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Received yesterday — 25 April 2025

Why Old Dominion Freight Line Stock Was Sliding Today

Shares of Old Dominion Freight Line (NASDAQ: ODFL) were falling today in sympathy with a disappointing report from rival Saia, another top less-than-truckload (LTL) carrier.

Combined with the report from ODFL the day before, Saia's update is clear evidence that the trade war and weakening economy is already having an effect on the trucking sector.

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As of 11:58 a.m. ET, Old Dominion stock was down 6.7%, while Saia stock had plunged 29.1%.

A truck in a loading dock.

Image source: Getty Images.

Trucking demand is weakening

Old Dominion managed to pass muster with its own first-quarter earnings report as results, though weak, lived up to analyst expectations.

ODFL said revenue fell 5.8% to $1.37 billion, which matched estimates, while earnings per share dropped 11% to $1.19, which was ahead of expectations at $1.14. Management said the results reflected the "ongoing softness in the domestic economy." Tonnage per day was down 6.3%, reflecting weakening demand in the industry.

Despite the weak results, management was able to reassure investors that it can weather the uncertainty in the economy.

Saia's earnings report seemed to shift investor perception of industry dynamics as it reported an increase in revenue in the first quarter, but a sharp drop in profit, showing it prioritized market share gains over profitability. Its revenue growth was also slower than in previous quarter, indicating that demand was weakening.

Saia's revenue rose 4.3% in the first quarter to $787.6 million, badly missing estimates at $811.5 million, while earnings per share tumbled from $3.38 to $1.86, well below expectations at $2.76.

The results from both companies clearly show softening pricing dynamics in an industry where capacity is key, and Saia noted that shipments failed to grow sequentially through the quarter as they typically do, which it blamed on an "uncertain macroeconomic environment."

What's next for ODFL and Saia

It's unclear what's happening next with tariffs or the trade war, but things seem likely to get worse before they get better for the LTL sector as Trump's "Liberation Day" announcement didn't even go into effect until April, when the first quarter was over.

These companies don't typically give guidance due to the volatility inherent in the business so investors should steel themselves for more challenges ahead. However, the LTL sector has historically been a winner, meaning over the long term these two stocks should be able to recover.

Should you invest $1,000 in Old Dominion Freight Line right now?

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Old Dominion Freight Line. The Motley Fool recommends the following options: long January 2026 $195 calls on Old Dominion Freight Line and short January 2026 $200 calls on Old Dominion Freight Line. The Motley Fool has a disclosure policy.

Received before yesterday

Amazon Could Beat Tesla to This Massive Market. Are Investors Missing Something?

There's been no shortage of woes for Tesla (NASDAQ: TSLA) this year.

The company just reported a 13% decline in first-quarter deliveries. The brand is in the midst of an unprecedented crisis due to CEO Elon Musk's political turn, helming the operation known as the Department of Government Efficiency and weighing in on elections across the U.S. and in Europe. And President Donald Trump's tariffs threaten to further weaken the economy, specifically impacting the auto sector.

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Coming into 2025, Tesla was already struggling as deliveries fell in 2024, marking its first annual decline in unit sales.

However, despite those troubles, Tesla stock has been resilient, largely because investors have high hopes for its autonomous vehicle (AV) technology, which Musk said would make Tesla the world's most valuable company. In particular, the Tesla CEO has talked up a robotaxi network from his company, which he believes will be key in achieving that valuation.

The company unveiled its Cybercab robotaxi at a launch last October, but the event underwhelmed Wall Street, and it has not yet performed an autonomous vehicle ride. Tesla plans to begin offering autonomous rides in June in Austin, Texas.

However, the robotaxi market could get crowded quickly as the company seems to have new competition from Amazon (NASDAQ: AMZN).

A woman getting into a Zoox autonomous vehicle.

Image source: Amazon.

Here comes Zoox

Amazon is a huge company, best known for its e-commerce and cloud-computing businesses. However, the company also has a self-driving car business after acquiring Zoox for $1.2 billion. Zoox has quietly prepared to launch an autonomous vehicle ride-sharing service in several cities across the country, and it could do so before Tesla.

Zoox announced recently that it was launching its sixth testing site in the U.S., this time in Los Angeles.

Amazon's ride-sharing service is also aiming to begin serving riders in Las Vegas and San Francisco, though it's unclear when. Zoox is different from most of its autonomous vehicle peers as it has four inward-facing seats, allowing for a more social experience than the typical vehicle and it has double doors that allow for easy entry and exit, making it look more like a shuttle van. The company says it's a robotaxi, not a car.

Can Amazon challenge Tesla in AVs?

At this point, it's speculative to assess Zoox's potential in autonomy, but it's clear that the space is becoming more crowded as Alphabet's Waymo continues to spread to new cities and as other companies work toward autonomous ride-sharing.

Tesla is also facing deep-pocketed rivals in Alphabet and Amazon, both of which generate tens of billions of annual free cash flow, some of which they can throw at the autonomous vehicle market.

Tesla does have a singular advantage with millions of cars on the road, but its full self-driving technology still requires supervision. Launch of the ride-sharing service is expected to include unsupervised full self-driving, available to Tesla owners.

If the technology proves to be capable of navigating the roads safely, it could be the game changer that Musk hopes it will be as the millions of Tesla owners could subscribe to FSD and theoretically lease their own vehicles out for ride-sharing -- provided the software is there to support it.

However, the arrival of well-heeled debutantes like Zoox shows that Tesla may not dominate the robotaxi market the way the bulls expect.

It's also worth remembering the safety risks in AVs. Other companies' autonomous dreams have gone up in smoke, including Uber Technologies and General Motors, which recently pulled all its Cruise vehicles off the road and ended that program.

Better buy: Amazon vs. Tesla

At this point, Tesla seems priced for perfection, and that perfection includes unsupervised FSD and a burgeoning ride-sharing network. Amazon, on the other hand, has a much more diversified revenue base, a cheaper valuation, and better growth prospects, considering the problems with Tesla's EV business.

Zoox's ramp-up toward a mainstream AV company is likely to be significantly slower than Tesla's, but safety is the biggest hurdle in the industry, not speed.

Overall, Amazon looks like the better buy here. While Zoox might not be a major factor in its business right now, it could be down the road, and it gives investors potential exposure to the robotaxi market.

Keep an eye on Zoox over the coming months as 2025 looks set to be a big year for robotaxis.

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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. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.

This Recession-Resistant Stock Is Up 16% This Year. Here's Why It Can Beat Trump's Tariffs.

Spring is only just starting to bloom, but 2025 is already starting to look like a lost year for investors. As of April 8, the S&P 500 (SNPINDEX: ^GSPC) is down 18%, the Nasdaq Composite is in a bear market, and investors are reeling over President Donald Trump's plan to impose the highest tariff rates in over a century.

Over the last week, all but five S&P 500 stocks are in the red, and of those, there's only one that isn't a healthcare company. It's a retailer with a business model that makes it recession-resilient. In fact, it has a history of outperforming and seeing stronger growth in recessions, and it's well positioned to avoid any headwinds related to tariffs.

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I'm talking about Dollar General (NYSE: DG), the discount retailer that suddenly looks like a winner after stumbling through 2023 and 2024. As you can see from the chart below, Dollar General has surged this year, easily beating the broad market:

DG Chart

DG data by YCharts.

Dollar General has gained as the S&P 500 has fallen, showing off its countercyclical nature. The stock surged the day after Trump announced global tariffs, gaining 4.7% even as the rest of the market tumbled, a sign that the market views Dollar General as tariff-proof.

Why Dollar General can beat tariffs

At the current moment of uncertainty in both trade policy and the overall health of the economy, Dollar General finds itself in an advantageous position, especially compared to other retailers.

First, consumables make up the vast majority of the company's sales -- 82% in 2024. These are products like paper and cleaning products, packaged food, perishables, and health and beauty products, all of which consumers buy in good times and in bad.

Because so much of its sales come from food, which is typically produced domestically, the company has much less tariff exposure than most retailers. According to Citigroup analysts, just around 10% of its inventory is exposed to tariffs, much better than Dollar Tree's 50%, as the latter company tends to sell more discretionary items.

Dollar General also has a history of outperforming in a recession, as consumers tend to trade down from more expensive stores when they're looking to save money. Additionally, the retailer has the advantage of selling smaller package sizes, so consumers can buy single rolls of toilet paper or paper towels, which they couldn't do at a competitor like Walmart.

In the throes of the great financial crisis, Dollar General reported same-store sales growth of 9% in 2008 and 9.5% in 2009, showing how consumers flock to its stores to save money. Over its history, the company has delivered positive same-store sales growth in every year since 1990, except for 2021 (a same-store sales spike of 16.3% when COVID-19 hit in 2020 gave way to a decline of 2.8% the following year). That track record shows it can do well in any economy.

An aisle in a convenience store.

Image source: Getty Images.

Is Dollar General a buy?

As a business, Dollar General has been struggling over the last two years. It's lost market share to Walmart, and has seen margins fall sharply as inflation weighed on consumer spending in the low-income demographic.

The company announced a "Back to Basics" strategy, aiming to streamline its supply chain by closing temporary storage facilities and to improve store operations by reducing out-of-stock situations and making sure the point-of-sale area is adequately staffed. It's also investing in more store remodels even as it continues to open new stores.

Dollar General finished 2024 with same-store sales growth of 1.4%, showing that demand is still improving, despite its margin challenges. Its 2025 guidance for same-store sales growth was a range of 1.2% to 2.2%. It also expects a modest rebound in earnings per share of $5.10 to $5.80 this year, compared to $5.11 in 2024.

The current economic environment could prove to be a tailwind for Dollar General, especially if concerns about a recession spread.

For investors, the stock remains well-priced at a price-to-earnings (P/E) ratio of 17. Additionally, it offers a current dividend yield of 2.6%.

With the uncertainty around the Trump tariffs likely to continue, Dollar General looks like a great stock to ride out the storm, and to beat the market if the economy continues to weaken.

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Citigroup is an advertising partner of Motley Fool Money. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

1 Simple Reason to Buy Micron Stock Right Now

The stock market drop following U.S. President Donald Trump's tariff announcement last week has affected nearly every industry. Even those that aren't directly in the line of fire are still vulnerable to the broader economic fallout, as the intensifying trade war has the potential to plunge the global economy into a recession.

Shares of semiconductor stocks, for example, have plunged as investors seem to fear that the high-flying sector is exposed to both cyclical risk and the effects of tariffs. While "bare die" semiconductors (unpackaged chips that are not inside a product) are excluded from tariffs, electronics and other products containing these chips are not exempt.

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After Trump announced the "Liberation Day" tariffs, the Van Eck Semiconductor ETF fell as much as 16%, a steeper drop than the Nasdaq Composite. It's been a quick reversal of fortune for a sector that had soared through 2023 and 2024 on a boom in AI demand fueled by the launch of ChatGPT.

With semiconductor stocks down sharply over the past week, there are a number of attractive discounts. One of the most appealing is Micron Technology (NASDAQ: MU), the integrated maker of memory chips.

A semiconductor being made.

Image source: Getty Images.

Where Micron stands today

Leading up to the tariff-fueled sell-off, Micron had reported impressive growth numbers, especially in the AI-driven data center segment. In the fiscal second quarter, which ended Feb. 27, the company reported overall growth of 38% to $8.05 billion. It noted strong AI demand, driving record data center dynamic random-access memory (DRAM) revenue.

The percentage of its revenue that came from data center and networking jumped from 25% to 55%, indicating it more than doubled over the last year. Its profits are soaring as well, with adjusted earnings per share up from $0.42 to $1.79.

Additionally, Micron has an advantage over its semiconductor peers, many of which use a fabless model and don't produce their own chips. Micron has manufacturing facilities in the U.S., making it the only domestic producer of memory chips. Micron is set to receive more than $6 billion from the federal government from the CHIPS Act, and it should be favored as part of the Trump administration's push to reshore manufacturing. In fact, it's building the biggest chip fab in U.S. history right now.

Micron also produces chips in Asia, and its leading-edge chips are made in Japan and Taiwan. Nonetheless, its position as a domestic manufacturer gives it a leg up at a time of upheaval in trade relations.

The case for Micron

Micron stock has fallen sharply since the tariffs were announced, and its closing price of $65.54 is within range of where the company traded throughout fiscal 2023, before the effects of the AI boom hit. At that time, the business was suffering from a slowdown in smartphone and PC demand due to the end of the pandemic restrictions and a glut in memory chips.

In fiscal 2023, its revenue fell by roughly half to $15.54 billion, and it reported an adjusted loss of $4.86 billion, or $4.45 per share. In contrast, the business is much healthier today and benefiting from strong tailwinds in AI, which has made Nvidia Micron's biggest customer.

Based on its trailing earnings, Micron now trades at a price-to-earnings ratio of 13, making the stock look like a bargain, especially if its momentum keeps up. The market seems to be pricing in a big effect on the chip sector, and it would certainly get hit in a global recession, but at the current price, Micron looks too cheap to ignore. The company is in a much stronger position than it was two years ago as it capitalizes on the AI boom, even though its stock price is the same.

That looks like a mistake. While the stock is likely to be volatile as the effects of the tariffs play out, Micron is well-positioned to be a long-term winner from here, given the AI demand, recent growth in the business, and the low share price. Patience with the stock should pay off.

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Jeremy Bowman has positions in Micron Technology, Nvidia, and VanEck ETF Trust-VanEck Semiconductor ETF. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

This AI Stock Just Flashed a Big Buy Signal

Like the rest of the stock market, Broadcom (NASDAQ: AVGO) was hit hard by the stock market sell-off. The two-day crash that followed President Donald Trump's tariffs announcement pushed Broadcom stock down 15%. It's now down more than 37% from its peak in December.

However, management gave the stock announced a new stock buyback program, authorizing a share repurchase of $10 billion through the end of the year.

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CEO Hock Tan said the repurchase move showed the board's "confidence in the strength of Broadcom's diversified semiconductor and infrastructure software product franchises," adding, "We are uniquely positioned in mission critical infrastructure software and enabling hyperscalers to drive innovation in generative AI."

A "buy, sell, hold" die and several $100 bills on top of some financial information.

Image source: Getty Images.

Why the buyback is meaningful

Broadcom's buyback announcement comes just days after the Trump administration rocked the market with 10% tariffs globally (as well as what it called "reciprocal" tariffs on dozens of individual countries). The new import taxes helped push the Nasdaq Composite into a bear market. They also present a massive obstacle for businesses around the world that now must figure out how to handle the new tariff regime. Their responses could include absorbing the additional costs, passing them along to customers, moving production to the U.S. or a lower-tariffed country, or coming up with another creative solution.

The specific implications for Broadcom, and its semiconductor peers aren't fully clear. For now, Trump's tariffs exempt direct chip imports, meaning imports of individual chips, while chips that are already packaged into electronics and then imported will be subject to tariffs.

Even if Broadcom isn't directly subject to tariffs, its business is still sensitive to the economy, as the semiconductor sector is cyclical, and a trade war could plunge the world into a recession, which explains the broad sell-off in the tech sector.

Broadcom's manufacturing is diversified both internally and outsourced to several partners, including Taiwan Semiconductor Manufacturing (TSMC) and others. It does handle some specialized manufacturing in the U.S., but the majority of its components come from abroad.

Despite the exposure, the company's buyback announcement shows confidence in the business and courage to face the long-term impact of tariffs, knowing that it can handle them.

Like its peers, Broadcom could see an impact from the tariffs, but it's in a strong financial position with $19.4 billion in free cash flow in fiscal 2024. Although its balance sheet is heavy on debt and relatively low on tangible assets like cash, the company's diversified business model and growth in artificial intelligence (AI) should ensure it continues to generate a healthy amount of cash flow.

Of course, Broadcom doesn't have to spend $10 billion on buybacks by the end of the year, but the announcement also shows the company is keen to take advantage of its beaten-down stock price, which is usually a smart move. With its market cap above $700 billion, the buyback would only reduce shares outstanding by about 1.5%, however.

As you can see from the chart below, the company has a history of buybacks, though its share count has continued to rise due to share-based compensation and its acquisition of VMWare in late 2023, which significantly diluted the stock.

AVGO Stock Buybacks (TTM) Chart

Data by YCharts.

Is Broadcom a buy?

Broadcom stock has fallen sharply in recent weeks even as the stock popped on its fiscal first-quarter earnings report as the company delivered impressive results.

Revenue in the quarter was up 25% to $14.9 billion on 77% growth in AI revenue to $4.1 billion. Its performance on the bottom line was strong as well, with adjusted earnings per share up from $1.10 to $1.60.

Looking ahead, Broadcom looks like a good bet regardless of whether it executes the buyback or not as its diversification, strength in networking infrastructure, and opportunity in AI make it well-positioned for growth over the long term even if tariffs slow it down in the near term.

With the stock still down close to 40% from its peak, investors may want to take the hint from Broadcom and buy the stock as well.

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Jeremy Bowman has positions in Broadcom and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Wall Street Titan Jamie Dimon Just Gave a Big Warning on the Stock Market. And Trump's Tariffs Are Only Part of It.

JPMorgan Chase (NYSE: JPM) Chief Executive Officer Jamie Dimon is one of the most respected voices on Wall Street.

Dimon leads the nation's largest bank by assets, and he successfully steered JPMorgan Chase through the great financial crisis without needing a bailout. The company and Wall Street analysts often refer to the company's "fortress" balance sheet, a nod to Dimon's canny risk management.

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Dimon is also one of the most vocal leaders in banking, and he's never been hesitant to share his thoughts on where the economy is headed or the wisdom of certain financial and economic policies. So, investors were eager to read his annual shareholder letter released on Monday, especially as it came out just after President Donald Trump announced unprecedented global tariffs.

The JPMorgan chief called out a number of risks in the letter, noting that tariffs would "likely increase inflation" and raise the probability of a recession. He also seemed to acknowledge that stagflation was a possibility as inflation could drive interest rates higher and drag down economic growth. Additionally, he bemoaned the large fiscal deficit and national debt, which he said was also inflationary.

However, one comment stuck out, especially for investors aiming to read the tea leaves regarding where the market is headed.

Gold bars and jewelry on top of several $100 bills.

Image source: Getty Images.

Stocks are still expensive

For investors wondering if they should run out to buy stocks to take advantage of last week's two-day market crash, Dimon seems to have a clear answer. Discussing the negative impact of tariffs, he said, "Even with the recent decline in market values, prices remain relatively high." The Wall Street titan added, "These significant and somewhat unprecedented forces cause us to remain very cautious."

Although the Nasdaq Composite was in a bear market as of Monday's close, defined as a decline of 20% from a recent high, and the S&P 500 (SNPINDEX: ^GSPC) is hovering near that, Dimon is correct that valuations remain elevated, especially compared to historical averages.

According to multipl.com, the S&P 500 P/E ratio had fallen to 24.7 as of April 8, down from a peak of 29.9 in December 2024. However, at that level, it's still more expensive than it was at almost any time in the 2010s. Over its history dating back to the 1800s, the S&P 500 has had an average P/E ratio of 16.1, though it's been higher in recent decades.

Those valuations are also based on trailing earnings, and future earnings could be lower, especially after the tariffs go into effect.

Dimon's observation underscores another driver behind the recent sell-off as well. Stocks were already near record valuations before the tariff announcement as the chart below, which uses the cyclically adjusted (CAPE) P/E ratio, shows.

S&P 500 Shiller CAPE Ratio Chart

S&P 500 Shiller CAPE Ratio data by YCharts

Although that chart doesn't reflect the full extent of the recent pullback, it does illustrate that S&P 500 stocks were previously as expensive as they've been in history since the dot-com bubble.

What it means for investors

Predicting short-term market movements in any environment is difficult, but in the current one, it's virtually impossible as the whipsawing over rumors of a delay in tariff implementation on April 7 showed. It's unclear if the tariffs will be enacted as proposed and if they will be permanent or will change with negotiations.

However, Dimon is right to note the risks in the market, including not just tariffs but also elevated asset prices and interest rates, and pressure from the deficit and debt.

It's not officially a bear market for the S&P 500, but it's worth considering the severity and length of one should it happen. On average, it takes 13 months for stocks to fall from peak to trough in a bear market, and the S&P 500 declines by an average of 33%, though there's a broad range in severity and duration. Recoveries take 27 months on average to get back to the former peak, or about twice as long as the decline.

The unpredictability of the tariffs will add to the market's volatility for the foreseeable future. For investors, the best thing to do is to remember that the U.S. stock market has recovered from far greater dislocations over time, and that buying high-quality stocks at good prices has always paid off.

Despite his risk assessment, you can bet that Dimon is staying invested. Doing so is the only way to win in the long run.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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