After massive declines in the second half of last year, Celsius Holdings (NASDAQ: CELH) stock may finally be ready for a comeback. The company's rapid growth came to a sudden halt (at least temporarily) as sluggish demand led one of its major distributors (likely PepsiCo) to dramatically scale back its orders.

The beverage stock is down over 60% since its peak in early 2024. Still, it is up over 50% since the beginning of the year. The question for investors is whether that recovery signifies the beginnings of a Celsius comeback, or whether investors need to stay on the sidelines.

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Image source: Getty Images.

The state of Celsius stock

Celsius has carved out a compelling, lucrative niche within the energy drink industry. Instead of pursuing customers like its larger competitors, Red Bull and Monster Beverage, Celsius targeted fitness enthusiasts. It also participated in clinical studies to validate the health benefits of its beverages.

Celsius' beverages first became available in 2009. However, it was its distribution agreement with PepsiCo in August 2022 that helped sales take off. Since that agreement in the third quarter of 2022, quarterly revenues have increased by 75% even after the recent slowdown in sales. Additionally, that figure does not account for Celsius' takeover of Alani Nu, which occurred in the second quarter of this year.

Before that purchase, Celsius also claimed approximately 11% of the market share, putting it in third place in the energy drink market. Still, investors should remember that it leads the health and fitness-oriented niche in the market, which will likely make it a major force in this industry.

Image source: Statista.

Amid the stock's partial recovery, Celsius sells at a price-to-earnings (P/E) ratio of 127. Nonetheless, since it is recovering from last year's slump, the forward P/E ratio of 50 may better reflect the company's valuation, a level coming off historical lows. It is also well below the forward P/E ratio of 125 from the stock's peak in early 2024. That forward multiple arguably brings the stock price more in line with its current growth.

Celsius' mixed financial picture

Unfortunately, investors may still balk at Celsius' valuation as they brace for slower growth.

In the first quarter of 2025, revenue of $329 million dropped by 7% yearly. That's a dramatic improvement over the 31% decline in Q3. Still, it is well below the 102% revenue gain in 2023. The falling revenue also led to a comprehensive income in Q1 of $37 million, well below the $63 million in the year-ago quarter.

Revenue growth should improve in the near term due in part to the Alani Nu takeover. In 2025, analysts forecast 60% revenue growth. But once Celsius benefits from that one-time bump, they expect the revenue increase rate to slow to 21% in 2026.

Knowing that, the most significant hope for bulls may lie in the company's potential internationally, where 96% of the world's population resides. Even though international sales made up 7% of revenue in Q1 2025, that part of the market grew revenue by 41% annually.

Moreover, that revenue share was only 4% one year ago. Assuming it can continue to increase the proportion of international sales significantly, Celsius stock could deliver higher returns if revenue growth abroad remains strong.

Is Celsius stock a buy now?

Over the long term, Celsius stock likely remains a buy.

Admittedly, the 50 forward P/E ratio could point to some overvaluation in the near term. Furthermore, the immediate recovery in revenue will probably happen because of the buyout of Alani Nu, rather than an organic increase in Celsius brand products.

Nonetheless, the 21% forecasted revenue increase in 2026 is an indication that demand will rise over time. Additionally, even though international growth will take some time, sales outside of North America are likely to become the company's primary revenue driver over time.

Such potential indicates that Celsius' growth story is far from over, meaning its stock could still be positioned for huge gains.

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

Before you buy stock in Celsius, consider this:

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Will Healy has positions in Celsius. The Motley Fool has positions in and recommends Celsius and Monster Beverage. The Motley Fool has a disclosure policy.

Telecom specialist Lumen Technologies (NYSE: LUMN) just announced the sale of its mass-market fiber business to AT&T for $5.75 billion. That move continues the transformation which began last summer when it partnered with Microsoft to leverage its existing network to strengthen connectivity among Microsoft's data centers. It has also agreed to provide similar services to Amazon and Meta Platforms.

The sale of the mass markets fiber business seems to confirm that Lumen is pivoting toward business and away from the consumer market. The question for investors is whether that deal will boost Lumen's stock over the long term.

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Image source: Getty Images.

The AT&T deal and its implications

According to CEO Kate Johnson, the company will receive net proceeds of $4.8 billion. Lumen can use those funds to reduce its debt or support its growing need to increase its capital expenditures as the company tries to reinvent itself from what had been a declining wireline telco business.

Still, one has to assume Lumen will focus on debt reduction at some level. As of the first quarter of 2025, it holds $17.3 billion in long-term debt. The company's book value is only $289 million, so that liability has put tremendous strain on the company's balance sheet.

Moreover, the company has to build what it calls a "backbone" for artificial intelligence (AI) to serve its enterprise customers. To that end, Lumen plans to spend $4.1 billion to $4.3 billion in capex this year, presumably to help build that AI backbone. That is up 30% from the $3.2 billion in spending in 2024 but should enable the company to meet the needs of its new customers.

Does the deal boost the case for Lumen stock?

Nonetheless, investors may be right to question how much the deal helps Lumen as an investment. So far, the pivot toward enterprise has not boosted the company's financials. In the first quarter of 2025, revenue dropped 3% year over year to $3.2 billion. Although that is an improvement from the 10% drop in revenue in all of 2024, it still represents a decline.

Despite a net loss of $201 million, Lumen generated $354 million in free cash flow in Q1. Unfortunately, Lumen expects $700 million to $900 million in free cash flow in 2025, down from $1.4 billion in 2024. However, free cash flow will fall because of the increase in capex spending, not poor financial performance.

Investors do not know quite what to make of Lumen's transformation. The stock is up 200% over the past year but down 64% from its peak in November. This likely indicates that investors are wary.

Measuring the valuation is also tricky. The lack of profitability leaves it without a P/E ratio. As for its price-to-sales (P/S) ratio, it is less than 0.3. That is up from 2024 lows but below the five-year average of 0.4, making it unclear whether Lumen's valuation will help draw investors back to its stock.

Should you buy Lumen Technologies stock?

Given the current state of the company, investors should probably limit stock purchases to speculative positions until its deals begin to drive positive revenue growth.

Prospects for a turnaround have improved thanks to the aforementioned AI partnerships, and the cash infusion from the sale of the consumer fiber business greatly increases the odds of a turnaround.

Unfortunately, these deals have not translated into an improved financial performance. Lumen's revenue continues to fall, and forecasts indicate that trend will continue through 2025 and 2026. Ultimately, until revenue growth turns consistently positive, Lumen stock will probably struggle to move higher.

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

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Given Chipotle's (NYSE: CMG) recent stock performance, one has to wonder if it's still reeling from the sudden departure of former CEO Brian Niccol last summer. Eight months after Scott Boatwright became the company's new CEO, the stock is now down over 25% from its high.

Despite the uncertainty such a transition brings, it's not necessarily clear why the restaurant stock is suffering. Is it down because of temporary factors, or do investors need to start taking a more negative view of the company? Let's take a closer look.

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The current state of Chipotle

At first glance, the CEO change looked like something that might have minimal impact. Boatwright had been the chief operating officer since 2017. Since he presumably played a role in the changes made by Niccol, that fact alone makes any significant changes to the company's successful business strategy less likely.

However, the results from the earnings report for the first quarter of 2025 might leave investors concerned about the state of the business. Chipotle experienced an annual comparable-restaurant sales decrease of 0.4%. Boatwright blamed consumer uncertainty for the slowdown.

Indeed, it's a considerable pullback from the 7.4% comparable-sales increase in 2024 and even the 5.4% yearly rise in comparable sales in Q4.

Also, Chipotle increased its restaurant count to 3,781 in Q1, a 12-month increase of 302 locations, or around 8%. With that, it reported $2.9 billion in Q1 revenue, but that 6.4% increase indicates Chipotle has lost some traction on a per-restaurant basis.

When factoring in operating costs, its operating margin in Q1 rose to 16.7% versus 16.3% in the year-ago quarter. Hence, even though its income tax expense rose, the $387 million in net income was an 8% yearly gain.

Nonetheless, the company predicts comparable-restaurant sales growth will stay in the "low single digits" for the year. That leaves shareholders wondering whether they'll have to adjust to lower growth numbers in future quarters.

Assessing the Chipotle investment case

Unfortunately, shareholders seemed accustomed to the higher growth rates of past quarters. Over nearly every period of three years or more, Chipotle stock typically outperformed the S&P 500.

Still, that changed in July of last year, two months before Niccol stepped down as CEO. Although the stock rose following his departure, it has steadily pulled back since December, and is now down 15% over the last 12 months.

Furthermore, the company's valuation is a concern due to the slowdown. Its price-to-earnings (P/E) ratio is 45, which is at the lower end of its range over the last five years. Chipotle has consistently been a pricey stock, but investors typically dismissed the valuation thanks to double-digit revenue growth. However, you might now wonder whether the recent drop is due to a compressed valuation.

Remember that more mature restaurant stocks, such as McDonald's and Niccol's current company Starbucks, trade at 28 times and 27 times earnings, respectively.

Maintaining Chipotle's high P/E will likely be a challenge. If growth slows permanently, that increases the chance of its valuation matching those of its more mature peers, presumably meaning a pullback of approximately one-third from current levels. Even if the stock doesn't fall that far, that differential indicates the share-price decline may continue.

Nonetheless, its relatively smaller size may help Chipotle compared to its larger peers. The number of Chipotle locations is less than one-tenth of either of these companies. That makes it easier to grow its footprint at a higher percentage rate.

Also, it plans 315 to 345 new locations in 2025 and has announced plans to open restaurants in Mexico. That indicates it can maintain its rapid pace of expansion, and possibly continue to command a premium valuation.

Should investors buy Chipotle stock?

For now, you should probably regard Chipotle stock as a hold. Admittedly, it continues to offer a compelling value proposition, amid a rapid expansion that's on track to continue.

Still, the company faces considerable uncertainty amid its leadership change and a sluggish economy, and the subsequent slowdown in sales growth seems to have worried investors.

Furthermore, Chipotle's P/E ratio may seem more appropriate for its more rapid growth in past years. Until you can either buy the stock more cheaply or identify a path for more rapid growth, you might want to refrain from adding shares.

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

Verizon (NYSE: VZ) just reported its earnings for the first quarter of 2025. The telecom company improved its revenue and profits, but not at levels that impressed investors. With that, the stock fell amid higher-than-expected cancellations.

Nonetheless, Verizon's long-term problems are likely the issue weighing on its stock performance. Until the company addresses those, the telecom stock is likely to struggle. Here's why.

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Verizon's Q1 earnings

At first glance, Verizon delivered a stock performance that was consistent and typical for a mature company such as this. The $33.5 billion it earned in revenue was 1.5% higher than the year-ago level.

Also, Verizon held the line on operating expense growth, limiting it to 0.2%. Despite lower income from other sources and higher income tax expenses, Verizon delivered just under $5 billion in quarterly net income, a 5.5% increase from the same quarter in 2023.

Moreover, what was probably the most impressive number was free cash flow, which climbed to $3.6 billion in Q1, up from $2.7 billion in the same quarter last year. Verizon has just under $2.9 billion in quarterly dividend expenses, which should presumably reassure income investors concerned about the safety of its payout.

Still, investors focused more on subscriber numbers, which pointed to some struggle. The company lost 289,000 subscribers last quarter, well above the 197,000 that analysts had expected.

This is notable, as Verizon is a domestic business and, thus, does not face any direct threats from tariffs, though struggling consumers may look for lower-cost plans as a way to deal with rising costs.

Ongoing challenges

However, the concerns about Verizon stock seem to be more subtle but well-known. One issue is the ongoing strains of market competition. The need to avoid falling behind AT&T and T-Mobile forces it to invest heavily in maintaining and upgrading its network.

To this end, it spent $4.1 billion on capital expenditures in Q1. The company subtracts that expenditure from free cash flow, and indeed, its competitors have to make similar expenditures.

Nonetheless, it weighs on a company that has to service $143.6 billion in total debt. That's a tremendous burden on the balance sheet, considering the $102 billion in total equity.

Additionally, that debt fell by only $365 million during the quarter, resulting in $1.6 billion in interest costs over the same period. That rightly leaves investors questioning whether the company should cut the dividend to apply some of the $2.9 billion it spends quarterly on payouts to debt reduction.

Verizon currently offers a yearly payout of $2.71 per share, a dividend yield of 6.4%. That's more than quadruple the S&P 500's yield of just under 1.5%.

Furthermore, that dividend looks increasingly like a trap. Verizon has had the worst-performing stock among the three major telcos, meaning shareholders seem to own it for its payout. Since the dividend has risen for 18 consecutive years, the annual payout hikes likely contribute to its popularity as an income stock.

VZ Total Return Level data by YCharts.

Investors should also remember that AT&T walked away from a 35-year track record of payout hikes when its financial troubles forced it to cut its dividend. While the stock dropped for two years after its dividend cut, it has experienced a resurgence since mid-2023. That could make Verizon's management reconsider its dividend stance.

Moving forward with Verizon stock

Despite a mixed Q1 report, long-term issues remain the biggest challenge for Verizon stock. Indeed, Verizon stock is up by nearly 35% since bottoming in late 2023. Additionally, at a price-to-earnings (P/E) ratio of 10, it looks like a bargain.

Unfortunately, the 6.4% dividend yield that makes Verizon attractive to income investors could also be a target as the company looks for ways to reduce its massive total debt. Moreover, it is unclear whether a low P/E ratio would limit the downside of this stock if it were to trim its payout.

Hence, while the latest earnings report points to business as usual, investors should focus more on the company's longer-term problems and base their investment decisions on those.

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

Before you buy stock in Verizon Communications, consider this:

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Will Healy has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

When it comes to investing, a $3,000 position may not sound like much. While it's not enough to deploy into multiple individual stocks, it's enough to allow one to take $1,000 positions in three different stocks, and that includes artificial intelligence (AI).

Due to a recent pullback in stocks, many AI stocks are on sale. Thus, now is likely an excellent time to take starter positions, and these stocks could serve investors well.

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Alphabet

When it comes to AI investing, it's likely too early to count out Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Alphabet first began using AI in 2001, and since then, it has been a pioneer in the technology.

It was only with OpenAI's generative AI breakthrough in 2023 that some began to doubt Alphabet's strength in the AI market. Although the company has followed up with Google Gemini and plans to spend $75 billion in capital expenditures (CapEx) in 2025 alone, Alphabet has not eased doubters' fears.

Nonetheless, the Google parent could easily rebound. Alphabet held about $96 billion in liquidity at the end of 2024, and it generated around $73 billion in free cash flow, a figure that does not include CapEx expenses. Those results show that it can afford such investments. Additionally, its massive ad business continues to grow revenue at double-digit rates, and the 31% revenue increase in Google Cloud shows that it's diversifying its revenue sources.

Investors should also remember that amid doubts, Alphabet stock has risen since OpenAI's generative AI breakthrough in 2023. Moreover, its price-to-earnings (P/E) ratio of 19 sits at a multi-year low, making it increasingly likely that now is an opportune time to add shares of this internet giant.

Meta Platforms

Facebook parent Meta Platforms (NASDAQ: META) built its success on becoming the dominant social media stock and creating a wildly successful digital ad business based on that.

However, with about 3.35 billion users logging on to a Meta-owned social media site daily, its sites seem to be approaching global saturation. Thus, after failing to draw investor interest through the metaverse, the company has pivoted into AI.

It has developed a generative AI assistant that helps Meta users generate images, personalize experiences, and use open-source AI. It just released Llama 4, its latest family of large language models, and a paid subscription service is also in the works. Thanks to sites such as Facebook and Instagram, Meta accumulated a treasure trove of data on much of the population that may give it a competitive advantage.

It holds about $78 billion in liquidity, not including the $52 billion it generated in free cash flow, leaving it with tremendous optionality regarding AI investing. With that, it announced plans to invest $60 billion to $65 billion in CapEx to stay competitive in the AI race.

Like Alphabet, Meta stock has risen steadily since Open AI's generative AI release. With a P/E ratio of 21, investors may want to consider this stock while it trades at a reasonable valuation.

Amazon

Amazon (NASDAQ: AMZN) has been adept at staying at the forefront of tech innovation, and AI is no exception. The company's cloud computing arm, Amazon Web Services (AWS), pioneered the cloud industry and remains the leading provider. However, since the cloud facilitates AI functionality in many cases, Amazon had to become adept with the technology to stay relevant in its field.

The e-commerce side of the business also uses AI. The technology personalizes customer experiences and improves the content and advertising appearing on its platform. In its third-party seller business, AI helps sellers streamline operations and provides overviews to evaluate a seller's performance.

Like its mega-tech peers, Amazon also plans to spend heavily on capital expenditures. It implied that it would spend $100 billion, most of which would go to AI. Investors should also like that it can probably afford these investments because it holds $101 billion in liquidity and generated $38 billion in free cash flow in 2024.

Indeed, Amazon stock has dropped dramatically in recent weeks amid the market sell-off. Nonetheless, investors should note that its P/E ratio has fallen to 31, a multi-year low for Amazon stock. That factor likely makes now a good time to add shares while the stock is comparatively inexpensive.

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

Before you buy stock in Alphabet, consider this:

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

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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. 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. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

Conditions continue to work in favor of Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM). The world's largest chip producer already controls two-thirds of the foundry market, according to TrendForce. Moreover, with artificial intelligence (AI) demand growing at a rapid clip, the need for the chips it produces only continues to rise.

Unfortunately, the healthy state of TSMC's business did not prevent a 35% drop in the stock price since January. However, with industry leadership and a diverse and desired client base, the short-term forces hammering TSMC stock are more likely a buying opportunity than a sign of a longer-term decline, and here's why.

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The state of TSMC

Other than TSMC's equipment maker ASML, few other AI stocks are in a stronger position. As the world's most advanced chipmaker, its clients are top chip design companies, including Nvidia, Advanced Micro Devices, Qualcomm, and Apple.

This market strength has unfortunately not stopped TSMC stock from falling. Geopolitical tensions with neighboring China are on the rise, and some investors fear for the future of the company should China invade the island. Also, investors fear the effect of tariffs on the company despite the Trump administration exempting semiconductors.

Nonetheless, TSMC seems to only extend its dominance, which makes its stock attractive with its lower price. TSMC's foundry market share grew more than 2 percentage points to 67% between the third and fourth quarters of 2024.

According to multiple reports, TSMC has also entered into a joint venture with Intel, the largest chip manufacturer in the U.S. This agreement could potentially offer tremendous benefits to both companies. With the move, TSMC diversifies its manufacturing base away from the geopolitical risks it faces in Taiwan. Additionally, manufacturing in the U.S. blunts the effects of possible U.S. tariffs and pacifies Intel, which had begun to emerge as a potential competitor.

Financials remain strong

Despite the recent drop in the stock price, TSMC's financial performance should make it more attractive to buyers over the long term. In 2024, revenue of $90 billion rose by 34% from year-ago levels. With that increase, gross margin rose by 2 percentage points to 56%, a testament to the company's rising efficiency.

Additionally, operating expenses dropped slightly as a percentage of revenue. That led to a comprehensive income of more than $39 billion, a 50% increase from year-ago levels.

Still, staying on top of demand and increasing its market share requires the company to invest heavily in building and maintaining foundries. Thus, it spent almost $30 billion in 2024 on property and equipment, just slightly less than it spent in 2023. Between rising demand for the most advanced semiconductors and the push to build more foundries in the U.S., investors should expect that level of capex spending to continue.

However, investors may find it easier to overlook those high fixed costs amid a lower valuation. TSMC's P/E ratio had exceeded 30 as recently as January. Today, its earnings multiple has fallen to just 21, and the forward P/E ratio of 16 indicates its rapid profit growth is likely to continue.

Consider TSMC stock

TSMC has become the dominant company in semiconductor manufacturing, and the deep discount in the stock price amid the stock sell-off makes it an even better buy.

Investing in TSMC does bring some degree of geopolitical risk, particularly with rising trade tensions. Nonetheless, virtually all top chip companies turn to TSMC to meet their manufacturing needs. Additionally, its new partnership with Intel addresses some of the geopolitical risks while turning a potential competitor into a partner.

Considering that investors can now buy this chip stock at a heavily discounted valuation, it has become an opportune time to buy shares.

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.

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Will Healy has positions in Advanced Micro Devices, Intel, and Qualcomm. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.