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.

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.

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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.

Though indexes have rebounded, the first half of the year has been rocky for investors. The market had to digest a variety of uncertainties, from geopolitical problems to mixed economic data and the U.S. plan to tax imports. All of these factors -- particularly the import tariff announcements -- have weighed on investors' appetite for stocks.

But in recent weeks, trade talk progress has lifted investor optimism, and this, along with strong corporate earnings reports, has helped the S&P 500 return to positive territory for the year. Many great bargains still exist though, making now a fantastic time to invest. Here are my five dirt cheap favorites to buy before the second half, which starts next Tuesday.

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1. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the cheapest of the "Magnificent Seven" technology stocks that led market gains last year but tumbled this year amid concerns about tariffs and their impact on the economy. Today, the stock trades for 17 times forward earnings estimates, a steal considering the company's earnings track record, strong moat, and prospects across its main businesses.

This tech giant is the owner of something many people use every day: Google Search. It's the world's No. 1 search engine, and its presence in our daily routine and Alphabet's moves to use artificial intelligence (AI) to continually improve results should help it remain on top. This is key because Alphabet generates most of its revenue through advertisements across the Google platform.

Alphabet's Google Cloud also is proving to be a huge part of the revenue picture, generating double-digit quarterly growth in recent times. Again, AI is part of the story as Alphabet makes available a wide range of AI tools for customers. With AI growing in leaps and bounds and Alphabet's price low, now is the perfect time to invest.

2. Viking Therapeutics

Viking Therapeutics (NASDAQ: VKTX) doesn't yet have products on the market so we can't use traditional valuation metrics to assess the stock price. Instead, it's important to look at pipeline progress, the potential market for its products, and Viking's financial health.

This biotech is working on a variety of candidates for metabolic conditions but the one that's captured investors' attention is VK2735 for weight loss. An injectable candidate is set to start phase 3 trials, and the oral formulation has already started phase 2 trials. Earlier trials have produced strong results, and demand for weight loss drugs is booming -- the market is set to approach $100 billion by the end of the decade.

Though pharma giants Eli Lilly and Novo Nordisk already share the market, demand suggests there's room for additional companies to generate significant growth too. Viking is well positioned to be one of them thanks to its candidates and cash position of more than $800 million to support development. That's why it looks like a bargain today.

3. Target

Target's (NYSE: TGT) revenue growth has stumbled in recent years as shoppers favored essentials over discretionary spending, but this retailer is well positioned to excel over the long term for a few reasons.

Target has built up a strong online presence, and that's helping digital sales advance even if overall sales have stagnated. The company also has invested in its stores through remodels and new openings, and revamped stores generally have delivered higher sales. Target also is known for its owned brands, many of which generate billions of dollars in revenue annually, for example, the Cat & Jack children's clothing line. Owned brands are an important asset for Target as the company has more control over the cost structure and therefore is able to generate higher profits on sales.

On top of this, Target is making moves to focus on growth. In the recent quarter, it announced the creation of an "accleration office" to supercharge decision making and the development of its strategy.

Target stock is cheap, trading at 13 times forward earnings estimates, and could easily head higher with any progress in the coming quarters.

4. Pfizer

Pfizer (NYSE: PFE) is another company that's had a growth problem recently. This is as its top-selling products -- its blockbuster coronavirus vaccine and treatment -- saw declining demand and at the same time, some of Pfizer's older blockbusters headed for patent expiration.

But it's important to take a long-term view and imagine where Pfizer may be a few years from now. The company has brought several new products to market over the past couple of years, and it acquired oncology specialist Seagen as part of an effort to grow its presence in oncology. Importantly, Pfizer says its oncology products are generating high gross margin and operating margin.

Meanwhile, Pfizer also has been working to cut costs, a move to strengthen its business and prepare for a new wave of growth led by its newer products. In the recent quarter, Pfizer said it was on track to deliver $4.5 billion in cost savings by the end of this year. And it expects $500 million of research and development cost savings by next year, and will reinvest this to support pipeline growth.

All of this suggests Pfizer's growth could pick up at any moment, making the stock a bargain trading at about 8 times forward earnings estimates.

5. Carnival

Carnival (NYSE: CCL) (NYSE: CUK) suffered in the early days of the pandemic as it was forced to temporarily halt cruises, but over the past couple of years, the company has been recovering and returning to growth.

The world's biggest cruise operator has done this by focusing on efficiency -- for example, replacing fuel-intensive ships with ones that use less -- and the company also has prioritized paying down debt. It's made significant progress on that, as the chart below shows, and tackled variable-rate debt, a move that makes it less vulnerable to shifts in interest rates.

CCL Total Long Term Debt (Annual) data by YCharts

As for revenue and demand for sailings, they've been on the rise and have reached records in recent quarters. And advanced bookings, even at higher price points, have climbed, too. This is thanks to Carnival's strength in the market as well as the general popularity of cruise vacations.

So, right now, trading at 12 times forward earnings estimates, down from nearly 20 times, Carnival looks like a bargain to get in on before the second half as it continues along its new growth path.

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

Before you buy stock in Alphabet, 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 Alphabet 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!*

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*Stock Advisor returns as of June 23, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Target. The Motley Fool has positions in and recommends Alphabet, Pfizer, and Target. The Motley Fool recommends Carnival Corp., Novo Nordisk, and Viking Therapeutics. The Motley Fool has a disclosure policy.