Key Points

• President Donald Trump signed his landmark legislation, the "Big, Beautiful Bill," into law on July 4.

• The bill includes a temporary new senior tax deduction intended for retirees that pay Social Security taxes.

• Not all Social Security recipients would be eligible for the deduction, but millions will be.

• The $23,760 Social Security bonus most retirees completely overlook ›

President Donald Trump signed his landmark "Big, Beautiful Bill" into law on July 4. The legislation is a large budget reconciliation that implements trillions in tax cuts and allocates more funds for border security, along with many other provisions.

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While the bill does not outright eliminate Social Security taxes, as Trump had previously promised, it will indirectly eliminate them for the large majority of Social Security retirees. In fact, over 14 million retirees are about to see lower Social Security taxes under the bill that will materially boost their purchasing power.

Increasing the senior tax deduction

Legislation can be confusing, and this is going to be one of those times. For several months, President Trump has discussed the idea of outright slashing taxes on Social Security benefits to give more money back to retirees. Many argue that Social Security benefits have lost purchasing power in the 21st century. However, cutting Social Security taxes outright would have significantly exacerbated financial strain that Social Security is already experiencing -- the Social Security trust funds are set to run dry by 2034.

What's more, Republicans are using the budget reconciliation to speed up the legislative process for the "Big, Beautiful Bill." Under this legislative process, lawmakers aren't allowed to pass provisions that would impact the Social Security trust funds. So, Trump and the Republicans essentially used a workaround by increasing senior tax deductions.

Image source: Getty Images.

To be clear, these deductions impact all seniors, regardless of whether they receive Social Security benefits. However, it's specifically aimed at those that currently pay Social Security taxes.

The House initially passed a $4,000 bonus senior deduction for single seniors and $8,000 for married seniors. But the Senate increased that to $6,000 and $12,000, respectively, which is what went into the final version of the bill. The bonus deduction is only temporary and will expire in 2028. .

According to the White House, which cites data from the U.S. Treasury Department, under the existing tax code, 37.2 million U.S. citizens over 65 claim Social Security benefits and qualify for enough exemptions and deductions that exceed their taxable Social Security income. That is equivalent to 64% of Social Security recipients age 65 and over. With the $6,000 bonus senior tax deduction, the White House expects this number to jump to 51.4 million beneficiaries, or 88% of Social Security recipients age 65 and over.

Retirees that claim Social Security between the ages of 62 to 64 will not benefit from this deduction, and many recipients with the lowest incomes already don't pay Social Security taxes. Single filers would only qualify for the maximum $6,000 if they make no more than $75,000 per year, while joint filers can make up to $150,000. The deductions would be phased out once single filers make $175,000 and joint filers make $250,000.

How much in savings will the deductions provide?

People should also keep in mind that deductions don't eliminate taxes. Rather, they lower the income that will get taxed, resulting in a lower overall tax bill. According to The Wall Street Journal, a married couple that makes $100,000 per year would realize roughly $1,600 in savings from the $6,000 deduction.

This is certainly significant, considering the average monthly Social Security check for retirees in May was about $1,950, or $23,400 annually. The $1,600 in savings is equivalent to nearly 7% of the average annual benefit this year, and is much higher than the typical Social Security annual cost-of-living-adjustment (COLA).

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Key Points

• Citigroup has been working on a company-wide transformation since 2021.

• Progress is being made. The bank has been divesting international consumer banking divisions and investing capital into higher-returning businesses.

• The stock recently hit highs not seen since 2008.

The large U.S. money center bank Citigroup (NYSE: C) has enjoyed quite the run. The stock is up over 75% in the last five years and now trades at over $88 per share (as of July 3), highs not seen since 2008.

Citigroup also trades at about 97% of its tangible book value (TBV), a significant discount to peers, despite having materially grown TBV per share in recent years. Investors are certainly pleased with the progress and wondering if Citigroup can keep the momentum going. Where will the bank be in three years?

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Finishing the transformation

Shareholders have been through the ringer with Citigroup. They've dealt with consent orders and lackluster returns, which has kept the stock depressed until recently.

But when current CEO Jane Fraser took over in 2021, she immediately launched a companywide transformation plan. The transformation included divesting international consumer franchises that were inefficient from a capital perspective. Citigroup also decided to divest its highly profitable international consumer banking operations at its Mexican subsidiary Banamex. The idea is to free up capital that management could use to invest in higher-returning businesses like investment banking, wealth management, and Citigroup's crown jewel, treasury and trade solutions (TTS).

Image source: Getty Images.

Freed-up capital has also been used to repurchase shares below TBV. These types of accretive buybacks increase TBV per share, which bank stocks trade relative to, so higher TBV tends to result in a higher share price over time.

Citigroup has largely completed sales or exited most of its international consumer banking operations. Banamex has taken longer than management would have liked. Selling the consumer business turned out to be difficult because the Mexican government had to approve the seller, and Citigroup ended up abandoning the process. Management then chose to split its Mexican consumer business from its institutional business and spin it off into an initial public offering. Fraser on the company's most recent earnings call said the bank would like to be in a position to take Banamex public by the end of the year.

With the transformation getting closer to completion, Citigroup will focus on five core businesses: U.S. personal banking, wealth management, investment banking, fixed-income and equity markets, and services, which includes the TTS business.

The transformation has been all about boosting returns. In 2024, Citigroup generated a 6.1% return on tangible common equity (ROTCE). However, management is targeting a 10% to 11% ROTCE by 2026. Analysts and investors seem more confident in this trajectory after the bank put up a 9.1% ROTCE in the first quarter of the year.

If Citigroup can start consistently generating a 10% or 11% ROTCE, with prospects of moving higher from there, the bank may finally begin to close the valuation gap with its peers.

C Price to Tangible Book Value data by YCharts

What to expect over the next three years

I think Citigroup's transformation is real. Over the next three years, I expect it to finish its international divestitures including the IPO of Banamex. I also expect the company to hit the long-awaited 10%-11% ROTCE in 2026. Deregulation in the banking sector and a simpler organization should lead to lower capital requirements, allowing Citigroup to increase capital returns to shareholders through dividends and share repurchases.

As you can see from the chart above, Citigroup doesn't need to do anything heroic to generate strong gains for shareholders. Its current TBV per share is about $90. A $145 stock price would only require a valuation of 1.5 times TBV, which would still be below peers. And remember, Citigroup should be able to continue to grow TBV per share in a meaningful way. I don't ever expect Citigroup to be JPMorgan Chase, but I do think it can continue to close the valuation gap over the next three years.

And who knows, perhaps once Citigroup achieves a better valuation -- and therefore a better stock currency -- it may start to think about whole bank acquisitions to bolster its U.S. deposit presence. That's speculative and still likely several years away, but also something for investors to consider.

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

April seems like it happened a lifetime ago. On April 2, dubbed by President Donald Trump as "Liberation Day," the White House imposed sweeping tariff rates on the United States' largest trading partners.

The high rates caught many investors off guard, and the stock market plummeted. By April 9, Trump announced a 90-day pause on the high tariff rates to give countries time to negotiate trade deals, leading to a major market rally. That 90-day pause will end on July 9. Should investors buy stocks before then?

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What has happened since the pause?

Since the pause, the Trump administration has made some progress on forging trade deals, but ultimately, there is still much to be decided.

Image source: Getty Images.

Currently, there are 50% tariffs in place on steel and aluminum imports, although the rate falls to 25% for any of these materials coming from the United Kingdom. There are also 25% tariffs in place on certain car parts. Furthermore, the 10% base level of tariffs on imports from most other countries remains.

The U.S. has already struck a trade agreement with the U.K., leaving the 10% tariff rate intact. The White House also appears to have struck a trade deal with China, which has been the biggest question mark in all of this. The deal appears to set a total tariff rate of 55% on Chinese goods, although that includes the 25% tariffs Trump imposed on Chinese goods in his first term, meaning the new 30% rate is expected to be left in place.

As of June 25, there have been many reports of the U.S. closing in on agreements with countries like Vietnam and India, while trade deals have not been reached with major trade partners like the European Union, Japan, and Canada, as of this writing.

What will the situation look like on July 9?

I'm expecting more trade deals will be struck by July 9. It's also possible there is another pause, which Treasury Secretary Scott Bessent recently hinted at for countries that show "good faith."

However, I also wouldn't rule out Trump letting some higher tariff rates go into effect for imports from countries that the administration does not believe negotiated in good faith. The stock and bond markets are always good barometers for how much room Trump has to maneuver when it comes to tariffs.

Despite everything that has happened since April, the stock market is nearing all-time highs as of this writing, and the yield on the 10-year Treasury note is at 4.33%, giving Trump the flexibility to still take a tougher stance.

What is the best outcome? Can you buy stocks?

Realistically, the best outcome for July 9 is clarity. If the U.S. sets final tariff rates at the 10% level or in that vicinity for most of its trading partners, the market will likely respond positively. The resulting clarity allows companies to figure out their capital expenditure plans and provide more accurate earnings and revenue guidance.

Clarity will also provide the Federal Reserve with better insight regarding tariffs' potential impact on inflation. Currently, tariffs appear to be the single largest roadblock preventing the Federal Reserve from lowering interest rates, which Trump badly wants to happen. Another extended tariff pause is also possible and would likely be received positively because it shows the Trump administration is willing to take the time to negotiate.

So, should you buy stocks before July 9? Yes, but you shouldn't try to trade the event because, as investors have seen many times over the last decade, President Trump is quite unpredictable.

Short-term trades also have a higher chance of losing money, especially with the market hovering around all-time highs. Investors should be buying benchmarks like the S&P 500 or stocks they plan to hold for the long term. Seeking out individual names with more reasonable valuations is also a smart move, as opposed to buying popular names at sky-high valuations.

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Investing can be extremely volatile, as experienced this year when the market fell into bear market territory from its highs in February. After recouping those losses it's now approaching near all-time highs.

That's why investors may want to consider adding some dividend stocks that can generate reliable passive income each year. There's no better place to look than in the portfolio of Berkshire Hathaway, the conglomerate run by Warren Buffett that has generated market-crushing returns for over six decades. Investing $25,000 in these two Warren Buffett stocks will generate roughly $1,200 in annual passive income.

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Chevron: 4.77% dividend yield

Buffett and his team of investors have been piling into oil and gas stocks in recent years. One of those is the Houston, Texas-based Chevron (NYSE: CVX), which is now the fifth-largest position in Berkshire's massive $283 billion equities portfolio, making up 6% of the portfolio.

Image source: Getty Images.

Chevron operates extensive upstream and downstream oil operations with a significant presence in the Permian Basin, and plans to ramp up wells and other projects worldwide. In the Permian Basin, Chevron is projecting 5% to 6% compound annual growth in oil production, along with declining capital expenditures that will lead to $2 billion of free cash flow growth by 2026.

Overall, Chevron expects to increase total free cash flow by $9 billion by 2026, assuming Brent Crude Oil per barrel is in the $60 range. Chevron also hopes to further integrate alternative sources of energy in its business, like renewables, hydrogen, and carbon capture and storage, while lowering the carbon intensity of its downstream operations.

In addition, the company is a proven dividend payer, having increased its dividend for 38 straight years and paying an extremely healthy dividend yield of nearly 4.8%. With a 12-month trailing free cash flow yield of nearly 5.3%, Chevron can cover its dividend. Remember, the company expects to significantly increase free cash flow between now and 2026. Furthermore, Chevron is repurchasing $10 billion to $20 billion in stock per year, which is also a way to return capital to shareholders.

Sirius XM: 4.80% dividend yield

The large digital audio operator Sirius XM (NASDAQ: SIRI) has been a dismal investment over the last five years, with the stock down about 59%. The company, which owns Sirius Satellite Radio and the Pandora streaming service, has struggled to grow subscribers amid rising competition from major players like Spotify.

However, Buffett and his team are betting big that management can right the ship, buying up over 35% of outstanding shares. Sirius' management team has a long-term plan to grow subscribers from 40 million to 50 million and free cash flow by 50% from $1.2 billion to $1.8 billion. The plan involves building new in-car technology and launching a new pricing structure. Management also plans to grow its advertising business and has purchased the exclusive advertising and distribution rights of several big-name podcasts.

Seaport Global analyst David Joyce earlier this year noted the company is a relatively safe pick for investors concerned about tariffs because it has a sticky subscriber base of mainly U.S. consumers. Furthermore, ad revenue still only makes up 20% of Sirius' business and could provide a runway for growth.

The company has a high dividend yield of 4.8% and has paid and increased its dividend every year since 2016. Sirius' trailing-12-month free cash flow yield in excess of 12% should make the dividend easy to cover and increase each year, and Sirius is also conducting share repurchases. The turnaround will require patience, but management has a plan; the stock is cheap, trading at less than 8 times forward earnings, and investors will be well compensated while they wait.

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Shares of ride-hailing giant Uber (NYSE: UBER) traded roughly 7.6% higher as of 11:19 a.m. ET today. The company announced a partnership with Alphabet's Waymo in Atlanta that will allow people to order Waymo rides exclusively through Uber's app.

Autonomous driving is here

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The partnership comes in the same week that Tesla launched its robotaxi service in Austin, Texas, an event the market also met with enthusiasm. Atlanta is now the second market Uber and Waymo have partnered in. The two companies also forged a partnership in Austin, where there are now more than 100 Waymo vehicles exclusively available through Uber. Waymo trips in Austin have an average rating of 4.9 stars, according to Uber.

Image source: Getty Images.

Riders in Atlanta now have the chance of being paired with an autonomous, full self-driving vehicle at no additional cost, although riders will have the option to switch to a regular human-driven vehicle if they choose.

Riders in Waymo vehicles will also have 24/7 access to customer support through the Uber app and Waymo's in-car screens. The Atlanta launch will start with 65 square miles of Atlanta, from the downtown area to Buckhead to Capitol View, and Uber and Waymo plan to expand in the future.

Uber's autonomous strategy taking shape

Uber has no plans to build its own self-driving cars, but instead plans to partner with major players in the space -- and this strategy seems to be off to a good start. The company's platform, massive fleet, and operational experience makes it an ideal partner for autonomous companies, and presents a potentially large new revenue opportunity for Uber. I think the stock remains a buy.

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Shares of the large grocer and retail department chain Kroger (NYSE: KR) had surged by roughly 10%, as of 12:38 p.m. ET today, after the company reported earnings for the first quarter of 2025.

Reaffirming guidance

Kroger reported adjusted earnings per share of $1.49 for the three months ending May 24 on total revenue of $45.1 billion. Adjusted EPS beat Wall Street estimates, while revenue came in just shy of them. Perhaps more importantly, management maintained its full-year earnings outlook and raised its full-year revenue outlook.

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Image source: Getty Images.

Kroger's CFO David Kennerley said in an earnings statement:

Our strong sales results and positive momentum give us confidence to raise our identical sales without fuel guidance, to a new range of 2.25% to 3.25%. While first-quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain, and as a result, other elements of our guidance remain unchanged.

Is the stock a buy after a good quarter?

Kroger certainly surprised investors and is being rewarded right now. The positive news also comes as the company is continuing its search for a new CEO after former CEO Rodney McMullen resigned from his post in March. The company's board of directors earlier this year conducted an investigation into McMullen that concluded "his personal conduct that, while unrelated to the business, was inconsistent with Kroger's Policy on Business Ethics."

Kroger's forward price-to-earnings multiple of 15 is toward the bottom of its peer group, and it is a consumer staples stock, making it a good defensive pick for any kind of looming recession. Therefore, I think investors can definitely allocate at least some capital to the name.

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While Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) sometimes will move in and out of stocks on a short-term basis, the company -- led by famed CEO Warren Buffett -- is largely considered a long-term investor.

This can sometimes make it difficult to immediately understand why Buffett and his team are buying a stock or a group of stocks because their thesis could still be several years away from playing out. The companies they buy may have underperformed recently and also may not screen well.

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In recent years, Buffett and Berkshire have loaded up on energy assets, including oil and gas stocks, even as many industry experts have expressed caution about the price of oil. Does Buffett know something that Wall Street doesn't?

Berkshire's oil and gas acquisitions

Although Berkshire invests in a range of different sectors from banking to tech and artificial intelligence, it's clear that Buffett and his team have been bullish on the energy sector for a number of years now.

Image source: The Motley Fool.

In 2020, Berkshire announced it would spend $10 billion (including the assumption of debt) to purchase the natural gas assets from Dominion Energy, which included all of Dominion Energy Transmission, the Questar Pipeline, and Carolina Gas Transmission. The deal also included half of the Iroquois Gas Transmission System and 25% of the natural gas export-import and storage facility Cove Point LNG.

Last October, in a year where Berkshire hardly put any of its massive cash hoard to work, Berkshire announced it would purchase the remaining 8% of Berkshire Hathaway Energy that it didn't already own.

In its massive equities portfolio, Berkshire has also been busy buying domestic U.S. oil and gas stocks. In 2019, Berkshire purchased its first stake in Occidental Petroleum (NYSE: OXY) by providing the company with $10 billion in financing for an acquisition, in return for preferred shares and warrants. Berkshire hasn't slowed its buying since and now owns nearly 27% of outstanding shares. Occidental makes up 4.3% of Berkshire's portfolio and is the company's sixth largest position.

Berkshire also owns nearly 7% of outstanding shares in Chevron (NYSE: CVX), a position it first launched in 2020. Chevron is Berkshire's fifth-largest equity holding.

By all indications, I would expect Berkshire to keep investing in energy and utility stocks and assets. When Buffett retires from the CEO role at the end of this year, Greg Abel will succeed the 94-year-old, and Abel has run Berkshire Hathaway Energy for a number of years.

What does Buffett know?

Occidental Petroleum and Chevron have not performed well since the beginning of 2020, significantly underperforming the broader market.

CVX data by YCharts

Oil prices have struggled over the last several years for a variety of reasons. Prior to President Donald Trump's current administration, there had been more of a focus on alternative energy and electric vehicles, as more people have grown increasingly concerned about climate change and its effect on the world. There have also been concerns about global demand for oil and the supply and demand dynamics.

The Organization of the Petroleum Exporting Countries and its allies have announced plans to increase production in an effort to retain and reclaim market share from countries it believes are producing too much oil. Meanwhile, the U.S. has significantly increased its fracking and drilling production over the last 15 years and saw oil production last year hit a record 13.4 million barrels per day, which also likely had an impact on supply.

Earlier this year, the U.S. Energy Information Administration (EIA) predicted Brent crude oil prices would average about about $66 per barrel this year and about $59 per barrel in 2026, compared to $81 per barrel in 2024.

So why are Buffett and Berkshire so interested in oil and gas assets? One reason may be geopolitical tensions. Relations in the Middle East have been fragile for many decades now. More recently, there has been significant escalation in the region due to the Israel-Gaza war and the growing conflict between Israel and Iran. Following Israel's recent and surprising strike on Iran's nuclear and military facilities, the price of oil surged to one of its highest in years.

Oil and gas are also viewed as finite resources. In a 2023 report, the EIA estimated that there is enough global supply of crude oil, liquid hydrocarbons, and biofuels to power the world's demand for liquid fuels through 2050. While technology can always change things, growth is expected to slow in the Permian Basin, one of the largest sources of oil production in the U.S.

Buffett and the Berkshire team may view holding U.S. energy assets as quite valuable if supply erodes and alternative energy sources can't fill the gap. Or perhaps they view companies like Occidental and Chevron as candidates to move into alternative energy sources.

Either way, it may not be a bad idea for investors to take a page from Buffett's playbook and build some exposure to U.S. oil and energy assets. These can serve as a hedge if oil prices surge due to escalating conflicts in the Middle East or if supply becomes constrained.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

Since last Friday, shares of D-Wave Quantum (NYSE: QBTS) fell nearly 15% as of the market close on Thursday. The stock also traded lower on Friday. While the quantum computing sector experienced some good news this week, D-Wave also announced an at-the-market (ATM) stock offering to potentially raise new capital.

A potentially dilutive event

D-Wave's ATM offering is with several brokerages and investment banks and will allow the company from time to time to conduct the "issuance and sale" of common stock for up to $400 million. The word issuance indicates that new shares could be offered to raise capital, which would be dilutive to existing shareholders.

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Image source: Getty Images.

In a filing with the Securities and Exchange Commission( SEC), D-Wave also said that cash balances on hand as of March 31 are enough "to fund the company to profitability." D-Wave plans to use any potential proceeds for general corporate purposes, including funding capital expenditures (capex), acquiring new companies, or expanding the business, as well as for general working capital purposes.

The news is disappointing because it comes during a week when Nvidia's CEO Jensen Huang praised quantum computing. "We are within reach of being able to apply quantum computing in areas that can solve some interesting problems in the coming years," he said. Few CEOs can move the market, but Huang is one of them, being one of the most influential people in the artificial intelligence (AI) sector. Other quantum computing stocks jumped this week.

What a run it's been

Shareholders never like to see dilutive capital raises, but with D-Wave trading at an extremely high valuation, this is often when management will try and bring in additional capital to fund growth. Either way, it's been an incredible run. D-Wave's stock is up 1,268% over the last year and currently trades at 191 times forward sales.

While D-Wave appears to be making real progress toward eventually mass producing quantum computers, it's very difficult to buy stocks at these kinds of meteoric valuations. I wouldn't recommend anything more than a small, speculative position at this time.

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Bram Berkowitz 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.

Social Security is a complex program. It doles out benefits to over 69 million Americans each month, so it's tough to accommodate that many people with a one-size-fits-all solution.

It is for perhaps this reason that retirees can claim benefits at different ages. Retirees can start claiming Social Security as early as age 62. They can also delay benefits until age 70. There are trade-offs to both options and certainly no one right answer, but here's the No. 1 reason to claim benefits early at age 62.

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Understanding the trade-offs

If retirees can start claiming benefits as early as 62, why wouldn't they? Well, the main reason is that the benefits received at this age will be a lot less than what retirees could be entitled to if they wait.

Retirees pay Social Security taxes for years and often decades before they can claim benefits. The Social Security Administration (SSA) determines a person's benefits largely based on how many years they worked and how much they paid in Social Security taxes, which is based on annual wages. So, the more a worker makes, the more they pay in Social Security taxes, and the more in benefits they are likely to qualify to receive. However, workers can only pay Social Security taxes on wages up to $176,100 in 2025.

Image source: Getty Images.

The maximum amount of benefits one can qualify for, determined from these criteria, is called the primary insurance amount (PIA). The PIA is the maximum amount of benefits a retiree is entitled to at their full retirement age (FRA), which is 67 for those born in 1960 or after. This is important because it essentially sets a baseline for a retiree's benefits. If retirees start taking benefits prior to turning 67, they will see their benefits reduced, while waiting until 70 will increase benefits.

Claiming benefits at 62 can reduce a retiree's benefits by as much as 30% -- the earlier one takes them prior to their FRA, the more they are reduced. Meanwhile, retirees who wait until age 70 could increase their benefits by 24%. The purpose of this is to provide flexibility for retirees who want or need to take benefits at different times in their 60s.

Assuming one lives to the average life expectancy in the U.S., the actuarial adjustments are intended to give a retiree an equivalent amount of benefits through their life, regardless of the age they claim.

The main reason to claim at 62

If retirees can get higher benefits by waiting, why take them early? Well, the most obvious answer in my mind is that they need the money. By the time retirees reach their 60s, they could be at very different stages of their lives. Some might have saved enough to the point where they don't really need Social Security, while others may still be constrained financially.

One factor is health. If a retiree's health is struggling, they may need the additional funds to help pay for care and treatment. Or if there are questions about their life expectancy due to significant health issues, then it makes sense to claim benefits sooner than later, in order to make use of their hard-earned funds.

Another consideration is lifestyle. Some retirees are happier with less and decide to wait, while others may want to travel or purchase vacation homes and need more now.

I'll reiterate that there is no right or wrong decision. If at 62 a retiree is healthy and financially stable, then it likely makes sense to wait to claim benefits. But if retirees need the money, they shouldn't hesitate to claim benefits as soon as possible at 62.

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Since last Friday, shares of the popular online brokerage Robinhood (NASDAQ: HOOD) had surged 13%, as of 12:36 p.m. ET Thursday. Investors believe the company will soon join the S&P 500 (SNPINDEX: ^GSPC).

A big potential upcoming step

Bank of America analysts led by Craig Siegenthaler said in a report this week that Robinhood is a "prime candidate" to join the broader benchmark S&P 500 index, which includes 500 of the largest companies in the U.S. with an unadjusted market cap of at least $20.5 billion, as of January 2025. The rebalancing is expected to be announced after the market closes tomorrow. Inclusion into the S&P 500 tends to be bullish because funds that track the index will have to purchase Robinhood, likely leading to significant inflows.

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Image source: Getty Images.

"The S&P 500 and Russell 1000 are the two major benchmarks for our large-cap long-only clients," the Bank of America analysts said in their note, according to Bloomberg. "When companies are added, we experience significantly higher interest from long-only portfolio managers, which are essentially now forced to cover them and make a call."

Robinhood pioneered commission-free trading, which is now common practice among almost all major brokerages, and expanded access to investing for smaller, retail investors. The platform has become the go-to trading post for retail traders. At the end of April, Robinhood had close to 26 million funded customers and $232 billion in platform assets.

Is the stock a buy?

In the first quarter of 2025, Robinhood grew earnings by 114%. I am also impressed by the company's ability to execute its product road map. Robinhood's Gold membership offers an impressive 3% cash back on its Gold card, the ability to earn competitive interest on deposit balances, and annual matches on individual retirement account contributions.

Robinhood has really become a compelling one-stop shop for many banking needs, all bundled together in a sleek and easy-to-use digital platform. Currently trading at 51 times forward earnings, the stock is undoubtedly expensive, so I'd start by dollar-cost averaging or buy on future dips.

Should you invest $1,000 in Robinhood Markets right now?

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

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

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

Since last Friday, shares of the artificial intelligence (AI) data center company Nebius Group (NASDAQ: NBIS) had soared roughly 29%, as of 11:57 a.m. ET Thursday. The company successfully raised capital this week and received more positive sentiment from Wall Street.

Becoming a serious AI name

On Monday, Nebius announced that it had successfully raised $1 billion through two different tranches of unsecured convertible notes. Half is in the form of 2% convertible notes due 2029, while the other half is 3% convertible notes due 2031.

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Image source: Getty Images.

Nebius' founder and CEO Arkady Volozh said in a statement:

Since our $700 million equity financing in December 2024, we have been scaling rapidly and expanding our global AI infrastructure footprint. The fresh capital we are raising now gives us more firepower to go faster, paving the way for increased revenue opportunities in 2026 and further accelerating us toward our medium-term target of mid-single-digit billions of dollars in revenue as a high-margin business, with potential upside.

This morning, Arete Securities analyst Andrew Beale initiated coverage of Nebius with a buy rating and $84 price target, implying significant upside from current levels. Beale also said he prefers Nebius to another larger and similar company, CoreWeave, due to Nebius' more attractive valuation. While CoreWeave is more of a pure play on AI, Beale thinks Nebius' neo-cloud valuation is too low.

Still affordable in AI land

Nebius and CoreWeave are essentially in the business of running data centers for customers looking to build and run AI applications on, so if the AI industry continues to thrive, these two companies stand to benefit.

While I believe in AI's potential, I usually stay away from most AI stocks because of extremely high valuations. Nebius, however, actually came to the market last year at a very affordable valuation. The company had been delisted from the Nasdaq for close to three years due to being a Russian-owned company, although this is no longer the case.

After the stock's big run, the company trades at close to an $11 billion market cap, so it's more expensive than it once was. However, if management can hit its mid-single-digit billions revenue guidance over the next few years, the stock won't look expensive at today's value.

Should you invest $1,000 in Nebius Group right now?

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

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

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Bram Berkowitz has positions in Nebius Group. The Motley Fool has positions in and recommends Nebius Group. The Motley Fool has a disclosure policy.

With its robotaxi service debut just around the corner, shares of Tesla (NASDAQ: TSLA) traded nearly 4% lower, as of 11:12 a.m. ET today. There are a few potential reasons for the sell-off.

Possible concerns over robotaxi safety

It's been an eventful week for Tesla and CEO Elon Musk, who has been vocal in his opposition against President Trump's "one big beautiful" bill pending in Congress. But I think investors may be more focused on Tesla's upcoming limited robotaxi launch in Austin, Texas, which is reportedly starting next week.

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Image source: Getty Images.

Yesterday, Bloomberg reported on a fatal car accident in 2023 involving Tesla's assisted-driving technology. The business publication also said it was one of the most-read stories on the website. However, it's important to note that the accident occurred under different software than Tesla is using now, which previously relied on 100% driver supervision.

Furthermore, The Washington Post and Tesla have been in an ongoing legal battle because the Post is trying to obtain crash data related to Tesla's Autopilot and Full Self-Driving (ASAD) technology.

The data is submitted to the U.S. National Highway Transportation Safety Administration (NHTSA), but most of the data is redacted due to confidentiality policies. In a filing related to the lawsuit, Tesla, according to the electric vehicle and Tesla news site Electrek, said the company "would suffer financial and economic harm if the requested information is disclosed."

Robotaxis drive the valuation

As I've now said many times, Tesla's extremely high valuation is not built on its core electric vehicle business, which is struggling, but on future initiatives like full self-driving (FSD) technology and the potential robotaxi service that Musk has talked about.

I don't necessarily doubt Tesla's ability to play a large role in the FSD wave, but there are still a lot of uncertainties about the new sector and the technology. There's also likely to be plenty of competition.

If FSD comes up short of expectations, I suspect Tesla's valuation would take a hit, which is why I don't love the risk-reward proposition right now.

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 $368,035!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,503!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $668,538!*

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

For the last couple of years, it's been easy to group the "Magnificent Seven" together. These massive companies have become the dominant tech players and have taken advantage of artificial intelligence (AI) like no other group of companies in the market.

But once President Donald Trump took office and enacted sweeping tariffs, the group began to diverge based on how tariffs impacted their supply chains and the types of products and services they sold.

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Microsoft (NASDAQ: MSFT) has been one of the strongest, most resilient performers in the group. Is it time to double down on Microsoft stock today?

Riding Azure's momentum

While all the companies in the Magnificent Seven operate in the tech sector, most of them have been able to develop diversified revenue streams. Microsoft has many unique tech businesses, including cloud services, Microsoft Office 365 products, gaming, LinkedIn, search and advertising, and more.

Luckily for Microsoft, many of these businesses are services the company provides and therefore are less impacted by tariffs, which likely explains its strong performance in 2025 (as of June 3).

MSFT data by YCharts.

But a big reason for the company's strong performance is Azure, which falls under the company's cloud services and products category. Azure and other cloud services revenue in the company's third fiscal quarter of 2025 (quarter ended March 31, 2025) grew 35% year over year.

Azure is the foundation of Microsoft's artificial intelligence offerings and business. Launched in 2010, Azure started as a cloud computing network of data centers that companies could run their business on instead of maintaining their own infrastructure.

Since then, Azure has branched out to offer numerous other products, including in artificial intelligence. Through a partnership with OpenAI, Azure provides AI models that developers and businesses can leverage to build their own AI applications. Microsoft has also integrated AI tools from Azure into its own applications, such as Microsoft 365 Copilot, to automate repetitive tasks and improve efficiency.

Image source: Getty Images.

Many investors questioned Microsoft's significant capital expenditures (capex) on AI over the last two to three years, wondering when they would see a payoff, which has now started to play out. Interestingly, on the company's most recent earnings call, Microsoft CFO Amy Hood pointed out that it's getting harder to separate AI-related revenue from non-AI-related revenue, as the two are starting to feed off of one another.

Evercore analyst Kirk Materne raised his price target on Microsoft from $500 to $515 in late May and maintained a buy rating on the company. Materne said that not only is Microsoft all in on AI, but the more traditional cloud business also still has plenty of runway, considering only around 20% of information technology workloads run in the cloud today -- a number Materne thinks could eventually increase to 80%. And AI tools could be a way to bring more businesses onto the cloud. Materne estimates that Microsoft's AI revenue could reach upwards of $110 billion by fiscal year 2028.

Time to double down?

There are several reasons to double down on Microsoft. For one, it is arguably the company least impacted by tariffs in the Magnificent Seven. As Morningstar points out, the company "has minimal risk exposure to retail, advertising spending, cyclical hardware, or physical supply chains." This should make it more resilient as the trade war continues to play out.

Microsoft's cloud and AI business is also starting to thrive. The company is reaping benefits from all the capex spending and is well-positioned to further grow revenue as the digital transformation of the business world continues to progress. Finally, Microsoft is one of just a few companies in the world to hold the highest possible credit rating from both Moody's and S&P Global. This makes it a source of stability throughout the economic cycle.

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Moody's, Nvidia, S&P Global, and Tesla. 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.

The real estate investment trust (REIT) Realty Income (NYSE: O) may not beat the broader market in terms of stock price appreciation, but that doesn't mean it's not a great stock to own. The company is known for its ability to generate passive income for shareholders through a hearty dividend.

REITs by their very nature receive special tax status, as long as they pay out at least 90% of their taxable income to shareholders, along with other requirements. Here are three reasons to buy Realty Income like there's no tomorrow.

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1. A high-yielding dividend

Although REITs have to pay out most of their earnings through dividends, some REITs pay higher dividends than others. Realty Income's dividend yield is roughly 5.75%, which compares favorably to the broader sector. According to data compiled by S&P Global this year, the average one-year dividend yield of publicly traded U.S. equity REITs was 3.91%.

Image source: Getty Images.

While that's nothing to sniff at, keep in mind that the U.S. economy has been in a high-interest-rate environment for the last couple of years, where Treasury yields exceeded 5%. As of May 31, the yield on the U.S. 10-year Treasury bill was nearly 4.4%, which means investors could get higher yields from super-safe U.S. Treasury yields over REITs. This gives Realty an advantage since its dividend yield is significantly higher.

2. The dividend looks safe

Sometimes, a high dividend yield can indicate that a company may be struggling. But Realty Income's dividend looks safe. The company refers to itself as "The Monthly Dividend Company," and for good reason.

Realty Income, which pays a monthly dividend, has paid 658 consecutive monthly dividends and increased its dividend for 110 consecutive quarters, meaning the company has increased its dividend for three decades. Throughout this period, Realty Income has grown its dividend at a compound annual growth rate of 4.3%.

Another way to evaluate a REIT's dividend is by looking at adjusted funds from operations (AFFO) and how much of AFFO the dividend consumes. AFFO is typically defined as net income to common stockholders plus depreciation and amortization of real estate assets, and impairments of depreciable real estate assets, all subtracted by gain on property sales. The adjustments remove nonrecurring items each quarter. AFFO is essentially free cash flow for a REIT. In 2024, Realty Income only distributed about 75% of AFFO to shareholders, which provides a good margin of safety.

3. Realty Income runs a solid business

Looking at the operations that fuel earnings and distributions, Realty Income runs a solid business with a portfolio of 15,600 properties in all 50 states of the U.S., the United Kingdom, and several countries in Europe. The company is what's considered a triple net lease operator. It rents out almost all of its properties, but in addition to rent, the tenants cover costs associated with maintenance, insurance, and property taxes.

For landlords, the arrangement is a no-brainer because it's less work and costs on their side. However, for taking on the associated burdens, tenants may be able to negotiate longer leases or lower rents. They also have more flexibility when arranging a space, which is helpful for businesses.

Realty Income's strategy involves focusing on businesses that are nondiscretionary, have lower price points, and are more service-oriented. Some of the larger sectors they lease to are convenience stores, grocery stores, dollar stores, home improvement stores, and quick-service restaurants. Some of their larger clients include 7-Eleven, Dollar General, and Walgreens.

Realty Income has also started to wade into new growth sectors and geographies that could power the company's future expansion such as U.S. data centers and gaming, which the company believes has a $900 billion total addressable market (TAM). Realty would also like to grow in Europe, where it believes there is an $8.5 trillion TAM.

Should you invest $1,000 in Realty Income right now?

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — 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.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income and S&P Global. The Motley Fool has a disclosure policy.

President Donald Trump's election victory in November has turned into a sweet dream for crypto investors, none more so than for those who invest in the world's most-valuable cryptocurrency, Bitcoin (CRYPTO: BTC). Since Trump's win last November, Bitcoin is up almost to 60% (as of May 29) and has surpassed $111,000 on several occasions.

Trump has surrounded himself with pro-crypto advisors and installed the former head of a financial and crypto consulting firm to run the Securities and Exchange Commission. He's also announced the creation of a U.S. Strategic Bitcoin Reserve to hold Bitcoin currently in the government's possession, and perhaps even purchase more. And Trump just delivered more great news to Bitcoin investors.

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Will Bitcoin soon be in your retirement account?

During former President Joe Biden's tenure, the Labor Department issued guidance to U.S. companies warning them to use "extreme care" before allowing employees to invest in cryptocurrencies through their 401(k) savings accounts:

At this stage in their development, cryptocurrencies have been subject to extreme price volatility, which may be due to the many uncertainties associated with valuing these assets, speculative conduct, the amount of fictitious trading reported, widely published incidents of theft and fraud, and other factors. Extreme volatility can have a devastating impact on participants, especially those approaching retirement and those with substantial allocations to cryptocurrency.

Guidance from federal agencies isn't the law of the land but it tends to have a sobering effect, as companies often get concerned that by acting against official guidance they may find themselves under scrutiny.

Official White House photo by Joyce N. Boghosian.

The Trump administration has now rescinded this guidance, which is more or less a green light for employers to consider offering crypto or crypto-related investments to their employees, if they so choose. However, the current Labor Department added that it is "neither endorsing, nor disapproving of" crypto investments in 401(k) accounts.

Another potential tailwind

In 2024, the U.S. Government Accountability Office found that while some 401(k) plans were offering workers the ability to invest in crypto, actual investment remained low.

Still, the new guidance and friendly approach toward crypto by the Trump administration is likely to change this, and it presents yet another tailwind for Bitcoin and the sector. Most crypto experts think that wider adoption by more mainstream financial institutions will help move crypto prices higher. Retirement savings in 401(k) plans totaled more than $8.9 trillion as of late 2024, so even a gradual increase in crypto purchases by this group could make a big difference.

Now, whether investors should consider adding crypto to their 401(k) accounts is another question. Last year, BlackRock, the world's largest asset manager, published a report on whether Bitcoin should be included in a multi-asset portfolio. It ultimately concluded that Bitcoin could consume a similar allocation as the high-flying "Magnificent Seven" stocks. According to the report:

Those stocks [the Magnificent Seven] represent single portfolio holdings that account for a comparatively large share of portfolio risk as with bitcoin. In a traditional portfolio with a mix of 60% stocks and 40% bonds, those seven stocks each account for, on average, about the same share of overall portfolio risk as a 1-2% allocation to bitcoin. We think that's a reasonable range for a bitcoin exposure.

Bitcoin is now viewed by many as the equivalent of digital gold and therefore a hedge against inflation and a flight to safety as U.S. fiscal concerns mount. For this reason, I think it does make sense to have some small exposure to Bitcoin in your portfolio because it offers a form of diversification away from stocks and bonds. Bitcoin has shown resilience and some similar attributes to gold such as its finite supply of 21 million tokens.

In my opinion, Bitcoin is the only cryptocurrency right now that deserves a small allocation in a 401(k) account. Every other crypto has proven volatile and shows no real attributes that make a multi-asset portfolio any safer.

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

Before you buy stock in Bitcoin, 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 Bitcoin 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.

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Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Electric carmaker Tesla (NASDAQ: TSLA) has had an eventful year, with its stock experiencing wild swings as investors try to factor in the struggles in the core EV business, the actions and comments of its controversial chief executive, and the excitement around future initiatives like robotaxis to determine a fair price for the stock.

Speaking of robotaxis, Bloomberg recently reported that Tesla plans to launch a small group of robotaxis in Austin, Texas, on June 12, the beginning of what Tesla asserts will eventually be a massive new business and stream of revenue. The event could also give investors information regarding how effective Tesla's self-driving technology is.

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Should investors buy Tesla now in anticipation of the June 12 announcement?

Image source: Getty Images.

What's the big deal with robotaxis?

Tesla's core EV business has struggled this year, with the company only reporting 337,000 deliveries in the first quarter of the year, the lowest level seen in over two years. Whether due to CEO Elon Musk's involvement with politics, which seems to have come to an end, or increased competition, sales have struggled. Recent reports don't indicate much improvement in the second quarter of the year. Further, Tesla stock still trades at an extremely high multiple.

Data by YCharts.

The stock has been propelled by the company's future initiatives, which include the upcoming launch of cheaper EVs, robotaxis, and the Optimus humanoid robots that will supposedly be able to complete household chores. Robotaxis are the most exciting on tap, with the Austin launch reportedly just days away. According to media reports and analyst research reports, the Austin robotaxi launch will feature 10 to 20 Tesla Model Ys with human supervisors, and the vehicles will be geofenced, meaning they will only operate in certain areas of Austin.

However, Musk has also said there could be 1,000 units on the road within a few months. There are varying reports and data about how well Tesla's unsupervised full self-driving (FSD) technology works. Users have now tested FSD over billions of miles, and Tesla's management team claims FSD is safer than human driving.

However, some have suggested that the FSD technology is not as strong as Musk claims. Morgan Stanley analyst Adam Jonas recently told investors in a research note, "As is typical for highly anticipated Tesla events, we would keep expectations well contained for the (reported) June 12th Cybercab launch event in Austin."

If Tesla's FSD turns out to be a success, Musk has plans to eventually launch Tesla's own ride-hailing fleet. "We have millions of cars that will be able to operate autonomously," Musk told CNBC a few weeks ago. "And I should say that it's a combination of a Tesla-owned fleet and also enabling Tesla owners to be able to add or subtract their car to the fleet, so that existing Tesla owners will be able to earn money by adding their car to the fleet for autonomous use."

Should you buy the stock pre-Austin launch?

Investors will be watching the Austin debut closely to see if there are any mistakes by the FSD and how effective the technology is. I'm sure some analysts will soon have opportunities to try out the robotaxis. While the service could prove to be successful and generate tons of new revenue for the company, I still think investors are getting ahead of themselves. The technology may not be as strong as people think, and it remains unclear how quickly this business can scale.

With such a meteoric valuation, the market seems to already be baking in success of the robotaxis and other future initiatives like the Optimus robots. Long term, the odds of Tesla being a part of the robotaxi and autonomous driving wave remain high, but it is still early, and we don't know what the new autonomous driving sector will ultimately look like. For these reasons, I remain on the sidelines with investing in Tesla.

Whether you decide to go in on the stock before June 12, remember that a single event (in most cases) should not be the driving force behind any stock transaction. Foolish investing involves making buying and selling decisions based on the long-term thesis around a company rather than short-term events that could move a stock's price.

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 $350,426!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,129!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $651,049!*

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 June 2, 2025

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

Since last Friday, shares of D-Wave Quantum (NYSE: QBTS) have rocketed nearly 52%, as of 12:17 p.m. ET Thursday. Earlier this week, the company announced general availability of its sixth-generation Advantage2 quantum computing system.

High praise for D-Wave's latest system

Several companies have been working to bring quantum computing to the masses. Quantum computing, or super computers, use quantum mechanics to solve complex equations and problems much faster than a typical computer, and even surpass the skills of experts.

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D-Wave CEO Dr. Alan Baratz called the company's new computer "... a system so powerful that it can solve hard problems outside the reach of one of the world's largest exascale GPU-based classical supercomputers." The new system is now available in 40 countries.

In a report on quantum computers, analysts at JPMorgan Chase praised the company's progress and technological innovation.

"Their newly announced Advantage2 prototype features over 1,200 qubits with 20-way connectivity, with a goal to reach 7,000 qubits in the full Advantage2 system," the report said. "This prototype claims significant speedups over classical supercomputers."

A qubit is the basic unit of data used in quantum computing. Regular computes only leverage bits, or the smallest unit of data that is used to build the foundations of a regular computer.

The best of the bunch?

Quantum computing is a tough industry for retail investors to wrap their heads around. But unlike many of its peers in the sector, D-Wave's technology appears ready to hit the ground running, and its super computers are already in use.

In its first-quarter earnings release, the company also announced a smaller loss than one year prior, and significant revenue growth, so there seems to be something there. Still, with the stock trading at close to a $5.5 billion market cap, I'd keep positions smaller and more speculative for now.

Should you invest $1,000 in D-Wave Quantum right now?

Before you buy stock in D-Wave Quantum, 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 D-Wave Quantum 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 $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% 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 19, 2025

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

Surging U.S. Treasury yields may be pressuring the broader market, but they aren't slowing down the artificial intelligence (AI) data center company CoreWeave (NASDAQ: CRWV). Since last Friday, the stock has blasted roughly 39% higher, as of 11:41 a.m. ET Thursday.

Having a big week

CoreWeave is having a huge week, due to several big announcements. On Wednesday, shares surged after the Nvidia-backed company announced a $2 billion debt offering that matures in June 2023, with the notes yielding 9.25%. The raise came in half a billion dollars higher than expected and was reportedly five times oversubscribed, according to Barron's.

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Image source: Getty Images.

Also on Wednesday, Citigroup analyst Tyler Radke maintained a neutral, high-risk rating on the stock, but more than doubled his price target from $43 to $94. Radke cited the company's first-quarter earnings report last week, showing a continuation of strong AI demand.

Radke said in his research note:

Overall, we think the print reinforces CoreWeave's high-growth status, especially with recent $4B OpenAI expansion deal, and likely assuages investor concerns around AI capex/infrastructure slowing. Shares have gone vertical ... While we'd argue a portion of the rerating is justified, given strong Azure/hyperscaler numbers and capex... we'd like to see more progress on profitability and more customer diversification.

Keep an eye on valuation

Just a few months ago, many investors saw CoreWeave's highly anticipated IPO as a failure because it was priced much lower than management had hoped. Since then, the stock is up 176% and trades at over a $55 billion market cap.

While CoreWeave should be a big beneficiary of continued AI success, remember that the company is not yet profitable. For this reason, I'd recommend investors start small and then dollar-cost average into a position over time because the stock could be susceptible to big moves in both directions.

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

Before you buy stock in CoreWeave, 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 CoreWeave 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 $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Citigroup is an advertising partner of Motley Fool Money. Bram Berkowitz 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.

Shares of Palantir Technologies (NASDAQ: PLTR) traded nearly 3% higher as of 10:55 a.m. ET today. The U.S. Department of Defense (DoD) yesterday announced it has awarded Palantir a contract modification to increase potential spending on work Palantir is currently doing with the Army.

Increased spending from the Pentagon

The DoD said it awarded Palantir a $795 million modification for its Maven Smart System software licenses, with an expected completion data of May 28, 2029. According to SpaceNews, the contract for Palantir's Maven Smart System had a ceiling of $480 million one year ago. With the $795 million increase, the Pentagon may spend nearly $1.28 billion on artificial intelligence (AI) for the Army by 2029.

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Palantir has been working with the DoD since 2017 to help the department improve the sharing of information between its various departments through AI-enabled awareness, global integration, logistics, and targeted workflows, among other solutions. The company can gather massive amounts of data from different sources, including satellites, drones, and various sensors, and then analyze the data and make suggestions in real time for how to approach various situations.

Palantir has impressed investors with its ability to keep securing government contracts and funding, despite much discussion about government spending cuts this year. However, it looks like the Trump administration will look to keep the defense base budget flat in fiscal year 2026.

Palantir continues to defy gravity

Palantir is now up 66% this year and has absolutely crushed the market. The stock seems to have no limit and now trades at 214 times forward earnings. Given the company's traction and how well the stock has performed in the face of many challenges this year, Palantir's technology appears to be very impressive and a leader in AI analytics and decision-making.

That said, I just don't buy stocks at these kinds of valuations.

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 $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Bram Berkowitz 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.

On April 2, which President Donald Trump coined as "Liberation Day", Trump announced high tariff rates against nearly all major trading partners of the U.S., including China, India, Japan, and Vietnam, among many others. The news caught the market by surprise and sent stocks spiraling. From highs made in late February, the broader benchmark S&P 500 (SNPINDEX: ^GSPC) fell close to 20%, essentially entering bear market territory.

However, later in April, Trump announced a 90-day pause on tariff rates, indicating that he was open to making trade deals, which sent the market into a furious rally. The S&P 500 is down about 4% this year (as of April 7).

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Many have wondered whether the greats -- like Warren Buffett and the investing team at Buffett's company, Berkshire Hathaway -- took advantage of the sell-off to buy the dip. While we still technically don't know, we just got a major clue.

Berkshire was a net seller of stocks in the first quarter

Berkshire recently reported its first-quarter earnings report. While we'll have to wait until May 15 to see what specific stocks Berkshire bought and sold in the first quarter of the year (which includes January, February, and March), we can see from Berkshire's cash-flow statement that the company was a net seller of stocks in the first quarter of the year.

The company sold over $4.6 billion of equities and purchased nearly $3.2 billion.

Image source: The Motley Fool.

Berkshire also continued to hoard cash in the first quarter, growing cash, cash equivalents, and short-term U.S. Treasury bills to over $342 billion. Remember, the first quarter doesn't include April, when tariff-induced volatility in stocks began. However, the market had begun to struggle in March, and Buffett and his team of investing lieutenants at Berkshire didn't appear to have viewed it as an opportunity.

Funds or investors who own more than 10% of a company's outstanding shares must file new transactions within two business days through a 13G filing. They also may need to file a 13D within 10 calendar days of first crossing 5% ownership in a publicly traded company.

Berkshire operates a massive equities portfolio and holds over a 10% position in nine of its holdings. But the company hasn't filed a 13D or 13G since mid-February, as of this writing, indicating that Berkshire hasn't yet increased any of its major holdings since then.

It doesn't sound like Buffett has been buying the dip

At Berkshire's annual meeting earlier this month, Buffett was asked about the company's large cash position and why it has been hoarding cash. If Buffett has been buying in April, he certainly didn't sound like it, based on his response, suggesting that opportunities don't come around too often:

And every now and then, you'd find something. And occasionally, very occasionally, but it will happen again. I don't know when. It could be next week. It could be five years off, but it won't be 50 years off. We will have -- we will be bombarded with offerings that we'll be glad we have the cash for. And it'd be a lot more fun if it would happen tomorrow, but it's very unlikely to happen tomorrow. Very, very unlikely to happen tomorrow. But it's not unlikely to happen in five years, and then it gets -- the probabilities get higher as you go along.

Based on that sentiment, I don't think that Buffett and the team at Berkshire bought the dip in April. While the company had plenty of dry powder, Berkshire focuses on long-term investments and doesn't like to trade based on the news cycle, which seems to be driving the market right now.

Of course, I could be wrong, but there are still lots of concerns about a potential economic downturn. Nobody can predict how the tariff situation will ultimately play out.

A key to Buffett and Berkshire's impressive performance is their timely withdrawal from the market before major crises. This may be one of those times where they see elevated risk in the market, and are choosing to play it safe for the time being.

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 $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.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Bram Berkowitz 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.