Long-term investing is the key to sustainable returns in the market. But if you bet on the wrong company (without diversifying your portfolio), you might be better off leaving your cash in the bank. With shares down by 38% over the last decade, Ford Motor (NYSE: F) is an example of a company that has consistently failed to generate shareholder value.

That said, chaos can sometimes create opportunities. The U.S. automotive industry is in flux as major players shift toward electric vehicles (EVs), and dramatic shifts in trade policy could transform the world's second-largest auto market into a protected industry for domestic players. Let's dig deeper to explore how Ford might navigate these challenges.

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Could tariffs boost Ford's brand?

As an iconic American brand, Ford can be expected to benefit from consumer patriotism. Management has leveraged this advantage in the face of Washington's new 25% tariff on imported cars. Despite boasting a significant international supply chain, the company appears to be leaning into the resurgent "made in America" agenda.

According to the Detroit Free Press, Ford has launched an ad campaign touting its role in American manufacturing. The company is also offering employee pricing discounts on its 2024-2025 models, possibly in an effort to clear out inventory and capture market share ahead of potential disruptions. This move stands in stark contrast to European rival Volkswagen, which has halted some shipments to the U.S. and plans to put import-fee stickers on its cars to show the impact of the new policy.

However, while Ford's strategy appears promising in the near term, it will be challenging to sustain, especially if the planned 25% tariffs on auto parts are implemented. The company may not be as American as it appears on the surface.

How American is Ford, really?

Like many U.S. automakers, Ford has leveraged opportunities, such as the North American Free Trade Agreement (NAFTA), to expand its supply chains and benefit from lower wages and healthcare costs in the U.S. and Canada. While the company claims to assemble nearly 80% of its vehicles in the U.S., its cars utilize manufactured parts from around the world. For example, Ford's iconic F-150 pickup truck has only around 60% domestic content, despite being assembled in Dearborn, Michigan.

Ford's reliance on imported parts could lead to increased prices across the board. And even if tariffs end up hurting its rivals more, the overall industry could shrink and margins could narrow until supply chains can be reworked. Furthermore, they could severely undermine Ford's EV strategy.

The company's popular Mustang Mach-E is assembled in Cuautitlán Izcalli, Mexico, making it vulnerable to the new 25% tariffs. Furthermore, a range of battery and electric car components rely on Chinese imports.

Image source: Getty Images.

Perhaps the biggest hit will be faced by Ford's luxury division, Lincoln, which made the disastrous decision (in hindsight) to manufacture its new Nautilus SUVs in China. China is currently subject to a 145% tariff that could more than double the vehicle's price. Lincoln CEO Dianne Craig has not revealed plans to stop importing the Nautilus, so Ford will likely absorb most of the immense import fee and sell the vehicles at a loss.

What could the next 5 years have in store?

While President Donald Trump's automotive tariffs could give Ford some advantages over foreign rivals in its home market, the policy's downsides outweigh the potential benefits. With prices projected to rise across the board, customers may purchase fewer cars, whether domestic or otherwise. Furthermore, the policy undermines Ford's EV strategy, as it relies heavily on international supply chains, particularly for its flagship Mach-E crossover SUV.

That said, uncertainty may be Ford's most significant long-term challenge. U.S. trade policy has become highly unpredictable. This will make it hard for management to commit to any long-term strategy, especially one related to growth opportunities, such as EVs. Investors seeking a bargain in the market should steer clear of Ford.

Should you invest $1,000 in Ford Motor Company right now?

Before you buy stock in Ford Motor Company, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

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Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Over the long term, Tesla (NASDAQ: TSLA) has been one of the best-performing auto stocks in history, with shares increasing by 1,580% over the last decade due to the success of its mass-market electric vehicles, such as the Model S and Model Y. However, in recent months, the company's growth story stalled. CEO Elon Musk's foray into politics has damaged Tesla's brand, while low-cost Chinese rivals pose a threat to its business model.

The next five years will make or break the company. If things go well, Tesla could transition from being just another automaker into a diversified technology giant, maintaining or even growing its $813 billion market capitalization. If things go poorly, expect the company's valuation to fall back down to earth. Let's delve deeper into what the future may hold.

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Tesla stock is crashing -- or is it?

With shares down 37% year to date as of this writing, it might look like Tesla is melting down. But that's not actually true. When you zoom out, the stock is still slightly above its level from just six months ago. This dynamic means that while investors have tempered some of the arguably irrational excitement about Tesla, they remain highly optimistic about its long-term potential.

TSLA data by YCharts

Furthermore, with a forward price-to-earnings (P/E) ratio of 92, Tesla stock remains extremely expensive. For context, the S&P 500 has an average estimate of 20, while other established American automakers, such as Ford and General Motors, trade for just 8 and 4 times forward earnings, respectively.

However, the most alarming comparison is with China's BYD, which trades at a P/E of just 19, despite its fourth-quarter profits growing by 73% year over year. Tesla's profits fell 71% in the corresponding period.

Tesla's problems continued into 2025. First-quarter deliveries declined 13% to 336,681 units, primarily due to collapsing sales, particularly in the European Union, where deliveries dropped by over 30%. This negative trend is likely to continue over the coming years as new Chinese rivals expand their production capacity in Europe to avoid tariffs and other restrictions.

Protectionism is both a threat and an opportunity

Tesla's rapid decline in Europe highlights a problem in the market that may run much deeper than investors want to admit. While the Trump administration provided a "mask-off" moment, European hostility toward Tesla predates Elon Musk's overt political involvement.

Despite being a green energy leader, Tesla's gigafactory in Berlin-Brandenburg has been beset with environmental protests and vandalism despite many other facilities operating in the region. The company also faced frequent regulatory holdups in its efforts to roll out self-driving across the continent, a technology that could be one of its key advantages over the fast-growing competition.

Image source: Getty Images.

The European market has proven unreliable for Tesla. And President Donald Trump's protectionist policies could give the company an opportunity to succeed without it by focusing more on its home court.

With a 100% tariff on Chinese EVs (excluding the new 245% tariff on most Chinese products), Chinese auto imports are virtually banned from the U.S. market. And while Tesla's use of some imported components means it will be impacted by the blanket 25% tariff on all cars and auto parts, it will fare better than rivals like Ford's Mustang Mach-E, which is assembled in Mexico, and Hyundai's Ioniq 5, which is partially made in South Korea.

What the next five years might have in store

Over the next five years, investors should expect the U.S. market to potentially become a walled garden for Tesla. Its top competitor, BYD, currently has no plans to expand into the U.S. Meanwhile, a more favorable regulatory environment can help it expand its self-driving efforts and unlock an opportunity that analysts at McKinsey believe could be worth $300 billion to $440 billion by 2035. If Tesla can pull this off, the challenges in Europe and China might become distant afterthoughts.

With that said, Tesla's current valuation already seems to price in a best-case scenario. Investors may want to wait for shares to fall further or for a technological or regulatory breakthrough in its self-driving tech before considering a position in the stock.

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

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• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $266,353!*
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Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company and General Motors. The Motley Fool has a disclosure policy.

Warren Buffett is one of the most successful investors of all time, with a performance that easily surpasses the S&P 500's average. His holding company, Berkshire Hathaway, presents a valuable snapshot of the companies he believes in.

Below, I'll explore why e-commerce giant Amazon (NASDAQ: AMZN) could make an excellent long-term pick in this uncertain macroeconomic environment.

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Buffett was somewhat late to the party

While Warren Buffett is a hugely successful investor, he isn't infallible. Berkshire Hathaway passed on the opportunity to bet on Amazon when it was just a start-up in 1994, and again when the stock went public in 1997 at just $18 per share ($0.075, adjusted for stock splits). Buffett finally pulled the trigger in 2019 and now owns roughly $1.7 billion in shares.

In the past, Buffett may have seen Amazon as a speculative business with an uncertain future. However, the company now aligns more closely with his conservative investment strategy thanks to its deep economic moats, which are the competitive advantages it has over rivals in several different industries.

Amazon's biggest advantage may be its sheer scale. The larger a company becomes, the easier it is for management to take advantage of efficiencies to reduce costs and pass on savings to customers. It also creates a network effect, as more customers attract more merchants and a wider variety of items. This, in turn, attracts even more customers.

Amazon's scale advantages aren't limited to just e-commerce. The company is also a leader in cloud computing through Amazon Web Services (AWS), which holds a 30% global market share. In recent years, it has leveraged this to become a leader in generative artificial intelligence (AI) by allowing clients to access computing power for running and training large language models (LLMs) within AWS.

The numbers look good

While investors shouldn't expect Amazon stock to repeat the 675% gain it achieved over the past decade, the company can maintain its market-beating performance over the long term due to its strong fundamentals and reasonable valuation. First-quarter revenue jumped 10% year over year to $187.7 billion, driven by particular strength in AWS, which is benefiting from rising demand for AI-related workloads.

It's unclear how this business will play out over the long term. However, Amazon is investing heavily in the opportunity by buying more of Nvidia's AI chips. It also builds custom chips called Trainium and Inferentia, which are designed to reduce the company's dependence on third parties and run specific workloads more efficiently than one-size-fits-all solutions.

Image source: Getty Images.

The best thing about Amazon's AWS-led growth is its higher profitability, compared to e-commerce. Fourth-quarter operating income jumped 61% to $21.2 billion, with approximately half of the total coming from the AWS segment.

Amazon is working to boost profitability across its businesses by implementing cost-cutting measures. It aims to slash around 14,000 managerial positions this year, aiming to save between $2.1 billion and $3.6 billion annually.

What are the potential challenges?

Amazon's biggest near-term challenge may come from macroeconomic uncertainty. The Trump administration's on-again, off-again tariffs could cause consumer prices to rise temporarily, potentially hurting demand. Furthermore, the unpredictable policy will make it hard for companies to plan their supply chains and make investments for the future.

That being said, Amazon's growing reliance on AWS, its cloud computing segment, shields it from much of this tariff-related uncertainty. Furthermore, with a forward price-to-earnings multiple (P/E) of 26, the company's valuation appears to account for much of these fears.

While shares are pricier than the Nasdaq-100 estimate of median of about $24, Amazon deserves a premium due to its deep economic moat and impressive bottom-line momentum. It's easy to see why Warren Buffett is a fan.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% 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 April 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, and Nvidia. The Motley Fool has a disclosure policy.

If you've got a pile of cash burning a hole in your pocket, consider putting it to work in the stock market. Long-term investing is a great way to build wealth, and few know this better than investing legend Warren Buffett, who has turned his once-modest holding company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), into a $1.1 trillion equity behemoth.

Below I'll discuss why Chinese electric-vehicle (EV) maker BYD (OTC: BYDDY) -- as well as shares in Berkshire Hathaway itself -- could be great buys right now.

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 »

BYD

Since its 2003 founding in Shenzhen, China, BYD has been riding the wave of China's industrial miracle. It starting as a battery manufacturing and electronics company before pivoting to electric vehicles a few years later. Warren Buffett began buying shares in 2008 and now owns a substantial $2.5 billion worth of BYD equity, representing about 1% of Berkshire's total portfolio.

It's easy to see why he likes the company. Buffett tends to favor businesses with deep economic moats, which refers to the competitive advantage they have over industry rivals. In BYD's case, the moat is the company's vertical integration as it manufactures its own batteries at scale, enabling it to pass on cost savings to consumers.

However, BYD isn't just about low prices. The company has started to emerge as a technological leader.

In March, it unveiled a new technology capable of charging EVs in just five minutes, providing up to 249 miles of range. If this makes it into mass production, it could significantly close the convenience gap between electric cars and their gasoline-powered counterparts.

BYD's valuation is also too good to ignore. With a forward price-to-earnings ratio (P/E) of just 19.5, the shares are significantly cheaper than rival Tesla, which trade at a forward P/E of 84. Fourth-quarter profit jumped by an impressive 73% year over year to $2.1 billion.

Berkshire Hathaway

Instead of buying individual stocks, some investors may want to bet on the entire Berkshire portfolio. This move would enable greater diversification across various industries while leveraging Warren Buffett's holistic strategy and market-beating instincts.

Buffett has famously stated, "Never bet against America," referencing the country's tremendous business potential, even in the face of temporary setbacks. With multibillion-dollar positions in leading U.S. companies like Apple, Coca-Cola, and American Express, the Oracle of Omaha puts his money where his mouth is. And in terms of performance, Berkshire Hathaway has consistently beaten the S&P 500.

BRK.A Total Return Level data by YCharts.

Berkshire's edge may come from its ability to respond to changes in the macroeconomic landscape. In 2024, the holding company began raising eyebrows by selling stock and not reinvesting, ending the year with $334.2 billion in cash. Some analysts think this move may have been in anticipation of the tariff-led sell-off this year. Berkshire Hathaway is in a position to scoop up quality stocks for cheap when the dust settles.

Investors shouldn't expect Berkshire Hathaway to repeat the explosive growth it has experienced during past decades. The larger a portfolio is, the more challenging it becomes to grow. That said, the legendary holding company looks fully capable of maintaining its market-beating success.

Which stock is best for you?

BYD and Berkshire Hathaway are both excellent choices based on Warren Buffett's successful investing strategy. That said, investors who prioritize market-trouncing growth should look to BYD, due to its huge opportunity to scale its EV business globally. Berkshire Hathaway is another excellent choice, but its size and diversification make its performance more closely align with the S&P 500 average.

Should you invest $1,000 in BYD Company right now?

Before you buy stock in BYD Company, 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 BYD Company 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 $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% 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 April 21, 2025

American Express is an advertising partner of Motley Fool Money. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.

This has been a brutal year for the U.S. tech industry as a combination of challenges, ranging from political uncertainty to foreign competition, has shaken some of its core assumptions. Globalism is no longer guaranteed, and developing markets like China are transitioning from a source of low-cost labor into a viable threat to U.S. technological dominance.

The next 12 months could be a make-or-break period for Nvidia (NASDAQ: NVDA) as it navigates the evolving macroeconomic landscape. Let's dig deeper to decide how the company's shares might perform.

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Globalization might be dead. What comes next?

While it is too early to be sure, President Donald Trump's April 2 tariff announcement may mark the beginning of the end for globalization -- a system that facilitated increasingly complex international supply chains. Nvidia is a typical example of how globalized business models work.

As a fabless semiconductor company, Nvidia only designs its chips. Their actual production is outsourced to foreign companies like Taiwan Semiconductor Manufacturing (TSMC), which produces them with the help of EUV machines from the Dutch company ASML.

These international interdependencies could draw unwelcome political attention. But the good news is that Nvidia worked to preempt this exposure with the help of its manufacturing partners.

In late 2024, TSMC opened its first U.S. factory in Arizona, allowing Nvidia to source its cutting-edge Blackwell AI chips domestically. This move could shield the company from potential tariffs, which is essential for its long-term success. Even though semiconductors are currently exempt from this latest round of tariffs, their strategic nature will likely attract attention from this administration and future U.S. lawmakers, so it is advantageous for Nvidia to get ahead of this potential headwind.

China and India also seek AI relevance

Although trade war talk is stealing the show in April, Nvidia's stock price crash started in January, with the launch of the high-performing Chinese large language model (LLM) DeepSeek V3, which was allegedly developed for just $6 million. While the actual cost is still hotly debated, it is believed that V3 was built using much less advanced H800 chips while still comparing favorably to American LLMs like OpenAI's ChatGPT, which were built with substantially more expensive hardware.

Image source: Getty Images.

DeepSeek calls into question the amount of money American AI companies are spending on Nvidia hardware. And while major customers like Meta Platforms continue to plow money into the opportunity, it may be a matter of time before they face shareholder backlash over the amount being spent for minimal financial reward.

In April, an Indian start-up called Ziroh Labs added even more uncertainty to the U.S. AI market with the release of Kompact AI, a system designed to run LLMs without advanced graphics processing units (GPUs) made by companies like Nvidia. Inference (the process where an AI model uses its trained knowledge to generate output) represents a significant source of demand for Nvidia's hardware. Kompact AI aims to facilitate this process using less expensive central processing units (CPUs), which are widely available on consumer devices like laptops and computers.

What could the next 12 months have in store for Nvidia?

Over the next 12 months, Nvidia should face substantial volatility. Even though the company seems relatively isolated from the direct impacts of the trade war, that isn't stopping investors from jumping ship. Low-cost competition from China and India is also beginning to call into question the importance of its most advanced (and expensive) GPUs for training and running competitive LLMs.

With a forward price-to-earnings (P/E) multiple of 25, Nvidia's current valuation is relatively low for a company that grew fourth-quarter profits by 80% year over year. This discount already prices in much of the uncertainty. However, investors may want to wait for the stock to fall deeper into oversold territory before considering a position.

The events of early April have made this a fear and uncertainty-driven market. And until that changes, fundamentals may take the back seat.

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 $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 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. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Tesla (NASDAQ: TSLA) has been one of 2025's worst-performing megacap stocks, with shares down by a whopping 28% year to date, compared to the S&P 500's decline of 7% over the same period. The electric automaker is facing a combination of rising competition and political pressure that is calling its persistently high valuation into question.

However, while the short-term picture looks grim, Tesla remains a hugely innovative company that wants to use its legacy automotive business as a springboard to transition to next-generation technologies like artificial intelligence (AI), self-driving, and robotics. Let's dig deeper to see if this sell-off is a buying opportunity or a signal of more trouble ahead.

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The automotive segment looks grim

A few years ago, Tesla was one of the hottest growth stocks on the market, driven by the successful launches of its Model 3 and Model Y, which are some of the most popular vehicles in the world. However, those days are long gone. Competition from traditional automakers and low-cost Chinese rivals makes Tesla look like another car company.

In the first quarter, the company delivered 336,681 vehicles, a sharp 13% decline from the prior-year period as the company experienced boycotts, vandalism, and brand erosion, particularly in the European Union.

Some of this weakness may be due to the company's aging lineup, and design refreshes of its most popular cars could help stimulate demand later in the year. That being said, with a forward price-to-earnings (P/E) multiple of 98, Tesla is still valued like a growth stock, even though it isn't growing. That isn't sustainable. Something will have to give.

Transitioning away from the automotive business

The only way Tesla's valuation makes sense is if the company can successfully reorient its business away from automotive manufacturing to next-generation technologies like robotics, AI, and self-driving cars. On the robotics front, the company is working on a general-purpose humanoid robot called Optimus, which is designed to replace people in unsafe or repetitive tasks. CEO Elon Musk is optimistic, suggesting it could eventually be the biggest product of all time, with $10 trillion in sales.

Management expects to build several thousand Optimus robots this year, with an exponential production ramp-up in 2026. However, investors should take Musk's projections with a grain of salt because the executive has a track record of overpromising and underdelivering.

From a common-sense standpoint, it is hard to see how a general-purpose robot will be more useful than contemporary alternatives, such as robotic arms, which are designed to maximize efficiency in one task.

Image source: Getty Images.

Self-driving cars seem like a more promising opportunity. According to analysts at McKinsey, the market could create $300 billion to $400 billion in revenue by 2035. Tesla would have clear advantages because of its existing fleet of cars, which generates training data that it can use to refine its algorithms. The company will likely target this opportunity through self-driving taxis, which could dramatically boost growth while diversifying the company into services-related revenue.

Investors should wait for the dust to settle

On April 9, the Trump administration announced a pause on some of its "reciprocal tariffs" on U.S. trade partners. While some people may take this as a signal to get back into the market, it can pay to be cautious. Right or wrong, U.S. government policy has become very volatile and uncertain, which could cast a shadow over equity markets in the near term.

Furthermore, China was excluded from the tariff pause. And the country's imports into the U.S. currently face total tariffs of 145%. Tesla makes its U.S. cars at factories in Texas and California, shielding it from some direct tariffs.

However, the rising tension with China puts Tesla in a challenging position because it could become the target of anti-American retaliation among consumers or even the Chinese government itself. Investors should wait for more clarity before considering a position in the stock.

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $278,956!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $36,102!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $496,779!*

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

See the 3 stocks »

*Stock Advisor returns as of April 10, 2025

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.