Billionaire Bill Ackman and his Pershing Square fund have made some moves recently. Although it hasn't been disclosed in a Form 13-F, the fund stated that it scooped up shares of Amazon (NASDAQ: AMZN) at an "extremely attractive" price. Although it didn't give details on what the entry point was, I think it's safe to assume that management essentially bought the bottom of the stock market sell-off in April.

Although Amazon's stock has risen significantly since then, is there still enough value in the stock to warrant purchasing shares now? Let's take a look.

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Amazon's stock has risen around 30% from its lows

Amazon's stock bottomed with the rest of the market at around $167 in mid-April. If we assume that Pershing Square scooped up shares at around that price tag, they're already up around 30% on the investment -- not bad for just two months of holding a stock.

However, Ackman and his company aren't known for flipping stocks. He's a long-term investor who pinpoints undervalued companies and buys them at attractive prices. As a result, I think it's fairly clear that this 30% gain is nice for Pershing Square, but it expects even more performance from Amazon over the long term.

But is that realistic, considering how threatened Amazon is by tariffs?

Tariffs may not have as big an effect on Amazon's stock as one may think

One of Ackman's comments on his Amazon purchase was that he believes earnings will continue to grow because he thinks tariffs will have less effect on consumers than expected. Whether you think that's a valid statement or not, something undeniably factors into this comment: Amazon doesn't get a ton of profits from its commerce division.

Even though Amazon's online store is what most customers interface with almost daily, Amazon Web Services (AWS) is far more vital to the company's profitability than the various items that are made in China and sold on its platform, which may rise in price over the next few months. Cloud computing firms are seeing strong growth thanks to a general migration of on-site workloads to the cloud and AI workloads coming online.

In the first quarter, AWS' revenue growth was 17% year over year, far outpacing its North American commerce sales growth of 8% and international commerce sales growth of 5%. It's also far more profitable, with AWS' Q1 operating margin at 39%. Overall, AWS made up 63% of Amazon's total operating profits in Q1, despite only making up 19% of sales.

Although commerce may have funded the buildout of the AWS business, it's now a cloud computing business with a commerce storefront. With AWS expecting to deliver strong growth over at least the next decade, and with how much it contributes to Amazon's profits, investors should focus on AWS, not commerce. With AWS' profits growing faster than the overall company, it will be able to resist some of the headwinds that tariffs have induced on the commerce side of its business.

That's likely why Ackman believes tariffs won't affect Amazon as much as investors thought in April. With Amazon only about 10% off its all-time high after its rally, the market is starting to come around to that idea as well.

While you can't hop in a time machine and buy shares at the same level as Ackman, I still think there's a compelling argument to buy Amazon's stock here. AWS is a monster that's displaying strong growth and is extremely profitable. Outperformance by this segment will continue to drive margin expansion and deliver strong earnings per share (EPS) growth quarter after quarter that is faster than the market's growth pace (usually around 10%). That makes Amazon a long-term investment story, and it's one that I'd gladly scoop up more shares of today.

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

Before you buy stock in Amazon, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Quantum computing stocks are still quite hot in the market, although their week-to-week performance can be incredibly volatile. For example, one of the more popular quantum computing plays, Rigetti Computing (NASDAQ: RGTI), set a new all-time high right at the end of 2024, but plunged 70% just a few weeks into 2025. Now, it's only off around 40% from its all-time high. One of its peers, IonQ (NYSE: IONQ), has also seen extreme volatility, although not quite the same level as Rigetti.

Of these two, is one a more attractive stock to buy? Although quantum computing is still a few years away from being widely used commercially, any quantum company could have a breakthrough at a moment's notice, and send shares soaring. That alone is enough to get some investors excited about the stocks, but I think there's one pick that might prevail in this analysis.

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Both companies have taken steps to ensure they have adequate cash on hand

Both IonQ and Rigetti are quantum computing start-ups that rely on external funding to continue their operations. Both companies have issued more shares, taken on debt, and received contracts for their work. Basically, any funding source that's outside of actual profitability. Until these companies can prove quantum computing's relevance to everyday problems, they will be in this external funding state, which makes examining cash piles and resource burn critical.

Free cash flow (FCF) is an excellent measure of understanding how much cash is burning each quarter, as it utilizes operating cash flow and subtracts capital expenditures from that figure as well. For unprofitable companies like IonQ and Rigetti Computing, this allows investors to understand how long their current cash pile would last if operations continued in their present state.

IONQ Free Cash Flow (Quarterly) data by YCharts

IonQ has around 16 quarters of cash left, and Rigetti has about 13 quarters left. However, Rigetti Computing is also undergoing a capital raise, as it is issuing enough stock to generate $350 million in additional funds for the company. This will ensure the company's finances and allow it to invest more aggressively in its quantum computing capabilities.

Both companies believe that 2030 will be a turning point for quantum computing. IonQ believes it will be profitable by then, and Rigetti points out that the quantum computing market will dramatically expand in the decade following 2030.

That's still five years away, so is there a clear leader in the quantum computing arms race between the two?

Predicting the future of quantum computing is nearly impossible

Both companies offer full-stack quantum computing solutions, offering everything a potential client would need to run a quantum computer. This includes the hardware and software necessary to run quantum computing workloads. As a result, they are direct competitors with each other. However, these two are also competing against some of the biggest tech behemoths in the world, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Both Alphabet and Microsoft can afford to invest billions of dollars into quantum computing if they want, and easily outspend or acquire a company like IonQ or Rigetti Computing.

This makes them formidable competitors, and they are ones to keep an eye on as well.

As for IonQ versus Rigetti Computing, it's incredibly difficult to assess whether one is beating the other in the quantum computing arms race. The best way to look at it is which company has the best 2-qubit gate fidelity, which measures how accurate a quantum computer is. IonQ has achieved 99.9% fidelity, while Rigetti Computing is at 99.5%. While that's fractions of a percent better, the amount of work necessary to go from 99.5% to 99.9% is large.

As a result, I think IonQ is likely a better pick than Rigetti. However, both companies are approaching the quantum computing arms race differently, with Rigetti Computing utilizing superconducting technology while IonQ uses trapped ions. There could be a fundamental flaw in either one of these approaches that nobody has discovered, causing every company that's taken that path to immediately fall behind in the quantum computing arms race.

As a result, I think you're better off owning a basket of quantum computing stocks than just picking one or two winners. Over the long term, owning Rigetti, IonQ, Alphabet, and Microsoft will provide better results than throwing a dart and picking a random quantum computing company. We're still far from determining a winner, and there's no guarantee that any of the companies mentioned above will win the race. It could be countless other companies that are also trying to develop a quantum computing solution. Because of that, investors should spread their risk out among multiple picks, as companies like IonQ or Rigetti Computing will likely be worthless if they lose the quantum computing race to someone else.

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 $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

There are many ways to play the AI investment trend. Hardware companies like Nvidia (NASDAQ: NVDA) are powering the training of AI models, suppliers like Taiwan Semiconductor (NYSE: TSM) are building the chips for Nvidia, and software companies like Palantir (NASDAQ: PLTR) are providing platforms to deploy AI for real-world use. I tend to prefer neutral options in the AI space. That way, I can benefit from the general buildout of AI rather than having one company succeed.

While Nvidia is an excellent choice in this realm, so is Super Micro Computer (NASDAQ: SMCI). Super Micro Computer, often called Supermicro, builds server racks and cooling solutions for data centers to house high-powered computing devices like Nvidia's GPUs. Supermicro has seen impressive growth over the past few years, but what's ahead could make investors even more money.

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Supermicro's servers offer some advantages over competitors

Server racks are fairly commoditized, so there isn't much to separate one competitor from another. However, one area where a company can make a name for itself is customizability and cooling technology. Supermicro's racks are highly modular, allowing clients of all sizes to find a server rack that fits their workload size and application.

Another advantage of Supermicro's solutions is its direct liquid-cooling (DLC) technology. Traditionally, computing hardware is cooled by moving air across the unit, which isn't the most efficient way to cool these units. Supermicro's DLC technology moves liquid across the surface (contained in tubes), which is a far more efficient way to cool them. Furthermore, because these units don't have to account for airflow, Supermicro's clients can pack more server racks into a given space, which helps decrease building costs. Supermicro estimates that this provides up to 40% energy savings and 80% space savings.

Supermicro also has key partnerships in the industry, most notably with Nvidia. Nvidia's most powerful chip, based on Blackwell architecture, can be placed in servers purpose-built to hold those exact GPUs, helping users squeeze out every last bit of performance from these chips.

Supermicro's latest results weren't the company's best

In Supermicro's third quarter of fiscal year 2025 (ended March 31), sales rose 19% year over year to $4.6 billion. While that's solid growth, the company faces some headwinds due to tariffs. Supermicro also faces some headwinds moving into next quarter, with revenue expected to be about $6 billion at the midpoint of guidance, indicating 13% growth.

However, one area where Supermicro shines is its valuation, as shares can be scooped up for a dirt-cheap level. Supermicro's stock trades for just 15.2 times fiscal year 2026's earnings, which is far cheaper than most of the AI stocks in the market, which commonly trade in the high-20s to the low-30s range.

SMCI PE Ratio (Forward 1y) data by YCharts

As Supermicro figures out tariffs and shifts supply chains around, it could see its growth start to reaccelerate, as AI demand is still massive. Nvidia forecast, using third-party data, that data center capital expenditures would reach $400 billion in 2024 but could rise to $1 trillion by 2028. Should this occur, Supermicro will see its business rapidly expand due to the field in which it's playing.

That kind of growth could send Supermicro's stock soaring if it can capture the bulk of server infrastructure, making Supermicro a potentially fantastic buy to capitalize on the AI arms race that's still heating up.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, 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 Super Micro Computer 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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Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

"Dirt cheap" and artificial intelligence (AI) aren't typically mentioned in the same sentence. There's a preconceived notion that many of the AI stocks in the market are quite expensive, which is, for the most part, a fair assessment.

However, there are still plenty of dirt cheap stocks that look like screaming buys in the AI space. Two of them are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Adobe (NASDAQ: ADBE), and each looks like an incredible buy right now.

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Why are these two dirt cheap?

I consider both of these stocks cheap because they meet two criteria. First, both stocks are cheaper than the broader market, as measured by the S&P 500 (SNPINDEX: ^GSPC). The S&P 500 has a forward price-to-earnings (P/E) ratio of 22.1, and both stocks are currently cheaper than that mark.

GOOGL PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio.

Furthermore, both stocks have rarely been this cheap, which is another sign for investors that now may be an excellent time to scoop up shares.

My second factor for determining whether a stock is dirt cheap is its ability to grow earnings per share (EPS) faster than the market. If a stock is cheaper than the broader market, yet growing more slowly, there is a good reason why it's priced below the market. Both companies are projected to post strong earnings growth over the next two years, exceeding the S&P 500's usual 10% growth rate.

Data source: Yahoo! Finance. EPS = earnings per share.

However, I believe these analyst projections are flawed, as they don't account for both companies having massive stock buyback plans. With both companies having record-low stock prices, don't be surprised if they increase their share buyback amounts. A cheaper stock makes these buybacks more effective and can cause the share count to fall quickly, which boosts EPS.

Both stocks look cheap, yet they have growth that should make them premium to the market. So, why is the market valuing them in this way?

The market assumes both companies are victims of the AI trend

Both Alphabet and Adobe's primary businesses are at risk of being disrupted by AI. Alphabet's primary business is Google Search, and there has been no shortage of predictions about replacing traditional search with AI. However, Google has already introduced AI search overviews and released an AI search mode. Both options may bridge the gap and keep Alphabet in the leadership position. Furthermore, generative AI has been around for nearly three years, and Google Search's revenue still rose by 10% in the previous quarter. So, clearly, it isn't dead yet.

Adobe is in a similar boat. Its suite of graphic design products has become the industry standard and is used worldwide. However, investors are worried that generative AI image generation could make Adobe's software obsolete.

While this may produce some headwinds, Adobe has already launched its incredibly popular Firefly AI, which allows its users to generate images and easily modify existing designs. Furthermore, generative AI tools don't offer the same level of control that Adobe's software provides, and graphic designers aren't willing to give up full creative control to a randomly generated image.

While both companies will encounter some headwinds popping up from time to time as a result of generative AI, these are mostly headline-induced worries. The actual businesses are doing just fine. Their consistent execution, combined with a cheap stock price, gives me confidence in their long-term ability to provide market-beating returns, which is why I think these two are excellent buys now.

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

Before you buy stock in Alphabet, consider this:

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

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

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Adobe and Alphabet. The Motley Fool has positions in and recommends Adobe and Alphabet. The Motley Fool has a disclosure policy.

This year has been a strange one for the markets. If you only looked at the S&P 500 (SNPINDEX: ^GSPC) on Jan. 1, lived in a cave for five months, then emerged in June, you would have thought it has been an extremely boring year for the markets. But investors know that's not the case as tariff turmoil has rattled the market, which subsequently caused it to rise when levies were decreased as concessions were made.

Despite all the market turmoil, I still think there are several compelling stocks to invest in during June. My top three are Taiwan Semiconductor Manufacturing (NYSE: TSM), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA). This trio represents all types of companies in the investment range but is focused on one of the biggest growth trends the market has ever seen: artificial intelligence (AI).

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1. Nvidia

Nvidia has been the name to own since 2023, as its graphics processing units (GPUs) are powering the AI revolution. A GPU's ability to process multiple calculations in parallel sets it apart from other computing methods. Furthermore, connecting thousands of these GPUs in clusters multiplies this effect. Several AI hyperscalers have assembled supercomputers with 100,000 GPUs, allowing them to train AI models rapidly.

Nvidia has made a fortune from these GPUs, and it's not yet done. In Q1 FY 2026 (ended April 28), its revenue rose 69% year over year. Although the U.S. government restricting chip sales meant for China had some impact, it was still an impressive quarter and shows that Nvidia is maintaining its growth rate.

During its 2025 GTC event, Nvidia touted a third-party estimate that stated data center capital expenditures were $400 billion in 2024, but were slated to rise to $1 trillion by 2028. If that prediction comes true, Nvidia's jaw-dropping growth will continue, making this a must-own stock.

2. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (TSMC) is a key supplier to Nvidia and many other big tech companies. Its chip fabrication abilities are second to none, which is why most innovative tech companies choose TSMC as their chip fabricator.

TSMC is in a unique and enviable position because it can stay neutral. Since it isn't trying to sell its chips on the market, only its chip-producing abilities, companies that compete with each other are often also TSMC clients. So, as long as the prevailing tech trend is to use increasingly advanced chips and more of them, TSMC will continue to be a winning stock pick.

Additionally, because these chip orders are placed years in advance, management has a great vision of the future. It expects AI-related revenue to grow at a 45% compound annual growth rate (CAGR) for the next five years and overall revenue to increase at a near-20% CAGR. On top of that, TSMC's stock really isn't all that expensive.

TSM PE Ratio (Forward) data by YCharts

With the stock trading for 21.2 times forward earnings compared to the broader market's 22.1 times forward earnings valuation (as measured by the S&P 500), TSMC offers an excellent combination of growth and value.

3. Alphabet

Alphabet is more on the value side of the investment spectrum, although it also provides excellent growth. In Q1, Alphabet's revenue rose 12% while diluted earnings per share rose 49%. If all you do is read news headlines about Alphabet's stock, then you may be shocked to find that the company is still doing excellent despite increasing headwinds.

Alphabet faces three primary headwinds:

1. Artificial intelligence taking over its search business.
2. An economic slowdown harming advertising sales.
3. A potential government breakup.

It's hard to predict the third headwind, as it will still be years before investors know what will happen with Alphabet's business. There are many appeals processes and settlements to be reached, and I'm ignoring that possibility right now. However, if you're uncomfortable with ignoring the impending government action, that's also OK.

Economic slowdowns happen occasionally, and Alphabet has always bounced back stronger after each slowdown, so this is only a short-term tailwind (if it occurs at all).

Lastly is AI taking over search. This is a real threat, but management has already implemented an AI search overview on Google and launched an AI mode. Furthermore, Google Search's revenue increased by 10% during Q1. If there were serious problems stemming from generative AI threats, observers likely would have seen some weakness, as widespread generative AI use has been occurring for nearly three years.

Alphabet is still doing fine as a company, yet the stock trades for less than 18 times forward earnings due to various fears surrounding it. I think now represents an excellent buying opportunity, and investors should be scooping up shares of this value play in June.

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 $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

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

The market is a forward-looking machine, so knowing where a stock is heading is key to investing success. While price targets are always estimates, it's good to know your acceptable rate of return for an investment. That way, you'll know if your stock-picking process is working.

One stock that I'm extremely confident in is Taiwan Semiconductor (NYSE: TSM). I'm confident that this stock will not only beat the market over the next five years, it will crush it. But where did I get my estimate of a 129% gain in five years? It's fairly obvious when you listen to management speak.

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Taiwan Semiconductor is a valuable partner for many companies

Taiwan Semiconductor is the world's largest chip foundry. Its clients are among the biggest tech companies in the world, including Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA). When you hear about companies like these two designing their own chip, they are designing it, but the manufacturing process is most likely farmed out to TSMC. This is a great relationship, as big tech companies don't need to maintain expensive facilities and employ thousands of workers whose only expertise is chip production.

In return, TSMC provides best-in-class technology and execution. Right now, TSMC can produce 3nm (nanometer) chips, which few other foundries can. It's also working toward 2nm chips slated to be launched later this year and 1.6nm chips for 2026. TSMC has cemented itself as a great partner by continuously innovating and offering cutting-edge technology.

Because chip orders are often placed years in advance, TSMC's management has unparalleled insight into the company's future. So, when it speaks, investors should listen. Over the next five years, management expects AI-related revenue to grow at a 45% compound annual growth rate (CAGR), with overall revenue nearing a 20% CAGR. That's strong growth, but what does that mean for the stock?

Taiwan Semi's stock rise will be tied to business performance

At the end of 2024, Taiwan Semiconductor produced $90.1 billion in revenue. If TSMC produced an 18% growth rate (near 20% as management has guided for), that figure would rise to $206 billion -- a 129% rise. That's well over a double in under five years. As long as TSMC can maintain its margins and isn't valued at an absurd starting valuation, assuming that its stock price will increase by a similar amount is not unreasonable.

Because Taiwan Semi is a sole source supplier for many of these companies, it's unlikely that it will need to compress its margins over the next few years. However, tariffs could shake up this assumption if its customers are unwilling to absorb some of the costs. One thing to note is that semiconductors are currently exempt from "reciprocal" tariffs, although U.S. President Donald Trump has stated that this arrangement will be revisited. Taiwan Semi has already gotten ahead of this threat, announcing a $100 billion investment to increase manufacturing capabilities in the U.S.

While some say this $100 billion investment equals being strong-armed by Trump, both TSMC's CEO and Taiwan's president have denied this, pointing to the fact that TSMC's existing Arizona production facility has sold out capacity through 2027. Regardless, Trump's getting what he wanted by moving more production stateside.

Furthermore, the $100 billion investment won't affect Taiwan's income statement. That expense is only recognized through depreciation in subsequent years. One area that might take a hit is its operating expenses, as TSMC will have to hire staff before actual chip production, which will decrease its margins. However, that factor will eventually disappear once the production facilities are up and running.

As a result, TSMC's profit margin may dip within the five-year timeframe, but it should return to its current levels by the end.

Moving to valuation, Taiwan Semi's stock trades at almost exactly its five-year average price-to-earnings (P/E) level.

TSM PE Ratio data by YCharts.

This gives me confidence that TSMC's stock isn't overpriced at these levels, and that any future growth will not be due to earnings expansion.

Taiwan Semiconductor is in an excellent position to capitalize on the AI boom and many other technological trends. Management has a great view of the future of chip demand, which leads me to believe that Taiwan Semiconductor's stock can more than double over the next five years.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, 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 Taiwan Semiconductor Manufacturing 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

Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Although the market had a strong week, plenty of stocks still look like phenomenal buys. I'm focusing on three right now: Nvidia (NASDAQ: NVDA), Taiwan Semiconductor (NYSE: TSM), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Although each of these stocks may have rallied over the past week, their gains will be nothing compared to the long-term stock performance that's in store for this trio.

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 »

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1. Nvidia

Nvidia makes graphics processing units (GPUs), which are widely deployed in applications that require significant computing power, such as artificial intelligence (AI) model training. Nvidia's market share in the data center GPU market is astonishing, with most estimates pegging Nvidia's market share above 90%.

Additionally, over the past 12 months, Nvidia has generated $115 billion in sales from its data center division. Considering that Nvidia's overall revenue over the past 12 months was $130.5 billion, Nvidia's performance is heavily tied to data center buildouts.

While some investors are worried that data center buildouts may slow, all big tech companies have committed to record-setting capital expenditures in 2025, most of which will be deployed in data center builds.

A third-party estimate Nvidia cited stated that data center buildouts totaled $400 billion in 2024. However, that figure is expected to rise to $1 trillion by 2028. That's incredible growth, and if it turns out to be true, there's still massive upside for Nvidia's stock if it maintains its market share dominance.

This is still the early innings of AI deployment and workload migration to the cloud. As a result, there's still a ton of data center capacity to build, which is excellent news for Nvidia. With that in mind, Nvidia is a stock that I want to buy and hold for years to come.

2. Taiwan Semiconductor

Taiwan Semiconductor (or TSMC) makes chips for Nvidia and nearly every other big tech company. These clients can't manufacture their own semiconductors, so they farm out that work to foundries like TSMC. Nobody has the long-term history of continuous innovation and execution like this company, so it has cemented its place as a valuable partner for these companies for the foreseeable future.

Management is incredibly bullish on the future. They expect AI-related revenue to grow at a 45% compound annual growth rate (CAGR) over the next five years, with overall company revenue increasing at nearly a 20% CAGR. Many companies place chip orders years in advance, so when TSMC's management speaks about future growth, investors would be wise to listen.

However, one glaring issue with TSMC is that most of its fabrication facilities are outside U.S. borders, making it a potential target for Trump administration tariffs. While this is a valid concern, investors must be aware of other issues.

First, semiconductors are currently exempt from reciprocal tariffs. Second, TSMC management unveiled plans to invest $100 billion in chip production facilities in the U.S. This may be key to staying out of the crosshairs of a tariff, as President Donald Trump's ultimate goal is to increase domestic chip production capacity.

The growth that TSMC is expected to put up is undeniable, and with the ball rolling toward getting more U.S. capacity up and running, tariffs aren't as much of a concern.

3. Alphabet

Last is Alphabet, which is trading for an absurdly low price tag. At just 17 times forward earnings, Alphabet's stock is among the cheaper stocks in the market.

GOOGL PE Ratio data by YCharts

There are multiple reasons for Alphabet's cheap price tag. First, Alphabet's primary business is advertising, which tends to be negatively affected when the economic outlook is uncertain or negative. Second, investors are worried that Alphabet's primary cash cow, the Google search engine, could be replaced by generative AI models. Last, Alphabet has been found guilty of operating an illegal monopoly in its search engine and advertising platform businesses.

That's not a great setup for Alphabet's stock, and the market is assuming the worst-case scenario outcome for all three of these problems. I think that's the wrong way to view the stock, as advertising revenue always comes back following a downturn.

Alphabet is already integrating AI summaries into its Google search results, and the court case could take years to wrap up. When all these factors are considered, I think the pessimism is excessive, and investors are ignoring a great business that's still growing at a double-digit pace.

As a result, I think investors are fine with taking a position in Alphabet here, as the pessimism is far too great.

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 $349,648!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,142!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $635,275!*

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 12, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

May 28 will be an important day for the stock of Nvidia (NASDAQ: NVDA). That's when it reports fiscal 2026 first-quarter results. While earnings reports may not be the most exciting activity, they are one of a handful of times each year that investors get information about a company.

A lot has occurred since the last time we received an update from Nvidia, and the pessimism surrounding the stock heading into this date is noteworthy. I think the pessimism will be unnecessary and that the stock could be primed to explode higher following the earnings announcement on May 28.

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

Image source: Nvidia.

Nvidia's largest clients have already hinted at how good its results will be

Why am I so confident that the company will post solid results for the first quarter? Its primary clients have already confirmed that they will keep the status quo.

Nvidia makes graphics processing units (GPUs), which are chips that specialize in complex computational tasks, such as gaming graphics (their original use) and training AI models (their current most-common use). The company has the best GPUs available, which has helped it attain an impressive 90%-plus market share in data center GPUs.

The biggest concern heading into the quarterly report is that the chipmaker's largest clients have slowed their purchases. Because there are still many high expectations built into the stock price, investors are worried it won't live up to expectations.

However, after hearing from the AI hyperscalers that are large buyers of the company's GPUs, it's clear that data center spending is going full steam ahead. And one -- Meta Platforms -- has even upped its capital expenditure (capex) guidance.

Nvidia's sustained growth is crucial since the stock's current valuation assumes that its rapid increase will continue.

NVDA PE ratio (Forward) data by YCharts.

The spread between the trailing price-to-earnings ratio (P/E) and the forward P/E indicates how much analysts expect earnings to grow this year. With the stock trading at 38.7 times trailing earnings and 25.7 times forward earnings, that projects about 51% growth.

However, this will be the last quarter of the year when Nvidia's P/E remains normal. Because of a change in export restrictions to China, it had to take a $5.5 billion write-off this quarter, so investors shouldn't be alarmed when it reports a drop in profits. The real number to keep an eye on is growth, and that's expected to be strong for years to come.

The four-year outlook is strong.

While one-year returns are nice, keeping focused on the three- to five-year horizon gives investors an edge. One guiding light that CEO Jensen Huang gave them is that Nvidia expects data center capex to rise from $400 billion in 2024 to $1 trillion by 2028.

That's monster growth, and if it turns out to be true, it doesn't matter what happens to the stock after the first quarter since the long term will still be incredibly promising.

Over the past 12 months, the company has generated $115 billion from its data center division, which indicates that Nvidia gets around 30% of total spending on data center infrastructure. If Huang's $1 trillion projection turns out to be true and his company can maintain a 30% hold on that spending, it would generate $300 billion from data center GPU sales.

That would be incredible growth, making it a solid stock. Even if expectations fall short of that lofty figure, Nvidia is still the top dog in the GPU world, and with a massive amount of AI infrastructure still to be built, it's an excellent investment.

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

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. Keithen Drury has positions in Meta Platforms and Nvidia. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.

Amazon (NASDAQ: AMZN) is one of the least understood big tech companies. Everyone is familiar with its e-commerce platform and most probably use it weekly. However, its e-commerce business isn't a primary profit driver.

This is why worrying about what China tariffs will do to Amazon's business isn't productive. There are other parts of Amazon's business that make the majority of the profits, and these will do just fine.

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

Image source: Getty Images.

AWS generates the majority of Amazon's operating profits

First, let's break down where Amazon's revenue comes from.

Data source: Amazon. Note: YOY = Year over year. Note: Percentages may not add up to 100% due to rounding errors.

As you can see, online stores and third-party seller services, which facilitate other sellers on Amazon's commerce platform, make up the majority of Amazon's revenue.

However, operating profits are a different story.

AWS alone accounted for 63% of operating profits in Q1. This is possible because AWS' operating margin was 40% in Q1, compared to a companywide operating margin of 12%.

So, as long as AWS is doing well, Amazon's profit picture will do well. Considering AWS grew 17% in the quarter, it's on the right track. Additionally, it's expected to continue putting up strong growth, as cloud computing is an important part of artificial intelligence (AI) infrastructure buildout.

Cloud computing is vital in AI because few companies have the resources or skillset to maintain a giant data center with high-powered computing equipment. So, they rent this computing power from providers like AWS. This growth is expected to continue for some time, as the demand far outweighs the capacity.

Tariffs are also not expected to affect this demand, so investors can rest easy about that fear.

AWS is my primary reason for buying Amazon stock, but another intriguing division exists.

Advertising is an important part of Amazon's business

Amazon's fastest-growing segment is advertising, which grew revenue 18% year over year in Q1. Unfortunately for investors, Amazon doesn't break out this division's operating margin, but you can use clues from other companies to determine this margin.

Two big tech companies with dominant ad platforms are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META). Both companies get the majority of their revenue from ads, with Alphabet sourcing 77% of revenue from ads and Meta getting 98% from ads.

Consequently, you can examine both companies' operating margins to get an idea of what Amazon's advertising service divisions might produce as an operating margin.

GOOGL Operating Margin (Quarterly) data by YCharts

Both companies have consistently produced between 30% (Alphabet) and 40% (Meta) margins, so it's safe to assume that Amazon's ad service business likely has a margin profile around those figures.

If you take the conservative approach and give the ad service business a 30% operating margin, you can estimate that it generated $4.2 billion in operating profits. That would account for about 23% of Amazon's total operating profits.

This means that ad services and AWS combined made an estimated 86% of Amazon's operating profits in Q1. That's an impressive profit share, so investors need to understand that these two divisions steer Amazon's profits.

Advertising may not hold up as strongly as AWS, as ad budgets are known to get cut during an economic downturn. But Q1 growth figures were still strong, which might bode well for the rest of the year. Plus, if Chinese products are no longer priced to compete with products sourced from other locations, those companies may feel the need to advertise to promote their products, which could level out any headwinds caused by declining dollars from Chinese products.

We'll see how this shakes out throughout the year, but Amazon's two most important divisions are thriving now, so the stock should continue to do the same.

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.

See the 3 stocks »

*Stock Advisor returns as of May 5, 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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

Although the market is starting to trend up a bit from its recent lows, nothing is stopping another announcement from the White House or Federal Reserve that could crash the market again. You should keep a short list of stocks you'd scoop up during a market crash, so you're ready to act when it happens.

Two stocks at the top of my shopping list are Nvidia (NASDAQ: NVDA) and Taiwan Semiconductor Manufacturing (NYSE: TSM). If we see another big drop, these will be among my first purchases.

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 »

Image source: Getty Images.

Nvidia

Nvidia makes graphics processing units (GPUs), the computing muscle behind most of the artificial intelligence (AI) models we use. Nvidia dominates this market, with many estimates putting its market share at more than 90%. Buying dominant companies in critical industries is a smart investing strategy, which is exactly why Nvidia is at the top of my shopping list.

Right now, we're in a multi-year buildout cycle with massive demand for Nvidia GPUs. Third-party data used by Nvidia estimates that data center capital expenditures reached $400 billion in 2024 and could rise to $1 trillion by 2028. Part of the market is still a bit pessimistic and thinks this spending spree will slow down if trade wars ramp up.

But all of the language of Nvidia's largest clients on their conference calls seems to indicate that it's full speed ahead for data center spending.

I don't think investors need to wait for a market crash to buy Nvidia's shares, as they are currently down around 25% from their all-time high. The stock is also trading at the lowest forward price-to-earnings ratio it has seen in over the past year, which should excite investors even more. At its current level, it only trades for a slight premium over the S&P 500, which is valued at around 21.1 times forward earnings.

NVDA PE Ratio (Forward) data by YCharts

Nvidia is still a smart buy today, but if the market crashes, it'll be one of my first purchases.

Taiwan Semiconductor

Similarly, Taiwan Semiconductor is in great shape to take advantage of the chip boom caused by AI. Taiwan Semi is the world's largest chip manufacturer and holds contracts with several big tech companies (like Nvidia) that can't fabricate chips themselves. Many of these companies place their chip orders years in advance, so investors should listen when TSMC's management makes a projection about the chip market.

Over the next five years, management expects AI-related revenue to expand at a 45% compound annual growth rate (CAGR). Its projection for overall company revenue is a CAGR of nearly 20%, or an increase of nearly 148% over those five years. TSMC recently gave investors even more confidence when its CEO, C. C. Wei, made this comment during its Q1 earnings report:

We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers' behavior so far. Therefore, we continue to expect our full-year 2025 revenue to increase by close to mid-20s percent in US dollar terms.

That's great news for shareholders, but there's still some fear that a future tariff announcement specifically targeting semiconductors could be coming. Regardless of whether one comes or not, TSMC's chips are vital to nearly every high tech device out there, and it's a cost that must be absorbed. As a result of this fear, the stock is still relatively cheap.

TSM PE Ratio data by YCharts

With the stock trading for under 19 times forward earnings, I think it's still an excellent buy at these levels, and investors should scoop up shares while they're still cheap.

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 $303,566!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,207!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,103!*

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 May 5, 2025

Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Turning $10,000 into $1 million is every investor's dream. That's a 100-times return on your investment, and it could be the very thing investors need to meet all their retirement goals. However, this kind of return in that timeframe is extremely rare. Only a handful of stocks have ever accomplished this feat.

Nvidia (NASDAQ: NVDA) has been a strong stock to own over the past few years, but there's still a ton of growth left in the AI market. Is there enough for a $10,000 investment to turn into $1 million a decade? Let's find out.

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

Image source: Getty Images.

Nvidia has already posted jaw-dropping returns

Nvidia is actually one of those stocks that turned $10,000 into $1 million in a decade. Even with the stock well off its all-time highs, if you invested $10,000 in Nvidia a decade ago, it would be worth around $2 million today. Unfortunately, investors don't have a time machine to go back and invest in Nvidia, so all that's left is looking forward.

So, could Nvidia turn $10,000 into $1 million again? Likely not.

For that to happen, Nvidia's value would need to rise 100 times, turning Nvidia from a $2.66 trillion company to a $266 trillion company. For reference, the entire U.S. stock market cap was around $62 trillion at the end of 2024. It's expected to reach around $128 trillion worldwide by the end of 2025. So, it's pretty evident that a $266 trillion company isn't going to appear a decade from now.

But is a $10,000 investment in Nvidia still a smart one? I think so.

You don't have to look for moonshot returns to be a successful investor; you just need to beat the market by a few percentage points each year. I think Nvidia can accomplish that, as there is still a ton of AI growth left.

Nvidia's growth is still expected to be strong moving forward

Nvidia's graphics processing units (GPUs) are best in class and have a greater than 90% market share in data centers. Few companies reach that level of dominance, but this just speaks to how successful a company Nvidia has been.

While data center buildouts have been massive over the past few years, they're nothing compared to where Nvidia thinks they're headed. In 2024, they estimated that data center capital expenditures were around $400 billion. However, Nvidia expects that number to rise to $1 trillion by 2028. That's monster growth in a four-year timeframe, and if Nvidia maintains its market share, it could see similar growth in its already impressive financials.

However, the market is worried that this data center spending could come under pressure if a trade war ramps up. This notion has been disproven, at least in the short term. Nvidia's biggest clients are AI hyperscalers like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Both of these companies affirmed commitments to massive capital expenditures over the next year, mostly focusing on data centers to power AI.

This means that Nvidia's growth is full steam ahead, but the market values the stock as if that's not the case.

NVDA PE Ratio (Forward) data by YCharts.

At 25 times forward earnings and 37 times trailing earnings, Nvidia is now valued at similar levels to its tech peers, such as Apple (NASDAQ: AAPL), which trades at 34 times trailing earnings and 29 times forward earnings, despite not having nearly the same growth potential as Nvidia. Furthermore, Nvidia isn't that much more expensive than the broader market, as measured by the S&P 500 (SNPINDEX: ^GSPC), which trades at 20.5 times forward earnings.

Nvidia still has a ton of growth left in the tank, even if the market isn't valuing it that way. While it won't turn $10,000 into $1 million, market-beating returns aren't out of the question, which makes Nvidia a great stock to scoop up today.

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 $296,928!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,933!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,685!*

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 28, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) has been the must-own stock for the artificial intelligence (AI) race. However, it sold off a fair bit over the past few months alongside the rest of the market. Currently, it sits around 25% to 30% down from its all-time high, trading at levels last seen during the late summer of 2024.

It's not often that a sale price comes around on a big-time winner like this, but today's sale price only really matters if Nvidia is still heading in the right direction a few years from now. So, where will Nvidia be in four years? The answer may surprise you.

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

Image source: Nvidia.

Nvidia's business has been so dominant that competitors are starting to rise up

Nvidia's graphics processing units (GPUs) drive the company. Originally designed for processing gaming graphics, GPUs soon found many alternative uses. Due to their unique ability to process multiple calculations in parallel, they are useful for any task that requires intense computing power, such as training and running an AI model.

Nvidia isn't the only company making GPUs, but it dominates the market. Most estimates peg Nvidia's data center GPU market share above 90%, which is very impressive. However, with that kind of market share dominance, it invites other players to the industry, as Nvidia is making a ton of money from its GPUs.

Nvidia's profit margins have skyrocketed since the start of the AI race, and some of its clients are getting fed up with the price they must pay for Nvidia GPUs. So, they're starting to look for alternatives.

NVDA Profit Margin data by YCharts.

One area that many of the AI hyperscalers are looking toward is custom AI accelerators, such as those designed by Broadcom (NASDAQ: AVGO). These units are tailored to process one type of workload and can outperform Nvidia GPUs in certain applications, such as training and running AI models. However, they are tailored for a specific workload, making them inflexible to run others. This likely isn't a big deal, as many of the AI hyperscalers already know how they want their AI workloads to run.

As a result, Nvidia could see some competition coming its way, but it likely won't be enough to dethrone Nvidia as an investment.

There will be plenty of data center revenue to go around

The biggest factor for Nvidia investors is understanding where data center capital expenditures are going. If this spending falls off a cliff, Nvidia's revenue will follow. However, using outside data, Nvidia projects that data center capital expenditures will rise from around $400 billion in 2024 to $1 trillion by 2028.

Over the past 12 months, Nvidia has generated $115 billion from its data center division. If that $400 billion figure is true for 2024, that means it captured just shy of 30% of total data center spending. Should data center capital expenditures expand to the $1 trillion mark and Nvidia keep all of its market share, it would generate around $288 billion. That's monster growth, but Nvidia may not be able to capture all of it due to rising competition from custom AI accelerators.

Broadcom estimates that the addressable market will be between $60 billion and $90 billion from three major clients alone by 2027. That's about a third of Nvidia's projected 2028 revenue (if it captures all of it), so it's safe to say that Broadcom is targeting Nvidia's market share.

So, is Nvidia doomed over the next few years? I'd say no. The future will likely be a combination of GPUs and custom AI accelerators, meaning stocks like Nvidia and Broadcom will be successful investments. Will Nvidia have the rocket-ship growth it once did? Likely not. But it will likely still put up strong double-digit growth, making it a great candidate for a stock that can beat the market moving forward, especially if you can scoop up shares on sale right now.

However, if the data center market doesn't reach that projected figure, Nvidia's stock may struggle to rise, as its overall revenue may be capped and under pressure as competition rises.

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 $296,928!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,933!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,685!*

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 28, 2025

Keithen Drury has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

One of the primary companies that investors are worried about getting severely hurt by tariffs is Amazon (NASDAQ: AMZN). Amazon is the world's largest online retailer, and a large chunk of its goods come from China, which currently has a sky-high tariff rate. If this cost is passed onto the consumer, these goods may not be purchased anymore, which would hurt Amazon's retail sales.

However, I don't think that's the correct metric to use when assessing Amazon's prospects, as the sale of goods doesn't make Amazon a ton of money. Instead, I'd challenge investors to examine where the profits come from. After doing that, it's clear that Amazon will be just fine, even if the brewing trade war drags on.

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 gets a ton of revenue from its commerce business

Over the past 12 months, Amazon's three divisions have produced the following revenue and operating profits:

Data source: Amazon.

This brings up an interesting point: Despite Amazon Web Services (AWS) generating only 17% of revenue, it made up 58% of its operating profits. That's because the margins on this business are far superior to the two commerce divisions.

So, will tariffs affect Amazon's cloud computing wing? Maybe.

Cloud computing workloads are very sticky and don't tend to be shut off after they are turned on. Additionally, there is still an ongoing AI arms race, which needs computing power from data centers to train and run these models.

However, if their clients start getting a bit more conservative with their spending, AWS's growth may slow down. That's what could be happening right now, as a Wells Fargo report stated that Amazon has paused some of its data center lease commitments. This is contrary to what Amazon CEO Andy Jassy stated a few weeks ago, as he didn't expect to slow any data center buildouts at that time. We'll likely learn more about this situation on May 1, when Amazon reports its quarterly earnings, but until then, we'll have to be patient.

Advertising is a key part of Amazon's profits

Another factor in Amazon's profit picture is how much it makes from advertising. Advertising services have grown to become a large chunk of Amazon's revenue picture, making up 15% of Amazon's total revenue in Q4. Unfortunately, Amazon doesn't break out the specific operating margin for this segment, as it lumps it into the North American and International segments. So, we'll just have to speculate.

If you look at advertising-focused companies that have a similar scale to Amazon's ad service, like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META), you'd get a good idea of what level of operating margins Amazon's ad division could produce. Over the past 12 months, Alphabet and Meta Platforms delivered 32% and 42% operating profit margins, respectively. If Amazon's ad business produced a 30% operating margin, then it would have generated about $5.2 billion in operating profits, or about half of what AWS generated. While there's no rock-solid information to confirm that figure, it's likely a pretty accurate estimate.

This means that a large chunk of Amazon's operating profits come from ad services and AWS, not direct commerce sales.

Advertising could be affected by an economic slowdown, as companies tend to slash ad budgets in the face of one. However, this may not come to fruition, as some companies may launch new products produced in other countries, so advertising will be necessary to make consumers aware of them.

Regardless of how tariffs shake out, Amazon isn't going to collapse because of them. While revenue may take a slight hit, most of its profits will be fine, and that's the metric that investors care most about. As a result, I think investors can confidently buy shares of Amazon, as it will be just fine over the long term.

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 $287,877!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,678!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $594,046!*

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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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Wells Fargo is an advertising partner of Motley Fool Money. Keithen Drury has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

The stock market drawdown has opened up several investment opportunities, but few are more attractive than The Trade Desk (NASDAQ: TTD) right now. Some unfortunate timing hit the stock, and it has actually been hit by two sell-offs in a row, which has made the stock much cheaper than it has been in some time.

The Trade Desk's growth runway is massive, and if you don't buy shares of this top-tier company, you'll regret it years down the road.

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 »

The Trade Desk is bigger than it was the last time it was valued at this level

The Trade Desk has been a rock-solid performer for its entire life on the public markets. It had never missed management revenue guidance but failed to meet those expectations in the fourth quarter. As a result, the stock plummeted more than 30% after it reported Q4 results on Feb. 12. That was just a few days before the S&P 500 notched its last all-time high before the stock market moved lower.

As a result, the already beaten-down stock fell even further, leading to the current point where The Trade Desk is down 65% from its all-time high. You'd have to rewind back to January 2023 to see the last time the stock traded this low, but investors need to ask themselves: Is The Trade Desk a far better company than it was in January 2023?

Part of the reason The Trade Desk missed its revenue guidance was its transition from one platform to another. The Trade Desk's primary product is a software platform that helps ad buyers (companies with a product or service to advertise) place their ads in the most optimal locations. The Trade Desk may not have access to some areas of the Internet, like Facebook or Google, but it does have reach into important areas like podcasts and connected TV.

The 100% transition from its old Solimar platform to its new Kokai platform caused some issues, which is why The Trade Desk missed revenue expectations. Over the long term, this will be a much better platform for the company and its clients because Kokai is an AI-based platform that can adjust ad campaigns based on the data that it sees instantly.

Another reason why The Trade Desk dropped was that it gave fairly mundane Q1 guidance, with revenue only expected to grow 17%. We'll find out the true growth rate when The Trade Desk reports on May 8, but I expect them to exceed this projection. After a revenue miss, management wants a guaranteed win, so "underguiding" for Q1 so it can get back on track seems like a wise move.

But even if The Trade Desk just meets expectations, the stock looks like a great value here.

The stock looks like a strong buy at these levels

After the sell-off, The Trade Desk's stock is starting to look extremely attractive, especially considering its market value at the start of 2025.

TTD PE Ratio (Forward) data by YCharts

Though 27 times forward earnings isn't cheap, it has a massive growth runway, especially as society transitions from linear to connected TV. Wall Street analysts expect 17% revenue growth in 2025 and 20% in 2026, so the stock is clearly expected to put up market-beating growth.

The market was willing to pay a sky-high premium for the stock heading into the new year, but a revenue miss and a market-wide sell-off caused the stock to plummet to lows not seen for a long time. This seems like the perfect opportunity to scoop up an industry leader for cheap and hold onto the stock for three to five years as the recovery begins.

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 $276,000!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

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 April 21, 2025

Keithen Drury has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) has been notorious for being a high-growth, highly valued stock since its run began in early 2023. However, that's no longer the case using this one common and important evaluation metric. Now, it's nearly the same price as the S&P 500 (SNPINDEX: ^GSPC), which is an odd thing to say considering how much growth Nvidia is expected to put up over the next few years.

However, this metric has one important consideration, and it could be giving investors false hope.

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 »

The forward price-to-earnings metric is useful if you understand its nuances

The valuation metric that I most like to use -- and the one that's relevant in this discussion -- is the forward price-to-earnings (P/E) ratio. By definition, forward earnings haven't been achieved yet; they're just projections. As a result, they are inherently flawed because these predictions rarely come true. Furthermore, because the forward P/E ratio uses multiple analyst projections to come up with an average value, not every one of them can be right. But the average of all of them gives investors an idea of where the company's earnings could be heading, which is important considering how the market works.

The market isn't a rearward-looking entity. If it were, then tariff concerns wouldn't affect the stock market because it would only be looking at the past when tariffs weren't an issue. This is why the trailing P/E ratio is somewhat irrelevant (in my opinion) because it looks at where the stock has been, not where it's going. Still, the trailing P/E ratio can be a useful metric in conjunction with the forward P/E, as investors need to make sure earnings aren't going to fall off a cliff in future quarters.

The forward P/E ratio is especially useful for high-growth companies like Nvidia, as valuing it on trailing earnings when monster growth is expected in the next few quarters isn't a wise move. From this standpoint, Nvidia has nearly reached the same level as the S&P 500.

NVDA PE Ratio (Forward) data by YCharts

At 22.4 times forward earnings, Nvidia is only slightly more expensive than the S&P 500's 19.8 times forward earnings valuation. This is despite the fact that Wall Street analysts project 54% revenue growth in FY 2026 (ending January 2026) and 23% growth in FY 2027.

However, this price could be artificially low, as analysts might be waiting for Nvidia to report first quarter earnings before adjusting their projections. There are plenty of fears surrounding Nvidia, especially with tariffs looming. But is this enough to avoid the stock?

Reports are mixed on chip demand

Nvidia's graphics processing units (GPUs) have become the go-to computing components for training and running AI models. As more computing power is needed for these models, Nvidia will sell more. However, some AI hyperscalers have been slowing their data center expansion plans. None of these reports jive with what their management said just a few weeks ago, and they don't fit with what critical supplier Taiwan Semiconductor (NYSE: TSM) stated.

In TSMC's Q1 results, its CEO noted, "We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers' behavior so far." Nvidia uses TSMC's foundry to produce its chips, which clearly indicates that Nvidia hasn't canceled a bunch of its chip orders from TSMC yet.

That doesn't mean there won't be a slowdown, but the market is currently assuming the worst-case scenario for Nvidia's business, which is why the stock is down so much. As a result, I think right now represents an excellent buying opportunity, as long as you can stay patient with the stock for three to five years. If you can, there's a high probability that Nvidia will crush the market over that time frame.

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 $276,000!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

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

Keithen Drury has positions in Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

There are plenty of stocks on sale right now with the market well off its all-time highs. One of the stocks I added to my portfolio a while back due to lower prices was Broadcom (NASDAQ: AVGO), although its price today is lower than when I purchased it. I'd still consider adding to my position today, as it's an incredible AI company with a bright future.

With any stock, I'm not concerned about what the stock price does a week or a month after I purchase it. Instead, I'm focusing on a three- to five-year time frame, and Broadcom's outlook during that period is quite strong.

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 »

XPUs are an emerging opportunity for Broadcom

Broadcom has its fingers in many industries. Its products range from mainframe software to internet connectivity to storage systems. However, I'm most focused on its emerging product line for artificial intelligence (AI) model training. Broadcom is using its chip design expertise to assist companies in producing their own custom AI accelerators, which Broadcom calls XPUs.

XPUs are similar to graphics processing units (GPUs), which are still the most popular choice when it comes to training AI models. However, XPUs can outperform GPUs when the workload is properly set up. In the early days of AI training, the AI hyperscalers were all attempting to figure out the most efficient way to train these models. So, having a flexible computing device like a GPU was critical.

Now, these hyperscalers have an idea of how to train their respective AI models, so building a device tailored to that computing method allows them to train AI models more efficiently. Furthermore, because the design work is done between Broadcom and its client, clients don't have to pay such sky-high premium as they do with Nvidia (NASDAQ: NVDA), the current GPU leader that has made a massive profit from its devices.

Broadcom's management team sees a massive market for these GPUs and other connectivity switches used in data centers. In its fiscal 2024, Broadcom generated $12.2 billion in revenue from this sector, up from $3.8 billion in 2023. However, management believes this segment could have an addressable market of $60 billion to $90 billion by fiscal 2027, which would indicate massive growth.

There's a key point in that $60 billion to $90 billion projection: It only comes from three clients. With two more hyperscalers slated to launch their XPUs this year and two more selecting Broadcom as a partner for their XPUs, this market range will dramatically expand from the current projection.

Given that Broadcom generated $54.5 billion in revenue over the past 12 months, its revenue could easily double in the next three to five years from one product line alone. This is huge news for investors, as Broadcom's XPU growth is a way to invest in an AI hardware stock like Nvidia was at the start of 2023.

The stock looks like a solid deal right now

Broadcom's stock trades for about 26 times forward earnings following the sell-off. Although that's a cheaper price than investors previously had to pay for Broadcom, it's still not cheaper than some of the other big tech stocks in the market.

AVGO PE Ratio (Forward) data by YCharts

However, I think there's massive growth in store for Broadcom over the next few years as its business shifts to focusing on XPUs. As GPUs start to wear out, another demand cycle will appear for AI computing hardware. While not every GPU will be converted to an XPU, there will be some changeover, allowing Broadcom to expand its revenue base dramatically.

If you can focus on the three- to five-year picture for Broadcom, it looks quite bright. At its current price, Broadcom stock is still a no-brainer buy.

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

Before you buy stock in Broadcom, consider this:

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

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Keithen Drury has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

There is a lot of speculation about the effects of President Donald Trump's tariff plans, but none have been seen yet, as many companies are still sorting through how they will be affected. As first-quarter results roll out, you'll get more commentary on how tariffs will affect various businesses, but one very important company has already offered commentary on tariffs.

Taiwan Semiconductor (NYSE: TSM) is one of the world's most important companies, as it is the chip foundry for many of the world's top companies. It made a comment on tariffs that will likely shock readers, and all investors should heed its CEO's words.

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 »

TSMC's CEO is bullish on the rest of 2025

Taiwan Semiconductor is one company that could be affected by tariffs, as most of its chips are made in Taiwan. While TSMC has built a plant in Arizona and announced a $100 billion investment to build more facilities in the U.S., the vast majority of its production is overseas.

On another note, TSMC's chips haven't yet been slapped with a huge tariff rate. Semiconductors are currently exempt, but President Trump has noted that there will be an upcoming semiconductor tariff. Regardless, the possibility of tariffs affecting demand for its chips hasn't been felt yet, which is why TSMC's CEO C.C. Wei had this to say on the company's recent Q1 conference call:

We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers' behavior so far. Therefore, we continue to expect our full year 2025 revenue to increase by close to mid-20s percent in U.S. dollar terms.

So, TSMC hasn't seen any effects of tariffs. Let's see how that shakes out if a semiconductor-specific tariff is announced, but it's business as usual for Taiwan Semiconductor as of right now. This likely isn't the case for every company, so this speaks to Taiwan Semi's strong position.

Despite its strong growth outlook and lack of tariff effects, the stock has been heavily sold off, which allows investors to scoop up shares for a steal.

The stock still hasn't reacted to the news

Despite strong Q1 results, Taiwan Semiconductor still trades like its business is about to fall off a cliff due to tariff effects.

TSM PE Ratio data by YCharts

Nineteen times trailing earnings and 16 times forward earnings is a dirt-cheap price tag for one of the world's most important companies, especially when it projects that 2025 revenue will increase in the mid-20% range.

This stock looks even cheaper when you compare Taiwan Semiconductor to the broader market, as measured by the S&P 500 (SNPINDEX: ^GSPC). The market trades for about 21.4 times trailing earnings and 19.8 times forward earnings, which is far more expensive than TSMC's stock in both cases.

The CEO of this company, who is much better connected in the tech world than almost anyone else, just told investors that the company hasn't felt any tariff impacts and doesn't anticipate any. However, the stock hasn't recovered from this sell-off and continues to move lower even after his optimistic statements. This clearly indicates that it's a great buying opportunity for the stock, and I think it's among the best buys in the market right now.

Even if a semiconductor tariff slightly affects TSMC's demand, it's still the most important chip foundry in the world, and its steps to move some production to the U.S. will benefit it. Thanks to AI, there's just too much growth in the chip industry, and Taiwan Semiconductor is one of the best ways to invest in this trend.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $566,035!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $629,519!*

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Keithen Drury has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

The $1 trillion stock club has been getting a bit thinner amid the stock market sell-off, as a handful of companies have fallen out of this prestigious club. At this writing, there are only eight companies with a $1 trillion valuation worldwide, but two more could easily join their ranks over the next few months if the market recovers.

Taiwan Semiconductor (NYSE: TSM) and Broadcom (NASDAQ: AVGO) are two companies that are destined to join the $1 trillion valuation club. Each has already reached that threshold but is currently on the outside looking in thanks to the sell-offs.

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 »

These two companies will be OK over the long term and will likely rejoin the $1 trillion club either this year or next. Here's a closer look.

1. Taiwan Semiconductor

Broadcom and TSMC aren't that far away from joining the $1 trillion club, as Broadcom and TSMC are currently valued at around $800 billion and $770 billion, respectively. That's still a 25% increase from today's level to get to $1 trillion, so if these stocks can do that in short order, they could be fantastic stocks to buy right now.

TSMC is the world's largest chip foundry. It makes chips for its clients who cannot do so themselves. These include companies like Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), and Broadcom. By staying neutral in the chip production world, Taiwan Semiconductor isn't competing against its clients, which is why it has grown to become the top option in the foundry space.

Another reason it is near the top is its drive to offer the most advanced technology. Currently, TSMC's most powerful chip is the 3 nanometer (nm) variety, which means chip traces are spaced at a minimum of 3 nm apart. However, it's slated to launch 2 nm and 1.6 nm chips this year and next, which represent improvements over current technology.

As for tariffs, Taiwan Semi's CEO recently made this comment:

We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers' behavior so far. Therefore, we continue to expect our full year 2025 revenue to increase by close to mid-20s percent in U.S. dollar terms.

This is an extremely bullish comment by the CEO, and it makes me even more confident that TSMC will eventually return to the $1 trillion club.

2. Broadcom

Broadcom does many different things, but one emerging product line makes me bullish on the stock. Its custom AI accelerators, which it calls XPUs, are an alternative to Nvidia's GPUs, which have dominated the AI computing marketplace. Some customers are fed up with the prices they have to pay for Nvidia's GPUs and prefer Broadcom's XPUs because they are tailored to one workload, such as those used to train an AI model, eliminating ancillary functions that one customer may use and another doesn't.

While the adoption of these units doesn't spell the end for Nvidia, it does open the door for Broadcom to steal a sliver of the market, which it projects it will do shortly.

By 2027, Broadcom expects the addressable market for XPUs to be $60 billion to $90 billion from just three clients. With two clients launching their XPUs later this year and two more clients selecting Broadcom to produce their XPUs, that market opportunity is expected to expand. Considering Broadcom's trailing 12-month revenue totals $54.5 billion, any growth from this segment will dramatically boost its overall total.

This makes Broadcom a great stock to pick up for cheap, as the latest market sell-off has opened up an attractive buying opportunity.

Both stocks are on sale

From a forward price-to-earnings (P/E) standpoint, both Broadcom and TSMC look like bargain deals.

TSM PE Ratio (Forward) data by YCharts

Broadcom has a slightly higher premium than TSMC, as investors aren't as worried about Broadcom losing as much business as TSMC. However, the price you pay for both businesses is still much cheaper than in recent months.

I think both stocks look like great deals now and will provide investors with market-beating returns over the long term. However, you'll have to be patient, as there are plenty of fears regarding tariffs surrounding the broader economy.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, 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 Taiwan Semiconductor Manufacturing 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 $566,035!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $629,519!*

Now, it’s worth noting Stock Advisor’s total average return is 829% — 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 21, 2025

Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Apple (NASDAQ: AAPL), the world's largest company, fell alongside most other stocks during this month's market downturn. It's around 23% off its all-time high, which is likely causing many investors to question whether now is a good time to buy the stock.

Although Apple is down significantly, I don't think today's prices are a buying opportunity. Apple is still rather expensive compared to some other big tech stocks, and it would need to tumble further before I'd consider taking a position.

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Apple's primary revenue driver hasn't grown in years

Apple is one of the most recognizable brands on earth due to its strong foothold in the smartphone sector, a device the vast majority of Americans own. However, that market is saturated and isn't growing like it used to. Furthermore, Apple hasn't released an innovative feature on its iPhones in a long time, so consumers are not upgrading their smartphones as often.

With iPhones being the largest segment within Apple by far (iPhone sales made up 56% of Apple's revenue during its last quarter), this stagnation isn't great for the company. However, this isn't just a 2024 issue; it has been happening for some time.

The first quarter of Apple's fiscal year (which ended Dec. 28, 2024 for Apple's fiscal year 2025) is the company's most important iPhone quarter, because it encompasses the Christmas holiday. But iPhone sales during this time frame haven't budged over the past five years.

Data source: Apple.

When you consider other factors like inflation, this lack of growth becomes even more of an issue.

Another factor that could harm Apple's business is tariffs. Apple's iPhones are assembled in China, but they recently received temporary relief from tariffs as they were recategorized. They still face a 20% tariff as of right now. However, Commerce Secretary Howard Lutnick said semiconductor-related tariffs are coming, and Apple likely won't escape those.

So, Apple has three choices:

1. Eat the cost of tariffs,
2. Pass those costs on to the consumer, or
3. Pass those costs on to the supplier.

The only way Apple's finances aren't harmed is option No. 3, but it's likely that it won't be able to pass along that much of the costs to the supplier. As a result, Apple could struggle until it moves some of its business back into the U.S.

Those aren't great prospects for Apple, yet the stock still has a premium valuation.

Apple's stock still isn't cheap despite the sell-off

Even after the stock has tumbled 23%, Apple's stock still fetches a hefty premium.

AAPL PE Ratio data by YCharts

Apple still trades above where it did from a trailing price-to-earnings (P/E) ratio perspective for most of 2021 through the beginning of 2024. Even its forward P/E ratio isn't attractive, as Apple's growth isn't expected to be strong this year or next. Wall Street analysts only project 4.2% revenue growth in fiscal year 2025 and 7.2% in fiscal year 2026.

A large chunk of the "Magnificent Seven" cohort has much better growth prospects and trades for a lower valuation than Apple does. As a result, I think investors should take a look at those stocks rather than waste time with Apple. The only thing propping up its valuation is its brand, which won't mean a whole lot if the consumer can't afford a tariff-impacted iPhone.

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

Before you buy stock in Apple, 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 Apple 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!*

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See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

Finding deals after a sell-off is a great way to make a profit as an investor. Many stocks are currently trading for an absurdly low valuation, even after the bump that stocks got on Wednesday.

Two that look like screaming buys right now are Taiwan Semiconductor Manufacturing (NYSE: TSM) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Each of these stocks is so cheap right now that investors cannot afford to miss out on the deals the market is offering.

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Taiwan Semiconductor Manufacturing

At first glance, Taiwan Semiconductor appears to be an odd pick. President Donald Trump specifically targeted Taiwan with a 32% tariff rate, which could hurt Taiwan Semi since most of the chips it makes are produced in Taiwan. That rate has now dropped to 10% to all countries across the board. However, that ignores a huge piece of information in the tariffs: Semiconductors are exempt. This is a key point that many investors are missing, making Taiwan Semi an intriguing buy right now.

Another factor that could keep Taiwan Semiconductor off of Trump's list of targeted companies is that it's actively working to build new production facilities in the U.S. TSMC recently announced a $100 billion investment in U.S. chip manufacturing facilities, which will include three fabrication facilities, two packaging centers, and one research and development (R&D) facility. That's big news for TSMC, and it's exactly what Trump wants: to move more manufacturing capabilities inside the U.S.

Still, there's fear that a weaker consumer could hurt TSMC's business, as some of its chips are used in consumer-facing products like smartphones or vehicles. While this demand will likely dip, it's bound to be outweighed by massive growth in AI chip demand. Over the next five years, management projects that artificial intelligence (AI)-related revenue will increase at a 45% compound annual growth rate (CAGR). Overall, it expects its total revenue to grow at a 20% CAGR, indicating that the company will be fine.

Investors will hear more commentary on how tariffs will affect Taiwan Semi's demand during its Q1 conference call on April 17, but there's no reason to doubt the stock as much as the market does right now. Following the sell-off, Taiwan Semi's stock now trades for less than 18 times forward earnings.

TSM PE Ratio (Forward) data by YCharts

That's an incredibly cheap price for one of the world's most important companies, especially when you consider its growth and ability to sidestep tariffs. With how cheap the stock is right now, I think it's one that investors can't afford to miss out on, and they should be buying up shares left and right at today's prices.

Alphabet

Alphabet is a member of the "Magnificent Seven," a group of tech stocks that have led the market over the past five years. These stocks were often noted as being expensive, but Alphabet has never fetched a premium valuation.

Many investors are worried that its advertising-focused business model centered around the Google ecosystem may be in trouble as generative AI takes some of its market share. However, the habit of "Googling" something is engrained in the behavior of most users around the world. Plus, Alphabet has already integrated generative AI-powered summaries into Google search results, so it's getting ahead of the curve.

Still, should the economy plunge into a recession caused by tariffs, Alphabet's advertising business won't fare well. Advertising is one of the first places companies look to cut expenses during a downturn, which has historically negatively affected Alphabet.

I don't expect this time to be any different should the economy plunge into a recession, but this is far from the first time the market has been worried about a recession over the past 15 years. Despite that, Alphabet's stock is not far from a 15-year low from a trailing price-to-earnings (P/E) standpoint.

GOOGL PE Ratio data by YCharts

So, even with all the fears caused by tariffs or a recession, Alphabet's stock looks dirt cheap from a historical standpoint. This sell-off has occurred without any confirmation of a recession, only the fear of one.

As a result, I think today marks an excellent buying opportunity for Alphabet stock, as it has rarely been this cheap over the past 15 years. We'll hear more from Alphabet in early May about how it believes tariffs will affect the company, but I think it's an excellent time to scoop up Alphabet shares.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.