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Where Will Lemonade Stock Be in 5 Years?

Key Points

  • Lemonade is growing fast, adding thousands of new customers and reporting accelerating growth.

  • Its loss ratio is declining, but it's still reporting net losses.

  • Management believes it has an edge over legacy insurers due to its digital technology.

Lemonade (NYSE: LMND) has experienced explosive growth since going public, and its stock is climbing, up more than 160% during the past year. The insurance technology company has made some serious progress, although there are still risks. Let's see where it might be five years from now and whether it's a good time to buy Lemonade stock.

Where Lemonade is now

Lemonade is 10 years old as of July, and it's been quite a decade. The company uses artificial intelligence (AI) to disrupt traditional insurance and offer a better product for policy holders. It was built using digital processes and AI throughout its business, including having chatbots onboard customers and assess claims. That may not sound so impressive today, as AI becomes the norm for many companies, but Lemonade has been doing this for years. It relies on data, machine learning, and continually improving algorithms to get things right, cutting out human intervention and lots of headaches and hassle for the average policyholder.

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Kids with a lemonade stand on a hopscotch drawing in front of an apartment building.

Image source: Getty Images.

This is proving to be a popular alternative, and Lemonade is attracting customers at a rapid pace. It had more than 2.5 million customers as of the end of the 2025 first quarter, a 21% year-over-year increase. The premium per customer is also increasing, up 4% year over year in Q1 to $396. Together, that's leading to increased in-force premium (IFP), Lemonade's preferred top-line metric. It surpassed $1 billion in Q1 for the first time, up 27% from last year. Lemonade has been reporting strong growth since it went public, but it has accelerated the past six quarters.

As with many young companies, Lemonade isn't profitable. As an insurance company, it measures its progress and success with metrics beyond revenue and net income. One of the most crucial profitability metrics for an insurance company is the loss ratio, or how much it collects in premiums versus paying policy claims, and Lemonade has been struggling here. Recently, however, it looks like it's going in the right direction, which is down. The Q1 loss ratio was 78%, down one percentage point from last year, and the trailing-12-month loss ratio was 73%, in line with 2024's Q4 and below the company's short-term target of 75%. All good there.

This incredible performance has been lightening the market's mood about the continued net losses. The net loss was $62 million in Q1, worse than $47 million a year earlier.

Building for the future

Buying into Lemonade's thesis and stock is really a bet on its ability to disrupt traditional insurance. Chief Executive Officer Dan Schreiber sees that as a given and that it will happen, and it's just a matter of time before Lemonade's business outperforms its legacy competitors.

Schreiber notes that, although it's perceived that all insurance companies are using AI today, that's not actually the case. Many of the large, traditional giants are taking a wait-and-see approach, and it's not so simple to switch over all of their systems to the kind of digital substrate where all parts connect and communicate that Lemonade has. Those companies still heavily rely on outside sales agents, who bring in 62% of all property and casualty premiums, giving Lemonade a leg up in this game.

Schreiber thinks that the company's AI technology will be even more potent in the next five to 10 years, and he explains that

before the decade is out, those that are moving at the pace of AI will find that the same $1 million that buys one squad's worth of engineering firepower in 2025 will deliver the equivalent of 90,000 engineers in 2030.

Lemonade is well positioned to jump ahead of the competition as that happens. It will also help it on its journey to profitability. Many companies are already restructuring their workforces as they get more done with AI.

Today, Lemonade is still in scale mode, spending a lot on marketing to grab more customers. The expectation is that eventually, the revenue from these customers will be more than the money the company is spending on getting them. Its other operational costs have remained constant due to its reliance on AI systems, and because this is insurance, each new customer has lifetime value as they renew their policies, so long as Lemonade can impress them and keep them.

Is now the time to buy?

Management expects to report positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2026. That would be a milestone, but Wall Street is still expecting a net loss of $1.97 per share next year. Management is shooting for positive net income by the end of 2027 and beyond.

If that's the way things go, shareholders are in for a treat. Even if there are hiccups along the way, it does look like five years from now, Lemonade will be bigger and profitable, and its stock should reflect that.

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

Before you buy stock in Lemonade, consider this:

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*Stock Advisor returns as of June 30, 2025

Jennifer Saibil has positions in Lemonade. The Motley Fool has positions in and recommends Lemonade. The Motley Fool has a disclosure policy.

SoFi Stock Has Big News. Is Now the Time to Buy?

Key Points

  • SoFi is a young and agile finance company that focuses on the young professional market.

  • It recently announced that it's going to bring back cryptocurrency trading and other tools on its platform.

  • It's having success expanding its platform beyond its core lending segment.

As a young tech-focused growth enterprise, SoFi Technologies (NASDAQ: SOFI) stock usually reacts to news about company operations with big moves -- both positive and negative. The company just made an announcement that sent its stock soaring, and now looks like a good time to buy shares.

Let's see what's happening and why the future looks a bit brighter for SoFi.

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Another way SoFi is standing out

SoFi is a fast-growing digital bank. It's attracting new members at a rapid pace, drawing them in with its low fees, easy-to-use interface, and financial innovation. Since it's small and digital, it's more agile than the standard U.S. bank, and it has a greater ability to try and implement new programs. It's also targeting a young and mobile population that's looking for a bit of a different financial experience, and SoFi's new products play into that market.

Students looking at their phones.

Image source: Getty Images.

SoFi started out as a loan provider for university students, and the student and young professional market is still its target. These are people just starting out on their financial journeys, but they're educated and upwardly mobile, and catching them at this stage should be an excellent long-term growth driver. The company often points out that 90% of deposits come from direct deposit, leading to a strong and increasing cash stream.

SoFi frequently raises its own bar in terms of services and rolls out new and useful products for this population. For instance, it has offered account holders access to several initial public offerings (IPOs) that are usually restricted to institutional investors. It also offers investment access to a private fund that invests in SpaceX. It also has a robo-advisor for investors in partnership with BlackRock.

SoFi's latest development is that it plans to launch new cryptocurrency tools on its platform. This isn't the company's first foray into cryptocurrency. It previously offered trading on its platform, but it closed that service down and migrated customer accounts to other platforms while it focused on its banking products. It had to meet regulatory guidelines to get its bank charter, which prohibited cryptocurrency trading.

Now it's bringing cryptocurrency trading back, as per new guidelines initiated by the Trump administration, and it's also planning several other crypto-related services. Management wants to harness the power of digital currency to offer cheaper and more functional services for its members, eventually offering a full platform for payments, investing, and transferring money.

SoFi management said the bank will start out with global remittances, a type of international wire transfer alternative. Members will be able to automate payments in the SoFi app for quick and easy transfers sent over a blockchain network, which SoFi says is lower-cost and faster than traditional methods. It boasts its varied assortment of money-moving services, which already includes Zelle, peer-to-peer payments, ACH, and self-service wires, and will soon include self-service international money transfer and stablecoins.

Can SoFi become a major player in banking?

SoFi wants to be a real player in U.S. banking and thinks it can become a top-10 financial institution. That starts with its standard banking services, like savings accounts and loans. Investors are excited about its loan business as it continues to grow at a healthy pace and demonstrate improved credit metrics. Lower interest rates are helping.

SoFi is monetizing its core clientele by expanding into other financial services, which are fee-based and low-cost. The financial services segment is growing much faster than the whole, and it's catching up to the lending segment. Here's what it looked like in the 2025 first quarter.

Metric FY 2025 Q1 Total Growth (YOY)
Adjusted net revenue $771 million 33%
Lending segment revenue $414 million 25%
Financial services segment revenue $303 million 101%

Data source: SoFi quarterly reports. YOY = year over year.

I suspect that cryptocurrency services alone won't add substantially to SoFi's revenue, but having these added services makes the overall platform more attractive to more customers and better positions the company to grab market share as the nature of the industry changes.

As its price continues to rise, SoFi stock is becoming more expensive. It trades at a forward P/E ratio of 40. However, it warrants this premium for its high growth rate and incredible potential. If you plan to hold SoFi stock for a few years, it could be a great addition to your portfolio. However, considering its elevated valuation, you might want to employ a dollar-cost averaging strategy to potentially benefit from a better buy-in price.

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

Before you buy stock in SoFi Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

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*Stock Advisor returns as of June 30, 2025

Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

3 Reasons to Buy Carnival Stock Right Now

Carnival (NYSE: CCL)(NYSE: CUK) continues to deliver impressive results, but its stock is still 64% off its all-time high. There's good reason for that; it has a huge debt that makes it risky.

But that isn't likely to stick around forever. If you have some appetite for risk, now's the time to buy before it pays off the debt and soars. Here are three reasons why Carnival stock looks ripe for buying today.

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1. It's experiencing record demand

Carnival is the largest cruise operator in the world, and it's dealing with incredible demand for its industry-leading cruises. Over the past few years, as demand continues to soar and sales continue to increase, there have been various reasons investors have been worried that it would eventually slow down. It hasn't.

Sales have surpassed pre-pandemic levels, and they continue to grow. In the fiscal 2025 second quarter (ended May 31), revenue increased 8.6% year over year.

Youngsters dangling their legs off a boardwalk with the ocean in the distance and a sandy beach directly below.

Image source: Getty Images.

Demand is staying strong. It's remaining at historically high levels, with 93% of 2025 booked in its second-highest-ever position, and 2026 also booked at historic levels. Total deposits were a record $8.5 billion in Q2. Carnival is also benefiting from increased onboard sales of non-ticket items like food and entertainment. Clearly, these are engaged passengers.

Revenue is trickling down to the bottom line, which took a little longer to get back into the positive. Operating income nearly doubled year over year in Q2 to almost $1 billion, and adjusted net income more than tripled from last year, well above management's guidance. Earnings per share (EPS) of $0.35 beat internal guidance of $0.22 and crushed Wall Street's expectations for $0.25. Management raised guidance for net income and EPS for the full year.

2. It's investing for the future to keep it that way

All the worry about slowing down has been for naught up until now, but that doesn't mean the worry is going away. Management is making many moves to keep demand strong and stay in growth mode for the foreseeable future.

It has one new ship scheduled for delivery this year, and it's refitting some current ships with upgrades and new attractions. It has another four ships on order for delivery between 2027 and 2032.

The cruise line has been making a major marketing effort to generate buzz and interest in its new, exclusive asset called Celebration Key, a resort for Carnival guests in the Bahamas. It features beaches, shops, restaurants, and guest services, and it can accommodate two million guests annually, or two cruises at once, and it's launching in July.

Carnival has two other experiences ready to roll out next year -- RelaxAway and Isla Tropicale. These innovations can attract new users and feature new ways to vacation for repeat customers to keep high demand steady. It's also launching a new membership program to achieve loyalty and drive more repeat business.

3. It's almost at investment grade

As risky as it is for Carnival to hold so much debt right now, management has been paying it down efficiently. Although it stands at more than $27 billion as of the end of Q2, that's nearly $10 billion off its peak total debt of $32 billion at the end of 2022. In Q2, it prepaid $350 million and refinanced another $1 billion at better rates.

Also in Q2, it got two upgrades from rating companies Fitch and S&P Global after getting an upgrade from Moody's in Q1. It's now one notch away from an investment-grade rating.

Due to the current risk, Carnival stock trades at the cheap, forward, one-year price-to-earnings (P/E) ratio of 12 and a price-to-sales (P/S) ratio of just over 1.

Carnival is demonstrating its resilience right now, becoming stronger through adversity. Not only is profitability coming back, but in Q1, it reported its highest operating margin in almost 20 years. These are the kinds of qualities you want to see in a great company.

Carnival won't stay cheap forever, and now appears to be an excellent time to buy shares.

Should you invest $1,000 in Carnival Corp. right now?

Before you buy stock in Carnival Corp., consider this:

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*Stock Advisor returns as of June 23, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moody's and S&P Global. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.

Is MercadoLibre Stock Your Ticket to Becoming a Millionaire?

Investors are celebrating the S&P 500 being back in the positive in 2025, but it's up only 2% as there's plenty of uncertainty remaining in the economy.

The S&P 500 is only an average, but it reflects trends in the broader market, and it tends to be quite accurate. Many of today's hottest stocks are similarly up or down a bit this year, like Nvidia stock going up 7% after gaining 171% last year and Amazon stock going down 2% after climbing 44% last year.

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But not all stocks are in that boat. E-commerce powerhouse MercadoLibre (NASDAQ: MELI) continues to thrive as a business, and its stock is trouncing the market, up 41% this year. Let's see whether this top stock can make you a millionaire.

Superior performance in the present

Investors may be focusing on non-U.S. stocks right now, but MercadoLibre has been a market-beating stock for a long time. It consistently reports outstanding performance in nearly all areas.

Its main business is e-commerce, and it operates an online marketplace similar to Amazon in 18 Latin American countries. Despite being around for quite a while, this business continues to grow rapidly. In the 2025 first quarter, gross merchandise volume increased 40% year over year (currency neutral). Items sold increased 28%, and unique active buyers were up 25%. That's its fastest growth since the pandemic started, when it accelerated. The company credits its investments for enhancing its value proposition with driving growth in unique buyers.

A person holding a mobile phone and a credit card.

Image source: Getty Images.

It has one of the fastest delivery rates on the planet, with 74% of orders reaching their destinations within 48 hours in Q1. That's a slowdown from a high of 80% in 2021, and for good reason. The company offers a membership program called Meli+ with the option for a weekly delivery day, and while it brings down its two-day delivery rate, it cuts down on costs.

The company has developed a robust fintech platform to service its underbanked customers, and this business is also flourishing. Total payment volume increased 72% year over year in Q1, and monthly active users were up 31% to more than 64 million.

The fintech platform includes a large credit business, with different kinds of accounts, loans, and credit cards. Assets under management more than doubled from last year in the first quarter, and the credit portfolio increased 75%.

Massive potential for the future

MercadoLibre is demonstrating fantastic performance right now, but there are also many reasons to be confident about the future.

E-commerce in Latin America is still way behind other parts of the world. Penetration is in the mid-teens, which lags behind the U.S. by about a decade. The marketplace has a self-reinforcing network effect where as there are more buyers, more sellers get on the platform. This leads to more choices and more competitive pricing, a higher value proposition, and more buyers. As buyers become more comfortable with the platform, engagement increases, and more buyers purchase across more categories.

There's a similarly huge opportunity in fintech, where the banking industry is being disrupted. MercadoLibre has an edge because of its ecosystem, and platform users are already in the system. In Brazil, one of its biggest markets, legacy banks still have about 59% of the market, but that's changing. In Argentina, another of its large markets, the loan-to-gross domestic product ratio is less than 10%, while it's above 50% in Brazil.

It's also growing its advertising business and sees opportunities to further expand into new areas, giving it a long growth runway in many directions.

Can it make you a millionaire?

Like any stock, how much you put in will somewhat determine how much you can make. Do I see MercadoLibre becoming a multibagger for new investors? I do. As an example, let's say it can grow at a compound annual growth rate (CAGR) of 30% over the next five years. With a 64% increase (currency neutral) in Q1, and similar performance in general, that seems credible. That would lead to revenue of $78 billion in five years. Keeping its price-to-sales ratio constant, the stock would nearly quadruple.

There's no guarantee that this will happen, but it's a possible scenario. If you put in enough money and have a long time horizon, it could turn into $1 million. However, that will only work for investors who have that much to invest in one stock while remaining well diversified.

If you don't have that much to invest, buying MercadoLibre stock today can still be a valuable addition to a portfolio that could lead to millionaire status.

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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. Jennifer Saibil has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.

5 Growth Stocks Down 20% or More to Buy Right Now

Although it may be counterintuitive, it makes sense to buy stocks when they're down. Getting a great deal can lead to huge gains that you might not see if a stock is overpriced.

There are several caveats to that, though. Most importantly, it only works if you can find amazing stocks that you can be confident about. Stocks that are falling because there's trouble on the horizon could be value traps.

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

If you're looking for top stocks that are down right now but could soar soon, Shopify (NASDAQ: SHOP), SoFi Technologies (NASDAQ: SOFI), Revolve Group (NYSE: RVLV), Nu Holdings (NYSE: NU), and RH (NYSE: RH) are excellent choices.

A person with screens at a desk.

Image source: Getty Images.

1. Shopify: 37% off highs

Shopify is a leader in e-commerce, but it doesn't sell products; it sells e-commerce services like websites and payment processing. It has moved from a model catering to small businesses to a full-service commerce model with components and packages to meet demand at every stage and size.

It's growing rapidly as well as becoming highly profitable. In the 2025 first quarter, revenue increased 27% year over year, and operating income was up 136%. It's benefiting from the organic tailwinds of increasing e-commerce sales, and it has other growth drivers in launching new features and expanding internationally.

Shopify stock fell when pandemic-fueled growth began to decelerate and it built out too quickly before demand dropped. It's gotten itself into great shape, though, and it's likely to surpass its previous highs and climb higher.

2. SoFi: 40% off highs

SoFi is an online bank that's growing quickly, attracting new members at high rates and becoming profitable. Adjusted net revenue increased 33% year over year in the first quarter, and it added 800,000 new members. The low-cost, fee-based financial services segment increased 101% over last year, and that's boosting profits. Adjusted earnings per share (EPS) were up from $0.02 last year to $0.06 this year in the quarter.

The company has expanded from its roots as a loan business, and that's helping protect it while interest rates have been high. But the loan business is improving, too, with lower default and delinquency rates in the first quarter.

SoFi stock soared to astronomical valuations when it went public in a strong bull market, and it couldn't sustain its unreasonable levels when inflation hit and interest rates were raised. But it's rallying now, and it has incredible long-term opportunities.

3. Revolve: 76% off highs

Revolve sells clothing, shoes, and accessories on its fashion websites, and it uses artificial intelligence (AI) to drive sales and savings. It works with celebrities and social media influencers to reach its target audience of young, stylish shoppers, and it has developed a robust digital presence and loyal following. Sales had been declining when inflation was climbing, but active customers and orders placed have continued to rise, and sales and profits are climbing again. In the first quarter, sales increased 10% year over year, while net income rose 5%. As usual, active customers increased, 6% year over year, and total orders placed were up 4%.

As more companies start to imitate its digital, AI, and social media model, Revolve has a first-mover's edge. When the economy is in a better place, Revolve is well positioned to thrive.

4. Nu: 23% off highs

Nu is an all-digital bank and financial services company operating in Brazil, Mexico, and Colombia. It is a leader in disrupting the traditional banking sector in its region, and it's bringing in customers at a rapid pace. It already has more than half of the adult population in Brazil as members, but it's still adding new ones to the tune of about 1 million monthly, and this is in part because it has gone beyond its original core customers who couldn't access the banking system, which has high barriers to entry, and it's now targeting a more affluent consumer base. As fast as it's growing in its hometown of Brazil, it's growing even faster in Mexico and Colombia, and it sees international expansion down the line.

It reports high growth every quarter, with a 40% sales increase year over year in the first quarter. Net income increased 74% to $557 million, and the interest-earning portfolio was up 62%.

Nu fell earlier this year when investors were worried about high inflation and instability in Brazil, and on the news that Buffett sold out of it. But it's back in favor with the market because it doesn't have exposure to U.S. tariffs, and there's massive long-term potential.

5. RH: 74% off highs

RH is a luxury furnishings retailer, but it's styling itself these days as a global luxury brand. It has a small list of global galleries, most of which are in affluent cities in the U.S., but it's been expanding with stores in the United Kingdom and other large European cities. It also owns several restaurants and offers "experiences" like a guesthouse and yacht rentals.

It has a fair amount of resilience since it targets an upscale crowd, but even that hasn't been able to pull it through inflation without damage as consumers put discretionary items on hold. However, it might be on the rebound. It reported solid results in the 2025 fiscal first quarter, including a 12% year-over-year increase in revenue and a 7% adjusted operating margin.

It may take time for RH to get back to its previous highs, but as it turns a corner, now looks like a good time to buy.

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

Before you buy stock in Shopify, 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 Shopify 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 $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $881,731!*

Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Jennifer Saibil has positions in Nu Holdings and SoFi Technologies. The Motley Fool has positions in and recommends Revolve Group and Shopify. The Motley Fool recommends Nu Holdings and RH. The Motley Fool has a disclosure policy.

Could Buying Netflix Today Set You Up for Life?

Shares of Netflix (NASDAQ: NFLX) have likely minted many millionaires over the years. If you had invested $10,000 in its initial public offering (IPO), you would have more than $10 million today.

There probably aren't too many who invested $10,000 at its IPO and still own Netflix stock today, which climbed and crashed on many occasions. But those who invested early and held their positions are enjoying fabulous returns.

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

Although it isn't that young growth stock anymore, it has other things going for it. Today, it's a household name with formidable assets, and it's the leading paid streaming service. Can it still set you up for life today?

Streaming for all

Netflix has gone through several iterations on its way to becoming the leading global streaming company. It went public in 2002, five years before it became a streaming company. You would have had to have confidence in its chances as a DVD rental company to have invested at the time, so early investors either saw a great spark of innovation or were just lucky.

Today, the company services more than 300 million global viewers through its premium paid subscription channel as well as its relatively new ad-supported network. It generates increased revenue through more subscriptions, price hikes, and advertising. As more people join the ad-supported tier, it gets higher ad revenue through increased views.

Couple watching TV.

Image source: Getty Images.

The company uses a top-down margin model, which means it determines what kind of margin it wants to have and spends accordingly. That could restrain how much content it produced at a particular time, but it ensures efficiency and profitability.

In the 2025 first quarter, revenue increased 12.5% year over year, and operating income increased 27%. Operating margin expanded from 28.1% to 31.7%. Management is guiding for revenue to increase 15.4% in the second quarter and for an operating margin of 33.3%, up from 27.2% last year.

Upcoming opportunities

Netflix shifted directions several times in the past, from its origins as a DVD company to streaming, and from a premium network to offering the ad-supported tier. There have been worries multiple times about where it might be headed, but it has always landed on its feet and continued to run.

The accelerated shift to streaming that began when the pandemic started is still winding down, and that was followed by the ad tier and a pivot to offering gaming. There hasn't been a shortage of new opportunities over the past few years, but I wouldn't be able to envision what the next stage could be.

The field is quite full today, with many of the smaller players consolidating or breaking up, figuring out where they belong in the world of streaming. Netflix has been the steady and stable leader throughout this time.

The company now produces world-class films that can compete with the best studios. It has had some limited runs of its films in theaters, but it hasn't taken that route as a significant part of its operating model. Although that could change if it makes sense, as streaming has eaten away at the box office, it doesn't seem that theaters are the next step for Netflix at this time.

Many companies have made the mistake of entering new areas that would seem complementary instead of focusing on their core competencies. It's always a balance for an innovator, and it could be something lucrative at some point in time.

A hefty price to pay

Netflix stock has delivered for shareholders, and it has a premium price tag to show for it. It trades at a price-to-earnings ratio (P/E) of 57 and a price-to-sales ratio (P/S) of 13.

It was recently reported that management had plans to reach a market cap of $1 trillion by 2030. That implies the stock almost doubling, and it's not really within its control.

However, it can take action to generate higher sales and profits and boost its price. I think that's an ambitious goal, but while possible, it's not likely. Netflix is a mature company, and it would have to keep up the growth it's reporting today to double revenue over the next five years -- it would require a compound annual growth rate of 15%.

However, that assumes the same premium P/S. If that goes down, it won't be able to double its market cap even with those growth rates.

So, unless you invest a lot of money and have a long time horizon, I don't think Netflix stock will set you up for life. But it can still be a valuable part of a wealth-creating portfolio and grow over time.

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

Before you buy stock in Netflix, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% 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 9, 2025

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

3 Reasons to Buy Walmart Stock Like There's No Tomorrow

Walmart (NYSE: WMT) is the largest company in the world by sales, and it's held on to that status tightly, even as tech stocks have surged and the world has gone digital. Although Amazon, the second-largest company, keeps getting closer, Walmart's simple retail model beats out everyone else.

This kind of strength is something every investor should have in their portfolios, and Walmart is an excellent candidate. Here are three reasons to buy it today.

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A Walmart associate in a store.

Image source: Walmart.

1. It's safe

When the market is uncertain, it's the safe, established stocks that can tide your portfolio over. Investors have been pouring into Walmart stock, and it's crushed many growth stocks and the market itself over the past year as it's gained 47%.

Walmart's sheer size gives it an edge over its competitors. It has more than 10,500 global locations, including 4,600 in the U.S. alone. It's a discount retailer, so it appeals to customers at all times, but even more so when the economy is under pressure. It has tremendous leverage with suppliers, allowing it to play with price and change its supply chain when necessary.

Management said that with the new tariffs, it would have to raise some prices. But the company's exposure is limited, as most of its high-moving products are everyday essentials that it can easily keep flowing, with two-thirds of its product assortment already made in the U.S., and because it's a global company. In any case, Walmart has many levers to pull to offset the impact of new tariffs, such as shifting production to different regions and changing the materials it uses. Again, due to its scale and leverage, it can have suppliers make these changes.

It's also benefiting from some of its new businesses, such as a Prime-style membership program and advertising, which are high-margin and can make up some of the higher costs.

2. It's growing

Walmart has $685 billion in trailing-12-month sales, yet it still manages to report year-over-year growth consistently. Sales increased 4% (currency neutral) in the fiscal 2026 first quarter (ended April 30), and management expects sales to increase 3% to 4% for the full year as well.

The company constantly finds new ways to upgrade and boost sales. It recently launched a new line of premium products to attract a more upscale consumer, and it's still opening new stores. The advertising business, including the recently acquired Vizio ad-supported streaming, increased 50% year over year in the first quarter. This is an exciting new venture. Membership is also adding value, and membership fee income increased by 15% over this quarter last year.

One of its most compelling growth drivers lately has been e-commerce. Walmart was a bit behind the curve when e-commerce first exploded, losing significant ground to Amazon. But it's invested in its digital channels over the past few years and has a formidable program, including an edge over Amazon in using its thousands of stores for distribution and order fulfillment.

E-commerce sales increased 22% year over year in the first quarter, with a 21% increase in the U.S. and a 27% increase for the Sam's Club stores. Sam's Club represents its own opportunity as it continues to open stores across the globe.

3. It's reliable for passive income

Finally, Walmart is a Dividend King. That's an exclusive status given to stocks that have raised their dividends annually for at least 50 years, implying a rock-solid dividend and a growing check. Walmart has raised its dividend under all kinds of circumstances for the past 53 years, providing reliable passive income for retirees and other shareholders who count on it.

Walmart's 0.9% (at the current price) dividend isn't high-yielding. Its other qualities, though, are very attractive.

As the market continues to experience uncertainty, with no one knowing what lies ahead, Walmart stock can bolster your portfolio and create long-term shareholder value.

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

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

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

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

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*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. Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

1 Artificial Intelligence (AI) ETF to Buy Hand Over Fist and 1 to Avoid

It looks like artificial intelligence (AI) is more than the latest fad. The technology is becoming an integral part of how people do things, from work to play, offering solutions to simplify complex activities. Many companies are investing billions of dollars into it in their efforts to become leaders in aspects of the industry or to maintain their positions in their established arenas.

Based on various forecasts, AI could become a trillion-dollar industry, and the companies that succeed in leading the charge could create tremendous shareholder value. Naturally, many investors are trying to predict which ones are going to be the winners and allocate their funds accordingly. However, since it's important to diversify your portfolio across many industries, it doesn't make sense for most investors to pick too many AI stocks.

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If you're looking for a way to get exposure to the AI revolution without placing too much money into that single industry, consider buying an exchange-traded fund (ETF) that's focused on AI. That would give you easy exposure to a variety of stocks in a single asset, allowing you to benefit from many winners without overexposing yourself to the space or increasing your risk through a lack of diversification.

There are many AI ETFs to choose from, but I would recommend buying the Vanguard Information Technology ETF (NYSEMKT: VGT) and avoiding the Ark Invest Autonomous Tech and Robotics ETF (NYSEMKT: ARKQ). Here's why.

The ease of indexing

Vanguard offers about 80 different ETFs that suit an array of different investing needs. What unites them is that they're all passively managed, meaning they each track an established index instead of having a fund manager choose the stocks. There are many benefits to this strategy.

First of all, it provides instant and wide diversification. The Vanguard Information Technology ETF tracks the MSCI US Investable Market Information Technology 25/50 Index, which includes 307 small-, medium-, and large-cap companies. It's a weighted index, so larger companies make up higher percentages of its total value. The top three components are Apple, Microsoft, and Nvidia, which collectively account for about 46% of the total.

A face with AI.

Image source: Getty Images.

However, because there are so many stocks in the portfolio, the risk from any single company's potentially poor performance is minimized. And index funds don't have to pay highly compensated fund managers to choose stocks which stocks to buy and sell, their fees are much lower than those of actively managed funds. The Vanguard Information Technology ETF has an expense ratio of just 0.09%, which compares quite favorably with the industry average of 0.92%.

Because AI and technology have been huge growth industries, this ETF has delivered fantastic results over the medium term. In fact, it has been Vanguard's best-performing ETF over the past 10 years, with 19.8% annualized gains. AI is still in its infancy, and as the market looks like it's recovering, now could be a great time to take a position.

Risk with low diversification

The Ark Invest Autonomous Tech and Robotics ETF has also done well over the past 10 years, but not nearly as well as the Vanguard ETF.

ARKQ Total Return Level Chart

ARKQ Total Return Level data by YCharts.

It experiences many of the same tailwinds -- and risks -- as the Vanguard fund does in terms of industry growth, but the Ark fund is a riskier investment because it only has 37 components. So when some of them go south, its portfolio will take a proportionally more intense beating. Moreover, in broad market downturns, many traders tend to run to safe stocks. In such times, those value stocks can cushion a portfolio. An ETF that's focused solely on growth stocks is bound to feel more pain in those times, though its relative portfolio diversity will mitigate some of that risk.

The Ark Invest Autonomous Tech and Robotics ETF also focuses more on emerging stocks than market leaders. Its top holdings are -- in sharp contrast to the Vanguard ETF's established giants -- Tesla, Kratos Defense and Security, and Palantir Technologies. These stocks trade at ambitious valuations, which makes them more susceptible to steep drops if the market's mood changes or their business results come under pressure.

Both of these ETFs are riskier than a value-oriented ETF or even an ETF that tracks a broad index like the S&P 500. But over time, they have so far rewarded investors who can handle that risk. If you're ready to invest in the future of AI but are concerned about current market uncertainty, the Vanguard Information Technology ETF looks like a smart way to play it.

Should you invest $1,000 in Vanguard Information Technology ETF right now?

Before you buy stock in Vanguard Information Technology ETF, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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. Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, 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.

Why Shopify Stock Jumped 13% in May

Shopify (NASDAQ: SHOP) stock soared 13% in May, according to data provided by S&P Global Market Intelligence. It reported well-received earnings results, and it benefited from an ease in tariff raises -- for now.

Best-in-class e-commerce services

Shopify is an e-commerce services provider, offering everything from full website development to single components for omnichannel retailers, including physical hardware. It's gone from its niche of small businesses to become a full commerce giant supporting large, well-known brands with many of its solutions.

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Like any company that's become top of its industry, it's experienced ups and downs. It has recovered from an ill-fated expansion into delivery services that hurt its bottom line, and it's now in a phase of strong growth and rising profits. With lots of opportunity, it should stay in that place for many years.

In the 2025 first quarter, revenue increased 27% year over year to $2.4 billion. Gross merchandise volume increased 23% to nearly $75 billion, very close to Amazon's e-commerce sales. Operating income more than doubled to $203 million, and free-cash-flow margin was 15%, up from 12% last year. These are strong results that demonstrate Shopify's dominance in e-commerce, a growing industry.

The market was also happy about the temporary pause on high tariffs on Chinese goods. As a global e-commerce provider, Shopify has millions of merchants across the world who rely on its platform, and it could be negatively impacted by raised tariffs and a global trade war. Management explained that it has released a tariff tracker that makes it simple for merchants to source goods from different countries based on tariff information, powered by artificial intelligence (AI). That can help them avoid raising prices while continuing to generate sales, and the market gave that update a thumbs-up.

A person at a workbench writes a note on a piece of paper.

Image source: Getty Images.

Opportunity abounds

These are just short-term factors, but the real reason to buy Shopify stock is its long-term potential. Shopify is the top e-commerce platform in the U.S., with about 30% of the market, giving it a robust edge against competitors. As e-commerce increases as a percentage of retail sales, it provides organic tailwinds for Shopify's business.

At the same time, it has huge opportunities in capturing greater market share internationally. International sales only account for 30% of Shopify's business, giving it a long growth runway as it expands and offers more services outside of the U.S.

The market was rewarding Shopify's recent wins, but investors should buy it for the long-term opportunity.

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

Before you buy stock in Shopify, 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 Shopify 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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*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. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.

4 Monster Stocks to Buy Right Now and Hold for 20 Years

Market volatility over the past few months could lead investors to sell and take their winnings home before things get worse. But investing success means riding out the short-term waves and holding on to long-term winners. The S&P 500 (SNPINDEX: ^GSPC) has already made up whatever it lost in value earlier this year, and it would have been a shame to have sold at a low and missed out on the quick rebound.

If you can hold on for at least 20 years, you can choose excellent stocks and let them work their magic on your investments. Amazon (NASDAQ: AMZN), Shopify (NASDAQ: SHOP), MercadoLibre (NASDAQ: MELI), and SoFi Technologies (NASDAQ: SOFI) are four monster stocks that should reward you well over the next 20 years.

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

Pleased investor smiling while looking  at their computer.

Image source: Getty Images.

1. Amazon: E-commerce and AI

Amazon is the leader in e-commerce and cloud computing, two massive growth industries. It has about 40% of the U.S. market share in e-commerce and about 30% of the global market for cloud computing. Both of these industries are growing organically, and Amazon is benefiting from these organic tailwinds.

Shoppers know Amazon as the king of e-commerce, and the company is heavily investing in keeping its lead there. But management has identified generative artificial intelligence (AI), primarily through the Amazon Web Services (AWS) cloud-computing business, as its main growth driver over the next few years.

Amazon said it would invest upwards of $100 billion in 2025 alone to keep building out this business, and it offers a huge assortment of features and tools to every size and stripe of client. AWS itself generated a 17% year-over-year increase in sales in the first quarter and has a $117 billion annualized revenue run rate. Management expects that with generative AI, that rate will increase.

"We thought AWS had the chance to ultimately be a multihundred-billion-dollar revenue run rate business," CEO Andy Jassy recently said of the pre-generative AI opportunity. "We now think it could be even larger."

Advertising and streaming continue to grow and add value to the business, and Amazon is investing in new concepts like Zoox autonomous vehicles and Project Kuiper broadband. It has a huge growth runway, and its stock should keep rewarding investors over many years.

2. Shopify: The other e-commerce giant

You won't see Shopify on any list of highest e-commerce sales because it doesn't sell products, it sells e-commerce services, like websites and payment processing. But its gross merchandise volume (GMV) is similar to Amazon's e-commerce sales, giving you a picture of Shopify's important and dominant position in the e-commerce space.

Shopify is also benefiting from the organic tailwinds of e-commerce growing as a percentage of retail sales. According to eMarketer, e-commerce accounted for 20.3% of retail sales in 2024, and that's expected to increase to 23% by 2027. Even that's still a small percentage, and with each percentage point translating into trillions of dollars, Shopify has a long growth runway.

It also continues to identify new ways to expand its market share and help its clients increase their sales. It has gone from a platform helping small businesses get online to targeting large businesses with individual e-commerce components. It offers a full-service omnichannel platform combining physical and digital retail, and it's making a bigger move into international, where there are several bigger players. International sales only accounted for 30% of the total in Q1, and that could be a huge growth driver in the coming years.

Patient investors should expect Shopify to be a top stock as it keeps growing and innovating for the foreseeable future.

3. MercadoLibre: The Latin American tech disruptor

MercadoLibre is similar to Amazon in that its core business is e-commerce, but it has dipped its toes into several other businesses that are driving fantastic growth. It operates in Latin America and offers a host of digital services in both e-commerce and financial technology. It consistently reports strong growth across metrics, such as a 40% increase in GMV year over year and a 72% increase in total payment volume in the 2025 first quarter.

The opportunity here is enormous because Latin America lags many other global regions in both e-commerce and digital penetration. In fact, 85% of sales are still offline, and some of its regions are underbanked, leading to a greater necessity for digital financial services.

Because its regions are still in their early innings in its industries, there are so many levers MercadoLibre can pull to move growth. It's doing so step by step, bringing in new, unique visitors to its ecosystem and generating higher purchase frequency. It's launching all sorts of innovative services, such as a new, free streaming initiative powered by its growing ad business.

MercadoLibre has a wide-open runway and tons of opportunities to grow its business and stock gains.

4. SoFi: The modern way to bank

SoFi is a digital financial disruptor offering all banking services online. It targets the young professional who's just starting their financial journey and appreciates SoFi's tech focus and easy-to-use interface.

Although its core business is lending, it has successfully expanded into a large array of financial services like bank accounts and investing tools. These are fee-based products that have low costs and are becoming incredibly profitable.

Even the lending business is bouncing back as interest rates go lower, and lending revenue increased 25% year over year in Q1. Financial services, though, more than doubled, and contribution profit increased 299%.

It's adding members at a high rate and generating higher engagement through cross-selling and upselling, and SoFi has a massive growth opportunity over the next 20 years as it gets closer to its ambition of becoming a top-10 U.S. bank.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in MercadoLibre and SoFi Technologies. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Shopify. The Motley Fool has a disclosure policy.

Airbnb's Latest Product Release Sparks Optimism Among Shareholders. Here's Why.

Airbnb (NASDAQ: ABNB) has been teasing followers for a while about some big news coming to change the company fundamentally. The announcement is out, and it's not as earth-shattering as one might have thought. The market bought into it, though, and Airbnb stock jumped on the news.

Let's see what's happening and why the market is excited.

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Slowing demand, changing behaviors

The name Airbnb has become synonymous with vacation rentals. Although this industry has existed for a long time, Airbnb was the first complete online solution for finding travel accommodations, often in places not served by other methods.

Airbnb accommodations have many advantages over hotels. They're often cheaper, there's a wide assortment of options in one platform, and they're often available even where there are no hotels.

Management noted on the most recent earnings call that Airbnb is a flexible platform that can easily respond to changing consumer behavior. When it started, Airbnb serviced tech professionals looking for cheap bed-and-breakfasts as an alternative to expensive hotels, and when there were lockdowns, people who wanted to vacation used it to find accommodations close to home.

Person in an Airbnb guesthouse.

Image source: Airbnb.

It's going through another shift right now. Management noted that international travelers are trending away from U.S. locations, but that they account for only about 2% to 3% of the total business. Most U.S. business is domestic, and international travelers are still using Airbnb's platform, just for different locations.

That said, demand is still expected to slow in the second quarter. Nights booked are projected to moderate, mostly due to softer demand in the U.S., where there's economic uncertainty. Management is confident, though, that this is another short-term shift, and that the company has many other growth drivers. It's particularly excited about the opportunity in international, where many large cities are still a small portion of the total business.

Perfecting the core

Management has wanted to expand the platform for a long time, but it's been focused on perfecting the core business before branching out. It feels confident in that respect now for several reasons. The first is price. The platform has more details about its prices at booking, and Airbnb has removed 450,000 lower-quality listings so travelers get better values.

It's also made many improvements to the platform over the past few years, featuring summer and winter releases that make the platform easier to use for both hosts and guests.

"We spent the last few years rolling out hundreds of upgrades to make Airbnb better for guests and hosts," CEO Brian Chesky said. "It's now easier to use, more affordable and more reliable."

New booking options on the platform

Now that management believes the core is intact, it's ready to move forward. Airbnb finally released its long-awaited news last week, and it thinks that the new launch can supercharge the company's potential. Management estimates that for every person who books on Airbnb, nine people book a hotel. If it can get one more of those nine to switch to Airbnb, it can double its business.

So what's this new release? Airbnb now has services and experiences listed as main booking options on its homepage. This isn't completely new; it's been offering these extras for a long time. But they're now included as a core part of the platform.

Honestly, I was underwhelmed by this not-so-major shift. Management thinks that by offering a more holistic experience, it can create a full travel experience for guests that they won't find other places. They'd have to either deal with a tour manager, which is much more expensive, or spend a lot of time putting together an itinerary using many different platforms. This is an all-in-one for cheaper.

This shift has a very upscale feeling. How many guests will want to book a Michelin-starred chef or spend an afternoon with NFL quarterback Patrick Mahomes? Then again, if Airbnb captures this lucrative business, it could be a strong growth driver.

The market had a positive reaction to the release, especially in comparison to the stock's decline after the first-quarter report a week earlier. The stock is still off its year-to-date high, however, so it was a tempered reaction.

A long growth runway

As you might have guessed, I have my reservations about whether this is a real change or just a way to capture attention. However, I do think Airbnb has tons of future potential as it expands internationally, tries to market itself to new populations, and, most importantly, improves its platform for users. The market is there, and Airbnb is doing an impressive job gaining share without theatrics. It could be a contender for a long-term stock to own for patient investors.

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Jennifer Saibil has positions in Airbnb. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy.

Dutch Bros Stock Just Plunged 18%. Is Now the Time to Buy?

After the stunning announcement earlier this week that the U.S. and China are bringing their tariffs back down, the S&P 500 is nearly back to where it started out the year. There's no way to know if it will keep climbing and hit new highs anytime soon or unravel again, but it's a big burst of confidence in the economy.

In the meantime, coffee shop chain Dutch Bros (NYSE: BROS) continues to outperform the market. The growth stock has incredible opportunities as it opens new stores and builds up its presence. However, it's plunged 18% over the past few months. Let's see why the market is spooked and whether or not this is a buying opportunity.

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

More coffee, please

Dutch Bros recently celebrated its 1,000th new store opening (this one in Florida), and it concurrently announced plans to open another 1,000 stores by 2029. It doubled its store count from around 500 when it went public in 2021 to where it is today, but it's still a bold statement to imagine doing that again over the next four years. It's planning to open at least 160 stores in 2025, so this ambitious plan implies that the rate is going to accelerate significantly over the next few years.

Dutch Bros "broista" taking an order in the drive-thru.

Image source: Dutch Bros.

Customers love the coffee, increasing confidence that it can reach this goal. It provided a further, long-term goal of reaching 7,000 stores. That was raised from its previous goal to reach 4,000 stores, and as it expands successfully, there's certainly a chance that even this goal could be surpassed.

Some recent metrics highlight why investors are so enthusiastic. In the 2025 first quarter, revenue increased 29% year over year, driven by 30 new stores and a 4.7% increase in comparable sales. Some of that was due to pricing, but transactions were also up 1.3%, a good sign of consumer engagement despite higher prices.

How it's winning new business

CEO Christine Barone attributes the success to three factors: innovation, marketing, and the company's rewards program.

Dutch Bros is known for its unique, customized beverages, and specifically for its cold drinks. It's had great success with recent launches like boba and protein coffee, and it recently rolled out a limited-time offer of popular cereal flavors to add to customized drinks. It's also piloting a new food menu in some locations. Food only accounts for 2% of sales right now, but management believes that offering a targeted food menu of specific items can lead to higher beverage sales. This could be a significant addition in capturing share of the all-important morning rush without adding unnecessary complexity for its "broistas." It launched eight new products, including four hot ones, in a pilot test of eight stores. Based on that initial success, it has expanded the program to 32 stores.

Paid advertising is an integral part of how the company is building its brand as it enters new markets. Since it isn't well known outside of its current markets, this is an important strategy to get its name out and create excitement about its products. But it's been equally successful in its more mature markets.

Finally, it's enhancing its rewards program with mobile ordering, and order-ahead is adding a substantial layer to sales. Rewards members accounted for 72% of sales in the first quarter, up five percentage points from last year, and there has been quicker adoption in new markets. Barone expects the rewards program to be a strong growth driver going forward.

Market sentiment or consumer sentiment?

Dutch Bros stock fell along with the rest of the market as investors were worried about a cooling economy if tariffs were raised. Management addressed how tariffs would affect its operations, and it was a confident take, since it estimated that only about 10% of its costs would be impacted. However, that doesn't address the pullback in general consumer spending.

With the new detente in tariffs between the U.S. and China, market sentiment is back up. Although Dutch Bros' costs that are affected, like coffee beans, don't come from China and could still be impacted by tariffs, consumer spending, which was the greater worry, may not be.

Great value on the coffee, but not the stock

Dutch Bros has a strong future ahead, but that comes at a price. Even at the lower price, it trades at a forward, one-year P/E ratio of 85, which is quite a premium. The market sees the tremendous opportunity here and is pricing it accordingly.

If you have a long time horizon, I don't think you'll be disappointed in owning this stock. However, because the valuation is so rich, the stock is susceptible to going lower on any bad news. If you can take that in stride and hold on through the likely bumps along the journey, Dutch Bros is an excellent stock to buy.

Should you invest $1,000 in Dutch Bros right now?

Before you buy stock in Dutch Bros, 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 $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool recommends Dutch Bros. The Motley Fool has a disclosure policy.

Opendoor Stock Now Costs Less Than a Slice of Pizza. Is There Any Way Back?

Opendoor Technologies' (NASDAQ: OPEN) misfortunes continue to deepen as the real estate market remains stuck, with no light showing yet at the end of the tunnel. It's joined the ranks of penny stocks and keeps sliding, down 56% this year alone and trading at dangerously low levels at under $1 per share.

Is there any hope left for Opendoor, or should investors stay far away?

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

Gloom and doom

Opendoor is an iBuyer, which means it buys homes directly from sellers, fixes them up, and then sells them at a higher price. It's a simple business model that individuals have been using forever, and Opendoor takes it up a notch by scaling it into a full, digitally supported platform. It also offers an assortment of complementary services, such as an online marketplace and agent services, and it's always expanding its features to meet demand and create options for sellers and buyers.

When the company went public in 2020, interest rates were historically low, and real estate was booming. The company's strong performance has now been hampered by high interest rates and a housing market that isn't budging.

According to the latest market data, housing prices are still rising, and the median home price reached $430,838 in March. Homes sold declined by 2.7%, and the average 30-year fixed mortgage rate declined by 0.17%, but was still high at 6.7%. Homes are also selling at their slowest pace in six years, with the average home on the market for 47 days before going under contract.

A couple getting the keys to a new home.

Image source: Getty Images.

Opendoor's management is tweaking its model to get the best it can out of the current circumstances. Instead of relying on its core product of making cash offers to home sellers, it's expanding its agent network with a program for agents to connect with potential homebuyers and explain the options.

It's also shifting its marketing and ad spend to find more homes for sales in the off-season, which are prepared for resale in the high season. A company as large as Opendoor believes it has the leverage to do that successfully.

Don't be fooled by earnings beats

Opendoor released its latest update this week, and although I would call it mixed, the market responded positively. Results were better than expected, and management gave a pleasing outlook.

Sales were down 2% from last year in the 2025 first quarter, but they beat Wall Street's expectations, and houses sold were down 4%. Gross profit was $99 million, down from $115 million last year, and gross margin was 8.6%, down from 9.7% last year. Net loss improved from $109 million in 2024 to $85 million in 2025, and loss per share was also better than Wall Street was looking for.

In some forward-looking metrics, it purchased 3,609 homes, 22% more than last year, but it ended the quarter with 1,051 homes under contract -- 60% lower than last year.

Beating expectations is certainly a step in the right direction, but there isn't enough progress to say Opendoor is out of the woods. A business turnaround will require a much stronger housing market, and the company doesn't have control over that. Management's work with what it does have control over is confidence-boosting, but the company will remain in a challenging position until external forces change.

The trek back up may be too long

Opendoor's platform might be better than the traditional system, but it's not good enough to beat back current headwinds. As those headwinds remain strong, Opendoor can't bounce back. At the current price, Opendoor stock trades at a price-to-sales ratio of less than 0.1, but it's not a bargain if you don't expect the stock to move higher anytime soon.

I wouldn't say there's no hope for Opendoor, but there doesn't look like any reason for investors to tie up money in this stock while the environment remains unfavorable. There are better places to park your money right now, or you might enjoy that slice of pizza.

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

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

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

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*Stock Advisor returns as of May 5, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Walmart Stock Jumped 11% in April

Walmart (NYSE: WMT) stock gained 11% in April, according to data provided by S&P Global Market Intelligence. Investors are flocking to what they see as a safe stock in the new tariff environment, and this call was bolstered by updates at the company's annual shareholders' meeting, where management shared recent successes.

A safe name in an uncertain world

Walmart has been enjoying strong growth recently, particularly in its e-commerce business, which is driving growth across the business. It's the largest retailer in the world, with more than 10,000 stores globally, nearly half in the U.S., and it happens to be a discount retailer, which makes it even more attractive when there's inflation.

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

In the 2025 fiscal fourth quarter (ended Jan. 31), sales increased 5.3% (currency neutral) over last year, with operating income up 9.4%. Sales growth was driven by e-commerce, which was up 16% year over year. It was late to the e-commerce game, but it's finally leveraging its assets, meaning its stores, to beat out other e-commerce retailers. It's using its huge stores as distribution centers, and its unmatched portfolio count means it can get goods to customers fast and at a low cost. E-commerce sales increased 21% for the full year.

Management is taking a confident stance on tariffs. "History tells us that when we lean into these periods of uncertainty, Walmart emerges on the other side with greater share and a stronger business," said CFO John Rainey.

The company gave a positive outlook at the investor meeting, where it identified ways to drive growth through offering more value and leaning into technology. It sees the potential to widen margins as it grows its high-incremental-margin businesses, and it outlined a plan to generate higher cash flow and create greater shareholder value.

A Walmart worker in a store.

Image source: Walmart.

The dividend doesn't hurt, either

Walmart pays a growing dividend that yields 0.9% at the current price. That's pretty low because it moves conversely with the stock price, and the stock has been on fire.

It's risen so high that it trades at a P/E ratio of 41, which is much higher than the typical safe stock. Investors see a rare combination of growth and security in Walmart stock, plus the dividend, which makes the stock look very attractive in today's environment.

At this price, I wouldn't make Walmart a central position in your portfolio, but it's a strong contender if you're looking for a stable, dividend-paying stock.

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

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Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

Prediction: MercadoLibre Stock Will Beat the Market. Here's Why.

It's been quite a week for the stock market. Although it reached down into bear territory, it has also proven resilient at certain moments. There have been wild swings, and by the time this is published, it could again look a whole lot different.

The S&P 500 is the standard market index, but it only includes 500 stocks, and they're all U.S.-based businesses. The index itself is just an average, which means some of the stocks included are performing better than the index itself.

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MercadoLibre (NASDAQ: MELI) is a Latin American e-commerce giant that wouldn't be included in the S&P 500, but it's beating it now, and it's likely to keep outperforming it by a wide margin over time. Here's why.

A leading tech company in Latin America

MercadoLibre means "free market" in Spanish, an ironic name in today's climate. The company operates an e-commerce and fintech business in 18 countries in Latin America, and it's growing rapidly.

Its main business is still e-commerce, but it has expanded into a full financial services platform. It offers digital payments, investing tools, credit products, and more, and its first full digital bank is in the works in Mexico.

In the 2024 fourth quarter, revenue increased 96% year over year (currency neutral). Gross merchandise volume was up 56%, and items sold increased 27%. Unique buyers rose 24% and exceeded 100 million for the first time.

On the fintech side of things, total payment volume increased 49%, and monthly average users were up 34% to $61.2 million. The credit portfolio increased 74% to $6.6 billion, and assets under management increased 129% to $10.6 billion.

It's also a highly profitable venture, and that's becoming more robust at scale. Operating income climbed from $335 million to $820 million year over year, and comparable operating margin expanded from 13.5% to 14.1%.

Massive opportunities ahead

Although MercadoLibre has been a growth machine for years, it's still just getting started and has a massive opportunity ahead. E-commerce penetration in its region is around 14.4%, or way behind the U.S. and China, which are 28.8% and 38.1%, respectively.

Management has cited third-party data that forecasts the market increasing from $151 billion in 2023 to $232 billion by 2028. As the leader in the region, MercadoLibre has a first-mover's edge in capturing the market as it grows. It already has a strong, recognized brand, and it's making investments in keeping its dominant position, such as high same-day or two-day delivery rates.

In fintech, much of the region's population is still underbanked, and there's plenty of room for financial disruption. In Mexico, where MercadoLibre is focusing right now, less than half of the population has a bank account and only a fifth of the population has a credit card. That's a target market ripe for the taking. In the wider Latin American region, only 74% of people have a bank account and 28% have a credit card, in contrast with 95% and 67%, respectively, in the U.S.

Again, MercadoLibre is well-positioned to both create and benefit from the shift. That doesn't even include MercadoLibre's advertising business and new opportunities, of which there are many.

Beating the market today

MercadoLibre stock is up 7% year to date while the S&P 500 is down 15%. There are a number of reasons investors see it as a safe play right now. Aside from the usual, which is its excellent performance and incredible opportunity, it doesn't have the same exposure to the tariff program that's been shocking the markets because it's not a U.S. company. That adds a layer of safety right now as the markets get roiled.

Even better, MercadoLibre stock trades at a forward one-year P/E ratio of 28. That's an attractive valuation for a company with as much potential as MercadoLibre, and now is an excellent time to open a position or add shares to your portfolio.

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

Before you buy stock in MercadoLibre, 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 MercadoLibre 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 $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

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*Stock Advisor returns as of April 10, 2025

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

Should You Buy Stocks as the Market Tumbles? History Offers a Clear Answer.

The markets got slammed last week as President Donald Trump announced his tariff plans, which sent global governments rushing to respond, and the turmoil is not letting up. There's fear of a trade war and a recession, and fear doesn't usually play out well for the markets.

Investors are fleeing to safer holdings, but is that the right way to go? On the one hand, investors could be in for some dark company forecasts as businesses deal with a potential new reality. On the other hand, low prices mean great deals.

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

History offers a clear answer. Let's see what it is.

Why are investors spooked?

Let's first understand what's happening. President Trump has raised tariffs globally using a tit-for-tat type of formula for each country individually. He has said that the U.S. has been at a disadvantage vis-a-vis its trading partners, and raising tariffs puts the system back in the proper balance.

His administration expects this to boost the U.S. economy because it should drive consumers to buy more U.S.-made goods. However, analysts don't necessarily see that happening. The U.S. economy has been strong despite fears of a recession over the past few years, and the Federal Reserve has been carefully lowering interest rates to fight inflation without triggering a recession. The job market is strong, and the gross domestic product (GDP) has been growing at around 3% annually over the past few years.

With the new tariff program, consumers might cut back spending, bringing down GDP growth and severely impacting company financial statements. In the near term, company sales growth could slow, and earnings could decline. Further along, it could become harder for companies to boost business. After the "Liberation Day" announcements, analysts at JPMorgan Chase lifted their recession outlook from 40% to 60%.

What's happened in the past

There have been 15 recessions in the past century, starting with the Great Depression in 1929. According to the National Bureau of Economic Research, they've lasted about 10 months on average since World War II. Although the technical definition of a recession includes two quarters of consecutive GDP contraction, the shortest recession was only two months long, when COVID-19 first hit the world.

By contrast, the longest recession since World War II was 18 months. That could be a very uncomfortable time, but in the scheme of things, it's a relatively short period. Selling stocks because companies will feel pressure for that amount of time and feel its after-effects seems quite shortsighted.

In all of these cases, the market has gone on to rebound and reach much higher levels. Since the end of the most recent recession, the S&P 500 has nearly doubled, and that includes its recent drop.

How you should play this

If you still have a long time horizon, these events shouldn't ruffle your feathers. The market has been here before, and it's always bounced back. Every investor should expect recessions, corrections, bear markets, and crashes over their investing lifetime.

If you are in or nearing retirement, you should have a well-diversified portfolio focused on safe and income-producing stocks that are less likely to be negatively impacted during these kinds of events. In fact, many of the safe and secure stocks are doing fabulously right now. If you are getting close to retirement and you don't have this kind of setup, you should make some changes to your portfolio.

One thing all investors shouldn't do is panic sell. Sure, it makes headlines to say that $6 trillion in market value has disappeared in a matter of days. But if you haven't sold your stocks, those losses weren't realized for you. If you keep holding on, they likely won't be. While you should expect unpleasant market moves over time, the vast majority of the time the market does do well, and if you stay in your position, it should reverse in due time.

One thing investors should do is spot bargains and buy. These are the kinds of buying opportunities savvy investors wait for when times are good. There are great deals on excellent stocks all over the place, but they won't last forever. As long as you can hold for the long term, you can use this market as an opportunity to buy on the dip.

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 $244,570!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*

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

Continue »

*Stock Advisor returns as of April 5, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

This Former Buffett Stock Is 1 of the Biggest Losers of the Market Rout, Plunging 40% in 1 Day

The market has been swinging wildly in the aftermath of President Trump's "Liberation Day" tariffs announcement. Investors are struggling to predict the consequences of a such a combative trade policy.

While many stocks have been moving in line with the market's ups and downs, others have remained fairly steady. Then, there are the stocks that have been completely crushed, including former Warren Buffett stock RH (NYSE: RH). Buffett sold his entire position in the company back in Q1 2023, but since that quarter, the luxury home furnishings retailer managed to rise over 80% to trade around $450 per share earlier this year.

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Following weeks of steady declines and a 40% one-day loss on April 3, the stock trades below $150 as of this writing.

In need of restoration

RH stock peaked in 2021 during the pandemic, but higher interest rates and a weak housing market have taken their toll on the company. Despite serving an upscale and resilient clientele, slow home sales have affected its business.

CEO Gary Friedman has remained firm in his approach to stay premium and curtail promotional activity, which could water down the company's brand. He sees that as a short-term strategy to boost sales that could weaken margins and otherwise have negative long-term repercussions for the business.

The situation looks like it's turning around, even though the housing market is still in the doldrums. Comparable revenue increased 18% year over year in the fiscal 2024 fourth quarter (ended Feb. 1), and demand, which measures the value of all orders placed by customers that are not yet recognized as revenue, was up 17%. Adjusted earnings per share (EPS) more than doubled to $1.58 last quarter, though that figure still missed the Wall Street consensus of $1.91 by a wide margin.

RH happened to report earnings after the market close on April 2, the same day Trump announced the new tariffs that sent the markets tumbling. The combined news resulted in a brutal sell-off for the stock last week.

Positioned for growth

Despite the recent headwinds, RH is still a growing and profitable venture, and it's setting itself up for greater success. Besides its stores, RH has expanded into hospitality ventures, including guesthouses and restaurants, to become a luxury lifestyle brand.

RH is planning to open seven new design galleries globally in 2025, with five in the U.S., one in Montreal, and one in Paris. It's also planning four other new galleries: two focused on outdoor furniture and two on its "new concept." It has stores planned for 2026 in London and Milan.

Though no one knows when the real estate market will bounce back, the company continues to position itself for a strong recovery. Even in this challenging environment, management expects to report 10% to 13% revenue growth in fiscal 2025, plus higher margins and positive free cash flow.

An opportunity to buy the dip

RH stock trades at a forward, one-year price-to-earnings (P/E) ratio of only 14.5 as of this writing. That's a bargain, but there's a lot of risk for RH right now.

If you have a long time horizon and can look past the recent volatility, this could be an attractive entry point for patient investors, especially since RH stock is down 78% from its all-time high.

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 $244,570!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*

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

Continue »

*Stock Advisor returns as of April 5, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool recommends RH. The Motley Fool has a disclosure policy.

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