SoFi Technologies (NASDAQ: SOFI) has been a major winner in the past 12 months. Shares are up just over 100% since early June 2024, highlighting how the business is winning over investors in remarkable fashion. But to be fair, it has been a volatile stretch.

This leading digital bank hardly flies under the radar anymore. It's doing a great job bringing on new customers, especially as it continues innovating with new products. Shares currently trade 45% below their peak, though.

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Investors should consider what the future might hold. Where will this top fintech stock be in five years?

Image source: SoFi Technologies.

Becoming a top 10 financial institution

CEO Anthony Noto, who has an impressive background working for the National Football League, Goldman Sachs, and Twitter (now X), has high hopes for his company. "Meeting all of a person's financial needs in one place with world-class products delivered seamlessly and digitally gives us a massive advantage," he said on the 2024 third-quarter earnings call last October. "This is why you will often hear me say it's a matter of when, not if, we become a top 10 financial institution."

It's not exactly clear what metric Noto is focused on with this goal. It could be market cap, revenue, or assets, for example. Nonetheless, it's strikingly clear that SoFi still has a long way to go.

According to Federal Reserve data, the 10th largest bank in the U.S. by assets is State Street. As of March 31, it had $368 billion in total assets on its balance sheet, more than 10 times bigger than SoFi.

It's part of every CEO's job to drive investor excitement. But from Noto's perspective, it's easy to be optimistic about what SoFi could look like in the future. That's because growth has been superb.

The business added 800,000 net new customers last quarter, with the total count approaching 11 million. And SoFi's first-quarter adjusted net revenue of $771 million was more than it brought in for all of 2020.

I'm confident that by 2030, SoFi will be a much larger financial services entity. It should have more customers, more products, higher revenue, and higher profits. Based on the company's success, it's difficult to think any other way.

However, there could still be some risks that affect SoFi's success over the next five years. For one, the culture of product innovation could weaken and pressure customer growth.

What's more, management could loosen up lending standards and its risk management in the name of faster expansion. So far, though, there's nothing concerning, but investors should be mindful of risk factors.

SoFi stock in 2030

As of this writing, this stock trades at a price-to-earnings ratio (P/E) of 34.9. This appears to be an expensive valuation, but there's more to it than meets the eye.

Management believes that profits will soar. It's expected that in 2026, earnings per share (EPS) will be $0.68 at the midpoint. And in the years after that, the company thinks EPS will grow at a compound annual rate of 20% to 25%. Based on these forecasts, EPS will total $1.25 in 2030.

Let's assume the P/E contracts to 23.4 in 2030, which is the current multiple of the S&P 500. I believe this could be a conservative view. Then, we're looking at a stock price of $29.25 at the end of the decade.

Of course, this is a rough estimate, but it shows that SoFi Technologies shares could return 105% in the next five years. No one will argue with that kind of performance.

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

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When thinking of the most powerful brands on the planet, Apple and Coca-Cola might immediately come to mind. I wouldn't be surprised if Nike (NYSE: NKE) gets brought up as well.

The leader in athletic footwear and apparel has a storied history, to be sure. However, it has hit a major rough patch. The share price, which is down 39% in the past five years, reflects underlying fundamental issues with the business.

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But opportunistic investors hunting for strong returns could see a turnaround play here. Can this consumer discretionary stock double a $1,000 investment over the next five years?

Image source: Getty Images.

Nike's strategic missteps

Nike generated $11.3 billion in revenue in the third quarter of 2025 (ended Feb. 28). That figure was down 9% year over year and also 9% lower than the same period in fiscal 2023. What's more, earnings per share (EPS) tanked 30%. These financial metrics are wildly disappointing.

With the benefit of hindsight, it becomes very clear what mistakes Nike made to get to this point. The business relied too much on classic footwear franchises, which contributed to a lack of product innovation that drove a loss of customer excitement.

On the distribution front, Nike leaned heavily on going direct to the consumer, mainly in e-commerce, alienating retailing partners in the process. And this opened up shelf space to up-and-coming rivals, particularly in the important running category.

Fashion is a tough industry to crack. Companies have to work hard to cater to the constantly changing tastes that consumers have. For example, the rise of the athleisure trend was a boon for Lululemon Athletica while spawning new businesses like Alo Yoga and Vuori. It seems more recently, there is growing interest in looser-fitting clothes. Change is the only constant.

It is surprising, though, that Nike has taken such a big hit financially. After all, this company has been around for decades, leading the global sportswear market. It should have a better pulse on consumer trends than any business in the industry. But even the best can still run into problems.

It's time to focus on the brand

Nike possesses one of the world's most iconic brands. I don't believe anyone would disagree here. This brand is precisely what makes up the company's economic moat. It provides a key asset for Nike to focus on.

CEO Elliott Hill, who was brought in last year to orchestrate a successful turnaround, is focusing on the right strategic priorities. It's all about getting back to product innovation and meeting customers where they are. Nike recently started selling its products on Amazon again after taking a six-year break from the dominant online marketplace.

For what it's worth, Nike still has a leading market share in the worldwide sportswear industry. Its brand, high-visibility athlete endorsements and league partnerships, broad distribution capabilities, and marketing prowess give it the tools it needs to succeed.

Nike's path to doubling your money

Nike shares are near the cheapest they've been in the past decade, trading at a price-to-earnings (P/E) ratio of 20.9. Expectations are understandably low, but that introduces upside potential.

Investors must believe that Nike will get back on track sooner rather than later. And by this, I mean it starts to register solid revenue and EPS growth. Making real progress could take some time, but this is the formula for investment success.

I wouldn't be surprised if the stock can double in five years, turning $1,000 into $2,000 by the end of the decade. A cheap starting valuation, coupled with improving fundamentals, can drive huge share-price gains. However, I still think this remains a very risky investment opportunity as the uncertainty is high.

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Amazon (NASDAQ: AMZN) has been one of the best investments anyone could've made. In the past 20 years, shares have catapulted 11,270% higher (as of June 3). A $10,000 investment would've turned into more than $1.1 million today. That's life-changing wealth.

As of this writing, this "Magnificent Seven" stock trades 15% off its peak from early February. Now might be a great time to add this dominant enterprise to your portfolio. Here's why Amazon shares still look like a long-term winner.

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Image source: Amazon.

Amazon has numerous avenues for growth

Investors prefer to own companies that exhibit solid growth, thanks to the presence of a powerful secular trend. Amazon stands out above the crowd because it has multiple tailwinds working to its benefit.

We all know about the massive online marketplace, which makes Amazon a leader in the e-commerce niche of the broader retail sector. According to data from the Federal Reserve Bank of St. Louis, physical shopping in the U.S. still represents 84% of the industry, providing Amazon with a durable opportunity to capture in the decades ahead.

Amazon Prime membership is estimated to have 220 million subscribers worldwide, providing recurring and predictable revenue for the business. People can buy items with fast and free delivery, get savings on gas, and watch shows and movies. Consequently, the rising popularity of streaming entertainment should make Prime a compelling service for more people.

Advertising might fly under the radar, but that should change. In the first quarter, digital advertising contributed $13.9 billion to Amazon's revenue. That sales figure increased 19% year over year. Amazon.com counted 2.6 billion visitors in April, so there's plenty of attention that can be monetized.

Amazon also has a budding presence within healthcare. Amazon One Medical is a primary care service offering in-person and telehealth appointments to patients. There's also Amazon Pharmacy, which can deliver medications at discounted prices.

AWS has become a high-powered business

One important secular trend that hasn't been mentioned here yet is cloud computing, a market poised to register fantastic growth going forward. CEO Andy Jassy says that 85% of IT spending is still on-site, which introduces a truly massive opportunity as these companies shift to off-premises and take advantage of the cloud.

Enter Amazon Web Services (AWS), which continues to be a significant growth engine, reporting a 17% revenue gain in Q1. In the past 12 months, AWS raked in a whopping $112 billion in sales, making it the leader in the global cloud market.

It's also bolstering the bottom line. Operating income came in at $11.5 billion for AWS during Q1, translating to a remarkable operating margin of 39.5%. It has required substantial investments to get to this point, but now AWS can leverage its expense structure to generate sizable profits.

With AWS, Amazon also has a critical platform to launch various artificial intelligence (AI) tools for its customers. "Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we've only fantasized," Jassy said.

Valuation and earnings create upside

While Amazon certainly proves that it's a wonderful company, it's important for investors to look at the stock's valuation as well. If you pay too much, no matter how great a business it is, returns going forward can disappoint.

Amazon shares trade at a forward price-to-earnings (P/E) ratio of 33.3. On the surface, this doesn't exactly look like a bargain. However, when you realize that net income soared 77% between 2021 and 2024, and that the analyst community sees earnings per share rising 62% from 2024 to 2027, it's easy to be bullish.

Amazon has been a fantastic stock to own in the past, and it can still be a long-term winner in the future.

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 $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!*

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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. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Although the market has been bouncing back in the past couple months and approaching its previous all-time high, not all companies are riding the wave. As of June 6, this growth stock is trading an eye-watering 84% below its peak, a record mark that was established in July 2021. At this point, maybe it's too hard to ignore the dip.

Should you buy shares in June and hold them for the next 20 years? Here are some important variables to think about.

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Image source: Roku.

Riding two secular trends

The internet has helped to reshape industries, corporate strategy, and consumer behavior. This is evident in the rise of streaming entertainment. It also reveals itself when you look at the digital advertising market.

The business that benefits from both of these secular trends is Roku (NASDAQ: ROKU). It provides users with a single platform that allows them to aggregate all their content. At a time when it seems there's an unlimited number of streaming apps out there, it's extremely valuable to have them all in one place. As such, Roku has top market share among smart TV operating systems in the U.S., Mexico, and Canada. A whopping 40% of new TVs sold in the U.S. during the first quarter came equipped with Roku software.

You couldn't tell by the stock's weak performance, but this company continues to post double-digit growth. Revenue increased 16% in Q1 (ended March 31). This was after the top line expanded by 18% in 2024. At the end of last year, Roku counted 89.8 million memberships, although it has stopped reporting this key metric.

It's worth highlighting that 86% of the company's sales in the first quarter of 2025 came from its platform segment, which makes money partly from advertising. "With more than half of U.S. broadband households and our expanding ad product offering, we provide marketers the reach and visual impact of traditional TV with the performance of digital advertising," the latest shareholder letter reads.

Understanding the financial situation

In 2021, Roku generated $242 million in net income. That was a great year, but it was an anomaly. Roku has consistently reported net losses, to the tune of a cumulative $866 million in the past nine quarters. This could change, though, due to expense controls.

The leadership team expects to post positive operating income in 2026. As a scaled internet-enabled enterprise, Roku should be able to grow the bottom line as it scales up and increases revenue. Investors should pay close attention.

Roku had its initial public offering in 2017. So I can certainly understand the critical viewpoint; if the business hasn't yet become consistently profitable, then maybe it won't happen anytime soon. In other words, we could be looking at the true nature of the company's financial situation.

It helps that the company has a clean balance sheet. As of March 31, Roku had $2.3 billion in cash and cash equivalents. On the other hand, it had zero debt. This reduces the chance it runs into financial troubles.

Valuation, risk, and time horizon

Because the stock has gotten crushed, the valuation is compelling. Shares trade at a price-to-sales ratio of 2.7. This is 69% below the stock's historical average. The current setup demonstrates just how much investors have soured on the business.

That valuation is attractive, no doubt. And I think it makes up for what I view as an important risk.

Investors can't ignore the competitive landscape. Big tech giants Alphabet, Amazon, and Apple all offer their own streaming apps and media hardware devices, putting them all head-to-head against Roku. This just means that Roku will have to remain focused on doing what's best strategically for its viewers and for its ad partners. So far, though, it has held its own in the industry.

It's difficult to say ahead of time that you should own a stock for 20 years. That's very far out into the future. However, Roku has the necessary ingredients to be a big winner. It has a cheap valuation, leading industry position, and meaningful growth potential. I believe investors who have a long time horizon should take a closer look at buying the stock.

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

Before you buy stock in Roku, 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 Roku 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!*

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*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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Roku. The Motley Fool has a disclosure policy.

Apple (NASDAQ: AAPL) shares are down 18% in 2025 (as of June 6). This makes Apple the worst-performing "Magnificent Seven" constituent this year, besides Tesla. Investors are probably concerned about tariff uncertainty and the company's slow progress with artificial intelligence (AI).

The stock is currently 21% below its peak. So, it has some work to do to get back to its former glory. Legendary investor Warren Buffett and his conglomerate, Berkshire Hathaway, have sold a sizable chunk of their shares in the past several quarters.

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However, should you go against the Oracle of Omaha's moves and buy the dip on Apple stock? I think the answer might surprise you.

Image source: Getty Images.

It's easy to recognize the positive traits

I mention Buffett because many individual investors like to follow his buy and sell decisions. Clearly, when Berkshire first bought Apple in early 2016, they must've thought the tech giant was a high-quality enterprise. It's not hard to see why.

Apple's brand is arguably the most recognizable in the world. This position wasn't created overnight. It took years and years of introducing truly exceptional products and services, that were well designed and incredibly easy to use, on a global scale. Apple is an icon, to say the least.

That brand has helped drive Apple's pricing power. And this supports the company's unrivaled financial position. Apple remains an unbelievably profitable business. It brought in $24.8 billion in net income in the latest fiscal quarter (Q2 2025 ended March 29).

Apple's products and services are impressive on their own. However, it's the combination of both of these aspects that creates the powerful ecosystem. Consumers are essentially locked in, which creates high barriers for them to switch to competing products. This favorable setup places Apple in an enviable position from a competitive perspective.

Even the best deal with issues

Despite Apple's market cap of nearly $3.1 trillion, which might make some investors believe it's immune to external challenges, this business is dealing with some notable issues recently. There are three that immediately come to mind.

The first problem is that Apple's growth engine seems to be decaying. Net sales were up less than 7% between fiscal 2021 and fiscal 2024. And they're up just over 4% through the first six months of fiscal 2025. According to management, there are likely over 2.4 billion active Apple devices across the globe. That number continues to rise with every passing quarter, but you get an idea of how ubiquitous these products are. Plus, the maturity of the iPhone, now almost two decades into its lifecycle, might lead to limited opportunities to further penetrate markets.

Critics can also call out Apple's slow entrance into the AI race. For example, we won't see an AI update to Siri until next year, a launch that was delayed. At the same time, it seems like other companies are moving rapidly to win the AI race.

Lastly, Apple has been and could continue to be drastically impacted by the tariff situation. China, which has gotten the most attention from President Donald Trump during the ongoing trade tensions, has been a manufacturing powerhouse for Apple. The business is being forced to shift its supply chain around to minimize the impact. Apple CEO Tim Cook said that the situation makes it challenging to forecast near-term results.

There's no margin of safety

Even though this stock trades 21% off its peak, investors aren't really getting a bargain deal here. The price-to-earnings ratio is 32 right now. That's not cheap for a company whose earnings per share are only expected to grow at a compound annual rate of 8.8% between fiscal 2024 and fiscal 2027.

In my view, there's zero margin of safety. If you're an investor who wants to generate market-beating returns over the next five years, I don't think you should buy Apple today.

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Tesla. The Motley Fool has a disclosure policy.

When it comes to massive retailers, perhaps two of the businesses that immediately come to mind are Costco Wholesale (NASDAQ: COST) and Home Depot (NYSE: HD). The former specializes in selling bulk quantities of general merchandise, while the latter focuses on home improvement goods. Shares of both companies have been monster winners in the past four decades.

The economic picture might look a bit gloomy. But that isn't stopping you from allocating capital to this sector. Which of these top retail stocks is the better buy right now?

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Image source: Getty Images.

Costco continues to put up solid financial performance

Costco's financial results make you forget that the U.S. is in the middle of an unprecedented trade war, soft consumer confidence, and record levels of credit card debt. During the fiscal 2025 third quarter (ended May 11), total revenue was up 8% year over year. This was supported by a 5.7% gain in same-store sales, which itself was boosted mainly by higher foot traffic.

This points to the clear value proposition that shoppers see. And it makes complete sense why. Costco provides extremely low prices on high-quality goods in a no-frills environment. It has immense buying power that allows it to obtain favorable pricing on merchandise for its warehouses. This directly benefits shoppers.

The customer base keeps growing, with about 5 million net new cardholders joining in the past 12 months. Costco also benefits from loyalty, as the membership renewal rate was 92.7% in the U.S. and Canada. The business should prove resilient should economic conditions deteriorate, given consumers' ability to handle all of their shopping needs in one stop and in a budget-friendly manner.

This is a massive enterprise. However, the growth story isn't over. Costco plans to end fiscal 2025 having opened 24 net new warehouses. The plan is to expand the physical footprint by about 25 to 30 new stores each year going forward, with plenty of opportunity both in the U.S. and internationally.

Home Depot is in the midst of a slowdown

Home Depot hasn't been navigating the economic situation that well. Higher interest rates pressure the housing market. And inflationary pressures, as well as general uncertainty among consumers, don't bode well for expensive renovation projects. This explains why Home Depot's same-store sales declined 3.2% in fiscal 2023 and 1.8% in fiscal 2024. On a bright note, this key metric is expected to rise 1% this fiscal year, according to management.

With this business, it's best to zoom out and pay attention to the bigger picture. For starters, Home Depot remains an extremely profitable enterprise. Its operating margin has averaged 14.4% in the past five years. Consistent earnings mean investors benefit from regular payouts. Home Depot spent $2.3 billion in dividends just in the past fiscal quarter. Management also occasionally repurchases shares.

The home improvement industry is massive, estimated to be worth $1 trillion in annual revenue. Home Depot is the clear leader, but its 16% market share means there is room to continue growing. It has the brand name, omnichannel capabilities, and product availability to outperform smaller rivals.

It helps that there is so much untapped equity in the housing market, thanks to home prices rising substantially in the past five years in the U.S. Homeowners have the wherewithal to tackle upgrades when they feel confident enough about the economy. And this should drive revenue growth for Home Depot.

How important is valuation to you?

Each of these leading retailers possess their own unique investment merits. However, I don't think it's a polarizing view to say that Costco is the better business. Its financial performance speaks for itself.

This doesn't mean you should go out and immediately buy Costco shares. The valuation will give anyone a reason to pause and think twice. Shares trade at a price-to-earnings (P/E) ratio of 59.7, which is extremely expensive. It's totally reasonable to expect that multiple to come down meaningfully over the next five or 10 years, which introduces a notable headwind for shareholders.

Home Depot stock, on the other hand, trades at a more reasonable P/E ratio of 25.3. To be clear, the business isn't humming along quite like Costco is. But things should improve once the economic backdrop is more favorable. And this means Home Depot has greater upside than Costco.

Should you invest $1,000 in Costco Wholesale right now?

Before you buy stock in Costco Wholesale, 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 Costco Wholesale 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 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

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Home Depot. The Motley Fool has a disclosure policy.

Financial services is arguably the most important industry in our economy, as the movement of money, as well as saving and lending activities, is vital for individuals, businesses, and governments. But alongside the massive banks we're all familiar with, there are smaller businesses to pay attention to.

In the past decade, the integration of technology within this sector in an effort to better serve customers has become hard to ignore. And this ongoing trend has investment implications for those looking to put money to work in this area.

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

Here are the smartest fintech stocks investors can buy with $500 right now.

Image source: Getty Images.

PayPal

The first fintech enterprise that should be on your radar is PayPal (NASDAQ: PYPL). The business has been at the forefront of digital payments for more than two decades, and it continues to be a leader in the space.

PayPal has 436 million active accounts. During the first quarter, it handled a whopping $1.7 trillion in annualized total payment volume, showcasing its impressive scale. There are multiple segments under the hood, like the PayPal-branded checkout solution, Braintree for merchants, and Venmo. It's the latter that is exhibiting the fastest growth lately, driven by the notable adoption of the Venmo debit card product.

While there is intense competition in the payments landscape, PayPal has carved out a successful niche. That's because it has a strong brand name in the industry that individuals and merchants have come to trust. As a two-sided platform, the business benefits from a powerful network effect.

PayPal's financial situation is robust. The balance sheet is in solid shape, with $15.8 billion in cash, cash equivalents, and marketable securities compared to $12.6 billion in debt. Profitability is worth mentioning, as the operating margin was a stellar 19.6% in Q1. For this full year, the company is expecting to produce $6 billion to $7 billion in free cash flow. The plan is to spend $6 billion just on share repurchases.

The market has soured on this company, as the stock currently trades 77% off its peak from July 2021 (as of June 3). This gives investors a cheap forward P/E ratio of 14 to take advantage of. That's a good deal for a growing and profitable payments leader.

SoFi Technologies

Another fintech stock to buy right now is SoFi Technologies (NASDAQ: SOFI), the budding digital bank that's continuing to register fantastic growth. During the first quarter, the business posted a year-over-year revenue gain of 20% while adding 800,000 net new customers to the mix. As of March 31, SoFi had amassed 10.9 million customers, up tenfold in the past five years.

Clearly, the company's products and services are a hit. That's because SoFi is finding success with a goal that seems to emphasize utilizing technology to provide an exceptional user experience when it comes to handling one's finances. The average customer uses 1.5 different products, so there remains a significant opportunity to cross-sell.

A new development is that SoFi is now firmly profitable. Diluted earnings per share (EPS) totaled $0.06 during Q1, marking the sixth straight quarter of positive generally accepted accounting principles (GAAP) net income. The leadership team believes this is just the beginning. After forecasting $0.68 (at the midpoint) of EPS in 2026, the expectation is for this bottom-line figure to increase at a compound annual rate of between 20% and 25% in the years after.

It won't always be smooth sailing. Something all banks deal with is cyclicality. Should there be an economic downturn in the U.S., it's likely that SoFi's robust growth and improving profitability will take a hit. This should be temporary, though.

As of this writing, investors must be comfortable paying a forward P/E ratio of 49 to add the stock to their portfolios. At first glance, this doesn't look like a bargain deal. However, when you consider the earnings trajectory, the valuation becomes more compelling.

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

Before you buy stock in PayPal, 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 PayPal 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 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

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy.

Uber Technologies (NYSE: UBER) has been on an absolute tear. As of June 3, its shares have soared 38% in 2025. That's a tremendous gain during a time when the broader S&P 500 index is up just 2%.

If you zoom out, the return is even more eye-popping. In the past two years, this top growth stock has catapulted 109% higher. Strong financial performance is clearly winning over the investment community.

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 »

Perhaps you've missed the ride thus far. Is it too late for investors to buy Uber?

Image source: Getty Images.

Diversified business model

It's been incredible to observe Uber's monumental ascent. What was once solely a ride-hailing service has evolved into both a mobility and delivery behemoth. In Q4 2019, prior to the COVID-19 pandemic, mobility gross bookings represented 75% of the company's total. In the latest quarter (Q1 2025), it was an almost even split between mobility and delivery.

This kind of diversified model is hard to overstate, and it gives Uber an advantage. This shows up in the ability to leverage the same driver network, allowing these gig workers to earn more money. Uber has more data to work with, which can support various marketing and promotional activities. And it can be a holistic solution for consumers who don't want to navigate multiple apps.

What's more, Uber brings in more than one revenue stream. In the first quarter of 2025, it registered $6.5 billion in revenue from mobility and $3.8 billion from delivery. There is a freight segment as well, which is tiny by comparison.

Generating substantial profits

What was probably once unimaginable to the critics is now a reality. And that is the fact that Uber is extremely profitable these days. It's a scaled platform that is boosting bottom-line performance. Uber posted $1.2 billion in operating income in Q1. That figure is a drastic improvement from a $1.3 billion operating loss in the first quarter of 2020.

A fresh focus on creating a more efficient organization is clearly working. The management team expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow about 37% to 40% between 2024 and 2027.

Operating from a position of power

Uber continues to operate from a position of strength thanks to its tremendous network effect. It counted 170 million monthly active users in Q1. There are more than 7 million drivers. And last year, Uber surpassed 1 million merchants. With more users, drivers, and merchants, the entire platform constantly becomes more valuable to all stakeholders.

Uber's competitive position is also supported by its powerful brand presence. The Uber name is now often used as a verb, both for getting from point A to point B and for having something delivered. That mindshare works wonders for Uber's visibility.

And it highlights just how valuable Uber has become to other companies that want to tap into such a massive user base. Uber recently announced partnerships with OpenTable and Delta Air Lines.

And key players working on autonomous vehicle (AV) technology, like Waymo, WeRide, and many others, have also chosen to partner with Uber to help further develop, improve, and commercialize their services. Because of Uber's competitive strengths and unrivaled reach, it makes sense these partners are leaning on it. Uber is positioning itself to be a leader in AV.

Are you late to the Uber party?

At the start of 2025, shares traded at a very compelling forward price-to-earnings (P/E) ratio of 16.7. Of course, the situation isn't as cheap today. The current multiple is 22.9. However, I don't believe this valuation is asking too much of investors.

As mentioned, there are many reasons to like this business. And there remains a sizable growth opportunity. For instance, CEO Dara Khosrowshahi says that AV technology alone presents a $1 trillion opportunity just in the U.S. Additionally, Uber is trying to sign up more teenagers, increase rider frequency, and expand use cases.

There appears to be substantial upside for prospective investors over the long term. This means it's not too late to buy Uber stock.

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

Before you buy stock in Uber Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% 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

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

Warren Buffett's incredible track record allocating capital for Berkshire Hathaway makes him a legend. For the average investor, following the conglomerate's portfolio to find potential ideas is a smart use of time.

In Berkshire's massive $277 billion portfolio, one well-known consumer brand is currently the third-largest position. There's no doubt that investors are familiar with this business, as it's been around for over a century.

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

If you invest $1,000 in this top dividend stock, could you become a millionaire one day?

Image source: Getty Images.

Generating sizable income for Berkshire

Berkshire has a stake in numerous companies. However, it owns a whopping 400 million shares in Coca-Cola (NYSE: KO), giving it control of 9.3% of the beverage giant. Berkshire has been a shareholder for decades, which highlights Buffett's appreciation of Coca-Cola.

Coca-Cola currently pays a quarterly dividend of $0.51 that yields 2.84% on a yearly basis. The business deserves a lot of credit for raising the payout for an unbelievable 63 straight years, a track record that investors will probably struggle to find anywhere else. This demonstrates the company's staying power.

This position generates a huge income stream for Buffett. Berkshire rakes in $816 million in annualized income from its stake in Coca-Cola. It's no wonder shares aren't being sold.

Coca-Cola is a high-quality business

It's easy to understand why Buffett likes Coca-Cola's business. For starters, it has one of the world's most recognizable brands. Coca-Cola has a successful history of providing consumers with consistent products that satisfy their thirst. Add to this effective marketing, a truly global footprint with a presence in more than 200 countries, and 2.2 billion servings consumed daily, and it's obvious that Coca-Cola's high visibility is a key part of its success.

What's more, the brand supports ongoing pricing power, a trait Buffett loves. Just in the latest quarter (Q1 2025, ended March 28), the company's sales benefited from a 5% impact from favorable pricing and mix. The fact that customers are loyal to the brand means that Coca-Cola can likely continue to increase prices within reason and not deal with tapering demand.

Coca-Cola is also an extremely profitable enterprise. The company relies on third-party bottlers and distributors to get its products to consumers. This results in a more efficient operating model that helped drive a 32.9% operating margin in Q1.

Another important characteristic that Coca-Cola has that long-term investors should appreciate is its longevity. It seems that the economy is undergoing rapid change these days, thanks to the continuing impact of technology. Coca-Cola simply doesn't invite much in the way of disruption, which means its profits and dividend payouts face minimal threats. This reduces risk.

What investors should expect

In the past 10 years, Coca-Cola has produced a total return of only 137%. This figure includes dividends. That performance is worse than the three stock market indexes, which is discouraging for investors looking to amass serious wealth.

Since the business is so mature with muted growth prospects, it's a good idea to temper expectations. The share price isn't going to skyrocket in the years ahead.

The valuation also isn't cheap. As of this writing, the stock trades at a price-to-earnings ratio of 28.8, above its trailing-five-year average.

The lack of substantial growth prospects, coupled with the elevated valuation, means Coca-Cola won't turn you into a millionaire. But dividend investors might still be interested in adding the stock to their portfolios.

Should you invest $1,000 in Coca-Cola right now?

Before you buy stock in Coca-Cola, 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 Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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

Now, it’s worth noting Stock Advisor’s total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Investors who choose to actively manage their portfolios, picking individual businesses in the process, probably want to beat the market over the long term. To achieve this goal, perhaps it's a good idea to look at past winners. Maybe the good times will continue.

Artificial intelligence might be getting all the attention. However, there's one booming footwear stock that has skyrocketed 465% in the past five years (as of May 14). That kind of stellar performance deserves a closer look.

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 »

Is this the smartest stock you can buy with $1,000 right now?

Image source: Getty Images.

Rapid growth is a thing of the past

Between fiscal 2019 and fiscal 2024 (ended Dec. 31), Crocs (NASDAQ: CROX) reported magnificent revenue growth of 233%. This was boosted by the HeyDude acquisition in 2022, but you still get an idea of the rapid expansion that occurred. There's no doubt that this growth drove share price gains.

More recently, the growth has slowed dramatically. Last year, Crocs posted a revenue bump of 3.5%. In the latest quarter (first-quarter 2025 ended March 31), sales dipped slightly on a year-over-year basis. To be fair, though, the flagship Crocs brand remains a bright spot, with revenue up 2.4%. HeyDude is the weak link, as its sales tanked 9.8%.

Management said the results were better than expected. However, the leadership team isn't overlooking the current macro environment, one in which uncertainty appears to be the key theme. Guidance for the full year was pulled.

Nonetheless, it's not hard to be optimistic that the business can weather the storm. One reason why is due to Crocs' incredible profitability. In Q1, the business reported a gross margin of 57.8% and an operating margin of 23.8%. Both of these figures are better than sportswear juggernaut Nike (NYSE: NKE), for instance. Being in solid financial shape should help reduce risk, something bolstered by the executive team's focus on paying down its debt load.

Investors wouldn't be blamed for expecting durable growth. It helps that Crocs has a total addressable market valued in excess of $160 billion, hopefully leading to long-term expansion potential.

Fashion trends are constantly changing

Crocs' financial and stock performance in the past five years speaks for itself. But the company still possesses one major risk, which is that the brand could fall out of favor with consumers. In the apparel and footwear industries, it seems that change is the only constant. Tastes are always shifting. This makes it harder for Crocs to remain relevant over the long term, as the business must always try to stay ahead of the curve.

To its credit, though, it has focused on product innovation, as well as effective marketing and brand campaigns, to drive interest. Investors must watch closely to ensure the brand doesn't fall out of favor in the future.

Selling on the discount rack

Despite the sizable gains, shares of Crocs have been volatile, to say the least. As of this writing, they trade 34% off their peak from November 2021.

Investors might not care, mainly because the valuation remains too hard to ignore. The stock trades at a forward price-to-earnings ratio of 9.4. For comparison's sake, the S&P 500 index (SNPINDEX: ^GSPC) trades at a multiple of 21.2, highlighting the massive discount at which the market is offering Crocs stock.

This is for a business that has exhibited rapid sales growth over the long term and that generates significant earnings and free cash flow. The risk of brand obsolescence can't be ignored, but the cheap valuation makes up for it, I think. While it's difficult to say that this is the smartest stock to buy, investing $1,000 in Crocs today could provide a boost to your portfolio over the next five years.

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

Before you buy stock in Crocs, 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 Crocs 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

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Crocs. The Motley Fool has a disclosure policy.

Since hitting a peak in January, the S&P 500 index has traded down, and is currently 14% off that record (as of April 22). President Donald Trump's economic policies, particularly around trade and tariffs, are causing a lot of uncertainty.

For individual investors, it can be scary to see the value of their portfolios declining. However, it's crucial to remain optimistic over the long term. Now might be a great time to put money to work.

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

The stock market is in the midst of a sell-off. The best investors should still consider buying my top Vanguard exchange-traded fund (ETF) with $2,000 right now.

A simple way to diversify

The S&P 500 is the most closely watched index for a good reason. This benchmark contains some of the largest companies in the U.S., and it represents about 80% of the total market value of all stocks that trade on exchanges in this country.

I view the Vanguard S&P 500 ETF (NYSEMKT: VOO) as one of the best ways for investors to gain exposure to the performance of the S&P 500. It's a simple way to automatically diversify your portfolio.

The ETF contains businesses in every sector, ranging from communication services and consumer discretionary to real estate and utilities. And it has exposure to some of the most dominant companies.

The ETF is offered by Vanguard, a pioneer in the industry that's been around since 1975. With total assets under management of $10.4 trillion (as of Jan. 31), this is a very reputable company to entrust with your hard-earned savings.

Double-digit returns at a low cost

In 2023 and 2024, the S&P 500 produced a total return of 26% and 25%, respectively. These gains were fantastic, but investors shouldn't expect this type of performance to continue. Instead, it's more reasonable to assume that we'll see a reversion to the mean.

In the past decade, the Vanguard S&P 500 ETF has generated a total annualized return of 11.3%. If we zoom out even further, the S&P 500 has typically put up a 10% yearly return. Looking ahead, it's best to have a more tempered outlook, with a double-digit gain certainly in the cards.

It's hard to complain about these kinds of results. Data shows that the vast majority of active fund managers, so-called professionals in the investment management industry, lose to the S&P 500 over an extended period. And in doing so, they still charge high fees to clients.

The Vanguard S&P 500 ETF is somewhat of a no-brainer investment option when viewed in this light. It carries a tiny expense ratio of 0.03%. On a $2,000 investment, only $0.60 goes to Vanguard to cover its overhead expenses. That's a great deal.

Keep the right mindset

There's a lot of fear right now among investors. No one is sure how the tariff situation will play out. And people are worried about a recession in the near future. It can make sense that investors would be hesitant to put money to work. However, it's important to always maintain a long-term mindset.

There have been numerous bear markets and corrections in the past. And every single time, the S&P 500 has ultimately recovered to reach a new high. The lesson for investors is to accept that drawdowns are normal. Moreover, the best times to invest are when everyone else seems to be running for the exits.

Investing $2,000 right now in the Vanguard S&P 500 ETF is a smart decision that will benefit you in the long run.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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

Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Shares of SoFi Technologies (NASDAQ: SOFI) are up an impressive 70% in the past 12 months. However, they have been extremely volatile. As of April 25, they trade 28% below their 52-week high.

Investors won't struggle to find reasons to like this digital banking powerhouse that's aiming to disrupt a massive industry. It's developing competitive strengths and still has a lot of growth potential.

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

Here's why this fintech stock could be a no-brainer buy in April.

SoFI is looking at a huge goal

"It's a matter of when, not if we become a top 10 financial institution," CEO Anthony Noto said on the third-quarter 2024 earnings call. Noto could be referring to market cap, total assets, or even revenue. Regardless of what metric he's focused on with that ambitious goal, it's clear that SoFi still has a long runway for growth. That's impressive in what is considered to be an extremely mature industry.

SoFi continues to win over customers with its fully digital platform. There are no physical bank branches to invest in and maintain. This allows the leadership team to prioritize providing a superior tech-driven user experience. SoFi's customer base has expanded by 10-fold just in the last five years. This indicates the company's offerings, like checking/savings accounts, various loans, and investment brokerage, are resonating strongly with consumers.

According to Wall Street consensus analyst estimates, SoFi's revenue is projected to increase at a compound annual rate of 18.5% over the next three years.

The customer base is growing, and there is a significant opportunity to cross-sell products. For example, someone who has a checking account with SoFi could eventually take out a loan. And it helps that the business typically brings on a younger demographic that has greater lifetime value.

Building competitive strengths

Companies with an economic moat are considered high-quality because they can defend themselves against the constant threat of competition. Dominant financial services entities, like JPMorgan Chase and Bank of America, fit this category. They typically benefit from switching costs and a cost advantage.

Founded in 2011, SoFi is still a newbie in the industry. However, it's trending in the right direction in terms of developing durable competitive strengths. Customers will deal with switching costs as time passes and they sign up for more products from SoFi. Of course, this depends on the business continuing to expand its offerings to cater to a variety of customers' financial needs.

As mentioned, SoFi doesn't have a physical retail presence, which can lower overhead costs. Some of its biggest expense categories are, unsurprisingly, technology and product development, and sales and marketing. Investors shouldn't want the leadership team to pare back in these areas as it would likely stunt growth. But as revenue continues to grow, SoFi should see some operating leverage, which can lead to an improving bottom line.

Banking on higher profits

Adding to that last point, SoFi is already showing signs of improvement. It posted $0.46 in earnings per share (EPS) in 2024, the company's first year of GAAP profit. And management expects to make major strides in building on this success.

SoFi's 2026 EPS is forecast to total $0.68 (at the midpoint) in 2026. In the years following, the business should see annualized growth of 20% to 25%. It's usually wise to take any executive team's financial forecasts with a grain of salt, but based on the positive factors discussed, it's easy to be optimistic in this situation.

The stock trades at $12.89 today (April 25). Based on the EPS estimate for 2027 of $0.83, this implies a three-year forward P/E of 15.5. That looks like a reasonable deal to buy this rising fintech enterprise.

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

Before you buy stock in SoFi Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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

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

Despite the latest turmoil that's rattling the market due to concerns about how President Donald Trump's trade policies will play out, the S&P 500 index has done a good job compounding investor capital over the long run. In the past 10 years, the widely followed benchmark has produced a total return, including dividends, of 194%.

However, there is one exchange-traded fund (ETF) that has absolutely trounced the broader S&P 500. Had you invested in the Invesco QQQ Trust (NASDAQ: QQQ) in April 2015, you would have registered a spectacular total return of 333%. No one will argue with that kind of outcome.

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 »

Should you buy the QQQ right now and hold it for 10 years? Investors must know important information before making that decision.

Exposure to powerful secular trends

Investors will gain different exposure in their portfolios with the Invesco QQQ Trust, which tracks the performance of the Nasdaq 100 index. This includes the biggest nonfinancial companies that trade on the Nasdaq exchange. That's in stark contrast to the S&P 500's composition.

While every sector is represented, there is an unusually high concentration in the technology and consumer discretionary sectors. That shouldn't be surprising because the "Magnificent Seven" stocks combined make up 40% of the entire portfolio. These companies have generally performed very well in recent times.

It's crucial for investors to realize that the QQQ is essentially a bet on various technology-focused secular trends shaping our economy. For example, this ETF will ensure you benefit from ongoing growth within digital payments, cloud computing, digital advertising, streaming entertainment, and perhaps the most powerful, artificial intelligence.

The beauty of choosing to invest in the Invesco QQQ Trust is that it provides instant diversification. There's no need to pick single stocks that might be the big winners of tomorrow. Instead, it's a basket approach that has worked out quite well in the past. And all it costs investors is a 0.2% expense ratio.

What to expect

As of this writing, the Invesco QQQ Trust trades 18% below its record high, which was established in February. A significant decline like this can definitely be unnerving for some investors, particularly when you see your net worth fall so much in such a short period of time. The natural reaction can be to hold off on buying, or maybe even dump your holdings. This would be a mistake.

The market's turmoil presents a lucrative buying opportunity. It's worth mentioning that the QQQ has experienced multiple major drawdowns historically. It can certainly be very scary when living through it. The market is known to be extremely volatile at times. But it should alleviate investor concerns knowing that this ETF has always bounced back to reach new all-time highs.

Patient investors who can look past the near-term uncertainty and focus on the big picture are inevitably rewarded. And I believe this will happen again, even though the Invesco QQQ Trust's future returns may or may not resemble those in the past.

The market downturn can be viewed as an advantage, particularly from a valuation perspective. The Magnificent Seven contain some of the most dominant and innovative businesses the world has ever seen. And today, the group trades at a median forward price-to-earnings ratio of 27.5. Given the general growth potential and impressive profitability of those companies, that valuation doesn't look unreasonable by any means.

The best thing investors can do is to consider starting to put money to work in the Invesco QQQ Trust today while it's well off its peak -- and dollar-cost average every month or quarter. This extra cash inflow can have a serious effect on returns over the next 10 years.

Should you invest $1,000 in Invesco QQQ Trust right now?

Before you buy stock in Invesco QQQ Trust, 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 Invesco QQQ Trust 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 $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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

Neil Patel has positions in Invesco QQQ Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Chipotle Mexican Grill (NYSE: CMG) reported its financial results for the first quarter on Wednesday, posting adjusted earnings per share of $0.29, which exceeded Wall Street estimates. However, its revenue of $2.9 billion came up short of expectations.

This top restaurant stock has been a huge winner over the past five years (as of April 24), rising by 184%. But investors are losing their appetite for it in 2025. Shares have tanked by 18% so far this year, and they're down 28% from the all-time high they set in June 2024.

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 »

Has that decline set Chipotle up as a stock you should buy now on the dip and hold for the next 20 years?

Dealing with economic weakness

U.S. consumers aren't in the best shape these days. The University of Michigan Consumer Sentiment Index's reading this month was the second lowest on record (data goes back to 1952). The only other time it was worse was in June 2022, right after the Federal Reserve started aggressively raising benchmark interest rates to combat soaring inflation.

The U.S. might not officially be in a recession right now. But the overall mood of consumers is far from rosy as they attempt to cut back on their discretionary spending in preparation for more difficult times ahead. That's taking a toll on Chipotle, a business that previously had enjoyed fairly durable demand.

The fast-casual Tex-Mex pioneer reported a surprising same-store sales decline of 0.4% in the first quarter. That was its first year-over-year drop since the second quarter of 2020 -- the onset of the COVID-19 pandemic. And it was a drastic reversal from the 7% gain it registered in Q1 2024.

"In February, we began to see that the elevated level of uncertainty felt by consumers are starting to impact their spending habits," CEO Scott Boatwright said on this week's earnings call. The company's outlook calls for same-store sales to increase in the low single-digit range for the full year.

To its credit, though, Chipotle has long implemented a strategy that focuses on its value proposition for customers. Management still believes this is the company's key strength, highlighting the below-$10 average cost of its chicken burritos and burrito bowls, its most popular entrees.

"This is about 20% to 30% below comparable fast-casual meals and can reach as high as 50% below comparable meals in some markets," Boatwright said about those menu items. This could at least provide a buffer that will allow Chipotle to fare better than rivals in a recessionary scenario.

Chipotle's growth story

It's easy to get caught up in the latest news about slowing sales, but don't let that cause you to forget Chipotle's phenomenal longer-term track record of strong financial performance. Between 2019 and 2024, its revenue rose by 102% while net income surged by 338%.

That growth came not just from higher sales per store, but also its rapidly expanding physical footprint -- and its efforts on that second front continue. Chipotle currently has 3,781 locations, with a goal of opening about 273 more before the year is over. It now has five restaurants in the Middle East, and the company just signed an agreement to open its first Chipotle in Mexico next year.

The management team remains confident that it will eventually hit its long-term target of having 7,000 stores open in North America. Based on one of its other objectives -- getting to $4 million in annual unit volume -- Chipotle is aiming for a top line of $28 billion a year at some point in the future. Given the company's track record of success, it's easy to be optimistic that it will hit that goal.

Is the stock expensive?

Shares of Chipotle usually aren't on the discount rack. That's because the market understands that this is a great business.

However, with the stock trading 28% off its peak, I think there's an opportunity here. Its current forward P/E ratio of 39 isn't necessarily a bargain, but it's certainly more reasonable than the multiple of 52 it traded at one year ago.

In my opinion, dollar-cost averaging your way into an investment in Chipotle and holding on for the long term seems like a smart strategy now. The company remains on course to have significantly greater revenues and earnings 20 years from now.

Should you invest $1,000 in Chipotle Mexican Grill right now?

Before you buy stock in Chipotle Mexican Grill, 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 Chipotle Mexican Grill 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 $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of April 21, 2025

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

There's no denying that investors love companies that can remarkably grow their wealth. That's precisely what one dominant business has done historically.

In the past 40 years, its shares have generated a spectacular total return of 22,000%. That means a $10,000 investment made in April 1985 would be worth an eye-popping $2.2 billion today. No one will argue with this outcome, which translates to a superb 14.4% annualized gain.

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 »

Continue reading to learn more about this monster stock and what makes the business special.

Doing the same thing

If there's a stock with that kind of phenomenal track record, investors need to pay attention. The company in question is Costco (NASDAQ: COST), the giant warehouse club operator with 897 locations around the globe. The operations haven't changed much in the past four decades, as there's always been an emphasis on providing shoppers with quality merchandise at affordable prices.

Costco has experienced meaningful growth, though. Its store base totaled just 221 in 1994. Besides the U.S., it has a presence today in 13 other countries. Executives see potential internationally, with long-term plans for just under half of annual new store openings to come outside the United States.

What's particularly impressive is that Costco experiences durable demand, regardless of economic conditions. We're seeing this play out today, with same-store sales increasing 6.8% in Q2. This key metric has risen in at least the last 13 full fiscal years. Costco is clearly a consumer favorite.

That has propelled net income gains. Diluted earnings per share have climbed at a compound annual rate of 11.6% in the past 20 years. According to Wall Street consensus analyst estimates, this closely watched bottom-line figure is expected to grow at a yearly pace of 11.1% between fiscal 2024 and fiscal 2027.

Dealing with competition

The retail sector is arguably the most competitive industry in the world. From a consumer's perspective, there are virtually an unlimited number of choices for where to spend money. In theory, this should make things difficult for Costco.

But over its storied history, the business has developed durable competitive strengths that support its success. Scale is particularly helpful when it comes to supporting Costco's industry position.

During the 12-week period that ended Feb. 16 (Q2 2025), the business generated $62.5 billion in net sales. That makes it the third-biggest retailer in the world. That volume means Costco has tremendous buying leverage over its suppliers. This advantage is bolstered by the fact that the company's typical warehouse carries just 4,000 stock-keeping units, 87% less than the average supermarket.

Buying massive quantities of a smaller number of goods allows Costco to obtain cost savings. And these are constantly passed to shoppers in the form of everyday low prices on store shelves.

Because of its intense focus on always doing what's right for the customer, Costco has developed a strong brand presence. That supports growth, with membership households increasing 6.8% in the latest fiscal quarter. Loyalty is impressive, as the worldwide renewal rate was 90.5%.

Time to buy Costco?

After learning more about Costco, the immediate reaction from investors might be to buy the stock. After all, shares are currently on the dip, down 9% from their February peak. It's hard to argue with the long-term track record of compounding shareholder capital.

The market is fully aware of just how great of a business Costco is. This is clearly represented by the valuation. If you want to buy the stock, you must be comfortable paying a price-to-earnings ratio of 57. That's not far off from their steepest level ever.

I think shares are extremely expensive. And in this instance, the starting valuation can get in the way of achieving adequate returns going forward. Investors probably shouldn't buy the stock right now.

Should you invest $1,000 in Costco Wholesale right now?

Before you buy stock in Costco Wholesale, 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 Costco Wholesale 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 $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

Let's face it: Investors put money to work in the stock market with a single core goal -- to achieve strong returns and grow those funds. And over the long term, a diversified portfolio can certainly do just that. Over the past two decades, the S&P 500 index has registered a 557% total return. But that is, of course, the average result from a large group of companies. Some have produced drastically better gains.

For example, a $10,000 investment made exactly 20 years ago in one business that has since become an industry leader would be worth more than $6 million (as of April 22). That monster gain would be life-changing wealth for any patient investor who was bold (and lucky) enough to bet on that then-unproven company and hold on through good times and bad along the way.

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That amazing business was none other than Netflix (NASDAQ: NFLX). But should you buy it today?

Press play

When it comes to disruption and innovation, few companies fall into the same elite category as this one. Netflix's success over the years has been truly exceptional.

When Netflix was young, traditional cable TV was the primary medium by which households watched their favorite shows and movies. However, the growth of high-speed internet access provided the DVD-rental-by-mail company with the technological infrastructure to bring streaming video entertainment to the masses. Netflix launched its streaming service in the U.S. in 2007, and today, it operates in 190 countries.

Netflix easily won over customers by providing a superior experience. People could choose to watch whatever they wanted from a large and growing content catalog whenever they wanted to watch it, all for a monthly fee that was much cheaper than a basic cable subscription. This helped drive rapid adoption. Between the end of 2014 and the end of 2024, the company increased its paid subscriber base by 459% and its revenue by 609%.

A dominant force

It would be hard to overstate just how much of a media powerhouse Netflix has become. More than 300 million households pay for its subscriptions, and management says it reaches a whopping 700 million people. It's on pace to rake in $44 billion in revenue in 2025.

From a financial perspective, Netflix has reached a level of profitability that its early critics probably never thought was possible. Credit goes to the company's massive scale. Keeping the new content pipeline full is expensive, but those costs are (relatively speaking) fixed -- it won't cost the company incrementally more to show the new season of Stranger Things to a larger audience, for example. Netflix plans to lay out $18 billion this year on new shows and films, but it has huge user and revenue bases to amortize that spending against.

The result is a lucrative business model. Netflix executives forecast an operating margin of 29% for 2025. That would be up drastically from 18% in 2020, showcasing the company's ability to scale up profitably. The business reported $6.9 billion in free cash flow last year -- most of which it used to repurchase $6.2 billion worth of outstanding shares.

Press pause

The stock market is in correction territory right now, but this hasn't fazed Netflix investors. The stock is up 17% this year as of April 22, bucking the S&P 500's 10% decline.

But though Netflix stock has been a tremendous winner in the past, I don't believe it's automatically a buy today. The valuation is what worries me. As of this writing, shares trade at a price-to-earnings ratio of 49.2. That's not a small premium to pay.

I'm totally confident that Netflix will not generate another 60,000% return over the next 20 years. Given its current market cap of around $467 billion, it's just not financially feasible for it to grow to a size 100 times bigger than Apple. My perhaps more controversial view is that it might not even outperform the broader market during that time. The business is poised to continue its solid growth, but its current valuation already has some of the market's high expectations baked in.

Investors who believe Netflix is a quality company worth owning should be patient and wait until there's a better opportunity to add shares at a less lofty valuation. But if you prefer not to wait, consider using a dollar-cost averaging strategy to build your position over time.

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

Before you buy stock in Netflix, 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 Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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

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

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

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

Costco (NASDAQ: COST) and Home Depot (NYSE: HD) are two of the biggest retailers in the world. One focuses on general merchandise, while the other caters to DIY and professional customers with home improvement products. The combined market cap of these two companies is a staggering $770 billion as of April 21.

Costco and Home Depot have been wildly successful investments in the past three decades. But between these dominant businesses, which one is the top retail stock to add to your portfolio right now?

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

Not worried about a recession

Investors are becoming more worried that an economic downturn is on the horizon. This probably isn't too much of a concern for Costco and its management team. The business continues to thrive regardless of external forces.

During the fiscal 2025 second quarter (ended Feb. 16), same-store sales (SSS) were up 6.8% year over year. This was driven mostly by a meaningful gain in foot traffic, an encouraging sign. Home furnishings, gold and jewelry, and appliances, among other items, registered strong growth.

In a potential recessionary period, Costco should be able to hold up better than its rivals. Its focus on low prices on quality goods makes it a favorite choice among consumers, especially when it comes to everyday essentials.

A successful membership-based model keeps these shoppers loyal, while also providing the business with a high-margin and recurring revenue stream. Costco's membership base now sits at 78.4 million households, supporting $1.2 billion in membership fee income.

Costco's ability to generate consistent profits is a feature of the durable demand it experiences. In addition to a regular dividend, the leadership team shares these earnings with investors in the form of special one-time payouts. The last one was for $15 per share in January 2024. A favorable capital allocation practice like this can boost returns for investors.

Thinking about the bigger picture

Home Depot raked in $159.5 billion in revenue in fiscal 2024 (ended Feb. 2), putting it significantly ahead of Lowe's in the home improvement industry. Its massive scale allows for sizable investments in supply chain and omnichannel capabilities, ensuring adequate inventory for customers. Home Depot's brand name undoubtedly carries weight, too.

Despite its competitive strengths, the business has been struggling recently. On the fourth-quarter 2024 earnings call, CEO Ted Decker said he and his team are focused on strategic priorities "despite uncertain macroeconomic conditions in a higher interest rate environment that impacted home improvement demand."

It's not surprising that the backdrop doesn't give people the confidence they need to spend a lot on a costly renovation project. Home Depot's SSS are expected to rise by only 1% this fiscal year, after falling 1.8% in fiscal 2024.

However, the overall industry should favor Home Depot in the long run. The median age of a home in the U.S. has gone up over the years. And the leadership team points to trillions of dollars in untapped home equity that can go toward upgrades.

Investors will be pleased with Home Depot's capital returns. The company paid $8.9 billion in dividends last fiscal year, and in the past five years, it has reduced the outstanding share count by almost 10%.

The final word on Costco vs. Home Depot

In my mind, Costco is the superior business compared to Home Depot, due to the simple fact that its customer demand appears to be much less sensitive to macro forces, while the latter's dependency on a favorable housing market is evident. To be clear, though, both are likely set to be affected by tariffs as things stand today.

However, that doesn't mean Costco is the better retail stock to buy. Home Depot is more deserving of a spot in your portfolio. It comes down to valuation. The home improvement chain's shares trade at a price-to-earnings ratio of 23.2, well below Costco's 55.9 multiple.

Some investors might not be fazed, preferring to own the best businesses regardless of valuations. This will push you toward choosing Costco over Home Depot. In this instance, I think the smart move is to adopt a dollar-cost averaging strategy, allocating a small sum on a recurring basis to buy shares at various price points.

Should you invest $1,000 in Costco Wholesale right now?

Before you buy stock in Costco Wholesale, 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 Costco Wholesale 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

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Home Depot. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.

Amazon (NASDAQ: AMZN) is a dominant technology-driven enterprise that has customers all across the globe. It got here thanks to fantastic growth. Between 2014 and 2024, the company's revenue increased at a compound annual rate of 22%. This rapid ascent has made Amazon one of the world's most valuable businesses.

Viewing things with a fresh perspective today, with an eye toward the future, you might be wondering if the company can continue on its impressive trajectory. There are reasons to remain bullish. Here's why Amazon is the smartest growth stock to buy in April with $2,000.

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 »

Massive end markets

If a company is lucky, it'll benefit from one secular trend. Amazon stands out because it has multiple tailwinds working in its favor. Additionally, the business operates in massive global end markets.

Take the e-commerce sector. Almost 40% of all spending online in the U.S. goes through amazon.com. Given that Grand View Research estimates the worldwide retail e-commerce market to grow at a nearly 12% annualized rate from its already large size of $6 trillion, Amazon is set to capture a lot of this opportunity.

Cloud computing is another important area. Amazon Web Services (AWS) posted 19% sales growth in Q4, with a stellar 37% operating margin. It's the industry leader with the most market share. And according to Grand View Research, the global market is worth about $800 billion today and will be worth much more in the future.

There's also digital advertising, a booming money-maker. In 2024, Amazon raked in more than $17 billion in revenue (up 18% year over year), which is surely generating a high margin. Only Alphabet and Meta Platforms have a bigger presence in digital advertising.

Combined, these industries are valued in the trillions of dollars. This gives Amazon plenty of opportunity to drive growth.

What about artificial intelligence?

Another secular trend that has come up in recent years is artificial intelligence (AI). Amazon has already been using AI capabilities throughout its business. For example, the online marketplace uses AI for personalized shopping recommendations. Prime Video uses AI to suggest shows and movies to watch. Alexa also leans on AI to process commands and respond accordingly.

Looking ahead, AI is and will continue to play a more pronounced role for the company, particularly within AWS. AWS offers a broad suite of AI tools and services for clients, like Bedrock for building generative AI apps, Translate for language translation, and Kendra for search functionality.

Amazon is planning to spend $100 billion on capital expenditures in 2025. "The vast majority of that capex spend is on AI for AWS," CEO Andy Jassy said on the Q4 2024 earnings call. He went on to declare that AI "is one of these once-in-a-lifetime type of business opportunities."

Durable growth

Investors gravitate to the fastest-growing companies. Maybe it's because they are the easiest to spot. And for sure it's because they believe they can generate huge returns over time by owning them.

Instead of focusing on how rapid the gains are, perhaps it's a better idea to look for durable growth. These are businesses that should see revenue increase at a much faster clip than GDP over an extended period of time, not just for a few years before fizzling out. While Amazon was an unbelievably fast grower in its early years, it has now transformed into registering healthy expansion.

Having multiple powerful secular trends working in its favor is helpful. What's more, Amazon's wide economic moat, supported by its brand, switching costs, network effects, and cost advantage, substantially decreases the chances the business ever gets disrupted.

These factors make it the smartest growth stock to buy with $2,000, in my opinion. As of April 21, the shares trade at a price-to-sales ratio of 2.9. This is very reasonable for such a dominant enterprise.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

Now, it’s worth noting Stock Advisor’s total average return is 811% — a market-crushing outperformance compared to 153% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

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. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

The S&P 500 index rose 24% in 2023 and climbed another 23% in 2024, putting together a stellar 24-month return. Investors were pleased with the outcome.

However, this year is so far shaping up to be a disappointment. The S&P 500 is around 15% below its peak, a record that was established in February. Investors are worried that President Donald Trump's trade policies will tip the economy into a recession, so they're taking some risk off the table.

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 »

If you're worried that the market is going to drop even further, then there's one stock to keep an eye on. It's actually up 17% this year, showcasing investor confidence in the business.

Steady as they come

In the past couple of years, the investment community has been enamored with businesses at the forefront of artificial intelligence (AI). The belief is that this technology will disrupt many industries, and so they've generally shifted their portfolios to gain exposure.

O'Reilly Automotive (NASDAQ: ORLY) could not be further from the AI boom. It's a boring aftermarket auto parts retailer that is a steady performer, regardless of macro conditions. And I think the market sees this durability, which is why the share price has jumped double-digits so far in 2025.

Through its 6,378 stores, of which 6,265 are in the U.S., and via its omnichannel presence, O'Reilly sells things like batteries, brakes, motor oil, wiper blades, and filters to both do-it-yourself customers and professional mechanics. Basically, people buy merchandise from O'Reilly to fix up their cars.

In a positive economic backdrop, consumers tend to drive more, increasing the wear and tear on their vehicles. This supports demand for the company. And in difficult economic times, people will hold off buying a new car. Instead, money will go toward maintaining the cars they already own. Again, O'Reilly benefits.

While tariffs are on everyone's mind these days, they might actually end up benefiting O'Reilly as people are discouraged from shopping for new cars because of higher prices. This all-weather appeal might be too hard for investors to ignore.

Strong financials

One of the most important metrics for a retailer is same-store sales (SSS), as it indicates changes in revenue from locations that have typically been open at least a year. O'Reilly has an unbelievable track record, increasing SSS in 32 straight years. The management team expects this figure to rise 2% to 4% this year, which would keep the streak alive.

The business has found a way to maintain its growth trajectory no matter what is happening externally. Unsurprisingly, this has led to strong profit gains, with earnings per share increasing at a compound annual rate of 18.7% in the past decade. With new store openings a key part of the strategy, the bottom line is set to keep growing.

Not on sale

Since mid-April 2015, shares of O'Reilly have catapulted 546% higher. This fantastic gain meaningfully outpaces the broader S&P 500. Consequently, the valuation isn't cheap. Investors who want to own this stock must be comfortable paying a price-to-earnings ratio of 34.2. That's over 40% more expensive than the trailing five- and 10-year average multiples.

The market is clearly very bullish on O'Reilly. That perspective is easy to understand. However, the valuation is too steep, even though this is a high-quality business.

O'Reilly has been a huge winner in the past. But I think it's best for investors to add the stock to the watch list for now. Wait for any sizable pullbacks before considering putting money to work.

Should you invest $1,000 in O'Reilly Automotive right now?

Before you buy stock in O'Reilly Automotive, 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 O'Reilly Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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

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

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Shares of Apple (NASDAQ: AAPL) are currently 26% below their peak from December last year (as of April 10), a drop that has been spurred by ongoing tariff announcements. As of this writing, there is a huge 145% tariff that's implemented on goods leaving China for the U.S. If this remains in place, it could harm Apple, because 80% of its production is still based in China, according to estimates from Evercore.

For consumers, the result could be much higher prices. If the increased costs are eaten by Apple, on the other hand, its profitability will definitely take a hit. There remains a lot of uncertainty about how things will play 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. Learn More »

Despite the potential effects, which are commanding all the attention these days, Apple has proven to be successful in another area that highlights growing diversification in the business model. Here's what investors need to know.

Apple's push into financial services

In fiscal 2024 (ended Sept. 28, 2024), Apple generated $391 billion in revenue, of which 75% came from the sale of products. This includes its popular iPhone, Mac, and iPad lineups.

But the company's services division is an up-and-coming money-maker, growing revenue 13% in the latest fiscal year, much faster than the overall business. It represents the other 25% of Apple's total sales.

Within services, Apple is making a bigger push into the financial services realm, where it appears to have developed a strong foothold.

In 2014, the company launched Apple Pay, its digital wallet solution that lets users connect credit and debit cards to use for transactions in-store and online. More than 90% of retailers in the U.S. accept Apple Pay, which has more than 600 million global users and handles trillions of dollars in payment volume. This is undoubtedly becoming a widely used checkout option.

Apple Card was launched in 2019. This is a credit card that gives consumers up to 3% cash back with no fees whatsoever. Apple partnered with Goldman Sachs to handle the program. The credit card portfolio has 12 million customers (data from early 2024) and $20 billion in balances.

Valuable for partners

It was reported that Visa offered the tech titan a cool $100 million to end its relationship with Mastercard, the current card network for Apple Card. American Express is also in the mix. What's more, issuers like JPMorgan Chase, Capital One, Synchrony Financial, and others are reaching out to Goldman Sachs, offering to take over the $20 billion in balances and to handle the program.

It makes sense why these heavyweights in the financial services industry would be trying so hard to be Apple's partner. Apple generates enormous amounts of revenue, and its customers are generally known to be more affluent than average. Consequently, there is a lot of buying power here, which can lead to revenue opportunities for banks and payment networks.

Apple might be facing some headaches due to tariffs and how they can affect its device sales. But its payment and credit card offerings continue to shine brightly. Partners are jockeying for position.

Should you buy Apple stock on the dip?

This gets to the discussion of whether or not Apple shares are a smart buy right now, especially since they are 26% below their record high. The price-to-earnings ratio is better than it was in December -- it's now at a 30.2 multiple.

However, I'm not convinced the tech stock can produce a return over the next five years that can outperform the broader market. Not only is the valuation still elevated, Apple's growth prospects aren't that robust. Plus, there is the unfortunate overhang of the tariff situation.

This is a fantastic business. But investors should pass on buying shares.

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

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

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

American Express is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Synchrony Financial is an advertising partner of Motley Fool Money. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Goldman Sachs Group, JPMorgan Chase, Mastercard, and Visa. The Motley Fool has a disclosure policy.