A million dollars is enough to change most people's lives. For example, putting that money into relatively low-risk assets like 30-year Treasury bonds would earn you more than the U.S.'s median annual income without reducing the principal. But while investing a million dollars is easy, making it is significantly harder.

To earn multibagger returns in the stock market, you typically have to bet on innovative companies with strong economic moats and massive addressable markets. Nvidia (NASDAQ: NVDA) has historically fit this bill with its industry-leading artificial intelligence (AI) chips. That said, past returns don't guarantee future success. Let's dig deeper to see if this megacap technology leader is still a long-term winner.

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First-quarter earnings were a mixed bag

Many analysts were optimistic about Nvidia's first-quarter results, which saw its sales jump by 69% year over year to $44.1 billion while net income increased by 31% to $22.1 billion. Big tech companies continue to pour billions into Nvidia's hardware to run and train their generative AI workloads. And Nvidia's CEO, Jensen Huang, continues to strike an optimistic tone, claiming that entire countries are beginning to realize that AI is an "essential infrastructure" alongside electricity, water, and the internet.

However, behind the hype, there are some signs that Nvidia's business is slowing. While sales grew 69% this year, that represents a deceleration from last quarter when they grew by 78% compared to the prior-year period. Furthermore, Nvidia's gross margins are also shrinking (down from 73% last quarter to 60.5% this quarter). Net income actually fell by 15% from the previous quarter -- an undeniable sign that things are changing.

Some of the weakness is due to recent regulatory challenges in China, where the Trump administration made it harder for Nvidia to sell its H20 chips, leading to a $4.5 billion impairment charge based on losses on excess inventory and failed purchase obligations. And while Nvidia plans to reenter the market with new products, investors should keep in mind the risk of continued regulatory setbacks.

Over the long term, Nvidia will face competition from homegrown Chinese rivals such as Huawei, which aims to take its market share with advanced AI chips of its own. And it is unclear if Chinese consumers will be comfortable building their businesses around Nvidia hardware that can be taken away at the whim of the U.S. government.

Nvidia also faces challenges in the U.S., where major customers like OpenAI are investing in their own custom chip design capacity to reduce their reliance on Nvidia and other third-party hardware suppliers.

Image source: Getty Images.

Investors should change how they look at Nvidia

Nvidia has historically been a growth stock capable of multibagger returns. However, with its current market cap of $3.4 trillion, this is becoming less likely. If Nvidia were to repeat the 1,500% return it has enjoyed since 2020, its market cap would swell to $51 trillion. That would be more than the combined value of all companies on the NASDAQ stock exchange, which currently totals approximately $30 trillion.

While this level of expansion is technically possible, it looks doubtful, even in the best-case scenario. Even though Nvidia has a strong moat, free-market capitalism typically leads to competition and falling margins, which already begins to show up in Nvidia's most recent earnings report.

That said, although Nvidia might be too big to be a typical millionaire-maker stock, that doesn't mean it can't return value to investors in other ways. With a forward price-to-earnings (P/E) ratio of 32.4, shares are still reasonably affordable, considering the company's growth rate. Investors should expect Nvidia to eventually start returning some of its massive profits to shareholders through dividends and buybacks, which can help support slow and steady stock price appreciation.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $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.

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*Stock Advisor returns as of June 2, 2025

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

Makers of electric vertical takeoff and landing aircraft (eVTOLs) aim to revolutionize the transportation industry by allowing people to literally fly above urban traffic on short-haul routes. Archer Aviation (NYSE: ACHR) is an early mover in the air taxi space, and with its market cap at just $5.83 billion now, new investors can still get in early on what could be an exciting long-term growth opportunity.

That said, potential rewards often correlate with potential risk in the stock market. And in late May, a report from short-seller Culper Research cast doubts about the quality of Archer Aviation's communications with investors and the public. Remember that short-sellers make money when a stock falls.

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 »

Culper Research is short Archer Aviation

On May 20, Culper Research published a report titled "Archer Aviation (ACHR): When You Can’t Earn Airtime in the Sky, Buy it on Late Night Television" and featuring an image of Archer Aviation CEO Adam Goldstein alongside Jimmy Fallon, host of The Tonight Show Starring Jimmy Fallon. Culper Research claims the company "systematically misled" investors about its progress toward developing and testing its flagship Midnight aircraft. The report cites examples from employee emails, photos, and public statements that the short-seller believes contradict Archer Aviation's claims about the progress of its eVTOL program.

The stock didn't immediately drop after the report, but was down about 18% from the close of trading May 19 to the close on June 5. Archer's management fired back in a statement, dismissing the claims as "baseless" and questioning Culper's credibility.

Short-sellers profit when the price of a stock that they have shorted goes down, which gives them an incentive to present such a company's situation as negatively as possible. That gives me pause about the Culper report. Furthermore, even if Archer Aviation is overselling the progress of its eVTOL program, that's par for the course for speculative tech companies. For example, Tesla CEO Elon Musk has frequently made projections about timelines and projects (such as self-driving) that have rarely played out the way he said they would. Expectations of some exaggerations and delays are likely already priced into Archer Aviation's stock.

Focus on the fundamentals

Instead of getting caught up in news stories and short-seller allegations, investors should focus on Archer Aviation's financial reports. This data should give investors the best indications of how long the company can sustain its operations while it waits for factors outside its control, such as regulatory approvals. So far, the situation is complicated.

In the first quarter, its operating losses stood at $144 million, compared to $142 million in the prior-year period. This was mainly due to research and development outflows, as it spent more to bring the Midnight aircraft closer to commercialization. However, with around $1 billion in cash and equivalents on its balance sheet, Archer Aviation could sustain that rate of cash burn for about seven more quarters before it would need to seek outside sources of capital.

Artist's rendering of futuristic eEVTOLs parked and landing on a building in a city. Image source: Getty Images.

The company is also working on expanding its manufacturing capabilities through a partnership with multinational automaker Stellantis. The companies are teaming up to build a manufacturing facility in Covington, Georgia, that will eventually be capable of producing up to 650 aircraft annually, with Stellantis contributing expertise and capital to the project. Archer Aviation expects to be able to produce two Midnight aircraft per month by the end of 2025.

What will the next three years have in store?

Like many speculative companies, Archer Aviation presents a hugely optimistic vision for its future. While the company is still awaiting final approvals from the Federal Aviation Administration (FAA) in the U.S., in international markets, it seems to be moving much faster.

Early "launch edition" customers for its eVTOLs include Ethiopian Airlines and Abu Dhabi Aviation, which plans to take delivery of Midnight aircraft later this year. Over the next three years, Archer's revenue growth could accelerate dramatically as it secures more clients and ramps up production. But while this is exciting news for investors, it is unclear if these customers plan to merely test and experiment with eVTOLS or incorporate them into large-scale revenue-generating operations.

Furthermore, investors shouldn't be surprised if there are delays and disappointments associated with the aircraft's commercialization, especially considering the allegations made in Culper Research's report. Archer Aviation remains a high-risk, high-potential-reward bet and it's not clear where it will be in three years.

Should you invest $1,000 in Archer Aviation right now?

Before you buy stock in Archer Aviation, 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 Archer Aviation 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

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

Palantir Technologies (NASDAQ: PLTR) has been unstoppable over the last few months, adding 509% to its share price since 2024 for a total return of 1,332% since it hit the market in late 2020. When a public company starts growing this fast, it's normal to wonder if a stock split might soon be on the table. Let's dig deeper to answer this question.

Why split a stock?

Companies often turn to stock splits after experiencing a tremendous amount of growth. This technique involves dividing each share by a specific amount to increase the number outstanding while keeping the same market cap (the value of all shares combined). The goal is to make the stock appear cheaper and more accessible for investors.

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Stock splits are typically seen as a positive sign because they suggest that a company is in good shape while making its equity easier to trade. And according to Bank of America analyst Jared Woodard, split stocks have consistently outperformed the market averages recently. That said, it looks unlikely that Palantir will split its stock anytime soon.

While the company has grown significantly over the last five years, it still trades for a relatively bite-size $132 per share. This number is considerably lower than recent high-profile splitters like Nvidia and Tesla, which split their stocks at $1,209 and $891, respectively. Palantir investors should expect much more growth before a possible split.

What will it take for Palantir to exceed $1,000 per share?

If the company manages to repeat the 1,334% five-year return it experienced since its initial public offering, each share would be worth approximately $1,758 by 2030, which would make a stock split much more likely. However, this price tag would give Palantir a market cap of $4.15 trillion, making it the most valuable company in the world, while other factors held constant. There are several reasons investors shouldn't expect this to happen.

For starters, it already has an astronomical valuation. With a price-to-earnings (P/E) multiple of 573, it is one of the most overvalued stocks on the market. For context, the S&P 500 has an average P/E of just 28, while AI leader Nvidia trades at just 44 times trailing earnings despite growing its business by 69% year over year in its most recent quarter.

Image source: Getty Images.

Palantir's growth is good but hardly enough to justify its current valuation -- let alone any expectations of future multibagger potential.

First-quarter revenue jumped 39% year over year to $883.9 million, driven by strong demand among public- and private-sector clients for its data analytics and AI solutions. Profits more than doubled to $217.7 million. And the company continues to win high-profile contracts like with the U.S. Army and NATO, which both plan to implement its AI-powered Maven Smart System, designed to provide battlefield awareness and planning.

But while these results would be fantastic in a vacuum, a great company isn't always a good investment if excessive expectations are built into its price tag. Palantir's P/E of 573 looks almost impossible to justify, even if the business continues to hum along at current levels.

Will Palantir split its stock anytime soon??

The short answer to that question is no. Companies have tended to split at around quadruple-digit stock prices. And with a current share price of $132, the stock is already alarmingly expensive compared to the size of its business and current growth rate. Instead of waiting for more multibagger gains, investors should probably be thinking about when it's time to take profits off the table.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, 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 Palantir Technologies 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

Bank of America is an advertising partner of Motley Fool Money. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.

Over the last few decades, the American technology sector has made boatloads of millionaires -- not only for founders and CEOs, but also for the thousands of regular people who work at these companies or buy their stock. With shares up by over 23,000% over the last decade, Nvidia (NASDAQ: NVDA) is the quintessential example of this phenomenon.

But as we all know, past performance doesn't guarantee future returns. And with a market cap of $3.2 trillion, Nvidia is already one of the largest companies on Earth, giving it less room to grow. Let's dig deeper to see what the future might bring for this legendary chipmaker.

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Is AI becoming mainstream?

While Nvidia started its life focusing on consumer video game graphics and cryptocurrency mining, both of those once-core operations have become totally overshadowed by generative AI. As of the fourth quarter, the data center segment (where Nvidia accounts for sales of cutting-edge AI chips) represented a jaw-dropping 91% of its $39.3 billion in sales for the period.

This level of concentration means that a large portion of Nvidia's valuation is tied to the prospects of this one industry. If AI tech exceeds expectations, so will Nvidia. But if the sector falls flat, well -- you know the drill. Right now, it still feels too early to know how things will play out.

Analysts at Jeffries seem wildly optimistic. Their research suggests that three-quarters of businesses already use generative AI in at least one function, and they expect it to drive $1.1 trillion in revenue by 2028.

But investors shouldn't necessarily take these projections at face value. Even if AI becomes a part of mainstream life, there is no guarantee that big profits will follow. And this puts Nvidia's clients in a tough spot.

AI companies are burning through money.

Despite the hype, generative AI remains wildly unprofitable. While giants like Alphabet and Meta Platforms can hide their AI losses within their vast research and development budgets, the scale of the problem is much clearer with pure-play AI companies like OpenAI, the maker of ChatGPT.

The Economist reports that while the start-up's 2024 revenue tripled to $3.7 billion, losses ballooned to $5 billion. And while OpenAI's management believes it can achieve $12 billion in cash flow by 2029, this is far from guaranteed due to the intense competition in the industry.

Chinese open-source rival DeepSeek shows that competitive AI models can be created (arguably) at a fraction of the cost of their U.S. counterparts, which means early leaders may not have much of an economic moat, especially when the technology matures and the rate of model improvement slows. If profit potential shrinks, so will the market for Nvidia's expensive hardware.

Image source: Getty Images.

Nvidia will also face challenges on the hardware side of the industry as companies seek to diversify their supply chains. In April, the Trump administration effectively banned the company from selling its h20 chips to Chinese clients. While Nvidia has already started work on a new compliant chip, it is unclear if Chinese companies will be willing to build their businesses around Nvidia hardware, given the unpredictability of U.S. regulations. Rivals like Huawei are working to take market share.

The easy money has already been made

Nvidia is a big player in a potentially transformational industry, so there is little doubt it can continue to outperform the market over the long term (even though there will be short-term volatility).

That said, the easy money has already been made. New investors shouldn't expect this legendary chipmaker to repeat the multibagger returns it enjoyed over the previous decades. You can attribute the slower progress to the challenging dynamics on both the software and hardware sides of the AI industry.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $804,688!*

Now, it’s worth noting Stock Advisor’s total average return is 957% — a market-crushing outperformance compared to 167% 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

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

There is a lot you could do with $6,500 -- put a down payment on a new car, buy a top-of-the-line gaming laptop, or even take an extended vacation somewhere warm and sunny. But if you used that cash to buy XRP (CRYPTO: XRP) in 2015, you would have a jaw-dropping $1,000,000 today. That's enough to stop working and earn more than the US's median income ($42,220) just from the interest on 30-year treasury bonds.

Of course, hindsight is 20/20; otherwise, we would all be rich. But while it is challenging to know which assets will generate such life-changing returns in the future, that won't stop us from trying. So let's dig deeper to see what the next five years might have in store for XRP.

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A unique spin on the cryptocurrency industry

When San Francisco-based Ripple Labs launched the XRP blockchain in 2012, the cryptocurrency industry was very different from what it is today. Bitcoin, the original cryptocurrency, had launched just three years earlier, and people still didn't know what to make of the new asset class and how it could be useful in real life. XRP aimed to help bring this technology into the mainstream by disrupting the international payments market.

The developers realized that crypto represents an ideal bridge currency. Someone who wants to transfer U.S. dollars to South African rand can use their dollars to buy XRP and then use that XRP to buy rand, bypassing potentially slow and expensive centralized intermediaries.

Ripple designed their blockchain to prioritize everyday usability, with an average transaction time of just 3 to 5 seconds and low fees of just 0.00001 XRP, which is worth a fraction of a cent. For context, the average Bitcoin transaction costs $1.52 and takes 44 minutes to complete at the time of writing.

A lot has happened since 2012. New blockchains have become faster and cheaper than XRP. Meanwhile, dollar-pegged stablecoins, such as Tether, can often serve as better bridge currencies because of their fixed prices. That said, XRP's early-mover advantages give it a level of trust and mainstream acceptance that will be hard for new blockchains to beat. This edge is crucial in the often poorly differentiated digital asset markets.

Regulatory wins are a long-term tailwind

Regulatory wins are another long-term tailwind for XRP, which has faced intense legal scrutiny in previous years. However, under the Trump administration, the Securities and Exchange Commission (SEC) has backed away from regulatory enforcement to prioritize clarity. XRP's developer, Ripple, has benefited from this policy change.

In March, the SEC dropped its appeal against a 2023 ruling that decided that Ripple's sales of XRP to retail investors weren't classified as securities sales -- although sales to institutional investors still were. The company finally settled this case, agreeing to pay a fine of $50 million, reduced from $125 million.

Image source: Getty Images.

XRP is becoming a "blue chip" cryptocurrency

Over the next five years, regulatory clarity will be key to the further adoption of digital assets by institutional investors like pension funds, university endowments, and insurance companies. Often called "smart money," these sophisticated and well-heeled investors usually deploy huge volumes of capital for the long haul. They also tend to consider their positions carefully instead of panic-selling at the first sign of trouble.

Expect these buyers to gravitate toward XRP as it slowly becomes seen as a "blue-chip" cryptocurrency due to its relatively long history and mature, utility-focused design. That said, don't expect XRP to repeat the exponential growth it experienced over the last five years. Winding down the SEC lawsuit is a unique event with game-changing qualities.

The larger an asset becomes, the harder it is to keep growing rapidly. With a market cap of $135 billion, XRP is already quite large. If things go well, investors should look for steady, consistent growth instead of boom-and-bust volatility.

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

Before you buy stock in XRP, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $804,688!*

Now, it’s worth noting Stock Advisor’s total average return is 957% — a market-crushing outperformance compared to 167% 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

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

Warren Buffett plans to retire this year after delivering a return of over 5,000,000% to long-term investors through his holding company Berkshire Hathaway. With a market capitalization of $1.12 trillion, Berkshire is already quite large, so investors shouldn't expect a repeat of the previous six decades of growth.

That said, the portfolio is still a great way to look for inspiration in the market. Let's discuss why two Berkshire-backed stocks, Amazon (NASDAQ: AMZN) and BYD (OTC: BYDD.F), could make great buys.

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 »

Amazon

Even the best investors make mistakes. Warren Buffett has admitted that he was "too dumb" to see Amazon's potential earlier. But he finally took the plunge in early 2019, and now Berkshire Hathaway owns a whopping $1.89 billion of the company's shares, representing 0.7% of its portfolio.

It's easy to see why Buffett likes Amazon. The company's economic moat is as deep as they come. Its size creates a positive feedback loop: the vast number of buyers attracts more sellers, which leads to more competition and product variety. The company can also unlock economies of scale in its logistics and distribution networks, passing on these savings and efficiencies to consumers.

While Amazon could face some challenges from the Trump administration's new tariffs on imported goods, its 3rd party business model can shift the impact mostly to sellers on the marketplace.

Amazon's diversification is another long-term asset. The company's cloud computing division, Amazon Web Services (AWS), represents around half of operating income, reducing its exposure to consumer spending and allowing it to benefit from long-term growth drivers like generative artificial intelligence (AI). Amazon's AI strategy focuses on the enterprise side of the industry, helping other companies run and train their models.

BYD

With a $2.68 billion stake, Berkshire Hathaway is one of BYD's highest-profile backers -- first betting on the Chinese EV maker in 2008. Like Amazon, BYD is an excellent example of how forging a deep and sustainable economic moat can be key to a company's success.

BYD's edge comes from vertical integration. The company started its life as a battery maker and has leveraged this expertise to control a vast amount of its supply chain -- not only making its own batteries, but also having rights to lithium mines and refining capacity needed to create them from scratch. This allows it to bring down costs and quickly scale up production.

In 2024, BYD overtook American rival Tesla to become the top-selling EV brand in the world with revenue of $107 billion.

Image source: Getty Images

While heavy tariffs will likely prevent BYD's cars from entering the U.S. market any time soon, the company has a massive opportunity for expansion elsewhere in the world. Management aims to double international sales to 800,000 in 2025, avoiding tariffs and other forms of protectionism by manufacturing locally. Tesla's weakness in the EU could turn into an opportunity for BYD to gain market share.

With a forward price-to-earnings (P/E) multiple of just 21, BYD's shares are remarkably affordable. For context, Tesla has a forward P/E of 127.

Warren Buffett is holding a record amount of cash

While Amazon and BYD are both relatively important holdings in the Berkshire Hathaway portfolio, they pale in comparison to the company's cash pile, which stood at a record of $334 billion at the end of 2024 after it sold $134 billion in stocks last year.

Buffett's defensive posture could signal that he feels cautious about the stock market in general, which makes sense considering the volatility surrounding Trump's trade policy. While Amazon and BYD remain great long-term buys, investors should also consider diversifying their holdings to minimize risk in this uncertain market.

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $304,370!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,442!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $617,181!*

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

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*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. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Berkshire Hathaway. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.

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

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

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Could tariffs boost Ford's brand?

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

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

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

How American is Ford, really?

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

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

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

Image source: Getty Images.

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

What could the next 5 years have in store?

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

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

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

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of April 21, 2025

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

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

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

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 »

Tesla stock is crashing -- or is it?

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

TSLA data by YCharts

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

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

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

Protectionism is both a threat and an opportunity

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

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

Image source: Getty Images.

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

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

What the next five years might have in store

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

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

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $266,353!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,790!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $566,035!*

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

See the 3 stocks »

*Stock Advisor returns as of April 21, 2025

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

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

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

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 »

Buffett was somewhat late to the party

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

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

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

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

The numbers look good

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

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

Image source: Getty Images.

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

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

What are the potential challenges?

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

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

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

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

Before you buy stock in Amazon, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

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

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

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

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

BYD

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

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

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

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

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

Berkshire Hathaway

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

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

BRK.A Total Return Level data by YCharts.

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

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

Which stock is best for you?

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

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

Before you buy stock in BYD Company, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

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

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

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

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Globalization might be dead. What comes next?

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

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

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

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

China and India also seek AI relevance

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

Image source: Getty Images.

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

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

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

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

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

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

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

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

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

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The automotive segment looks grim

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

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

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

Transitioning away from the automotive business

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

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

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

Image source: Getty Images.

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

Investors should wait for the dust to settle

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

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

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

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

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

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

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

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

See the 3 stocks »

*Stock Advisor returns as of April 10, 2025

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