The premise seems compelling enough. Forego a tax break that may or may not do you much good right now in exchange for tax-free withdrawals in the future -- when your tax rates might be higher. Although nobody knows for sure what the future holds, that's the higher-odds/lower-risk bet most people are making.

Except, Roth retirement accounts' tax-free distributions in retirement aren't necessarily always the right fit. It's possible you'd still be better served by making tax-deductible contributions to an IRA now and paying whatever taxes come due then.

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 a closer look at when and why the non-Roth option might make more sense for you.

Roth IRA versus regular

If you're not familiar with the ins and outs of either, here's the deal.

Traditional IRAs -- sometimes called contributory IRAs -- allow you to make yearly tax-deductible contributions to them. Investments made with this money are also allowed to grow tax-free, whether that be through dividends, capital appreciation, or any other form of gain. This money is only taxed (as ordinary income) if and when it's withdrawn from the retirement account.

Roth IRAs work the other way around. While contributions to a Roth retirement account don't reduce your taxable income for the year in which they're deposited, this money is also allowed to grow tax-free, and comes out of these accounts without creating any tax liability. Indeed, since the IRS has nothing to gain from these withdrawals, the agency doesn't even force you to take distributions from Roth IRAs. That's not so with ordinary contributory individual retirement accounts, which of course are subject to required minimum distributions once you turn 73 years old.

Just keep in mind that -- unlike traditional IRAs -- there are income-based limits to Roth IRA contributions.

On balance it doesn't seem to matter much either way. All other things being equal (and assuming you're investing your tax-savings effectively whenever you realize them), paying taxes now or paying taxes then should ultimately leave you with the same amount of spendable cash in retirement. And to be fair, for plenty of people that is the case.

There are some scenarios, however, in which a Roth IRA makes less financial sense than a regular individual retirement account funded with tax-deductible contributions. And one scenario stands out among them all.

When not to use a Roth IRA

Cutting straight to the chase, most investors are best served by paying their IRA-related income taxes when their effective income tax rates are likely to be at their lowest. For example, if you're confident you're earning more in work-based wages now than you'll be collecting in retirement income later in life, your potential tax liability is at its highest right now. Contributing to an ordinary IRA will lower your current taxable income, or more to the point, will postpone the taxability of some of this income -- as well as the investments made with it -- until you retire and you're in a lower tax bracket.

Conversely, if you've got reason to believe that your retirement income will be greater than your current work-based income (perhaps you have a seven-figure IRA, for example), you'll want to minimize your tax liability then even if it means not making tax-deductible contributions now. In this scenario a Roth IRA likely offers you an advantage.

For most people, of course, the former is the more likely scenario.

That's not the only noteworthy scenario in which a Roth IRA might not be ideal, however. If you're going to need to access the money in this account before you turn 59 1/2 and if your account is going to be opened and initially funded for less than five full years, a Roth may not make the most sense. See, although there are some exceptions (like medical bills or the purchase of your first home), if you aren't going to be able to meet both criteria, withdrawals could be subject to penalization or taxation or both.

Withdrawing money from an ordinary IRA before turning 59 1/2 also incurs a penalty, by the way, on top of the taxation that was always going to be paid anyway. At least there's no five-year minimum waiting period, though.

Given this age-based limitation, it's possible you'd be better off not making contributions to any kind of IRA and instead leaving this money invested in an ordinary brokerage account. It may be taxable every year, but at least it's also flexible.

Of course, you've also always got the option of funding a traditional IRA with tax-deductible contributions and then converting some or all of this individual retirement account into a Roth at a point in time of your choosing in the future.

This is a taxable event, and as such could prove expensive if completed in one shot. But this choice allows you to have your cake and eat it too, with no penalty or additional taxation should you decide later in life that you'd rather have a Roth IRA. You can even pay the taxes on these conversions with money found outside of your retirement accounts. Just bear in mind that you'll still need to be at least 59 1/2 to make penalty-free withdrawals from a converted Roth, and that the five-year taxation waiting period on the withdrawal of any gains (be sure to keep good records!) will possibly still apply beginning the year the conversion was completed.

Nevertheless, this flexibility alone is reason enough to not bother with a Roth until you've got more clarity regarding your financial future. Visit here to learn more about Roth conversions.

Crunch your best-guess numbers, and re-crunch them later

Figuring out which individual retirement account works best for you is admittedly easier said than done. Everyone knows their current financial situation. What may not be nearly as clear, however, is where you'll stand in the future. This exercise will require a bit of well-reasoned and honest conjecture, including about future tax rates. If you're in your 30s or 40s, this could prove particularly difficult to do.

Still, to the extent it's possible, making the best possible projections of your retirement income is time well spent. If you're disciplined enough to invest whatever tax savings you achieve when you achieve them you could ultimately lower your tax bill. The savings could be worth thousands of dollars per year, in fact, for most typical households that manage these not-so-little details.

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.

When most investors are thinking about buying a particular stock, they'll start by looking at the underlying company's recent fiscal results. And to be fair, it's a sound approach. Although past performance is no guarantee of future results, that past gives us a reasonably good idea of what the future likely holds.

Still, sometimes we need to dig deeper and examine the qualitative things a company is doing that could alter its quantitative future.

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 »

With that as the backdrop, although there's not much unpredictability with its business, Walmart (NYSE: WMT) and its stock are apt to be somewhere pleasantly surprising in the next three years. Here's why.

Meet the new-and-improving Walmart

Walmart is the world's biggest brick-and-mortar retailer, with 90% of U.S. residents living within 10 miles of one of its 4,600 domestic namesake stores, or one of its 600 Sam's Club warehouses. There are almost 5,600 other locations outside of the United States as well.

Last year this giant of a company did $681 billion worth of business, turning $19.4 billion of that into after-tax net income, and extending long-standing (even if occasionally bent and sometimes slow) growth trends. And yes, those numbers confirm the retailer continues to dominate at least North America's general merchandise and grocery retailing landscapes.

But the Walmart of yesteryear -- and even the Walmart of today -- isn't quite the Walmart you can expect come 2028. There are several initiatives underway right now that should be measurably more mature three years from now, each of which could make a positive impact on its top and bottom lines.

One of these initiatives is its nascent online advertising business.

If you ever shop at Walmart.com then you've seen advertisements, probably without even giving it a second thought. Every website runs ads these days, after all.

Except, Walmart isn't simply hoping to prompt you into making a purchase of something it's selling. Brands are paying Walmart to promote their particular goods online with these ads. The retailer did $4.4 billion worth of this high-margin advertising business, in fact, up 27% year over year, and bolstering the bottom line for an e-commerce platform Walmart was going to operate anyway. This still only scratches the surface of the opportunity, though. With an ever-growing amount of insight as to what works and what doesn't, this advertising revenue's growth accelerated to a pace of 31% year over year during the first quarter of this year.

While it's not clear exactly where the ceiling is for this business, eMarketer expects average annualized growth of 17.2% for the United States' entire retail media (digital advertising at retailers' e-commerce sites) business. That outlook bodes very well for Walmart.com's long-term ad business growth.

The mega-retailer isn't just looking to the U.S. as a growth engine, however. Indeed, Walmart seemingly understands that it's running out of places within the United States to establish profitable brick-and-mortar stores, having closed 11 of them last year. There's opportunity abroad, and the company is capitalizing on it more than you might realize. In 2023, management announced its goal to grow its international revenue from around $100 billion per year then to $200 billion annually by 2028. After last year's reported tally of $121.9 billion, that target doesn't seem so crazy after all.

Finally, while most investors can acknowledge Walmart has done the unthinkable by building a respectably sized e-commerce business in a market that's dominated by Amazon (NASDAQ: AMZN), they may be underestimating just how well it's doing online. Although the company itself doesn't disclose the specifics, consensus numbers provided by Statista suggest Walmart's worldwide annual online sales have soared from around $25 billion in 2019 to roughly $100 million last year.

That's still only a drop in the bucket, to be clear. Even within the all-important U.S, market, Walmart's 10.6% share of the e-commerce market is a distant second to Amazon's 39.7%, according to data compiled by industry research outfit Digital Commerce 360.

It's worth noting, however, that Walmart's share of the domestic online shopping market has more than doubled since 2017, while Amazon's share has barely budged. Clearly the company is doing something right.

And remember that each of these initiatives is still a work in progress. We're not yet seeing these efforts working at their eventual, refined best.

But tariffs? Arguably more bark than bite. The longer the standoff lingers, the clearer it becomes that President Donald Trump is posturing as a negotiation tactic. He wants trade to flow as freely as much as anyone.

What it means for revenue, earnings, and Walmart stock

So what does it mean for investors? It means don't be surprised if Walmart outperforms expectations over the course of the coming three years.

As of the latest look, the analyst community is calling for full-year revenue of $766 billion for the 12-month stretch ending in 2027. Extrapolating that annualized growth rate of 4% would put calendar 2028's top line in the ballpark of just under $800 billion. Using the same projection math, per-share earnings should swell from last year's $2.41 to roughly $3.60 for the same time frame. Not bad.

Just bear in mind that analysts could be underestimating Walmart's potential upside just as much as average individual investors are. Walmart's yearly sales growth rate has easily exceeded 6% in most years since 2021, and that's without all the growth weapons the company is successfully wielding now.

As for the stock, assuming its current earnings-based valuation of around 42 times its trailing per-share profits, Walmart stock could be priced around $144 three years from now. That's a 47% gain, or an average annualized improvement of roughly 15%.

Just don't get so enamored by the numbers that you look past the bigger and better reason to own a piece of this company (or any other). That is, Walmart is doing a lot of things right, leveraging its strengths while creating new ones. When an organization does that, everything else including progress from its stock tends to fall in line.

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

Before you buy stock in Walmart, 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 Walmart 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 $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

What's the ideal age for claiming Social Security retirement benefits? It depends on who you ask. The earlier you start, the smaller your checks. But, you'll collect these payments for more time. That's the trade-off.

But what exactly are your options, and how much of a difference can claiming later rather than earlier make? 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. Learn More »

The cost of claiming early vs. the benefit of waiting

To be a government-run program, Social Security offers taxpayers a respectably wide range of payment options. Eligible individuals can claim as early as the age of 62, but can also wait until they turn 70. Or, they can file at any point in time in between. Each of these choices, however, results in a different monthly payment.

And the disparity between these payments can be stark.

The table below puts things in perspective, comparing the difference in payment size for each age of this nine-year range relative to this year's average Social Security retirement benefit of $1,976 per month. Notice that while there's a progressive reduction in benefits the earlier you claim, there's also an ever-growing benefit for delaying the initiation of benefits beyond your full retirement age (or FRA). This additional benefit, however, stops growing once you turn 70.

Age at Claiming/Initiation of Benefits	Monthly Payment	% vs. Amount When Claiming at FRA
62	$1,383	70%
63	$1,482	75%
64	$1,581	80%
65	$1,713	86.7%
66	$1,844	93.3%
67	$1,976	100%
68	$2,134	108%
69	$2,292	116%
70	$2,450	124%

Data source: Social Security Administration. Note that this year's official FRA is 66 years and 10 months for people born before or in 1959. For those born in or after 1960, it is 67. Payment amounts as well as percentage comparisons to intended payments at FRA have been rounded, and could be different for beneficiaries wishing to name a spouse as a co-beneficiary.

You're reading that right. For the average beneficiary right now, the difference between claiming when you're 62 versus claiming at the age of 70 is over $1,000 per month. That's no small amount for most households. And the bigger your payment, the bigger the potential difference.

Other things to consider

The comparisons are clear -- there's an obvious and meaningful mathematical upside in waiting as long as possible to file for Social Security's retirement benefits.

Except these numbers alone don't necessarily tell the entire story for every individual and their unique situation. It's possible there's a very good reason to claim Social Security benefits as early as you possibly can, like health-related matters. You may also have enough money saved up to tap later in your life (like an IRA) to allow you to begin collecting some income before you otherwise might.

There's another often overlooked upside to claiming at 62 years of age, however, even if you don't need this money yet because you're still gainfully employed. That is, you might be able to do something more financially productive with these cash payments than the Social Security Administration is doing for you on your behalf.

Although the figure's not etched in stone, the average internal rate of return on money withdrawn from your paycheck and forked over to Social Security has been in the ballpark of 4%, after inflation. Sometimes it's more. Other times it's less. Any given year's effective return on this "investment," however, mirrors the average yields on longer-term U.S. Treasury Bonds at the time. Right now that's between 4% and 5%. If you can take these payments and do something more constructive with the money, it makes sense to do so.

But won't collecting Social Security while you're also working possibly reduce your Social Security payment?

If you're below your full retirement age, yes, it can. Specifically, any work-based wages beyond $23,500 you earn this year will start to shrink any Social Security payments you're already collecting. If you're going to earn enough at your job in 2025, in fact, it's possible you could erase all of your current Social Security benefits payments.

You're not actually losing money if this ends up being the case, however. These reductions are ultimately credited toward future Social Security payments, which are no longer reduced by work-based income once you're past your full retirement age. (There's also a very specific income threshold that applies only in the year in which you reach your full retirement age, although that's best left to another discussion.) In many regards this option allows you to have your cake and eat it, too.

For most people though, just know that plans to invest their early Social Security payments rarely pan out as initially intended. Successfully implementing such a plan requires a great deal of discipline.

Just think about it very carefully

Bottom line? There's no one-size-fits-all answer as to when you should claim your Social Security retirement benefits. You'll want to think carefully about your particular situation, including making some predictions as to what it will look like in the future.

Broadly speaking though, it rarely hurts to wait just a little while longer to claim, if only to make sure that plan is going to work for you, or to beef up your numbers just a little bit more.

And you will most definitely want to make sure it works for you before making the decision. The Social Security Administration will allow people who have claimed at or after reaching full retirement age to suspend these payments if they've only been collecting for 12 or fewer months. Anyone initiating these benefits before reaching their full retirement age, however, is permanently locked into their reduced payments.

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.

Are you just as afraid of a market pullback right now as you are of missing out on upside? If so, you're not alone. This is a confusing environment for investors. Major names like Nvidia and Home Depot are sending mixed messages, while the market itself seems to be waiting for more clarity about tariffs and the Trump administration's trade war.

There are some tickers with bullish backstories, though, that are bigger than any environmental or economic backdrop. You just have to look a bit off the beaten path to find them.

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 »

If you've got $1,000 -- or any other amount of money -- lying around available to invest, here are three solid prospects to consider.

CRISPR Therapeutics

Biotech stocks can be tricky investments to handle. Oftentimes, you're betting on a potentially game-changing premise well before it's profitable, or even before there's a marketable product. That's obviously risky. But the potential upside can be tremendous.

CRISPR Therapeutics (NASDAQ: CRSP) is not yet profitable, but the underlying science that makes the drugs it's currently developing possible holds enough promise to eventually get the company out of the red and into the black.

CRISPR Therapeutics specializes in gene editing. Company co-founder Dr. Emmanuelle Charpentier developed a way to cut a strand of damaged DNA and then force the genetic code's own built-in repair process to fix what's broken. While CRISPR's Casgevy (for the treatment of sickle cell disease and beta thalassemia) is its only approved drug based on this science, this biotechnology has a range of potential applications. Treating cancer and autoimmune diseases is arguably the biggest.

That any drugs based on this science have been approved bodes well for the concept, and CRISPR's got a total of five different clinical trials underway right now. Those are what most interested investors are eyeing. Ditto analysts, who collectively sport a consensus price target of $77.38, more than twice the stock's present price.

So why are CRISPR Therapeutics shares still drifting lower from their 2021 peak, knocking on the door of new 52-week lows? That's just part of the challenge of buying, holding, and even selling biotech stocks. Sometimes they reflect potential revenue and earnings too soon. Other times, investors lose interest when they've waited a little too long for results.

Don't overthink it, though. Just take a step back and recognize that analysts expect revenue to jump from $50 million this year to nearly $200 million next year and then to more than double again the year after that. This explosive growth should come on the heels of at least one more drug approval, although more than one approval is just as possible.

This growth will presumably stir up a bullish tailwind for the stock.

Palo Alto Networks

There's no sensational singular bullish argument for owning a stake in Palo Alto Networks (NASDAQ: PANW). There are dozens of solid reasons, though.

On the unlikely chance you've never heard of it, Palo Alto is a cybersecurity company. Firewalls, VPNs, threat detection, and breach response are all in its wheelhouse. There's nothing unique about its offerings, even if the company is the biggest and best-known name in the cybersecurity industry, that's more than reached full maturity.

That's not necessarily a bad thing, however, given the nature of this business.

Think about it. As the world uses computers more and more, it's going to need more and more cybersecurity solutions. That's why Precedence Research believes the global cybersecurity market is set to grow at an annualized pace of 12.6% through 2034. Palo Alto's top line is expected to slightly outpace this industry growth based on the consensus analyst forecast, but only slightly. There's little doubt that it will be able to leverage its size to achieve at least its fair share of this growth, though. Again, cybersecurity is a business that's unlikely to go away.

Don't tarry if you're interested. While this stock looks a bit frothy following its big rebound from its March low, it's still only priced around its early-2024 peak. The lack of net forward progress since then is sure to be catching the eye of many would-be buyers.

NextEra Energy

Finally, add utility name NextEra Energy (NYSE: NEE) to your list of stocks to buy with an idle $1,000.

Utility stocks are usually anything but exciting. That's because the highly regulated industry is anything but a high-growth one, and the business itself hasn't changed much since its inception. Ditto its individual companies. In many cases, these outfits are not only working with the same infrastructure they were working with decades ago, but they're also grappling with legacy capital structures and mindsets.

Not NextEra Energy, though. Although its roots are traditional, over the course of the past several years, this organization has made a deliberate effort not just to embrace cleaner, renewable energy sources, but also to evolve its utility business in a way that makes sense in the modern era. As of the end of last year, more than half of its power production comes from renewables like wind and solar, while roughly one-third comes from natural gas. Another 8% is nuclear, which President Donald Trump just gave a boost to last month with four executive orders aimed at revitalizing the U.S. nuclear energy sector.

Notice fossil fuels aren't part of the mix.

And yet, even though the company is spending more on energy infrastructure than any other utility outfit, it's still profitable.

This utility outfit is largely future-proof. That is to say, even though how utilities will be regulated and restricted by future emissions mandates isn't completely clear right now, all of NextEra Energy's future power production will likely satisfy whatever requirements await.

There won't be any explosive growth from NextEra, in the near or distant future. There should be plenty of reliable growth here, however, regardless of the economic environment.

There's also a respectable amount of reliable recurring income. Newcomers will be stepping into this stock while its forward-looking dividend yield stands at just under 3.4%. Not bad.

That's based on a dividend, by the way, that's more than doubled over the past 10 years and been raised every year for well over two decades. Even if dividend income isn't your big goal right now, this is reliable cash flow that you can use to buy stocks as other opportunities arise.

Should you invest $1,000 in Palo Alto Networks right now?

Before you buy stock in Palo Alto Networks, 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 Palo Alto Networks 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% 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 2, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics, Home Depot, NextEra Energy, and Nvidia. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

Shares of artificial intelligence (AI) company Tempus AI (NASDAQ: TEM) are down to the tune of 15.6% as of 11:13 a.m. ET on Wednesday, upended by a warning from investment management outfit Spruce Point Capital Management.

Just consider the source, and the fact that Spruce Point has something to gain by Tempus AI stock's pullback.

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 »

Why the name seems familiar

If the name rings a bell, it may be because California Representative Nancy Pelosi disclosed a bullish stake in the company in January of this year, just months after its June 2024 initial public offering. The company's AI-powered platform helps pharmaceutical developers optimize the creation, testing, and commercialization of new drugs, saving time and money.

The potential for such a tool is obvious, as is the reason for Pelosi's interest. Indeed, analysts expect revenue growth of nearly 80% this year and 25% next year, en route to a projected swing to profitability in 2027.

Not every observer is impressed, though, or even convinced. Spruce Point Capital Management publicly cautioned all investors on Wednesday that "Tempus Founder Eric Lefkofsky and his associates have a history of promoting disruptive technology companies, cashing out early, and leaving public shareholders with losses or lackluster returns." All told, Spruce believes Tempus AI stock's value is 50% to 60% below its price prior to Wednesday's plunge.

To be fair, there's some validity to Spruce Point's concerns.

But keep them in perspective. Spruce Point Capital Management and its clients have short positions in Tempus AI stock, meaning they benefit if this ticker loses value. Also bear in mind that one of Spruce's acknowledged focuses is short-selling. In other words, the firm regularly makes such bearish cases for companies, then profits when they decline.

Not a new reason to steer clear

Again, it's not that Spruce's points are incorrect, or that its conclusions are unreasonable. Much of the risk voiced today was already known and accepted, though, and built into this volatile stock's price. Risk is the norm for stocks of this ilk.

That said, it's worth noting that well-established pharmaceutical company AstraZeneca, Henry Ford Health, and the Mayo Clinic, as well as several universities and research hospitals, are using Tempus AI's technology. Although not all of these partnerships and collaboration efforts will necessarily translate into profitable revenue, the caliber and sheer quantity of organizations interested in Tempus AI's capabilities speak volumes.

Bottom line? There's plenty of risk here, to be sure. But there's no new or additional risk being injected by Spruce Point's warning. If you were willing to take this risk yesterday, nothing's actually changed in the meantime except the stock's price.

Should you invest $1,000 in Tempus Ai right now?

Before you buy stock in Tempus Ai, 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 Tempus Ai 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% 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 May 19, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends AstraZeneca Plc. The Motley Fool has a disclosure policy.

Is a required minimum distribution (RMD) on your near-term radar? If you'll be 73 years old or older at any point this year and you've got a non-Roth IRA of any size, then the answer to the question is "yes" -- whether you need it (or even want it), you'll soon be taking a distribution from this account. The IRS requires it, in fact. That's why it's called a required minimum distribution.

That doesn't mean you can't do something productive with this withdrawal, though. Indeed, anyone who doesn't need this money to cover ordinary living expenses may want to simply reinvest it. Before putting any of this money back to work, however, there are a handful of important details to consider.

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

But first things first.

What's a required minimum distribution?

Just as the name suggests, a required minimum distribution is a mandated -- and taxable -- withdrawal from an individual retirement account, or IRA. These accounts are typically funded with tax-deductible contributions, and allowed to grow without being taxed as long as the investments made with this money remain in the account. The IRS eventually wants to collect, of course, so once you turn 73, the agency comes knocking.

But what's the minimum? Well, it depends. It's always a percentage of the prior year's ending value of the IRA in question, for the record, but that percentage grows the older you get. For instance, the RMD for a 73-year-old is just a tad over 3.77% of the previous year-end value, while for 85-year-olds, the RMD is 6.25% of the account's value as of the last business day of the prior year. At 100 years of age, it's about 15.62% of the prior year's final balance.

The IRS provides forms to help you determine your exact RMD, although your brokerage firm or IRA's custodian will supply you with the relevant year-end value needed to make the calculation.

There are some other noteworthy rules to know. One of them is that the rules don't apply to Roth IRAs. After all, these accounts are funded with after-tax (nondeductible) dollars, and as such, withdrawals from them are tax-free. Since the IRS isn't due anything from these distributions, the agency doesn't care when, if, or how much -- or how little -- you remove from a Roth account.

Also, if you happen to have more than one eligible individual retirement account, you don't necessarily need to take an RMD for every single one. You can mix and match, so to speak; the IRS is only concerned that you remove the total proper dollar amount in any given tax year. Exceptions to this rule are 401(k) accounts and similar 403(b) accounts. You must take the correctly calculated RMD for each and every 401(k) you own.

You can combine required minimum distributions for 403(b) accounts, as long as you withdraw the proper amount in any given year. But you can only remove this amount from some combination of your 403(b) accounts.

Finally, there's timing. Required minimum distributions are to be completed by the end of the calendar year. The one exception is your first one for the year you turn 73. That one doesn't need to be done until April 1 of the calendar year after your 73rd birthday.

Just be careful if that's your plan. Waiting to take your first RMD until the year after you turn 73 will mean making two taxable withdrawals in one tax year, which could bump you into a higher tax bracket.

What you need to know about reinvesting RMDs

Those are the basic logistics of required minimum distributions. But what about strategically making the most of RMDs if you're simply going to reinvest these withdrawals? Here are four key things to know.

1. You may not need to sell and then buy anything

Most required distributions are made in the form of cash, and often funded by the proceeds from the sale of an investment (or multiple investments). This isn't your only option though. You could also take what's called an in-kind distribution of assets like stocks, bonds, or funds. You'll simply need to give your custodian or brokerage firm these instructions; the total value of the RMD will be determined as of its pricing the day the transfer is completed.

There's no additional tax benefit in using this approach, to be clear -- the tax due is determined by the dollar value of whatever's being withdrawn the day of the withdrawal. It's just one of convenience, allowing you to stick with your current allocation without risking a disadvantageous sell and repurchase.

2. It's an opportunity to optimize the taxability of your accounts

That being said, if you're already doing a bit of management with your IRA and brokerage accounts, you may as well optimize for this shift of assets from a tax-deferring account to a taxable one.

What this means will differ from one investor to the next. If you want or need investment income in retirement, your RMD would be best used to purchase dividend stocks or interest-bearing bonds. If you don't need the money anytime soon and would like to continue minimizing your annual tax bill, growth stocks give you more control of when you create a tax liability with a capital gain.

3. The required minimum isn't the allowed maximum

For most investors, one of the chief goals is minimizing any given year's tax bill. Taking the bare minimum required withdrawal from a non-Roth IRA will of course help accomplish this goal. You don't necessarily have to take the minimum possible amount, however. There may be cases when it makes sense to make more than the required minimum withdrawal from your IRA, even if doing so increases that year's tax liability.

For instance, you might need to free up enough cash to meet a new and immediate investment-income need. Another possibility could be a married spouse intentionally pushing their combined taxable income right up to the very brink of a higher tax bracket, knowing that the other spouse will soon begin their sizable RMDs. This will mean smaller required distributions from the first spouse's retirement account(s) in the future, perhaps preventing that dreaded push into a higher tax bracket.

Just bear in mind such cases are relatively rare, and won't likely apply to your situation.

4. You don't have to make the decision right now

Finally, if you're a retiree looking to reinvest your required minimum distribution, remember that you don't necessarily have to do something productive with this money right away. You can think about it for a while if, for example, stocks have soared to frothy levels that leave them vulnerable to a sizable sell-off. You're likely to make a more level-headed decision when you're not feeling rushed.

Just don't get too complacent if this is your plan, particularly if you're taking your RMD in the form of cash. Most brokerage accounts' basic money market funds aren't paying much more than low-yield checking accounts or banks' savings accounts. If you're willing to place a simple trade, however, you can park this money in a money market fund that's yielding on the order of 4% to 5%. That's not huge, but it certainly tops inflation.

The $22,924 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 $22,924 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.

There's no denying artificial intelligence (AI) technology has made enormous strides in just the past few years. But the businesses advancing it have still only scratched the surface of the underlying opportunity. Indeed, industry analytics outfit Precedence Research forecasts that the overall AI market will grow at an annualized pace of nearly 20% through 2034.

With that rapid-growth outlook as the backdrop, here are three of the best artificial intelligence stocks to buy right now, while they're all trading at a discount.

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

1. Arm Holdings

When conversations turn to the tech companies with the biggest potential to profit from AI, Arm Holdings (NASDAQ: ARM) is one of the least frequently mentioned. Don't be fooled, though: It will play a critical role in artificial intelligence's future.

Arm is a semiconductor company -- sort of. It doesn't make chips. Rather, it designs chips and chip components, and then licenses those designs to more familiar chip companies that may use them unaltered, or modify them to suit their purposes. Those chipmakers themselves often punt their manufacturing duties to third-party foundries.

It's possible you're regularly using a smartphone, computer, or other piece of consumer technology with an Arm-based chip inside it without even realizing it, in fact. As of its most recently completed quarter, the company was generating on the order of $4 billion worth of high-margin revenue per year.

But what specifically makes Arm a great artificial intelligence stock pick (besides its 20% pullback from its February peak)?

When AI was in its infancy, the amount of electricity the hardware used wasn't much of a concern -- engineers were simply trying to figure out how to make the tech work. Now that the technology is proven and going mainstream, though, engineers are grappling with the fact that artificial intelligence platforms are very, very power hungry. According to a Goldman Sachs (NYSE: GS) study, by 2030, the ongoing growth of AI data centers will increase the amount of electrical power drawn by data centers globally by 165% compared to what it was in 2023.

It's not just data centers. The chips in AI-capable smartphones also consume an unusual amount of power, draining batteries' charges at an inconvenient rate.

Well, Arm's chip designs happen to be built from the ground up to be power-efficient. Amazon's Arm-based Graviton processor uses 60% less electricity than comparable chips; Google's Arm-based Axion chip also requires 60% less power than comparable processors.

The importance of this competitive edge isn't always prioritized in an environment where processing speed, capacity, and performance often take center stage. There's a reason, however, that Arm's revenue is expected to grow on the close order of 20% per year for the next three years despite the uncertain macroeconomic backdrop.

2. SoundHound AI

The world's earliest attempts at voice-based interfaces weren't particularly impressive. Although some of them are still around (like voice-commanded phone menus, for which the acceptable response options are fairly limited), many of the higher-level projects using this idea have since been abandoned.

Last year, for example, fast-food chain McDonald's discontinued its use of IBM's automated order-taking tech -- mostly because it never worked quite as well as hoped.

Just don't jump to sweeping conclusions about the idea based on that one decision, though. The underlying tech was actually McDonald's before it was sold to IBM back in 2021 as part of what was more of a cheap experiment than an investment in a whole new profit center that was outside of either company's wheelhouse. Something more purpose-built, atop a more advanced AI platform, could prove more successful.

Enter SoundHound AI (NASDAQ: SOUN).

As its name suggests, SoundHound makes AI-powered voice communications work as was only dreamed of just a few years ago. It has been developing its current propriety AI platform (called Houndify) since 2015, marking the point where mere speech-recognition technology became speech-to-meaning technology, and even speech-to-understanding technology. There's arguably no other player nearly as far along as SoundHound is within the voice-driven sliver of the AI market.

As evidence of this argument, several automakers are also developing their in-car assistance tech around Houndify, while credit card company Mastercard features SoundHound's tech within the automated voice-ordering solution it now offers quick-service restaurants like the aforementioned McDonald's.

It's still not quite in its prime, and many consumers remain a bit hesitant to use automated voice-based interactions for many different aspects of their daily lives. They'll likely come around, though. Market research outfit Market.us believes the worldwide voice-based AI agent market alone will expand at an average annualized pace of nearly 35% through 2034. SoundHound AI is positioned to capture much of this growth.

In fact, it already is. Its first-quarter revenue improved an incredible 151% year over year, accelerating from the 85% growth it reported for the entirety of 2024.

3. BigBear.ai

Finally, add BigBear.ai (NYSE: BBAI) to your list of no-brainer artificial intelligence stocks to buy right now.

To date, most of the market's focus in the AI-powered decision-making software space has been on Palantir Technologies.

And understandably so. Not only did the Centers for Disease Control tap Palantir for help in getting a handle on the COVID-19 pandemic, but several arms of the Department of Defense also rely on its next-generation services to solve next-generation problems. These are high-profile deals. Never even mind the fact that Palantir is the biggest name in the artificial intelligence platform business.

Investment opportunities are relative, though; small companies with lots of growth potential are still capable of producing big gains for investors. There will just be fewer shareholders experiencing them.

BigBear is one such company.

At first glance, it may appear to be a near carbon copy of Palantir. Look deeper, though. BigBear.ai is different by virtue of being largely focused on businesses rather than government institutions. Manufacturing facilities, industrial warehouses, healthcare providers, and biopharma companies are its current core target markets -- although it can and does serve some public sector clients.

Although the private sector tends to make major capital investments at a slower, more methodical pace (since their stakeholders typically require careful care of resources), it's a much bigger opportunity than the government market. That's because AI can ultimately help organizations save money, make money, or both. And of course, both are priorities within the business world.

According to a forecast by Precedence Research, the decision-making piece of the artificial intelligence industry will grow at an average annual pace of 16% per year through 2034.

That doesn't mean this AI stock will always be easy to own in the near or distant future. Not only is BigBear.ai not profitable, its fairly small size means it doesn't enjoy the benefits of scale. It also has relatively few analysts following it and directing investors' attention toward it.

If you can stomach the level of risk and volatility involved, though, this last point might help inspire you to buy: Analysts' current consensus price target of $6.63 for BigBear.ai is nearly twice the stock's present price. That's not a bad tailwind to have while starting a new investment.

Should you invest $1,000 in Arm Holdings right now?

Before you buy stock in Arm Holdings, 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 Arm Holdings 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 $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% 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 May 12, 2025

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. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, International Business Machines, Mastercard, and Palantir Technologies. The Motley Fool has a disclosure policy.

Are you looking to build a worry-free, passive long-term portfolio that will allow you to focus on other things while growing your money? Buying and holding a handful of exchange-traded funds (or ETFs) is the answer, of course, and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) remains a top choice.

If you're truly looking for lifetime holdings though, you may want to consider a slightly different solution that allows you to adjust your overall allocation as time marches on. Namely, you'll want to buy a handful of different (but complementary) ETFs that can be individually scaled back or added to as your risk tolerances change.

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 »

If you have $1,000 in cash available to invest that isn't needed for monthly bills, to pay off short-term debt, or to bolster an emergency fund, here's a combination of ETFs to consider that will likely set most investors up for a lifetime of strong performance.

Vanguard Growth ETF

If this really is going to be a "forever" portfolio, it's a reasonably safe bet that growth is a priority for most of the time frame in question. The Vanguard Growth ETF (NYSEMKT: VUG) will handle this part of the overall job nicely.

Just as the name suggests, the Vanguard Growth ETF holds a basket of growth stocks. The fund currently holds significant stakes in Apple, Microsoft, and Nvidia ... some of the market's top-performing growth names of late. Although this company weighting evolves over time as some companies' market caps outgrow others, this ETF gives you a great shot at major long-term capital gains.

Data by YCharts.

There's a very particular reason, however, you might want to own the Vanguard Growth ETF instead of seemingly similar alternatives like the Invesco QQQ Trust, which holds many of the same stocks. That's the fact that this fund is meant to mirror the CRSP U.S. Large Cap Growth Index. (CRSP stands for the Center for Research in Security Prices.)

That won't mean much to most people. This might get your attention though: The CRSP Large Cap Growth Index largely sidesteps the common problem of taking on too much exposure to the market's very biggest companies, which in turn leaves investors vulnerable to sizable setbacks once the tide finally turns against these top names.

That hardly makes it an "equal weight" index, to be clear -- it's still measurably top-heavy.

The fund is top-heavy to a degree that's tolerable and even a little desirable, however, by virtue of ensuring a little bit of overexposure to companies that are becoming much bigger due to actual top- and bottom-line growth.

Schwab U.S. Dividend Equity ETF

Growth stocks aren't the only way for your portfolio to achieve net growth, of course. It can also be done by a slow and steady (and ever-rising) flow of fresh cash into the account, which is then used to purchase more of whatever's generating that income. For some investors, that will be bonds and other fixed-income instruments. For most people though, this income will come from dividend-paying stocks.

The irony? High-quality dividend-paying stocks often end up outgaining the broad market anyway.

Mutual fund company Hartford crunched the numbers, determining that since 1973, stocks of companies that were able and willing to consistently grow their dividend payments produced average annual net gains of more than 10% (assuming reinvestment of those dividends) while stocks that didn't dish out any dividends didn't perform half as well. Moreover, reliable dividend payers were the market's least volatile stocks during this stretch, making them easier to stick with during turbulent times.

Data by YCharts.

What gives? The best explanation is the argument that quality always eventually shines through, and a reliably growing dividend is a good sign that a company is solid and well-run. Although there's certainly the occasional exception to this norm -- think non-dividend-paying Nvidia -- identifying these exceptions isn't always easy. You should invest based on your best odds, particularly when you're thinking in terms of a lifetime.

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is arguably the best way to plug into this dividend-driven dynamic. Based on the Dow Jones U.S. Dividend 100™ Index, this ETF doesn't simply hold what appear to be the market's most promising dividend stocks. In addition to requiring at least 10 consecutive years of annual dividend increases, inclusion in this index also considers fundamental factors like free cash flow versus debt, return on equity, and its typical dividend growth rate. Each prospective constituent is then ranked on these metrics to screen out all tickers other than the best 100 names.

While this approach seems quite mechanical, that's the reason it works so well. There's no misleading emotion, presumption, or bias built into the selection and rebalancing process.

iShares U.S. Technology ETF

Finally, add the iShares U.S. Technology ETF (NYSEMKT: IYW) to your list of ETFs to buy and hold for a lifetime if you've got $1,000 -- or any other amount of money -- you'd like to put to work for a while.

It's obviously different than either of the other two exchange-traded funds suggested here, both of which represent a unique investing school of thought. A sector-based fund is more strategically precise, calling into question whether or not it's actually capable of being a true lifetime holding. And maybe it isn't. It would be shocking, however, if the technology sector wasn't a great one to plan on holding for the long haul, even if you can't fully see its future.

Data by YCharts.

Think about it. Ever since personal computers began proliferating back in the late 1990s, the world has increasingly become digitized. Automobiles have them on board, and people would struggle to function without the mini mobile computer they now carry around in their pocket or purse. Artificial intelligence is now being used by the pharmaceutical industry to discover, design, and digitally test new drugs. Factories are made more efficient by being able to instantly share and create actionable data. At the heart of all of it is technology, and now that we've seen what it can do, we're certainly not going back to the "old way" that was less efficient and less effective. Now, one of the world's most commonly asked questions is: How can we use technology to make things even better?

There's more than one exchange-traded fund that would fit this bill, but the iShares U.S. Technology ETF is arguably the best all-around prospect thanks to how it weights its holdings.

Built to mirror the performance of the Russell 1000 Technology RIC 22.5/45 Capped Index, this fund -- like the aforementioned Vanguard Growth ETF -- at least attempts to maintain a reasonably balanced allocation even when the market itself is becoming top-heavy thanks to the ongoing growth of a small handful of massive companies. As Russell explains in a factsheet on the index, "At the quarterly index reviews, all companies that have a weight greater than 4.5% in aggregate are no more than 45% of the index, and no individual company in the index has a weight greater than 22.5% of the index."

This approach doesn't always perfectly accomplish its goal. Right now, for instance, Microsoft, Nvidia, and Apple collectively account for about 45% of the index's value. That's not particularly well balanced.

The weighting rules will help more often than not in the long run though, and will certainly help more often than they hurt.

Should you invest $1,000 in Vanguard Index Funds - Vanguard Growth ETF right now?

Before you buy stock in Vanguard Index Funds - Vanguard Growth ETF, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% 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 May 12, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Index Funds - Vanguard Growth ETF. 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.

It's official. As was widely expected, The Walt Disney Company (NYSE: DIS) will be launching a stand-alone streaming version of sports-focused cable channel ESPN later this year, at a price point of $29.99 per month. Its effective monthly price will be even lower for consumers who also subscribe to Disney+ and Hulu.

The launch of this service also likely marks the beginning of the end of the cable television industry as known today, even if it doesn't mean an immediate and complete collapse.

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

Here's what investors need to know.

Disney is taking on already-battered competition

The world knew it was coming sooner or later -- CEO Bob Iger confirmed it in early 2024. The only question then was the timing, price, and the prospective impact that a cooperative sports-centric streaming package from Disney, Fox, and Warner Bros. Discovery might have on the overall marketability of a streaming service that only included ESPN's programming. That joint venture between Disney, Warner, and Fox has since been indefinitely blocked by a federal court, but Disney is clearly proceeding with its plans to offer an affordable version of ESPN that doesn't require a cable subscription.

That's a problem for cable companies like Comcast's (NASDAQ: CMCSA) Xfinity and Charter Communications' (NASDAQ: CHTR) Spectrum, both of which were already bleeding cable customers.

The graphic below tells the tale. Xfinity shed another 427,000 cable-television customers last quarter to bring the count down to just under 12.1 million, for perspective, extending a long-lived decline from the 2013 peak of nearly 23 million. Spectrum's TV headcount now stands at 12.7 million customers, thanks to last quarter's loss of 127,000, well down from its peak more than a decade ago.

These two cable powerhouses aren't unique in their customer attrition either, even if they are the biggest with the most customers to lose. Consumer market research outfit eMarketer reports the total number of paying cable-television customers in the United States has been culled by one-third of its 2013 peak, with non-cable households eclipsing cable TV's headcount of last year.

The advent of a streaming version of ESPN, however, could prove even more problematic for the cable business by accelerating this attrition for a couple of related reasons.

Ripe for (major) disruption

Again, the cable-television industry was already on the ropes, and as such, makes an easy target for a novel newcomer.

To the extent the cable TV business had any hope for a turnaround, though, it's now been wiped away.

See, Disney's ESPN isn't just a well-known and well-loved sports venue. It's the leading name of the sports-television market, accounting for nearly 30% of the nation's total sports viewership, according to numbers from TV ratings agency Nielsen. Adding Disney's ABC sports-branded programming to the mix pumps that number up to more than 40%.

Connect the dots. It's not just the biggest name in the business. Disney's got size-based leverage to exert in a myriad of ways.

Don't be surprised to see other studios mirror Disney's move, either, albeit with less scale and lower-priced streaming bundles of their sports-based programming.

Fox and Warner Bros. Discovery have already shown interest in looking beyond conventional cable for distribution of their sports-centric content, while several standard streaming services like Paramount's Paramount+, Warner's Max, and even Amazon's Prime also air the occasional exclusive sporting event. Most professional sports leagues and even a handful of individual teams now even offer their own streaming packages.

The point is, once Disney blazes the trail, the launch of many other new sports-centric streaming platforms from major studios wouldn't be a major leap.

That's a problem for the cable television industry for one simple reason. That is, live sports is the single biggest reason consumers still pay for cable television. A recent survey performed by CableTV.com indicates that 27% of these subscribers still pay a steep monthly price specifically for access to sports programming. The next-nearest reason is consumers' comfort with conventional cable, although it's difficult to imagine most of these people not being comfortable enough at this point to at least consider an alternative.

Whatever's in the cards, it works against cable companies' bottom lines.

Finally, at a turning point -- or the edge of a cliff

There was a time when content producers and content creators like Disney were in a symbiotic relationship, where the two parties helped one another without hurting one another. That's not the situation anymore. These relationships evolved into competition just a few years back. Now, with Disney's direct foray into the most important sliver of the television arena, it's become a full-blown competition that cable companies can't win -- studios just don't need middleman distributors anymore.

More to the point for investors, what's bad for an already beleaguered cable TV industry is good for Disney, and perhaps even disproportionately better.

Whereas the cable industry only pays Disney on the order of $10 per month per subscriber for the right to air ESPN's programming, Disney will be collecting three times that amount by selling the exact same content directly to subscribers. While sports currently makes up a little less than one-fifth of Walt Disney's revenue and roughly one-tenth of its operating income, both could swell if this new streaming-ESPN venture works out.

Bottom line? Cable stocks like Charter and Comcast were already tough to own. Now they're even less compelling. Conversely, The Walt Disney Company is finally addressing the ongoing shrinkage of its linear (cable) TV arm with a business model it's already proven it's great at. It brings plenty of marketing firepower to the table as well. This just might be the catalyst needed for the long-awaited turnaround from Disney stock.

Should you invest $1,000 in Walt Disney right now?

Before you buy stock in Walt Disney, 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 Walt Disney 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 $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% 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 May 12, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.

At first sight, the two discount store chains appear similar enough. Sure, Dollar Tree's (NASDAQ: DLTR) distinguishing feature is a retail price point of $1.25 for at least most of its merchandise. It and Dollar General (NYSE: DG) are still both categorized as dollar stores, however, and certainly compete with one another for consumers' dollars.

These two companies are actually quite different from one another, though, so much so that their stocks aren't likely to move in tandem for the long haul. Here's what investors need to know.

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 »

Not the same

Dollar General is still the titan of the business, operating 20,594 total stores peppered across most of the United States. Some of those are more experimental stores called pOpshelf, but by and large these locales operate under the Dollar General banner. This company did $40.6 billion worth of business last year, selling goods at a typical range of price points you'd expect from a discounter.

Dollar Tree's structure is different. It's actually the combination of 8,881 Dollar Tree stores and 7,622 Family Dollar stores, although the entirety of the latter chain is soon going to be sold to a private equity outfit. While this sale will essentially cut Dollar Tree's physical footprint in half, the remainder may be better off with this severing. The pairing never achieved the synergies investors were hoping it would when it was first formed back in 2015. The two separate units ended up operating quite independently of one another, with the Family Dollar arm simply devolving into dead weight that couldn't quite compete with more than a little head-to-head rivalry like Dollar General, but also outfits like Ollie's and Big Lots.

Still, the Dollar Tree brand itself enjoys enough scale -- $17.6 billion in sales last fiscal year -- and enough presence so that its eventual smaller size won't prevent it from effectively competing with Dollar General.

Nevertheless, there are differences investors will want to keep in mind.

Comparing and contrasting Dollar General and Dollar Tree

Giving credit where it's due, consumer market research outfit Numerator dug up most of the data on the table below, while the two companies themselves supplied the rest. Take a look, noting that Numerator's numbers for Dollar Tree only apply to Dollar Tree, and do not reflect Family Dollar's presence in the marketplace. (Dollar Tree's sales mix data at the bottom of the table, however, comes from these two companies themselves, and does include Family Dollar's portion of Dollar Tree's total sales.)

Metric	Dollar General	Dollar Tree
Locations
Rural	42%	30%
Suburb	38%	38%
Urban	19%	32%
Demographics
Lower income (<$40K)	27%	26%
Middle income ($40K-$125K)	49%	48%
Higher Income (>$125K)	24%	26%
Penetration/Reach
Average annual spend	$522	$290
Household penetration	60%	79%
Purchase frequency (annual)	20x	27x
Repeat rate	85%	80%
Sales mix
Consumables	82.7%	48.8%
Discretionary (seasonal, home, etc.)	17.3%	51.2%

Sales-mix data comes from each respective company. All other data provided by Numerator.

Much of this was already known, or at least broadly understood. Dollar General, for instance, has frequently touted the fact that roughly three-fourths of its stores are found in towns with populations of less than 20,000. According to Numerator, rural customers, despite shopping less often, contribute significantly due to higher spending per trip.

It's also arguable that Numerator's income breakdown understates just how many lower-income consumers depend on Dollar General. With above-average exposure to rural markets where incomes tend to be less than what they are in more urban settings, Dollar General's average customer lives in households with annual incomes believed to be right around the $40,000-per-year threshold Numerator is using at the low end of its middle range.

Perhaps the most eye-opening data point here, however, is how much consumables (food, cleaning supplies, etc.) Dollar General sells as opposed to Dollar Tree. More than 80% of Dollar General's sales are consumables, in fact, while a little less than half of Dollar Tree's are.

And remember, this sales-mix data includes Family Dollar's revenue, which presumably is more like Dollar General than not. Once Family Dollar's sales are taken out of the mix, look for Dollar Tree's sales mix to shift to an even greater proportion of discretionary goods.

Built to thrive in different environments

Great, but what does this mean for current and would-be investors of either stock?

It seems counterintuitive at first, but Dollar General's significant exposure to consumables is a problem when inflation lingers at relatively high levels, as it has since soared in 2021 and 2022. Not only does this pump up the retailer's costs on goods that already sport paper-thin margins, but in many cases struggling consumers simply stop making these purchases rather than shopping around for a cheaper alternative. As CEO Todd Vasos said last August following a disappointing Q2 report that preceded a cut to full-year guidance, "this lower-end consumer continues to be very much financially strapped, especially as it relates to her ability to feed her families and support her families." That message was reiterated in March this year.

The graphic below quantifies Vasos' qualitative assessment. Dollar General's same-store sales growth in 2022 is only the result of 2021's steep declines. This improvement withered in 2023, and has yet to be restored in earnest.

In contrast, Dollar Tree's discretionary business is arguably a competitive edge when inflation is chipping away at consumers' buying power.

This also initially seems counterintuitive. Think bigger-picture though. In a normal, decent economic environment, consumers might splurge modestly on décor, kitchenware, toys and the like with purchases at Walmart, Target, or Amazon. When forced to really pinch pennies though, these "splurges" increasingly happen at Dollar Tree at an affordable starting price point of $1.25.

In other words, Dollar Tree is the spending downgrade that Dollar General can't be.

The comparison below supports this argument. Not only have Dollar Tree's same-store sales consistently outgrown those of Dollar General since inflation was catapulted in 2021, Dollar Tree appears to have actually thrived when Dollar General couldn't specifically because of this lingering inflation.

These two stocks aren't exactly interchangeable

The opposite situation will, of course, lead to the opposite outcome. That is to say, if and when inflation finally cools and rekindled economic strength takes hold -- improving household incomes even in rural areas -- that plays to Dollar General's strengths.

That wouldn't necessarily put Dollar Tree at a troubling disadvantage though, to be clear. Dollar Tree's greater exposure to more urban shoppers and at least slightly bigger household incomes keeps its business relatively steady. There will also always be at least some demand for an affordable "treasure hunt" that only Dollar Tree can offer.

Still, an improving economy would set the stage for a shift in the competitive dynamic between these two dollar store chains, which could ultimately make a difference in their underlying stocks' performances.

And that may be what the market's betting on happening sooner rather than later, in light of Dollar General stock's recent market-beating run-up.

In the meantime, Dollar Tree shares are underperforming at least partly due to its Family Dollar drama. Even if it will be shedding this problematic arm soon, it's disruptive. Some investors may also be sensing a brewing shift toward economic health despite fallout from newly imposed tariffs that Dollar Tree is far more vulnerable to than Dollar General.

If you don't think the U.S. economy is actually out of the woods yet though (particularly as it pertains to consumers' buying power), beaten-down Dollar Tree shares are still arguably your better bet. Dollar General's more modest exposure to higher tariff costs still isn't enough to offset its disadvantageous mix of shopper demographics and its heavy reliance on lower-margin consumables.

Should you invest $1,000 in Dollar Tree right now?

Before you buy stock in Dollar Tree, 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 Dollar Tree 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 $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*

Now, it’s worth noting Stock Advisor’s total average return is 907% — a market-crushing outperformance compared to 163% 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 May 5, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool recommends Ollie's Bargain Outlet. The Motley Fool has a disclosure policy.

Many investors may know the average Social Security benefit for retirees currently stands at $1,976 per month. But that's an average with a wide range of inputs as well as potential outputs. The more money you earned during your working years, the greater your eventual payment becomes. The age at which you choose to initiate your benefits can also impact the size of your check.

With that as the backdrop, what's the average 75-year-old retiree collecting from Social Security these days? The agency reports it's $2,749 per month. For the sake of comparison, the typical 70-year-old is currently collecting $2,842 per month (the highest average age-based figure, by the way), while the average 80-year-old's monthly payment stands at $2,412.

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 »

Curiously, the 70-to-80-year-old crowd (born post-World War II, between 1945 and 1955) are seeing measurably bigger Social Security payments than the over-80 crowd as well as the under-70 crowd. The swell in the size of this cohort's Social Security payments suggests these so-called baby boomers enjoyed uniquely strong employment opportunities and subsequently strong incomes for almost all of their adult lives.

Not bad, but still not enough

So you're doing better than average, or you know you will be doing better when the time comes based on the Social Security Administration's projection of your future benefits? Don't celebrate too much, or too soon. This average payment still isn't covering the entirety of retirees' typical living costs.

Smaller payments don't necessarily spell doom, either. Plenty of people are generating more investment income from their retirement savings during their golden years even if they're collecting subpar Social Security payments.

And that's how it should be. The program was never meant provide all of your retirement income no matter how much or how little you put into it.

The bigger takeaway here is that you'll want to save as much as you possibly can for retirement on your own, and make the most of that savings while you can. This, of course, means achieving long-term gains that measurably and meaningfully outpace inflation.

The $22,924 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 $22,924 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.

Got a little money and a lot of time? Say, 10 years or more? That's perfect. Time is an investor's best friend, and of course, the more capital you've got to deploy, the bigger your potential net return gets. And if you've got at least a decade to work with, you've got time to take a shot on some relatively volatile but potentially revolutionary investment prospects.

With that as the backdrop, here's a rundown of three monster stocks to buy and hold for 10 years, if not longer. Notice that each of them isn't just in a whole new kind of business. They're largely driving the formation of their respective industries.

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 »

Uber Technologies

A decade ago, the idea of connecting a stranger who needed a ride with another stranger willing to give them one (using the driver's own vehicle, no less) didn't just seem unmarketable. It seemed outrageous. As it turns out, however, the ride-hailing business was a brilliant idea driven by a major sociocultural movement that wouldn't become clear until several years later.

In short, people are decreasingly interested in driving or even owning their own automobile. Figures from the Federal Highway Administration indicate that the number of 19-year-olds with a driver's license in the United States has fallen from over 87% in 1983 to under 69% as of 2022. And the difference is even starker the younger the teen. Fewer than 40% of eligible teenagers living in the United States hold a driver's license, for perspective, versus about two-thirds of this group three decades ago.

In a similar vein, a recent survey taken by Deloitte suggests that while only 11% of U.S. residents aged 55 and up would consider giving up their car, 44% of people under the age of 35 would at least be willing to entertain the idea, given their willingness to use other modes of transportation.

Connect the dots. Younger consumers are more comfortable with new ways of doing things. As they age, they'll further normalize this alternate mode of mobility.

Enter Uber Technologies (NYSE: UBER), which dominates the domestic ride-hailing business but has also set up shop overseas where the same growing disinterest in driving and vehicle ownership is evident. Last year's top-line growth of 18% to $44 billion extends a long-standing trend that's expected to persist at this pace for at least a few more years.

However, this growth trend will likely last for longer than just a few more years. Market research outfit Coherent Market Insights believes the global ride-hailing market is set to grow at an annualized pace of 13.5% through 2032. As a market leader, Uber is well-positioned to capture its fair share of this long-term growth. That is why the stock's lethargic performance since early last year is a buying opportunity.

Recursion Pharmaceuticals

Given the strides made by artificial intelligence just within the past few years, most investors would likely agree that it's only a matter of time before AI is being used to create new drugs. What most people might not realize, however, is that it's already happening. A company called Recursion Pharmaceuticals (NASDAQ: RXRX) currently uses such a developmental tool as well as offers it to third-party pharmaceutical companies.

It's called Recursion OS. Like any other ordinary LLM (large language model) AI platform, this one can sift through a massive amount of digital data and then combine contextually relevant information. It can then determine how a new therapeutic molecule might be assembled and then test how it might work as a treatment for a particular disease.

This approach's chief advantages over more conventional forms of drug research are ones you might guess: speed and cost. Whereas traditional pharma R&D work might require several years and hundreds of millions of dollars just to complete a trial that ends in failure, AI-based testing can be virtually completed for a fraction of the cost in a matter of weeks, if not days. This means the pharmaceutical industry can afford to take more swings, even knowing that most of them might end in failure.

Recursion's business is double-barreled, to be clear. Not only is it sharing revenue-bearing access to its platform with third-party drug companies that currently include Roche, Bayer, and Sanofi, but it's also working on some of its own stuff. All told, nearly a dozen drugs conceived and digitally tested within Recursion OS are now in actual, required clinical trials. Others were weeded out before wasting time and money on clinical testing.

That's still just the beginning, however. Global Market Insights expects the AI-powered drug discovery business to grow at an average annual rate of almost 30% between now and 2032. Recursion Pharmaceuticals is currently unprofitable. Given the industrywide tailwind, though, a swing to profitability could easily be in the cards within the next 10 years, catapulting this stock as a result.

IonQ

Finally, add IonQ (NYSE: IONQ) to your list of prospects that could dish out monster-sized returns over the course of the coming decade. You're probably familiar with how traditional computing devices -- like the one you're using right now -- work. A massive amount of digital information is racing around a computer chip, being translated into a form you can see and interact with comfortably.

As impressive as this technology may be, however, this tech's underlying binary code consisting of nothing but digital ones and zeros has actually become a bit limiting. There's a much more powerful option. By using subatomic particles as its basis, a so-called quantum computer can handle a massive amount of data. With quantum computing, in fact, calculations that might take a traditional computer decades to complete can now be done in a matter of minutes.

This speed, of course, has major implications for industries like artificial intelligence, cybersecurity, and even the aforementioned drug discovery, just to name a few.

There is the not-so-small matter of practicality and cost. Such platforms are overkill for everyday web browsing, for instance, while purchasing one for heavy-duty number-crunching could easily cost hundreds of thousands of dollars, if not more. Even just renting cloud-based access to a quantum computer can cost $50 per minute.

For the right purpose, though, plenty of institutions can come up with that kind of money, like the U.S. Air Force, the city of Busan (Korea), and the Applied Research Laboratory for Intelligence and Security (or ARLIS). All three organizations -- along with several others -- are now test-driving IonQ's tech to figure out how to best leverage this powerful new computing option. The company did $43 million worth of business last year, in fact, up 95% from 2023's top line.

But this still only scratches the surface. Precedence Research predicts that the worldwide quantum computing industry will see compound annualized growth of 31% through 2034, making the next 10 years incredibly exciting for one of the (very) few "pure plays" in the business.

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 $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

Now, it’s worth noting Stock Advisor’s total average return is 811% — a market-crushing outperformance compared to 153% 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

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.

If you're unsure what to make of Walmart (NYSE: WMT), you're not alone. It's resilient, but certainly not immune to the effects of newly enacted tariffs. As CFO David Rainey recently noted: "The range of outcomes for Q1 operating income growth has widened due to less favorable category mix, higher casualty claims expense and the desire to maintain flexibility to invest in price as tariffs are implemented."

Translation? The retailer might be forced to spend a little more or accept narrower profit margins as a means of maintaining market share. The market sensed all this well before the statement was made, of course, which is why the stock is still well down from its February peak despite Wednesday's sizable surge.

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 »

Now, take an honest look at the bigger picture. Walmart is as strong as it's been since its heyday growth of the 1980s and 90s, and far better equipped to handle tariffs than the market's giving it credit for. That spells opportunity for investors.

More strategic sourcing than most people think

Walmart is the world's biggest brick-and-mortar retailer, with 10,771 locations. More than 5,200 of these are in the U.S., where more than 90% of the population lives within 10 miles of a store. It did $681 billion worth of business last fiscal year, up 5% from the previous year's top line.

WMT Revenue (TTM) data by YCharts.

Size isn't everything, though. In fact, it can be a liability simply because the bigger an organization gets, the more difficult it becomes to manage. Any tariff-related headaches, of course, only aggravate such unwieldiness.

However, Walmart isn't nearly as vulnerable to the latest round of tariff-prompted turbulence as it seems like it should be. Roughly two-thirds of what the company spends on inventory is spent on American-made products, for perspective. So, while Mexico and China supply a significant portion of the other one-third of its merchandise costs and many of its U.S. suppliers are certainly affected by tariffs, Walmart is far from being catastrophically undermined, despite much of the recent rhetoric.

The company's also been making moves that ultimately offer it a means of maintaining reasonably wide profit margins. Walmart now manages more than 20 private label brands of its own that each drive more than $1 billion in annual sales, five of which are each generating more than $5 billion worth of yearly revenue. These in-house goods essentially sidestep the wholesaling stage of the procurement process, making them cheaper to put on store shelves than nationally branded merchandise.

Walmart's resilience as an investment, however, is rooted in far more than a careful refinement of how and where it sources its inventory.

The bigger-picture, philosophical bullish thesis

You could argue that Walmart's sheer size provides it with an unfair advantage over its competitors. And you'd be right. Investors don't want a fair fight, though. They want the companies they own to dominate their respective markets. Not only does this help keep competition in check, greater scale also allows an enterprise to operate more cost-effectively.

While e-commerce giant Amazon is now roughly the same size as Walmart in terms of total revenue, it's a somewhat misleading comparison. Less than half of Amazon's annual revenue stems from sales of physical products. The slightly bigger portion actually comes from subscription and service revenue, like Amazon Prime or its cloud computing business.

There's no denying that Walmart simply enjoys a physical reach that no brick-and-mortar competitor can match. Costco Wholesale only operates 890 locales, while Target's store count is less than 2,000. Given the U.S. Census Bureau's estimate that 84% of the country's retail spending is still done in store, this dominant market presence leaves Walmart very well-positioned for whatever the future holds on this front.

Bolstering this bullish argument is the fact that well over half of Walmart's business is groceries. This matters simply because -- regardless of any economic hardship -- people are going to need to eat. Many are going to lean on Walmart as their best bet for getting the most bang for their grocery buck, since the giant retailer is also better positioned than any other to push back on suppliers when its wholesale costs start to swell. The company's been doing exactly that for the past month, in fact.

Not only is Walmart likely to hold up to any brewing economic headwind, it might even thrive because of one. As Rainey commented at a recent investor event: "We see opportunities to accelerate share gains while maintaining flexibility to invest in price as tariffs are applied to incoming goods."

There's also the distinct possibility that the tariff war may end before it races out of control.

Now's the time to buy

This bullish argument begs the question: Why is this stock down as much as it is since February's peak? The right answer is also the most obvious one. That is, most investors are jumping to broad, sweeping conclusions based on rhetoric without knowing all the relevant facts. Had they known most of the information laid out above, the crowd might not be nearly as quick to dump Walmart stock.

Someone else's mistake can mean opportunity for you, though. Walmart was already a compelling long-term prospect, but given the likelihood of 2025 results that will be far better than recently presumed, the stock's a strong buy sooner rather than later.

The analyst community thinks so, anyway. It's calling for sales growth of more than 4% this year and the year after that, which is impressive given its size and the industry's usually slow movement. Despite recent disruption, the vast majority of this crowd also still considers Walmart stock a strong buy, with a consensus price target of $109.08 that's more than 20% above the stock's present price. That's certainly not a bad way to start out a new trade.

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

Before you buy stock in Walmart, 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 Walmart 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

Up more than 2,000% just since 2018, Axon Enterprise (NASDAQ: AXON) stock has already turned at least a few savvy investors into millionaires. The question is, can it do it again anytime soon? The cat's out of the bag, so to speak. It'll be tough for the security technology company to repeat the feat.

Never say never, though. Even if it's not likely to dish out a massive gain, it might still push you much closer to the seven-figure milestone.

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 »

Axon Enterprise, up close and personal

On the off-chance you're reading this but aren't familiar with Axon, Enterprise is the outfit behind the Taser brand of conducted energy weapons. You know them better as stun guns.

That's not all Axon is anymore, however. In fact, its biggest business these days is actually body cameras and the video-evidence software that makes the most of them. It's even wading into the drone arena, marrying this technology with its surveillance and video-recording solutions. Last year, the company did nearly $2.1 billion worth of business, up 33% year over year, but extending a trend that's been in place for far longer.

AXON Revenue (TTM) data by YCharts

The need for less-lethal security options has never been greater, either. Neither has demand for recorded evidence of nearly all enforcement actions from law personnel. Litigation has been normalized, after all. The only meaningful way of responding is with more and better tools, and more information about any particular altercation.

And Axon shines on both fronts.

The value of so-called stun guns in this regard is clear. Rather than a bullet, conducted-energy weapons deliver an electrical charge that incapacitates their target. The company reports that these devices have been used in the field more than 5 million times since their introduction nearly 30 years ago, saving on the order of more than 300,000 lives that may have otherwise been taken by a conventional firearm.

They're safer to wield and use, too. Axon adds that in a review of more than 1,200 usage cases, serious accidental injuries only occurred 0.25% of the time.

This, of course, is only half the solution needed for the new societal norm. Body-worn cameras are also increasingly necessary, by virtue of recording interactions of all types between law enforcement officials and potential perpetrators. Its technology doesn't just record video, though. Its cameras can directly connect to software that turns this recording into credible, official evidence that can be analyzed and presented in a courtroom.

And as was noted, drones are now part of the company's repertoire. In areas where it may be dangerous or physically impossible for a law enforcement professional to be present, the Axon Air and Sky-Hero drones facilitate real-time situational awareness by feeding video back to the drone's pilot. While this is a relatively new business line for the organization, expectations are understandably high.

A major, well-rooted trend with some serious longevity

So what suddenly sent this stock soaring after more than a decade's worth of sideways movement?

It would be naïve to not acknowledge that the world has changed dramatically in just the past several years. For better or worse, the advent of the worldwide web as well as smartphones capable of recording video has made it possible to share accurate -- as well as misleading -- imagery, while the online crowd (again, for better or worse) is capable of clamoring in response to alarming altercations. Police and other law enforcement agencies have never needed to "get it right" more than they need to now, and hold themselves as accountable as the public they serve does.

The social movement is still young, however, and so is the industry. While data from the Police Executive Research Forum suggests that roughly four out of every five of this nation's police departments utilizes body-worn cameras, that doesn't mean every single officer working for those departments does. Numbers from the National Institute of Justice indicates that only about two-thirds of police personnel in the United States wear them, with sheriffs even less likely to do so.

And that's just local law enforcement. While federal law enforcement officials like those employed by the FBI are now mandated to wear them, many of them still don't due to lack of availability.

They're coming, though, as funding and supply will allow it -- here and abroad. Market research outfit Technavio predicts the worldwide body-worn camera business is set to grow at an annualized pace of 19% between now and 2029. Given its massive market share of the police sliver of this market, Axon is positioned to capture at least its fair share of this growth, inside and outside the United States. Cementing this lead is the fact that the company's evidentiary software has been proven to work seamlessly with its hardware.

Although it's much older, the stun-gun industry is catching this same sociocultural tailwind. Mordor Intelligence believes the worldwide conducted energy weapons business is likely to expand at an average yearly pace of 6% through 2030. That's not tremendous growth. However, given this business's enormous growth of late, it's a tough act to follow.

Axon, of course, also augments this business by monetizing the training needed to make proper use of them.

As for drones, Lucintel expects the law enforcement drone business to grow at a clip of 12% per year through 2030, now that the tech is affordable and ready to use as initially hoped.

Still bullish, even if not red-hot

These are encouraging outlooks, to be sure. The question remains, however: After a big run-up that reflects the now-obvious opportunity, is there any chance Axon stock could better help newcomers become millionaires than other investment options?

Yes, it could, but this call comes with a major footnote. That is, this name's biggest and fastest gains are likely in the rearview mirror. From here, this stock won't be quite as bullishly explosive. That's because the newness that excites investors has run its course.

That's OK, though. While its very biggest gains are in the past, there are still plenty of growth-driven gains waiting in the near and distant future. Analysts are calling for revenue improvement of more than 20% this year as well as next, for perspective, with growth of just another 20% expected the year after that. That's just a taste of the sort of progress that's apt to be in the cards further down the road, though.

This might help convince you to take your shot sooner than later: Despite this ticker's recent pullback, the analyst community remains quite bullish. More than half of them still rate this stock a strong buy, sporting a consensus 12-month price of $674.69 that's 22% above the stock's present price. That's not a bad way to start out a new trade.

Should you invest $1,000 in Axon Enterprise right now?

Before you buy stock in Axon Enterprise, 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 Axon Enterprise 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

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.

How much do you need to save for retirement? For most people, the initial answer is "As much as possible." While that knee-jerk response is suspiciously unspecific, it certainly makes sense. You arguably can't tuck away too much for retirement. The worst-case result of that is having more than you need, allowing you to give away any excess however you see fit.

For most ordinary investors, saving "too much" isn't going to be a problem. The worry is not saving enough.

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 »

One of the big keys to ensuring you're saving enough is setting a specific numeric goal, and then mathematically working your way backwards to a monthly investment that will allow you to reach that mark. Here's the number-crunching that will tell you how to amass a $1.46 million nest egg in a Roth IRA over the course of 35 years.

A not-so-hypothetical hypothetical

These numbers weren't randomly pulled out of a hat, by the way. They're relevant.

For instance, according to a 2024 survey performed by insurance and investment firm Northwestern Mutual, the average American thinks they'll need to save $1.46 million to secure a comfortable retirement. Given that this sum could reasonably generate on the order of $60,000 worth of reliable yearly investment income, this should be sufficient retirement income for most people when paired with whatever Social Security you're due.

As for the 35-year timeframe, that's a bit longer than most people typically work. But that's changing. Social Security's so-called full retirement age -- or FRA -- is now 67, giving people over 40 years' worth of adulthood to work before many of them will even be thinking about initiating benefits. People are also simply living longer, healthier lives, and choosing to remain in the workplace for personal productivity, if not for financial reasons. So collecting 35 years' worth of wages that can be used to fund an IRA is far from being unrealistic anymore.

What about a Roth IRA (as opposed to a traditional IRA)? Both would work, to be sure. Given the growing uncertainty of future income tax rates, though, there's a reason Roth IRAs are growing in popularity, even if they're still a minority of retirement accounts.

If some or none of these details apply to you, adjust accordingly. However, this is where most ordinary investors are during the early part of their wage-earning years, so this is a decent starting point for planning purposes.

The magic number

Here's the number: Contributing $400 per month into a Roth IRA and investing that money in an instrument matching the S&P 500's (SNPINDEX:^GSPC) average annual gain of 10% would leave you with just a little more than $1.5 million after 35 years.

Since this is a Roth account, not only has this growth been tax-free, any withdrawals from this IRA will also come out tax-free.

There's one important footnote to add here. That is, while $1.46 million is a reasonably healthy sum of money now, it won't necessarily be the small fortune then that it is today. Assuming just average inflation in the meantime, you'll actually want to amass nearly $4 million by then to have the same amount of buying power that $1.46 million provides right now.

On the other hand, this inflation also works in your favor. Regular pay raises will allow you to grow your monthly contribution from $400 now to a more significant amount in the future. So, that $4 million figure isn't nearly as out of reach as it seems and sounds like it is at this time.

It's also worth pointing out that while the hypothetical account above grew at a smooth and steady annual 10% pace, the market's far from being this consistent. Although you'll likely achieve similar net results with a long-term investment in the S&P 500, you won't be growing your account in the same straight line. Some years will be better than others. In some years you'll even lose ground, albeit temporarily.

Just get started -- when, where, and however you can

But what if you don't even have $400 per month to put toward the effort right now, or maybe you don't have 35 years? That's OK on both fronts -- it just changes the numbers.

The big takeaway here isn't a magic formula for reaching the average American's retirement savings target of $1.46 million. You may be fine with less, or you may need even more.

The chief lesson here, rather, is to just do what you can as soon as you can, since time actually does most of the heavy lifting when it comes to growing a nest egg. For instance, in the example above, tucking away $400 per month for 35 years only translates into total personal contributions of $168,000. The other $1.3 million came from growth achieved on these invested contributions.

The key is just getting started how, when, and where you can, even if it seems like you're not saving enough money to matter yet. You are. Every little bit helps, and it helps even more the sooner you put this money to work.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 796%* — a market-crushing outperformance compared to 155% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of April 10, 2025

The Motley Fool has a disclosure policy.