 UnitedHealth 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Over the last several months, a new pocket of the AI realm called quantum computing has started to garner quite a bit of attention from the investment community. What's unique, however, is that the usual suspects of Nvidia, Microsoft, Alphabet, and Amazon aren't really pegged to the rising interest in quantum computing technology.

Rather, a new cohort of rising stars such as Rigetti Computing, D-Wave Quantum, and IonQ (NYSE: IONQ) are among the most popular quantum computing stocks right now. With shares down by 25% from their peak over the last year, IonQ stock trades for roughly $40 as of this writing. Is now a good opportunity to pounce on the stock?

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IonQ's popularity is fueling interest in quantum computing stocks, but...

Quantum computing is not a widely used application in artificial intelligence (AI) today. Yet despite its developmental stage, global management consulting firm McKinsey & Company is forecasting that quantum computing could be a $131 billion opportunity in the coming decades. With the potential for such enormous upside, it's not entirely surprising that investors were quick to look at which companies are involved with quantum computing development.

One reason that I think IonQ has emerged as a favorite in the quantum computing market is the company's impressive partnerships with cloud hyperscalers Microsoft, Amazon, and Alphabet. With the stock sliding as of late, investors may be wondering if the sell-off is an opportunity to buy the dip.

Image source: Getty Images.

... does the valuation actually make sense?

Despite working with major AI developers, IonQ has little to show in terms of tangible growth. Over the last year, the company has only generated $43 million in revenue. Meanwhile, the company's net losses are in the hundreds of millions (and worsening).

IONQ Revenue (TTM) data by YCharts

In a way, this financial profile actually makes some sense. As I alluded to above, quantum computing is not yet commercially used in AI development. Given those dynamics, IonQ's revenue potential is fairly limited for the time being. The unfortunate reality is that the company will likely remain a high-cash-burn operation as it continues building out its platform.

But still, for just $40 could IonQ be worth a look? Well, smart investors understand that the stock price alone does not determine the worth of a business. As of this writing, IonQ boasts a market capitalization of nearly $10 billion. This implies that IonQ is trading for a price-to-sales (P/S) ratio of 195.

Is IonQ stock a buy right now?

IonQ's P/S ratio is not just high; it is multiples above what investors witnessed during the peak euphoria of the dotcom bubble in the late 1990s. I bring this up because the prospects of quantum computing and the appearance of a low share price might tempt investors into chasing momentum -- mistakenly thinking they are buying a stock for a "cheap" price.

The reality is that IonQ stock is anything but cheap. Given the mounting losses pictured above, I suspect that IonQ could have a tough time financing future projects -- further limiting its ability to monetize and grow.

In my eyes, the current sell-off in IonQ stock could lead to further plummeting in the shares. I would not be surprised if IonQ begins to witness a significant valuation correction as more growth investors come to understand that they have been investing in a narrative around the company as opposed to an actual, concrete long-term thesis.

For these reasons, I would stay away from IonQ right now. Even with a 25% drop in share price, the valuation analysis explored above suggests the stock is still overbought and not yet trading for a reasonable price.

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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. 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.

Broadcom (NASDAQ: AVGO) revealed must-know insights during a conference call with Wall Street analysts.

*Stock prices used were the afternoon prices of June 14, 2025. The video was published on June 16, 2025.

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 »

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

Before you buy stock in Broadcom, 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 Broadcom 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

There's a lot to love about Rivian Automotive (NASDAQ: RIVN) stock right now. Over the next 12 to 24 months, the company will experience several major growth catalysts. But as Warren Buffett often advises, keeping an eye on the long term is key to generating the biggest profits.

Where might Rivian end up 10 years from now? The answer might surprise you.

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 »

Expect these 3 things to revolutionize the business

To understand where Rivian is headed over the next 10 years, we must first look at some near-term factors. That's because Rivian's near-term growth catalysts should help set the company up for the next decade of growth.

When it comes to electric vehicle (EV) stocks, one of the most exciting catalysts involves getting new models to market that the masses can afford. Roughly 70% of Americans want their next car to cost less than $50,000. Getting vehicles to market with starting prices under this threshold is critical to putting growth on overdrive.

But this is a challenge for most EV makers. On average, electric vehicles still cost more to build than conventional ones, and many EV start-ups lack the scale to sell vehicles at low prices. Plus, they often lack the capital runway to take a big financial hit by pricing vehicles that cost a lot to manufacture at a steep discount for consumers.

After years of investment, Rivian is finally poised to release its first "mass market" vehicles. The R2, R3, and R3X are all expected to debut with starting prices under $50,000. The first of these three should start production in early 2026, though I don't expect full production of all three to commence until 2027 at the earliest.

Still, these vehicles have the potential to revolutionize Rivian's business, changing it from a niche EV producer to a nationally recognized brand. Mass market vehicles like these can finally give Rivian the scale it needs to survive long term.

Right now, Tesla's two mass market vehicles -- the Model Y and Model 3 -- contribute more than 90% of its vehicle sales. They are critical for the company's profitability. Rivian's new models hold the same sales growth and profitability potential.

But beyond these three new vehicles, the future of Rivian isn't what you might expect. In fact, over the next 10 years, Rivian's most promising opportunity might not involve manufacturing vehicles at all.

Image source: Getty Images.

Rivian's future might not involve selling cars

Last year, Rivian and Volkswagen agreed to a $5.8 billion deal that would create a joint venture focused not on cars themselves, but on the knowledge and software involved in making them. "The partnership aims to strengthen areas of weakness in both companies, with Volkswagen looking for software expertise and Rivian in need of both manufacturing knowledge and an influx of cash," Car and Driver reported at the time.

The deal gave Rivian a lot of much-needed cash. But it was also a huge vote of confidence in the company's unique approach to software. Rivian's chief software officer, Wassym Bensaid, said that the software and approach to building the R2 -- Rivian's newest mass market model -- will provide "the platform that will underpin actually all future EV products at VW."

Rivian has been designing its own software stack for years. Its unique approach promises to be simpler, faster, and more efficient than existing architects'. As a pure EV maker, Rivian is far more focused on next-gen technology than legacy automakers like Volkswagen are. "What we realized over the last few years is the enormous difficulty for incumbent existing auto manufacturers to develop their own full stack software," Rivian's CEO stressed last summer. "The challenge for an incumbent existing [automaker] is if you built a deep dependency on suppliers for making all these ECUs to flip the switch to move off of that."

Rivian's software allows automakers to bring nearly the entire software stack in house, saving money and streamlining integration. This ability is so valuable that Volkswagen ultimately invested $5.8 billion for a 50% stake in the venture scaling up this architecture. Over the next decade, especially with vehicles becoming more and more connected, this segment of the business could be Rivian's biggest. Software typically has high profit margins, and if it's embedded in millions of vehicles, revenues can be recurring and "sticky."

So while Rivian's new vehicles should get all the attention in coming years, software could ultimately become Rivian's biggest profit generator over the next decade.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, 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 Rivian Automotive 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 $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% 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 9, 2025

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