The technology sector has helped lead the market higher over the past decade, and with new technologies such as artificial intelligence (AI) and autonomous driving continuing to emerge, there is every reason to believe it can do the same over the next decade.

Let's look at three leading tech companies to buy this year.

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1. Nvidia

Graphics processing units (GPUs) maker Nvidia (NASDAQ: NVDA) has established itself as the leading semiconductor company in the world. The strength of GPUs lies in their parallel processing capabilities, which allow them to perform many calculations at the same time. This capability makes these powerful chips ideal for running AI workloads in the data center.

The real secret to Nvidia's successes, though, is its CUDA software program. Created to expand the market for GPUs beyond their original intent of speeding up graphics rendering in video games, Nvidia aggressively pushed the software platform into universities and research labs in its early days, which helped make it the platform upon which developers learned to program GPUs for various tasks.

In the years since, the company has built a collection of tools and libraries that help improve the performance of its GPU for use in running AI workloads. This has helped give the company a dominant market share in the GPU space of more than 80%.

As the AI infrastructure market continues to grow, Nvidia continues to be the biggest beneficiary. However, that's not its only growth market, and the company also sees a big future opportunity in the automobile and autonomous driving sector. After all, autonomous vehicles need to perform quick calculations, which is the strength of GPUs, so they don't crash.

Since Nvidia doesn't have a recurring revenue stream, any slowdown in its end markets is a risk, but right now these markets still appear to be in the early days of their growth cycles.

2. Alphabet

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is certainly not without its risks, as some investors fret over AI disrupting its search business, while at the same time, it faces legal remedies from the U.S. government after losing an antitrust trial. However, the company has a collection of very attractive businesses and investors have largely ignored the advantages in search the company has.

Alphabet is about much more than Google search. Its YouTube business is not only the most-watched streaming platform, but it is also one of the largest digital advertising platforms in the world.

Meanwhile, its cloud computing unit, Google Cloud, is Alphabet's fastest-growing business, as it helps customers build out and run AI models and apps on its platform. Also not to be overlooked is its robotaxi business, Waymo, which has a first-mover advantage in the U.S. and is expanding rapidly.

That said, Google is still Alphabet's bread and butter, but it's not time to write this dominant search engine off just yet. Google has a large distribution and ad network advantage that should not be overlooked. Its distribution advantage comes from its popular Android smartphone operating system and Chrome browser, which use its Google search engine as a default.

Meanwhile, it has a revenue-sharing agreement with Apple and browser companies like Opera to run their search queries, as well. In addition, it has spent decades building one of the largest ad markets on the planet, with an ability to serve not only national advertisers, but also local businesses.

Alphabet also knows how to monetize search better than any company, and as the world moves toward AI search and chatbots, it's focused on profiting from queries that have commercial intent. That's why when it recently launched its new AI search mode, it included several commerce-focused features aimed at enhancing monetization, such as "Shop by AI," which allows users to find products simply by describing them, virtually try on clothes using a photo, and even track prices.

With unmatched distribution, a massive ad network, and a focus on commerce monetization, Alphabet is well situated to be an AI search winner.

3. Salesforce

Salesforce (NYSE: CRM) has long been the leader in customer relationship management software, and now it's setting its sights on becoming a leader in AI agents through its new Agentforce platform.

The company's core value proposition has always been about unifying customer data, and it has expanded this concept into the data center with its Data Cloud offering. Through acquisitions, it's also established a leadership position in employee and customer-facing apps, such as Slack and Tableau. This type of ecosystem is an ideal environment for AI agents to interact with this data and use it to automatically perform tasks.

Agentforce includes pre-built AI agents that can help businesses streamline tasks, as well as low-code and no-code tools that let customers design their own custom AI agents with little technical expertise. It has also established an Agentforce marketplace with more than 200 partners to offer more templates and broaden use cases. Thus far, Agentforce has seen solid momentum, with it already having more than 4,000 paying customers since its October launch and many more in pilots.

Salesforce is looking to lead a digital labor revolution. It plans to accomplish this through its ADAM framework that combines agents, data, apps, and metadata into one platform. It recently introduced a new consumption-based model that better aligns agent costs with business outcomes to help improve customer satisfaction and increase adoption.

Agentic AI is a competitive space, but Salesforce looks like it has the platform to be a winner.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet, Opera, and Salesforce. The Motley Fool has positions in and recommends Alphabet, Apple, Nvidia, and Salesforce. The Motley Fool has a disclosure policy.

With the stock market settling in after a volatile period, now is a good time to start looking at some leading growth stocks that have strong potential over the next decade.

Here are five growth stocks across industries that investors can look to hold for the long term.

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1. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (NYSE: TSM) is one of the most critical players in the artificial intelligence (AI) boom. As the world's leading contract chip manufacturer, TSMC manufactures the advanced semiconductors powering a range of products from AI infrastructure to smartphones and automotive tech.

Producing these chips isn't easy, as it requires leading-edge technology, precision manufacturing, and scale. Few companies in the world have the capabilities or the track record that TSMC does, and with competitors struggling, it has also garnered strong pricing power.

As such, the company has become the go-to partner for top chip designers, thanks to its leadership in advanced nodes and packaging. Advanced nodes refer to manufacturing processes that allow more transistors to be packed onto a chip, which in turn boosts performance and power efficiency.

Meanwhile, demand for high-performance computing, including AI chips, has exploded. With AI workloads growing, TSMC is expanding capacity alongside key customers to meet future demand.

Despite its pivotal role in the AI supply chain, TSMC's stock still looks reasonably valued. For long-term investors looking to benefit from the continued growth in AI infrastructure and semiconductors in general, TSMC is a great stock to hold.

2. Pinterest

Pinterest (NYSE: PINS) has undergone a quiet but powerful transformation under CEO Bill Ready. Over the past three years, the company has invested heavily in technology to turn its massive user base, which now sits at more than 570 million monthly active users worldwide, into a growth engine. Pinterest is no longer just an online vision board; it's become a shoppable platform with growing ad conversion capabilities.

One of the big drivers behind Pinterest's transformation has been its embrace of AI. The company built a multimodal model trained on both images and text to better understand what users are looking for. This powers personalized recommendations, while a visual search feature makes it easier for users to find and shop for products they see in pinned images. On the backend, meanwhile, its Performance+ platform is giving advertisers the tools to run better campaigns.

The results speak for themselves. Last quarter, Pinterest's revenue jumped 16%. Average revenue per user (ARPU) climbed across all regions, especially outside the U.S., where Pinterest is starting to better monetize users in emerging markets through the help of a partnership with Google.

Pinterest's stock still looks attractively valued, and the company is just scratching the surface of monetizing its user base. With AI-powered tools and a more shoppable platform, Pinterest has solid long-term investment potential.

3. Dutch Bros

Dutch Bros (NYSE: BROS) is shaping up to be one of the most compelling expansion stories in the restaurant space. With just over 1,000 locations across 18 states, the company believes it can more than double its footprint to 2,029 shops by 2029, and it sees the opportunity to eventually support 7,000 coffee shops nationwide.

Meanwhile, its small, drive-thru-focused shops are inexpensive to build, have attractive unit economics, and offer fast payback periods.

What makes the story even more attractive, though, is that Dutch Bros is only now starting to unlock other key growth levers. Mobile ordering, for example, is still early but gaining traction, accounting for only 11% of transactions last quarter. Mobile ordering also feeds into its loyalty program, allowing it to personalize its marketing and promotions.

The company is also leaning into food, testing hot items to drive breakfast sales at a few select locations. Food currently makes up less than 2% of sales, compared to nearly 20% at Starbucks, so there's real upside here. With more menu expansion and store openings on the way, Dutch Bros looks like a long-term winner.

4. Philip Morris International

Philip Morris International (NYSE: PM) is a growth stock in a defensive industry. While many tobacco companies are struggling with declining cigarette volumes in the U.S., Philip Morris doesn't have to worry about that because it doesn't sell cigarettes domestically. Instead, its growth is being driven by its smokeless portfolio, led by Zyn and Iqos, both of which have better unit economics than traditional cigarettes.

Zyn, its fast-growing nicotine pouch, has been its biggest growth driver, as evidenced by U.S. shipment volumes jumping 53% in Q1.

Meanwhile, Iqos, its premium heated tobacco product, continues to gain traction in Europe and Japan, with early success in new markets like Mexico City, Jakarta, and Seoul. In addition, after buying back its U.S. rights from Altria, the U.S. has the potential to be its next big growth driver. At the same time, its traditional cigarette business remains stable overseas, helped by strong pricing power and steady demand.

With strong pricing power, local manufacturing that limits tariff exposure, and growing demand for Zyn and Iqos, Philip Morris looks well positioned to keep delivering strong growth in the future.

5. Eli Lilly

Eli Lilly (NYSE: LLY) has emerged as a leader in the booming GLP-1 drug space, with surging demand continuing to drive strong revenue growth. Last quarter, its two key GLP-1 drugs -- Mounjaro and Zepbound -- generated a combined $6.1 billion in revenue, up sharply year over year. While Zepbound is officially approved by the Food and Drug Administration (FDA) for weight loss in obese adults or overweight adults with at least one weight-related condition, and Mounjaro is approved to help adults with type 2 diabetes, the reality is that the growth of these drugs is being driven by their being prescribed off-label for weight loss.

However, the drug that could be the biggest game changer for Lilly is still on its way. Orforglipron, its first oral GLP-1 drug candidate, recently demonstrated in a phase 3 trial that patients who took the drug lost considerable weight. As an oral medication, it is a much more convenient alternative to injectable GLP-1 drugs, making it especially appealing to patients who are wary of needles.

Orforglipron is also easier to manufacture and distribute than injectable drugs, as it doesn't require cold storage or injection pens. This should help Lilly avoid the supply constraints it saw with its injectable GLP-1 portfolio. With orforglipron looking like it has the potential to be the most potent oral GLP-1 weight loss drug on the market, Lilly is well positioned for continued future growth.

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

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

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

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

Geoffrey Seiler has positions in Philip Morris International and Pinterest. The Motley Fool has positions in and recommends Pinterest and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Dutch Bros and Philip Morris International. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) once again demonstrated rapid growth as demand for its graphics processing units (GPUs) remains robust. Even with new export controls severely limiting its ability to sell into China, the company projects strong revenue growth moving forward as the artificial intelligence (AI) infrastructure buildout continues to march along.

The stock is up an astonishing 1,450% over the past five years, as of this writing. Let's take a closer look at Nvidia's results to see whether the stock still has a lot of growth left in the tank.

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Blackwell leads the way despite China headwinds

The new export controls, which restrict Nvidia's ability to sell its chips in China, are expected to have a material impact on the company's revenue. It will take an $8 billion hit to sales in the second quarter alone. It noted that its H20 chip has been sold in China for more than a year and that no grace period was provided to let it sell through its inventory. In Q1, it generated $4.6 billion in H20 revenue, all of which occurred before April 9, and took a $4.5 billion charge. It said Chinese revenue would have been $7 billion in for the quarter if not for the export controls.

The company made a plea to be allowed to sell into China, stating that not having access to the Chinese market will benefit its foreign competitors in China and worldwide. It said China already has AI, and the assumption that it can't make AI chips is false. It believes the Chinese AI accelerator market will eventually grow to $50 billion, while noting that export restrictions spurred China's innovation and scale.

Even without access to China, however, Nvidia still forecasts its fiscal Q2 revenue to be approximately $45 billion, which would represent 50% growth. This will largely come from the continued ramp-up of its Blackwell GPUs.

Blackwell drove Nvidia's revenue growth in Q1, with the company calling it the fastest ramp-up in its history. Data center revenue surged 73%, with Blackwell contributing nearly 70% of its data center compute revenue in the quarter.

Nvidia stated that AI factory buildouts, which are large-scale rollouts that use its full stack of solutions, not just GPUs, are driving significant revenue growth. It added that AI factory deployments are accelerating, with nearly 100 Nvidia-powered sites in progress this quarter, which was twice as many as last year. Notably, the average number of GPUs per factory has also doubled.

It also said that AI inference demand is soaring, and it believes that demand for AI computing will accelerate as AI agents become mainstream.

Nvidia's other segments were also strong. Gaming revenue jumped 42% to $3.8 billion, while professional visualization revenue rose by 9% to $509 million, and automotive and robotics revenue increased 72% to $567 million.

Nvidia's overall revenue climbed 69% to $44.1 billion, surpassing the $43 billion guidance it issued in February. Adjusted earnings per share (EPS), excluding its H20 write-off, grew 33% to $0.96 and topped the $0.93 analysts' consensus as compiled by LSEG.

Adjusted gross margin, excluding charges, was 71.3%, 220 basis points lower than last year. As Blackwell continues to ramp up, it is looking for gross margins to return to the mid-70% range later in the year.

The company continues to generate a boatload of cash, with operating cash flow of $27.4 billion and free cash flow of $26.1 billion in the quarter. Nvidia ended the quarter with net cash and marketable securities of $53.7 billion and $8.5 billion in debt.

Is Nvidia stock still a buy?

As AI infrastructure spending continues to surge, Nvidia remains the company best positioned to benefit. Its GPUs are still the backbone of AI data centers, and as the market shifts further toward real-time inference, agentic AI, and more advanced reasoning tasks, demand for computing power is expected only to grow. With both industry-leading hardware and a powerful software ecosystem in CUDA, Nvidia's dominance in the AI infrastructure market remains firmly intact.

While the loss of being able to sell into China is a blow to the company, it still has a long runway of growth in front of it. There also is always the possibility that the new export controls will be rolled back as part of the broader trade deal, which would be a huge bonus for the company.

Trading at a forward price-to-earnings (P/E) ratio of 31 times this year's analyst estimates, the stock is still attractively valued.

If AI infrastructure spending is still in its early innings, which it appears to be, Nvidia continues to look like a solid buy at these levels. The biggest risk to the stock would be a sudden slowdown in AI spending, but right now, there are few signs of that.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

While on-again, off-again tariffs have created a lot of uncertainty and volatility in the stock market, one set of companies that should see minimal impact one way or the other are cybersecurity providers. After all, cybercriminals and hackers aren't downsizing their attacks due to tariffs.

Let's look at four top cybersecurity stocks that investors might want to consider buying this month.

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1. Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW) is in the midst of a transformation from being largely a provider of next-generation firewalls to becoming a comprehensive cybersecurity platform. Last year, it embarked on a new "platformization" strategy where it stopped selling new point solutions and began consolidating customers onto one of its three main cybersecurity platforms. To do this, it gave away some of its services for free to entice customers to ditch disparate point solutions and centralize on its platforms.

Thus far, the strategy appears to be working, with 1,150 of its top 5,000 customers now using one of its platforms. It hopes to have 2,500 to 3,500 platformization customers by fiscal year 2030. Its main platform is network security, but it has also been seeing a lot of growth coming from its threat detection and response solution Cortex, and its cloud security solution Prisma Cloud.

While its platformization strategy temporarily slowed its growth, it was the right move for the long term, and investors should be rewarded.

2. CrowdStrike

CrowdStrike (NASDAQ: CRWD) is another cybersecurity company that should benefit from the trend of companies looking to consolidate their cybersecurity needs onto a single platform. The company is best known as the leader in endpoint security, which is the protection of devices connected to a network, such as a smartphone or laptop. In fact, it is regularly at the top of Gartner's rankings for best endpoint security.

The company offers a comprehensive suite of cybersecurity protection, including threat intelligence, zero trust, logscale SIEM (log management and threat detections), and cloud security. And its flexible licensing and procurement service, Falcon Flex, is helping drive adoption of its modules.

Falcon Flex gives customers the flexibility to quickly deploy CrowdStrike solutions when and where they need them. Last quarter, 67% of CrowdStrike's customers deployed five or more of its modules, while 21% used eight or more.

With the impact of its highly publicized information technology outage now in the rearview mirror, and customer commitment packages (a set of incentives offered to affected customers, including discounts, subscription extensions, and other compensation deals) rolling off the books later this year, the company should begin to see growth start accelerating. That makes this a good time to jump into the stock.

3. Zscaler

Zscaler (NASDAQ: ZS) is a leader in zero-trust security, a model based on the principle that no user or device should be trusted. Instead, access to applications and data must be continuously verified, authorized, and revalidated to ensure security at every step.

Zero trust is becoming an increasingly important part of the cybersecurity landscape, and the company has been doing a great job of upselling its customers to new zero-trust systems. These include its Zscaler Private Access, which is being used to replace virtual private networks (VPNs), including within the federal government. Other products gaining traction include Zscaler Digital Experience, Zero Trust for Branch and Cloud, and artificial intelligence (AI) analytics.

It has also moved into data security to help prevent data loss in public AI apps. Last quarter, it saw a 40% increase in annual contract value for its data security products.

Overall, the company is growing, with revenue climbing 23% year over year last quarter. Its net dollar retention rate was 115%, showing its strong growth within its existing customer base. With zero trust and data protection becoming more important, Zscaler has a bright future.

4. SentinelOne

SentinelOne (NYSE: S) is a fast-growing endpoint cybersecurity company, trading at a low valuation. Its forward price-to-sales (P/S) multiple is only 6.6 times, despite having 29% revenue growth last quarter.

The company has a big opportunity in the second half of the year, when personal computer (PC) vendor Lenovo will begin shipping its computers with SentinelOne's Singularity Platform installed. Lenovo is the world's largest enterprise PC vendor, selling 61.8 million PCs last year, so this is a big deal for SentinelOne.

The company has also been doing a good job of upselling its Purple AI, which uses AI to help analysts detect complex security threats through the use of natural language prompts. It predicts that Purple's use of hyper-automation to enhance security operations by automating complex, multi-step processes will become "the bedrock for agentic AI in cybersecurity." Purple can also be run across vendor platforms, including Zscaler and Palo Alto.

Given its growth, the opportunities in front of it, and its valuation, SentinelOne is a stock investors can look to add to their portfolios.

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

Before you buy stock in Palo Alto Networks, consider this:

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

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

Geoffrey Seiler has positions in SentinelOne. The Motley Fool has positions in and recommends CrowdStrike and Zscaler. The Motley Fool recommends Gartner and Palo Alto Networks. The Motley Fool has a disclosure policy.

With the market settling down and trade tensions easing (for now), let's look at four artificial intelligence (AI) stocks that investors might want to consider buying right now. These are all leading tech companies with solid opportunities ahead.

1. Palantir Technologies

While much of the focus on AI has been on infrastructure and building out AI models, Palantir Technologies (NASDAQ: PLTR) has taken an approach that helps differentiate it from the pack. Its priority has been on the applications and workflow layers of AI, where it collects information from different sources and structures it into an "ontology," linking data to real-world objects and processes. Its Artificial Intelligence Platform (AIP) then works as an orchestration layer to help its customers use AI to solve real-world problems. It has also recently introduced AI agents within AIP that help automate decisions and drive action.

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The company's solution can be used for numerous applications across industries, giving it a huge market opportunity. Its solutions are also used within the U.S government, which is its largest customer, to help with mission-critical tasks. Its ability to help reduce costs and create efficiencies makes it a long-term winner that will eventually replace older, outdated systems, aligning it with the stated mission of the Department of Government Efficiency (DOGE). A recent deal with NATO, meanwhile, adds yet another growth leg to the Palantir story.

Overall, Palantir has one of the best long-term opportunities in front of it.

2. Nvidia

If there were any concerns that AI infrastructure expansion was slowing down, President Donald Trump's recent deal with Saudi Arabia should help ease those fears. As part of the deal, Nvidia (NASDAQ: NVDA) is set to ship billions of dollars worth of its new Blackwell graphics processing units (GPUs) to Saudi Arabia AI start-up Humain. Previously, Trump also led the way with Project Stargate, where a consortium led by OpenAI and SoftBank agreed to spend $500 billion building out AI data centers in the U.S. over the next few years.

Combine those projects with the massive AI infrastructure spending from cloud computing companies, as well as tech companies racing to build out AI models, such as Meta Platforms and xAI, and there is a lot of AI data center spending still going on.

Data infrastructure spending, meanwhile, is the biggest driver of Nvidia's growth. The company is the dominant player in GPUs, which are the main chips being used to run AI workloads. It's taken an over 80% market share in this massive market in large part due to its CUDA software program, which makes it easy for developers to program its chips and includes a collection of AI libraries and tools to accelerate the performance of its chips when running AI tasks.

As long as AI infrastructure spending continues to be strong, Nvidia will be a winner.

3. Salesforce

Salesforce (NYSE: CRM) helped revolutionize the software industry as one of the first major companies to introduce the software-as-a-service (SaaS) model. Today, it is looking to continue with its innovation path by working to become a leader in agentic AI. Through its new Agentforce platform, the company has integrated AI agents throughout its ecosystem that can automatically perform tasks with little to no human interaction.

Salesforce's platform includes pre-built AI agents that can help businesses streamline tasks in such areas as customer service, marketing, and sales. The company has also launched an AI agent marketplace with over 200 partners to broaden use cases. In addition, the platform includes no-code and low-code tools that let customers design their own custom AI agents with little technical expertise.

With a consumption-based product that costs $2 per conversation, Salesforce has a large opportunity in front of it if its AI agents can prove that they boost productivity and create cost savings. Thus far, the product has seen a nice reception, with more than 3,000 paid deals in place since its launch in October.

4. Pinterest

Online vision board platform provider Pinterest (NYSE: PINS) has been using AI to help successfully transform its platform into one that better engages its user base and makes it more shoppable. This has helped it both increase its number of users and well as better monetize them. But it's not finished yet.

The company developed a multimodal AI model trained on both images and text that can better interpret user intent and provide better personalized recommendations. This also allowed it to upgrade to visual search that lets users highlight a specific element within a pinned image to search for similar items based on visual or stylistic characteristics. Its visual searches can also include links directly to a retailer's checkout page for an item.

These are powerful tools that have caught the attention of brands and merchants. On the back end, meanwhile, it has introduced its Performance+ solution, which integrates AI-powered advertiser tools and new bidding functionalities, to help advertisers improve campaign performance and conversion rates.

Pinterest has a huge user base, and the company is just at the beginning of better monetizing them with the help of AI, making this a solid long-term investment.

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

Before you buy stock in Palantir Technologies, consider this:

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

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

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. Geoffrey Seiler has positions in Pinterest and Salesforce. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, Palantir Technologies, Pinterest, and Salesforce. The Motley Fool has a disclosure policy.

After seeing its shares tumble when the company pre-announced disappointing fiscal third-quarter results, Super Micro Computer (NASDAQ: SMCI) stock was once again falling after the company reported its full results and issued weak guidance.

It's been a crazy 2025 for the stock, which finds itself near breakeven on the year. However, it's also down nearly 50% since mid-February.

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 initially posted a huge rally after Supermicro was able to file its annual reports, potentially ending a saga related to its accounting. A short-seller initially accused Supermicro of manipulating its accounting, and the company subsequently delaying its annual report and its auditor resigning only added fuel to the fire. The fact that the Securities and Exchange Commission (SEC) had fined the company a few years earlier over accounting issues also didn't help its image.

Even as the stock rallied, though, underlying issues have been popping up with Supermicro's operational results. This is not the first time the company has lowered its fiscal-year guidance. It's been a consistent theme. In November, it slashed its fiscal first-quarter revenue guidance to a range of $5.9 billion to $6 billion from earlier guidance of between $6 billion and $7 billion. In February, meanwhile, it also announced that its fiscal Q2 revenue would fall short of expectations.

In addition to its struggles forecasting revenue, Supermicro has also seen gross margin pressure. This began in its fiscal Q4 ending in June 2024, when its gross margin sank to 11.3% from 17% a year earlier. The company said that this was because it reduced prices in order to secure new design wins. The lower gross margins are, the more difficult it is to turn revenue into profits.

Problems persist

With its fiscal Q3 report and guidance, Supermicro's past issues show no signs of letting up.

For the quarter, its revenue rose 19% to $4.6 billion, but that was well short of its earlier guidance for sales to range between $5 billion and $6 billion. Meanwhile, its fiscal Q4 guidance calling for sales of $5.6 billion to $6.4 billion also fell well short of the $6.82 billion analyst consensus, as compiled by LSEG.

At the time of its pre-announcement, Supermicro said customers were delaying platform decisions, which would move sales into its fiscal Q4. On its conference call, the company expanded on this, noting that it was due to customers waiting to evaluate the difference between Nvidia's Hopper and Blackwell graphics processing units (GPUs).

However, with its fiscal Q4 forecast far below estimates, it appears not enough of these sales were pushed into its June quarter. It now expects these commitments to come in the June and September quarters. It also cited tariffs and current macroenvironment uncertainty for its cautious outlook.

Gross margins also remained an issue, falling to 9.6% in the quarter. As a hardware integrator, Supermicro operates in a low-margin business. While it adds value by helping customers customize their server setups, the industry is highly competitive, with limited room for differentiation. Meanwhile, much of its revenue comes from passing through expensive components like GPUs.

However, the big drop in gross margins over the past year-and-a-half has been concerning. Meanwhile, it forecast gross margins to be around 10% in fiscal Q4, showing little sign of a recovery in the near term. It said its latest margin pressure stems from the GPU transition, with more price competition surrounding older platforms. It also noted pressure coming from tariffs.

Should investors buy the dip in the stock?

Brushing aside the accounting accusations and everything that went along with them, Supermicro is a company that has had its struggles. Revenue growth expectations have consistently been pushed lower over the past year, while already low gross margins have also come down considerably.

Now the stock appears cheap, with a forward price-to-earnings ratio (P/E) of under 9x based on fiscal-year 2026 analyst estimates. However, it is still to be seen if these estimates need to come down, as the company did not give fiscal 2026 guidance.

Supermicro should benefit from increased artificial intelligence (AI) infrastructure spending. However, it is in a low-margin, low-moat business, and the company has struggled. This is far different than a company like Nvidia that has gross margins above 70% and a wide technological moat.

Overall, I think the best way to play AI infrastructure is with the stocks of companies that have strong technology and attractive margin profiles. That description just does not fit Supermicro.

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

Before you buy stock in Super Micro Computer, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $714,958!*

Now, it’s worth noting Stock Advisor’s total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of May 5, 2025

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

When Advanced Micro Devices (NASDAQ: AMD) reported its first-quarter results recently, it gave a glimpse into why some investors remain excited about the stock's prospects despite its poor performance over the past year. As of this writing, the stock is down about 35% during that span.

This excitement stems from the revenue growth the company is seeing in its data center segment, where sales soared 57% to $3.7 billion. While that revenue is a fraction of what rival Nvidia (NASDAQ: NVDA) generates, the growth is nonetheless robust. AMD credited its strong data center growth to its continued central processing unit (CPU) server share gains and robust growth from its Instinct graphics processing units (GPUs).

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AMD has recently become the leader in the data center CPU space. While GPUs provide the power, CPUs are the brains behind the operations. The market is not nearly as big as the one for GPUs in the data center space, but it's still an important and growing market. In the quarter, several cloud computing providers started to offer new computing options based on AMD's latest EPYC chips. Its CPUs also saw strong growth in the enterprise segment.

AMD saw several hyperscalers (owners of massive data centers) expand their use of its GPUs for generative artificial intelligence (AI) tasks, such as AI search, rankings, and recommendations. It also said that one of the largest AI model companies is now using its GPUs to run a significant portion of its daily inference traffic. It added that big tech companies and AI start-ups are also now using its GPUs to help train their next-gen AI models.

While AMD is unlikely to overtake Nvidia anytime soon, it's still seeing strong growth and solid progress in the data center space. Meanwhile, while the AI training market has been the early focus of companies as they race to build better AI models, the inference market is eventually expected to become exponentially larger. AMD has always competed better in the inference market, so this eventual shift should be a big positive for the company.

Export restriction headwinds

While AMD's data center growth in the quarter was a highlight, not everything was coming up roses for the company. It said that it would lose out on around $700 million in revenue in the second quarter due to new export controls that would affect its MI308 GPU shipments to China. For the full year, it expects the export restriction to be a $1.5 billion headwind, with most of the effect in the second and third quarters.

Nonetheless, the company still forecasts strong double-digit percentage revenue growth in 2025. For Q2, it projected revenue to be $7.4 billion, plus or minus $300 million, representing 27% growth. Given its potential growth opportunities, AMD also plans to increase investments in its product and technology roadmaps.

Turning back to AMD's Q1 results, the company saw overall revenue rise by 36% to $7.44 billion. Adjusted earnings per share (EPS) surged 55% to $0.96. The results topped the analyst consensus of EPS of $0.94 on sales of $7.13 billion, as compiled by LSEG.

Client and gaming segment revenue rose 28% to $2.9 billion, with client revenue soaring 68% to $2.3 billion. The growth was driven by its new high-end Ryzen CPUs, which saw strength in gaming desktop PCs and AI-powered notebooks. Gaming revenue fell 30% to $647 million due to lower semi-custom revenue. The video game console cycle is pretty long in the tooth at this point, but growth for this segment should skyrocket once new consoles are introduced, likely in late 2027 or 2028. Embedded segment revenue, meanwhile, fell 3% to $823 million.

Is the stock a buy?

While the export restrictions on China throw a bit of a wrench in AMD's growth story, the company is otherwise seeing very good momentum in the data center space. It's the market share leader in server CPUs, which should continue to be a solid, growing market.

However, the company's biggest long-term opportunity may lie in the growing demand for AI chips focused on inference rather than training. AMD's GPUs have already carved out a solid position in the inference segment, which should help drive growth given that the inference market is expected to surpass training in size over time.

With its stock trading at a forward price-to-earnings ratio (P/E) of 26.5 times 2025 analyst estimates and at about 18 times 2026 estimates, AMD's valuation has come down a lot over the past year and is now at an attractive level.

AMD PE Ratio (Forward) data by YCharts.

Given the potential AI opportunities in front of AMD, I think now could be a good time to begin accumulating shares of the stock. If the company can grab market share in the inference market, AMD stock should have a lot of upside from here.

Should you invest $1,000 in Advanced Micro Devices right now?

Before you buy stock in Advanced Micro Devices, 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 Advanced Micro Devices 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 $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of May 5, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.

The stock market remains volatile but not quite as frantic as earlier this year. Meanwhile, the major market indexes remain well below their recent highs.

Against this backdrop, now is a great time to invest in high-quality exchange-traded funds (ETFs) that track indexes. ETFs are a collection of assets that trade as a single unit and are a great place for new and experienced investors alike because they bring instant diversification with the flexibility to be traded like a single stock.

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And $500 is a great starting point -- but just that. The key to investing, particularly with ETFs, is to contribute consistently over time. It's a strategy known as dollar-cost averaging, where you regularly invest a set amount at a specific time. This could be with each paycheck or on a particular day of the month.

It is important to stick with this strategy, whether the market is up or down. Down markets are a great time to pick up stocks on the cheap and get a better cost basis.

And you should continue to do so even in bull markets, which tend to last a long time. In fact, according to a JPMorgan Chase study, since 1950, the S&P 500 hit a new all-time high on 7% of its trading days, and on a third of those days, the index never dropped lower.

Let's look at three great index ETFs you can begin to invest in right now.

The Vanguard S&P 500 ETF

One of the most popular ETFs in the world is the Vanguard S&P 500 ETF (NYSEMKT: VOO), and for good reason. As the name says, it tracks the roughly 500 largest companies that trade on a U.S. stock exchange. The index is market-cap weighted, which means that the larger a company's value, the bigger part of the portfolio it occupies.

And as with most Vanguard ETFs, it comes with a minuscule expense ratio. Even seemingly low expense ratios, such as 1%, eat into returns over time, especially as your investments grow in size. The Vanguard ETF's expense ratio is only a scant 0.03%.

With this Vanguard ETF, investors get an instant portfolio of the companies that have grown to become some of the world's largest. The index is also generally considered the benchmark for the U.S. stock market as a whole.

The ETF has a long history of solid returns. Over the past decade, it has generated an average annual return of 12.3%, as of the end of April.

The Vanguard Growth ETF

Sticking with Vanguard and its low costs, the Vanguard Growth ETF (NYSEMKT: VUG) is another great option. It mimics the CRSP US Large Cap Growth Index, which is essentially the growth side of the S&P 500. It has a similarly low expense ratio of 0.04%.

The Vanguard Growth ETF gives you an instant portfolio of many of the large-cap growth stocks that have been helping drive the market over the past several years. It is heavily weighted toward the tech sector, which makes up about 57% of its holdings. And some very tech-heavy companies, such as Amazon and Tesla, are categorized into other sectors.

If you're looking for exposure to the so-called "Magnificent Seven" stocks (Apple, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla), this ETF is a good option. At the end of last quarter, these seven stocks accounted for over 50% of its holdings.

This fund has been a strong long-term performer, generating a 14.5% return over the past 10 years, as of the end of April.

The Invesco QQQ ETF

Beating the returns of the S&P 500 is not an easy task, but one ETF that has been able to consistently outperform it is the Invesco QQQ ETF (NASDAQ: QQQ), which tracks the performance of the Nasdaq 100. Like the other indexes mentioned above, the Nasdaq 100 is also market-cap weighted. It contains the 100 largest nonfinancial stocks on the exchange.

That index has historically attracted fast-growing companies, particularly in the technology sector. As such, it is also very heavily weighted toward tech, checking in at a similar 57% to the Vanguard Growth fund.

The Invesco ETF has been the best performer of these three over the past decade, with an average annual return of nearly 17% over the past 10 years, as of the end of April. And this has not been just from a couple of big years of outperformance. On a rolling 12-month basis, it has outperformed the S&P 500 more than 87% of the time over the past decade (for the period ended March).

It carries a 0.2% expense ratio, but its consistent outperformance over the years more than justifies its higher cost.

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 $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard Index Funds - Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Berkshire Hathaway (NYSE: BRK.B) (NYSE: BRK.A) has been a tremendous investment since the stock went public back in 1980. During that span, the insurance-led conglomerate has had only one chief executive officer: Warren Buffett. Buffett would prove himself to be one of the greatest investors of all time during his tenure at Berkshire.

However, Buffett shocked shareholders when he announced at the company's annual shareholder meeting that he would step down from the CEO role at the end of the year. Taking his place will be Greg Abel, his long-appointed successor and current head of Berkshire's energy division. Buffett will, however, stay on as a member of Berkshire's board.

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Unlike Buffett, Abel is not a renowned investor. Instead, his strength lies in his operating expertise and being a shrewd dealmaker. He made a string of acquisitions to help turn a sleepy Iowa utility into a major power production and pipeline company that is now called Berkshire Hathaway Energy. Meanwhile, he has been running Berkshire's non-insurance businesses since 2018.

However, Abel will not be running Berkshire's huge investment portfolio. That job will fall to Todd Combs and Ted Weschler, whom Buffett brought on to help run that side of the business several years ago. Ajit Jain, meanwhile, will continue to run the day-to-day business of Berkshire's insurance operations.

A lot of cash and a new CEO

Buffett will leave his CEO role at Berkshire, leaving behind an unmatched legacy. He created a unique model for the insurance industry where he eschewed investing Berkshire's insurance float in safe, fixed-income investments, instead investing it in stocks. Float is the money that insurance companies collect in premiums and hold until a claim is paid out.

This decision, combined with Buffett's investment acumen, has created an enormous amount of shareholder value over the years. Buffett has a long-term investment focus, and he would buy stakes in companies he believed were undervalued that have the ability to keep compounding for decades. One of his most famous investments is Coca-Cola, which Berkshire began buying in 1988 and still holds today.

Buffett also leaves Abel and Berkshire Hathaway with a tremendous stockpile of cash. Buffett began selling stocks last year ahead of the market sell-off, while also ending the company's buyback program. Together with increased operating profits, Berkshire ended the first quarter with a whopping $347.7 billion in cash on its balance sheet.

Despite the recent market volatility, Buffett also didn't seem eager to run out to buy stocks ahead of stepping down as CEO. He told investors that Berkshire will eventually find places to invest its cash, but that "it's very unlikely to happen tomorrow." However, he noted that it would likely find someplace to invest in the next five years. He has shrugged off the recent market downturn, saying it hasn't been a dramatic bear market.

Unless a great investment comes along in the next eight months, it looks like Abel will have a large cash hoard when he steps in as CEO. How he allocates that money will be interesting, but it likely will be different than if Buffett were CEO. After all, Buffett is a stock picker, and Abel is an operator.

Instead of investing in stocks, I would expect Abel to be on the lookout to buy entire businesses. I wouldn't be surprised if he sold some Berkshire businesses, as well. The conglomerate has nearly 200 disparate businesses, ranging from railroads to ice cream parlors. Buffett collected a lot of undervalued businesses with little to no synergies, while at MidAmerican Energy, Abel went out and made synergistic acquisitions that positioned the company to be one of the largest utility companies in the U.S.

This strategy shift would not be a bad thing, but it would certainly be much different than how Berkshire was run in the past.

Is Berkshire stock a buy?

Buffett is also leaving Berkshire with a pretty high stock valuation. The stock currently has a price-to-book (P/B) ratio of 1.7, which is one of the highest levels during the past decade. Buffett even stopped buying back Berkshire stock mid-year last year due to its high valuation.

BRK.B Price to Book Value data by YCharts.

When Buffett is no longer CEO, there's also a good chance that the Buffett premium in the stock will start to wane. In the past, Buffett would only buy back stock when it traded at a P/B below 1.2 times, so if the stock were to return to about this level, it could have some meaningful downside from current levels.

With Buffett appearing unlikely to use his cash stockpile anytime soon and a potential shift in its overall investment strategy (more toward buying operating businesses than stocks), my prediction is that this won't be the same Berkshire Hathaway stock in the years to come.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, 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 Berkshire Hathaway 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 $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Geoffrey Seiler 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.

One of the biggest hurdles for investors interested in buying Palantir Technologies (NASDAQ: PLTR) stock has been its high valuation. But it can overcome this by continuing to accelerate its revenue growth and grow into that valuation.

While the stock price sank following its Q1 results, the company once again showed accelerated revenue growth in the quarter and raised its revenue outlook for the year. However, with a high valuation comes high expectations, and while it was a very strong report, it wasn't perfect.

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Accelerating revenue growth

The first quarter of 2025 marked the seventh straight time that Palantir has seen its quarterly revenue growth accelerate. During that span, growth increased from 13% in fiscal 2023's Q2 to 39% last quarter. Meanwhile, its Q1 revenue of $883.9 million easily surpassed management's forecast of $858 million to $862 million.

Metric	Q2 '23	Q3 '23	Q4 '24	Q1 '24	Q2 '24	Q3 '24	Q4 '24	Q1 '25
Revenue growth	13%	17%	20%	21%	27%	30%	36%	39%

Source: Palantir quarterly reports.

Palantir's artificial intelligence platform (AIP) continues to be its primary growth driver, particularly with U.S. commercial customers. The company credited AIP's ontology, or the operational layer for AI that connects digital assets (data sets and models) to their real-world counterparts (products or orders).

It said AIP is entering its next phase of production, in which customers can use its platform to create AI agents to help drive enterprise autonomy. It cited examples of insurance giant AIG using AI underwriting agents built on its platform, as well as a hospital, Tampa General, using AI agents to monitor for sepsis. It also noted that customers are starting to expand rapidly, quickly moving on from boot camps or pilots to sign multi-year contracts.

As a result, U.S. commercial revenue soared 71% to $255 million in the quarter. Meanwhile, its U.S. commercial remaining deal value, which refers to revenue it will recognize in the future from contracts already signed, surged 127% to $2.32 billion.

On the government side of its business, revenue climbed 45% year over year to $487 million. U.S. government revenue increased by 45% to $373 million. The company said it remained confident that it was well-positioned to navigate the current federal budget cuts, noting that this should highlight the value of its offerings. Therefore, it expects to garner bigger budget allocations within the Department of Defense and other agencies.

Revenue growth on the international government side also rose 45% to $114 million. The company highlighted its new deal with NATO and its continued work with the U.K. healthcare system.

One weak spot, however, was with international commercial customers. Revenue for this group fell 5% to $141 million. Palantir said it continues to see headwinds in Europe, while it is looking to capitalize on opportunities in Asia and the Middle East. However, its top priority remains the U.S. On its earnings call, when asked about Europe, Palantir said the region "doesn't get AI yet."

Net dollar retention, which measures revenue growth from existing customers that have been with the company for more than a year, was 124%. A number above 100% indicates expansion. This metric was up from 120% last quarter and demonstrates the continued growth the company is having within its existing customer base.

Adjusted earnings per share (EPS), meanwhile, rose from $0.08 to $0.13 year over year. That was only in line with the analyst EPS consensus, as compiled by the London Stock Exchange Group.

Looking ahead, the company guided for full-year 2025 revenue of between $934 million and $938 million, representing growth of 38% at the midpoint. It also raised its full-year revenue guidance, taking it from a range of $3.741 billion to $3.757 billion to a new range of $3.890 billion to $3.902 billion, representing 36% growth.

Is it time to buy the dip?

As noted at the beginning, one of the biggest issues surrounding Palantir is its valuation. The stock trades at a forward price-to-sales (P/S) ratio of 66 times 2025 analyst estimates and just below 52 times 2026 estimates.

Data by YCharts.

That's just a very high valuation. However, if the company can keep growing its revenue at around a 40% clip per year, it can grow into its current multiple. At that rate, it would get to around $15 billion in revenue in 2029 for a P/S multiple of 17 in just over three years. Continue that growth further out, and it would get Palantir close to $30 billion in revenue in 2031, which in around five years would give it a forward P/S multiple of 8.5.

So the recent double-digit percentage dip in the stock could be a buying opportunity, with the caveat that the company must continue its current pace of revenue growth over the next several years. Given how the company has positioned itself as an AI operating system for AI agents, I don't think this scenario is far-fetched. The company has a lot of momentum; now it just needs to keep it.

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

Before you buy stock in Palantir Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.

Intel's (NASDAQ: INTC) first-quarter results came up flat, and investors sent shares of the struggling semiconductor company lower. Intel shares are down more than 40% over the past year.

Revenue was flat for the quarter, coming in at $12.7 billion. Adjusted earnings per share (EPS) sank 28% to $0.13. The lackluster numbers easily surpassed the $0.01 in EPS and $12.3 billion in revenue in the analyst consensus compiled by LSEG, but Intel's guidance disappointed.

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Let's take a closer look at Intel's quarterly results to see when a turnaround could be in store.

Intel's struggles continue

Intel's flat revenue was the first time it didn't see a revenue decline since Q1 of last year. However, the company has been more stuck in the mud in regard to revenue growth than seeing any big declines.

Intel's product revenue fell 3% to $11.8 billion. Its client computing group (CCG) product revenue fell 8% to $7.6 billion, while data center and AI (DCAI) product revenue rose 8% to $4.1 billion. The company said it saw better-than-expected sales of its Xeon chip, which is a CPU (central processing unit) designed for data centers and enterprise services. However, it said the growth was likely driven by customers increasing orders ahead of tariffs.

Its foundry business, meanwhile, had revenue increase 7% to $4.7 billion. However, the segment continues to post large losses, with an operating loss of $2.3 billion in Q1. That was a slight improvement from its $2.4 billion loss a year ago.

Revenue from Intel's other businesses, which include subsidiaries Altera and Mobileye, shot up 47% to $900 million. This segment also flipped from an operating loss of $170 million to a profit of $103 million.

Segment	Revenue	Revenue Growth (YOY)
Product	$11.8 billion	(3%)
--CCG	$7.6 billion	(8%)
--DCAI	$4.1 billion	8%
Foundry	$4.7 billion	7%
Other (subsidiaries)	$900 million	47%

Data source: Intel. YOY = year over year.

Gross margins remain under pressure, falling by 410 basis points from 41% to 36.9%. Some of the gross-margin pressure stems from ramping up the foundry business, but Intel has also seen a lot of margin pressure in its CCG and DCAI businesses as well.

The company produced $813 million in operating cash flow during the quarter, while spending $5.2 billion in capital expenditures (capex) as it continues to pour money into its foundry business. It ended the quarter with $50.2 billion in debt against $21.1 billion in cash and short-term investments.

Looking ahead, it forecast Q2 revenue to range between $11.2 billion and $12.4 billion, well below analyst expectations for revenue of $12.8 billion. At the midpoint, that would be a year-over-year decline in revenue of about 8%.

Due to its struggles, Intel is looking to significantly cut its operating expenses (opex). It plans to reduce opex to $17 billion this year and $16 billion in 2026. Excluding restructuring charges, opex was $22 billion in 2024, or $19.4 billion when excluding share-based compensation.

Meanwhile, it reduced its capex budget by $2 billion to $18 billion, and it plans to monetize noncore assets. This will begin the process of improving its balance sheet.

Is a turnaround near?

The simple answer to that question is no. None of this is a quick fix, and Intel won't be able to just cut its way to prosperity. On that front, it plans to refine its artificial intelligence (AI) strategy with the goal of developing full-stack AI solutions that improve accuracy, power efficiency, and security. That's a great goal to have, but Intel will have difficulty competing with a company like Nvidia, which is currently leaps and bounds ahead of it and has created a wide moat with the CUDA software platform.

That said, I think there's value to be unlocked within Intel. Its core business, while not growing, has been fairly steady on the revenue front, and I would expect gross margins to eventually start to plateau. The company has a lot of physical assets, as it's poured money into its foundry business, building new fabrication plants in both the U.S. and Europe. It has spent over $200 billion in capex over the past two years, which is more than twice its market cap.

As a result, Intel trades at a ratio of price to tangible book value (TBV) of just 1.2. TBV is the value of its physical assets minus any net debt, so basically, at current prices, investors are able to buy Intel at around the value of its assets.

INTC Price to Tangible Book Value data by YCharts.

Investors will need to be patient, but I think there's enough value in Intel for its stock to eventually work. That means you might consider accumulating shares now, and on any further dips.

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

Before you buy stock in Intel, 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 Intel 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 28, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool recommends Mobileye Global and recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.

Despite an abysmal quarter on nearly every metric, shares of Tesla (NASDAQ: TSLA) climbed even after the electric vehicle (EV) maker pulled its guidance for the year. The stock is still down more than 35% in 2025 as of this writing, but over the past year, it has risen by around 80% despite a string of poor quarterly earnings results.

The stock's rise can be attributed to CEO Elon Musk pledging to spend more time running the company instead of overseeing the Department of Government Efficiency (DOGE). Musk also continued to hype Tesla's robotaxi and artificial intelligence (AI) ambitions.

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The stock rallied on the news, but let's examine why it may have much more downside from here.

Its core auto business is cratering

Musk's political ambitions and time at DOGE significantly damaged the Tesla brand. He alienated a large percentage of the population, and those who were more likely to buy EVs. It's great that Musk is looking to refocus on Tesla, but the damage to the brand seems to be already done.

Tesla's first-quarter figures showed declines in both auto deliveries and revenue. Quarterly deliveries dropped 13% to 336,681, while auto revenue plunged 20% to $14 billion. Model 3 and Model Y deliveries fell 13%, while other models decreased by 24%. The latter shows that Tesla's distinct-looking Cybertruck is having trouble selling.

This does not appear to be a one-quarter blip. Management pulled its full-year guidance, saying it was "difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chain." Chief financial officer Vaibhav Taneja acknowledged the "near term" challenges the company has with its brand image on its earnings conference call.

However, Musk tried to shift the poor sales to being a macro issue, saying that beside that, it saw "no reduction in demand." However, that does not coincide with reality. For example, while Tesla saw a nearly 9% decline in U.S. deliveries in the quarter, according to Cox Automotive, overall U.S. EV deliveries jumped by more than 10%. Meanwhile, overall global EV sales soared 29% in the first quarter, according to market intelligence company Rho Motion, with European EV sales up 22% and Chinese EV sales up 36%.

This means that Tesla is seeing its auto sales decline despite what is still a pretty robust market for EVs.

More lofty promises

With its core auto business struggling, Musk once again turned to lofty promises about autonomous driving, robotaxis, and AI.

He said that it will begin offering paid robotaxi rides in Austin, Texas, beginning in June, starting with 10 to 20 vehicles. It will then ramp up its fleet and look to rapidly expand to other cities by the end of the year. He added that the robotaxi business would have a notable impact by mid-2026.

Tesla sticking to its June timeline, though, raises a lot of questions. The company thus far has only achieved Level 2 automation, which means that the automobile can steer and control speed, but a driver must stay engaged at all times. A robotaxi would require Level 4 automation, where the automobile can drive itself in a specific area. The leap from Level 2 automation to Level 4 is not a small step and skips Level 3 automation, in which the car can perform most driving tasks, but the driver must take over in some conditions.

Once again, it provided few details on how it was going to achieve Level 4 automation. The company's decision to eschew lidar (which uses lasers to measure distances and movement) and use a vision-only approach for autonomous driving has thus left it far behind, and even recent tests of its technology have found a lot of issues. Musk has a long history of overpromising and underdelivering when it comes to autonomous driving, but a June timeline is so close that you would have to think it could happen.

That said, even if Tesla does launch a robotaxi service, it doesn't necessarily solve the company's issues. Alphabet's Waymo has already taken the lead in the space in the U.S., and Tesla's problems with its brand reputation would extend to robotaxis as well. Meanwhile, most robotaxi fleets would operate in big cities, which tend to lean liberal.

Rohan Patel, the company's former head of business development and policy, told The Information, a technology-focused business website, that based on Tesla's internal analysis, the payback for its robotaxi ambitions was going to be slow.

An expensive stock

The stock has always gotten a huge premium valuation based on the hopes and dreams that Musk sells to investors, more than economic reality. That is the case now, more than ever.

The reality is that the company is currently seeing its market share and revenue decline. It trades at a forward price-to-earnings ratio (P/E) of over 100 based on 2025 analyst estimates, while its profitable U.S. auto peers all have multiples below 10. And while investors are placing a huge value on the potential robotaxi business, Alphabet, which has an operational paid robotaxi businesses, gets no such premium.

Between Tesla's valuation and the brand damage that has been done, I think the stock could have a lot further to fall in the future.

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $276,000!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

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

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*Stock Advisor returns as of April 21, 2025

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

The most closely watched metric for Verizon Communications (NYSE: VZ) during earnings season isn't the company's revenue or profits. Instead, it tends to be its postpaid phone subscriber numbers. Postpaid subscribers have wireless plans that are billed monthly, as opposed to prepaid subscribers, who pay for their services upfront.

Prepaid subscribers generally are not as affluent, and the business has much more churn. Meanwhile, its consumer and business wireline businesses are in decline. Broadband is a growth business, but the focus still tends to be on its core postpaid wireless business, as this is the gateway to its other offerings.

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On the postpaid wireless front, the company disappointed. After adding 568,000 wireless postpaid phone net additions in Q4 2024, it lost 289,000 in Q1 2025. The first quarter tends to see churn; in Q1, it lost 114,000 postpaid phone subscribers last year. However, the decline was worse than the loss of 197,000 subscribers that analysts were expecting.

Much of this appears to stem from price hikes, as the company's total wireless service revenue rose 2.7% to $20.8 billion despite the churn in customers. However, the company said that it saw mid-single-digit consumer postpaid phone gross additions in March and that its performance thus far in April has been strong. It noted that its new three-year price lock and free phone guarantee were starting to resonate with customers.

It also highlighted its new myPlan and myHome plans, which allow customers to customize their plans and add perks, such as discounted streaming services or unlimited cloud storage. myPlan is for mobile customers, while myHome is for broadband customers.

Broadband continued to be an area of strength in Q1, with 339,000 net additions in the quarter. This included 45,000 Fios internet net additions and 308,000 fixed wireless additions. Overall, it said total broadband connections increased by 13.7% year over year to 12.8 million, with 4.8 million of those being fixed wireless access subscribers.

It plans to deliver 650,000 incremental Fios passings this year while continuing to expand its C-band deployment. C-band is a wireless spectrum that Verizon is using to deliver its fixed mobile broadband solution and enhance its mobile wireless solution. C-band provides broadband internet service to areas that don't have traditional infrastructure.

Overall, Verizon continued to deliver steady results. Its overall revenue rose by 1.5% to $33.5 billion, while its adjusted EPS increased 3.5% to $1.19. That was just ahead of the analyst consensus for adjusted EPS of $1.15 on revenue of $33.3 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, rose 4.1% to $12.6 billion.

Looking ahead, Verizon maintained its full-year 2025 guidance. It continues to expect wireless revenue growth to be between 2% and 2.8% and for adjusted EPS to increase by 0% to 3%. The company projects operating cash flow to be between $35 billion and $37 billion after spending about half of that on capital expenditures (capex) to result in free cash flow between $17.5 billion and $18.5 billion.

A dividend darling

One of the things that most attracts investors to Verizon is its dividend. It has a robust forward dividend yield of about 6.4%, which is a nice payout in this environment.

The dividend remains well covered, with the company paying $2.85 billion in dividends in Q1 while it generated $3.63 billion in free cash flow. That's good for a nearly 1.3x coverage ratio. Over the past 12 months, it's generated free cash flow of $18.73 billion and paid out $11.03 billion in dividends, good for a 1.8 times coverage ratio. That gives the company plenty of room to continue to both invest in its business and increase its dividend moving forward.

The company's balance sheet also remains in solid shape with a leverage ratio on unsecured debt (net unsecured debt/trailing-12-month adjusted EBITDA) of 2.3.

With Verizon forecasting $17.5 billion to $18.5 billion in free cash flow this year, the company has a wide cushion to continue to increase its dividend, even if a weaker economic environment negatively impacts its results.

Is it time to buy the stock?

While Verizon's recent price hike caused some elevated churn in the most recent quarter, postpaid wireless subscriber additions look like they have been back on track for the last couple of months. Meanwhile, its three-year price lock and phone upgrade plan looks like an attractive offering that can drive subscriber growth.

At the same time, the company continues to do well by adding broadband customers. Its fixed wireless C-band offering allows it to target households in areas without fiber or cable broadband services. It is also a nice alternative option for customers who have cut the cord with cable but who are still beholden to their cable company's broadband options.

Turning to valuation, Verizon trades at a forward price-to-earnings (P/E) ratio of 9 based on 2025 earnings estimates, which is well below the nearly 13 times multiple of AT&T. With very similar overall growth metrics as AT&T, I think Verizon is the better buy and remains a solid, defensive dividend stock.

I wouldn't get caught up in one quarter of weak postpaid subscriber growth, as the overall picture at Verizon remains solid.

Should you invest $1,000 in Verizon Communications right now?

Before you buy stock in Verizon Communications, 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 Verizon Communications 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

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

With the stock market whipsawing amid to on-again, off-again tariffs, now is a great time scoop up some great stocks at discounted prices. Let's look at four monster stocks across industries that investors can buy and hold for the long haul. While in totally different businesses, all four should be artificial intelligence (AI) beneficiaries.

Nvidia (technology)

Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs) have become the backbone of AI infrastructure due to their superior processing capabilities that are ideal for running AI workloads.

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Meanwhile, the company's CUDA software platform has created a wide moat for the company in the GPU space due to how easily it allows developers to program its chips for various AI tasks. This has led the company to take an over 80% market share and grow its revenue by an astonishing 380% over the past two years.

With AI data center capital expenditures (capex) still increasing, Nvidia is uniquely positioned to continue to capture a large percentage of this spending. Cloud computing companies are leading the way, with the three largest in the space set to spend around $250 billion this year.

Meanwhile, companies developing AI models and enterprises are also spending big. For its part, Nvidia sees AI data center capex reaching $1 trillion by 2028. This type of projected spending makes Nvidia's stock a long-term winner.

Amazon (consumer goods)

The market-share leader in cloud computing with Amazon Web Service (AWS), Amazon (NASDAQ: AMZN) is leading the way on AI infrastructure capex, with plans to spend $100 billion this year. It also says that there are currently more than 1,000 generative AI applications being built across the company.

Amazon sees AI as a once-in-a-generation opportunity and as such will continue to invest big. If history is any indication, this is a smart move as the company's previous big bets, such as its logistics and warehouse network and AWS, proved to be the right moves.

At the same time, Amazon is still the world's largest e-commerce player, where it is also employing AI to improve the customer experience while at the same time creating efficiencies and reducing costs. This includes using AI to optimize routes for its drivers to speed up delivery times and using AI robots in its warehouses that can spot damaged items, so customers don't have the hassle of having to return them.

The combination of its AWS and e-commerce businesses position Amazon to be a long-term winner.

Energy Transfer (energy)

AI data centers consume a lot of power, which is driving up demand for natural gas. One of the companies best positioned to take advantage of this is Energy Transfer (NYSE: ET), which owns the largest integrated midstream system in the U.S.

The company is particularly well situated in the Permian Basin, which is the most prolific oil basin in the U.S. with some of the best drilling economics.

However, it is Energy Transfer's access to the cheap associated natural gas from this basin and vast pipeline network that give it an advantage.

A friendlier government stance toward fossil fuels and growing natural gas demand is leading to more growth projects for the company. As such, it has increased its growth capex budget this year to $5 billion from just $3 billion in 2024. It also signed its first contract to directly supply natural gas to a data center when it entered into a long-term agreement with data center developer Cloudburst to deliver natural gas to its flagship data center development in central Texas.

With some of the best assets in the midstream space and one of the cheapest valuations, Energy Transfer's stock is a solid investment opportunity. It also carries a nice 7.8% forward yield to boot.

PayPal (financials)

It's no secret that payments company PayPal (NASDAQ: PYPL) has had issues in the past. While the company was growing revenue, much of this was coming from low-margin sources, causing it to see margin pressure. Between 2015 and 2023, its gross margin contracted from 51% to 39.6%.

However, new CEO Alex Chriss set out to change this course, focusing on innovation, value-added services, and employing a price-to-value strategy (determining the highest price its customers are willing to pay for something). While this is leading to revenue growth initially decelerating, the company has started to boost its transaction margin dollars, which are similar to gross profits.

At the same time, PayPal introduced a number of new services, such as smart receipts and advanced offer platforms. Both of these are marketing tools that use AI to create personalized offers to customers. It's also begun to better monetize its popular peer-to-peer payment platform Venmo through the introduction of a Venmo debit card and Pay with Venmo feature.

The company's biggest innovation, though, is an AI solution called Fastlane that lets consumers check out with a single tap without having to provide credit card information or set up an account with individual retailers. This solution is a huge help to merchants that has been improving their customer conversions. The company has also said three-quarters of early Fastlane users have been new or dormant PayPal customers.

A cheap stock (less than 12 times forward P/E) that is showing signs of a turnaround, PayPal is a great option to buy now.

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

Before you buy stock in Nvidia, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Energy Transfer and PayPal. The Motley Fool has positions in and recommends Amazon, Nvidia, and 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.

With the S&P 500 (SNPINDEX: ^GSPC) ending last week down more than 10% in two days, the stock market experienced its first crash since March 2020, when the COVID-19 pandemic began to escalate. The culprit this time was the U.S. enacting punitive tariffs against much of the rest of the world and an ensuing trade war. These tariffs were even applied to two islands uninhabited by humans, with the Trump administration saying the duties were added so that other countries could not evade tariffs by shipping goods through the ports of these islands.

With the market in turmoil and a lot of volatility likely ahead, let's look at four ways investors can navigate the current market crash.

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1. Have liquidity

In a bear market or an impending bear market, one of the most important things investors can have is liquidity, or cash on the sidelines. By having available cash, investors can then take advantage of market dips.

If you're fully invested, consider selling some of your least favorite positions to raise some cash that can later be used to buy ideas you have more conviction in. If these are in a non-retirement account, you'd also get the potential benefit of a tax loss when you next file.

To be clear, you don't want to start panicking and just sell stocks. Instead, you want to look at this as an opportunity to high-grade (improve the quality of) your portfolio.

2. Create a list of high-quality stocks to buy

Another important thing you can do is create a list of high-quality stocks and the prices at which you'd start buying them. Undoubtedly, there have been stocks you've liked in the past, but their valuations were too high.

This could be highfliers like Palantir Technologies (NASDAQ: PLTR) or Cava Group (NYSE: CAVA) whose businesses are doing great but whose stock valuations just skyrocketed over the past year or two. Perhaps it could be stocks in industries that have always tended to have high multiplies, such as cybersecurity companies like CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW). There could also be blue chip tech names like Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) or Amazon (NASDAQ: AMZN) whose stocks have just gotten cheaper, given their collection of businesses and future prospects.

The key, though, is to gather a list of high-quality stocks you'd be comfortable owning over the long run. And then, when they reach your price target, be ready to start building positions in them. Just do the research beforehand so you're ready to pounce.

3. Consider writing puts

A more advanced strategy to use in a down market is to write (sell) put options. By writing a put option, you collect a cash premium up front, but you are then obligated to buy that stock if the buyer exercises his option to sell it to you. As such, you want to do this only with stocks and at prices where you would want to buy them.

For example, if Amazon was on your list of stocks to buy at $150, you could write a put on Amazon stock with a strike price of $150 and a May 9 expiration and collect around $3.70 in premium. If the stock falls below $150 and the option is exercised, you'd own the stock at $150. Note that each option represents 100 shares. If Amazon doesn't fall to that price, you just collect the premium, which would be worth around $370 for each option.

This strategy's intention is twofold. One is to let you buy into a stock you want to own at a lower price. However, if the stock never reaches that price, you still earn some return.

The downside to this strategy is that it does tie up some capital, which you could potentially use elsewhere. That is why I prefer to keep the expiration dates short, at about a month.

In addition, if the stock blows past your price target on the downside, you are still obligated to buy at the strike price. This is most likely to occur if a major event happened when the market was closed, and it opened way down. However, the assumption we are using is that you'd be a buyer of the stock at the strike price regardless. The other disadvantage is that if the market does make a quick reversal, you would lose out compared to if you had jumped in right away and bought the stock.

However, this is a nice strategy to supplement your investments, allowing you to earn some extra cash as you wait for stocks to hit your buy prices.

4. Dollar-cost average with ETFs

Another strategy investors should consider is dollar-cost averaging. In this strategy, you make investments at set times and dollar amounts regardless of their prices.

This strategy works particularly well with exchange-traded funds (ETFs) such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the Invesco QQQ ETF (NASDAQ: QQQ). These two ETFs track major market indexes that have proven to be long-term winners. The Vanguard ETF tracks the S&P 500, which comprises the 500 largest stocks traded in the U.S., while the QQQ ETF tracks the Nasdaq-100, which is more tech- and growth-oriented.

With ETFs, you don't have to worry about individual stock research. You can buy an ETF that immediately gives you a portfolio of leading stocks. Consistently dollar-cost averaging into index ETFs is a great way to build long-term wealth, and a down market is a great place to start implementing this strategy.

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

Before you buy stock in S&P 500 Index, 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 S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $590,231!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 5, 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. Geoffrey Seiler has positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Palantir Technologies, and Vanguard S&P 500 ETF. The Motley Fool recommends Cava Group and Palo Alto Networks. The Motley Fool has a disclosure policy.