Key Points

• Many AI stocks suffered in the first half as investors fled growth-oriented stocks, but positive momentum has returned in recent weeks.

• These two players are leaders in their industries and are ready to benefit from the AI boom.

• 10 stocks we like better than Amazon ›

The first half of the year was a difficult one for many artificial intelligence (AI) stocks as investors fled high-growth players. The reason? They worried that President Donald Trump's import tariff plan might lift prices for a wide range of goods -- and this could hurt the consumer's buying power, weigh on corporate expenses, and eventually stop growth companies in their tracks.

As a result, the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite slid in April, but in recent weeks, investor sentiment has improved. Initial trade deals with the U.K. and China helped, as did commentary from tech giants, who reiterated capital spending plans, suggesting that potential tariffs wouldn't stop their momentum.

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Though the tariff situation remains uncertain, the market's more sanguine view, as well as certain companies' solid long-term outlooks, make now a fantastic time to get in on AI stocks. And two in particular may be well positioned to soar in the second half.

1. Amazon

The best word to describe Amazon's (NASDAQ: AMZN) stock performance in the first half is "lackluster." The company actually finished the half at the same level it started, posting a 0% move for the period. Investors may have been concerned about Amazon getting hit by tariffs in two ways: Higher prices may weigh on e-commerce demand and revenue, and Amazon Web Services (AWS) might see customers rein in spending.

But there's reason to believe those problems won't occur. Amazon has a wide selection of products and sourcing countries, making it easy for the company to be nimble in an import tariff environment. As for AWS, so far, the strong spending message from companies suggests customers are sticking by their AI strategies and aren't slowing down.

I also like the idea that Amazon has proven its ability to handle difficult environments. A few years ago, when inflation was soaring, the company revamped its cost structure. That move had immediate results, helping Amazon recover from its first annual loss in about a decade. This new cost structure should also make it easier for the company to overcome future pressures on costs, such as import tariffs.

AMZN Net Income (Annual) data by YCharts.

Finally, AI infrastructure buildout continues, and AWS, as the world's biggest cloud company, should benefit as its customers seek compute and other AI solutions. This should keep Amazon's billion-dollar earnings growing. And that, as well as a valuation of 35 times forward earnings estimates, down from more than 40 times late last year, could prompt investors to pile into this stock in the second half.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock slipped more than 6% in the first half of the year amid the general uncertainties I mentioned above. It's on the rebound from its lowest point in April, having gained more than 20% since, and I think the stock will move considerably higher in the months to come amid the improving sentiment for growth players.

Like Amazon, Alphabet is a market leader that has proven itself over time, generating significant growth and billions of dollars in earnings. This is thanks to the company's Google platform and its cloud computing business, Google Cloud. The Google platform brings in revenue through advertising, as advertisers flock to the world's internet search leader to reach us where they know we'll be, and Google Cloud's wide range of services is also a billion-dollar revenue driver.

And AI is at the center of the story right now. The company has developed its own large language model (LLM), and this is fueling better search experiences for users and more targeted ad campaigns for advertisers. Both of these elements should keep advertisers spending, and even increasing spending, on Google.

As for Google Cloud, AI products and services have been driving growth, and the unit reported a 28% increase in revenue to more than $12 billion in the latest quarter. This momentum should continue as cloud customers develop and scale up their AI programs, as we're still in the early days of the AI story.

What may particularly attract investors to Alphabet right now is its dirt-cheap valuation, trading for only 18 times forward earnings estimates. And that could help this top AI stock to roar higher in the second half of 2025.

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

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.

Key Points

• Nvidia has delivered extraordinary revenue growth in recent years, and its stock has soared.

• In the first half of 2025, the company showed off a very important strength.

• These 10 stocks could mint the next wave of millionaires ›

Nvidia (NASDAQ: NVDA) has accomplished a lot in recent years and made plenty of big moves -- from developing the world's highest-performance artificial intelligence (AI) chips to making itself a general AI leader across industries from healthcare to automotive. The Dow Jones Industrial Average even invited Nvidia to join last year, and the company went on to post the best performance in the index.

Last year, Nvidia's biggest moves might be considered the company's stock split and the launch of the new Blackwell architecture and chip. By lowering the price of each individual share, the stock split made it easier for a broader range of investors to buy the stock. And the Blackwell launch, which delivered $11 billion in revenue almost right out of the gate, showed that Nvidia could successfully carry out its innovation promises.

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All of this is fantastic, but what happened in the first half of this year might have been Nvidia's biggest move yet. Here's a closer look.

Nvidia's 30-year history

Before fully exploring Nvidia's latest victory, it's important to understand all that's unfolded so far. This company's history spans more than 30 years and has gone from leadership in the video gaming chip market to expanding the use of its chips across industries -- and making them the chip of choice for AI. These chips are called graphics processing units (GPUs) and fuel crucial AI tasks, including the training and inferencing of large language models (LLMs).

Nvidia's GPUs have exceled for a very simple reason: They're the most powerful ones around. By choosing such chips, customers are able to more quickly accomplish their AI goals. Even though Nvidia chips cost more than those of its rivals, the company's CEO Jensen Huang says they're actually cheaper over the long run as the efficiency produced over time reduces the total cost of ownership.

This chip dominance has helped Nvidia's earnings explode higher quarter after quarter, and the company finished the latest fiscal year with a triple-digit revenue increase to the record level of $130 billion. This AI success is reflected in the share performance, too, with Nvidia stock surging 900% over the past three years.

First-half challenges

Now I'll consider what may have been Nvidia's biggest move yet, and to do so, it's important to understand the challenges the company faced in the first half. There are three: worries about cuts in AI spending, potential import tariffs, and U.S. controls on chip exports to China.

Earlier this year, investors feared that Chinese start-up DeepSeek's inexpensive training of an LLM could prompt U.S. tech companies to go a cheaper route -- but this pressure on Nvidia's stock was short-lived, as messages from tech companies highlighted their intention to continue aggressively spending on AI.

The import-tariff situation and chip-export issues remain ongoing, however. Though President Donald Trump exempted electronics from tariffs, this exemption is temporary. In the future, Nvidia could face higher costs on its imported parts and products. Though the company has made efforts to manufacture in the U.S., it still primarily manufactures abroad.

As for China, Nvidia, as it stands, can't sell its current chips there, a market that last year represented 13% of its total sales. So far, it's not clear if the company will regain access to China.

Nvidia's biggest move

What was Nvidia's biggest move? The ability to quickly win back investor confidence, resulting in a 67% gain for the stock from its April low and a 17% increase for the first half.

Nvidia did this by communicating honestly -- even if the news wasn't particularly fantastic -- and being proactive. For example, the company said that export restrictions were destructive for U.S. tech companies and it was looking for solutions. In the meantime, however, it would exclude China from its earnings guidance. As for the tariff headwind, Nvidia quickly took action, announcing its investment in two U.S. factories with the goal of building complete AI supercomputers in the U.S. for the first time ever.

This is a great sign for Nvidia investors because it shows this company has the strength to withstand headwinds -- and can galvanize investors' excitement about what the company has to offer over the long term. This turnaround already helped Nvidia reach the huge milestone of becoming the first company with a $4 trillion market value.

All of this could make investors confident that, when faced with other potential headwinds down the road, Nvidia, once again, will have what it takes to address and overcome them. That makes the stock a great one to buy and hold for the long term.

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Key Points

• CoreWeave scored significant wins in the first half, with revenue and stock performance soaring.

• The company is a key partner of Nvidia and depends greatly on demand for the AI leader’s chips.

CoreWeave (NASDAQ: CRWV) delivered an exciting first half to investors. The company, known for its close relationship with artificial intelligence (AI) chip giant Nvidia (NASDAQ: NVDA), made its market debut, reported triple-digit quarterly revenue growth, and went on to gain 300%.

Investors are excited about CoreWeave as the company has seen soaring demand for its AI cloud services, and with the AI market potentially heading for $2 trillion in a few years, this momentum could continue. And just last week, this up-and-coming AI giant delivered even more fantastic news to shareholders. Let's check it out.

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More than 250,000 Nvidia GPUs

First, though, let's catch up on the CoreWeave story so far. As mentioned, the company is linked to Nvidia, and this is in two ways: CoreWeave's main business is the leasing out of compute power in the form of Nvidia graphics processing units (GPUs), or the main chips fueling key AI tasks such as the training and inferencing of models. The company has a fleet of more than 250,000 GPUs operating in about 32 data centers, and customers can rent access to them by the hour or for a much longer period. So CoreWeave offers them a great deal of flexibility.

The second link to Nvidia is the fact that this AI powerhouse holds a 7% stake in CoreWeave. This support is a positive sign for CoreWeave and its investors because Nvidia, with its dominant position in AI, knows how to recognize potential winners. So, if Nvidia is investing in an AI company, other investors may want to give that particular company a closer look.

Now, let's consider the fantastic news CoreWeave just delivered to shareholders. The company said it became the first to make Nvidia's latest chip update -- Blackwell Ultra -- commercially available. This is in the form of the Nvidia GB300 NVL72 system built by Dell, a platform that CoreWeave says represents a "major leap" for AI reasoning and AI agent projects.

The GB300 NVL72 brings 1.5 times greater AI performance than the initial Blackwell chip -- GB200 -- that was launched in the fourth quarter of last year. And CoreWeave then was the first to make the Blackwell system available to customers too.

CoreWeave competes with other cloud providers such as Amazon's Amazon Web Services and Microsoft Azure, and those companies have both hefty resources and a broad customer base -- and they, too, offer Nvidia products and services. But, what could help CoreWeave stand out over time is this first access to Nvidia products and the fact that CoreWeave specializes in AI workloads. So, CoreWeave being first to launch Blackwell and Blackwell Ultra is key because it's establishing itself as the place for customers to go if they aim to gain immediate access to Nvidia's latest innovations.

CoreWeave revenue climbs 400%

This could help boost CoreWeave's already soaring demand. In the most recent quarter, revenue climbed more than 400% as customers rushed to the company for compute power. Considering CoreWeave now is launching Blackwell Ultra, it's reasonable to expect strong growth in the upcoming quarter too amid demand for this high-performance platform.

All of this is great news for early investors in this young AI stock. But what if you haven't yet invested in CoreWeave? Is it too late to get in on this soaring stock? This depends on your appetite for risk and your investment horizon.

Stocks never rise in a straight line without any sort of pause. So, it's possible that in the near- or mid-term, CoreWeave will see its shares stagnate or dip. And, though demand is high, it's important to remember that risk is present too: CoreWeave must invest heavily in GPUs in order to keep up with demand, and this may make it difficult to reach and secure profitability. This will be a point to watch in the upcoming quarters.

All of this means CoreWeave isn't the best fit for cautious investors or those who are uncomfortable with some ups and downs. But, aggressive investors with a long investing horizon may pick up a few shares of this highflyer and hold on -- if AI momentum continues at this pace and demand for Nvidia's GPUs remains strong, CoreWeave and its shareholders may be among the first to benefit.

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Key Points

• Eli Lilly is a leader in the weight loss drug market, generating blockbuster revenue.

• Viking Therapeutics recently launched a phase 3 trial for its weight loss candidate -- and could have a promising future in the market.

Though you may think "tech stocks" when someone mentions growth, you actually can find growth stocks throughout a wide variety of industries. Even those like pharmaceuticals, often known for the steadiness of their earnings, may, through certain specialty areas, offer you the opportunity for explosive growth. And today, the perfect example is weight loss drugs.

Today's $28 billion weight loss drug market is on track to reach nearly $100 billion by 2030, according to Goldman Sachs Research, offering companies in the space an extremely solid opportunity over the next several years and likely beyond.

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Two names that have been making headlines in this field are Eli Lilly (NYSE: LLY) and Viking Therapeutics (NASDAQ: VKTX). The former is a current leader, already selling two blockbuster drugs prescribed for weight loss, and the latter is an up-and-coming player, with a candidate in late-stage trials. Which is the better growth buy today? Let's find out.

The case for Eli Lilly

Eli Lilly shares weight loss drug market leadership with fellow big pharma player Novo Nordisk. They each commercialize two drugs prescribed to people aiming to lose weight and have brought in billions of dollars in annual revenue. Here, I'll focus on Lilly.

The company's drugs, Mounjaro and Zepbound, are actually the same compound, tirzepatide. But it's sold under the name Mounjaro for type 2 diabetes and under the name Zepbound for weight loss. The drug acts by stimulating hormonal pathways involved in the control of blood sugar levels and appetite. Thanks to the efficacy of tirzepatide, demand has soared, even surpassing supply until Lilly expanded its production capacity.

But Lilly isn't sitting still in the area of weight loss. The company also is developing other drug candidates that may improve upon tirzepatide. The closest to market right now is orforglipron, Lilly's oral candidate for weight loss that recently delivered positive phase 3 trial results. If approved, it would be the only oral weight loss drug of its class that doesn't require strict food and water restrictions. Lilly aims on applying for regulatory review by the end of this year.

All of this could result in more growth for Lilly this year and well into the future.

The case for Viking Therapeutics

Viking Therapeutics is a biotech company specializing in metabolic conditions, and it's made great progress with its obesity drug candidate, VK2735. The potential drug, in subcutaneous form, recently entered a phase 3 trial, and an oral form is involved in a phase 2 trial. These candidates are in the same class as tirzepatide, so work in the same way.

Investors have shown their excitement about Viking's program in the past: When the company reported positive phase 2 data for the subcutaneous VK2735 last year, the stock soared more than 120% in one trading session. The stock hasn't maintained those gains, but the movement shows that investors are interested in the program -- and more good news ahead could boost the stock again.

Now you might wonder why investors are so excited about Viking if there already are other successful weight loss drugs on the market -- and Lilly even is likely to reach commercialization with an oral weight loss drug ahead of Viking. This is because demand is high, and this is set to continue, so there is plenty of room for more than a couple of companies to succeed in the space. Investors also have speculated about the idea of a big pharma company acquiring Viking to get in on this high growth market.

Should you buy the pharma leader or the biotech challenger?

Lilly has the first-to-market advantage, is closer to the finish line with an oral candidate, and already is generating major revenue from its weight loss portfolio. Viking, if successful through clinical trials, could carve out market share and deliver major revenue growth down the road -- or the company could be acquired, offering investors another way to potentially gain.

Each company offers certain advantages. Now let's answer our question. If all goes well for Viking, it could represent the better growth buy as, starting from zero product revenue today, this player could see revenue soar if and when it brings a weight loss drug to market. And we've seen that Viking's stock price is very reactive to news, meaning the stock could skyrocket in such a scenario. But, if you go the Viking route, you should be comfortable with risk as uncertainty remains: The company hasn't yet reached the finish line with a product.

If you're more of a cautious investor, though, don't worry. You may opt for Lilly as, even though it's climbed 140% over the past three years, it still could have plenty of room to run over the long term thanks to this weight loss drug growth story.

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Before you buy stock in Eli Lilly, consider this:

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Novo Nordisk and Viking Therapeutics. The Motley Fool has a disclosure policy.

Key Points

• Nvidia stock was a sure winner over the past two years before slipping a few months ago.

• Investors worried that import tariffs would weigh on growth.

• Since then, though, positive momentum has returned.

Nvidia (NASDAQ: NVDA) was a surefire winner for investors over the past two calendar years. The artificial intelligence (AI) giant soared more than 800% over that time as it wowed investors with its explosive earnings growth. And as they aimed to get in on the AI growth story, Nvidia seemed like the obvious choice. After all, this tech player sells the world's top-performing AI chips, a critical product for customers building AI platforms.

But earlier this year, Nvidia stock slid into the doldrums alongside the rest of the tech market. This happened as investors worried about the impact of U.S. import tariffs on the consumer and corporate earnings. The idea was that this could lead to companies reining in spending, which might include lower spending on AI, potentially bad news for Nvidia. On top of this, U.S. controls on chip exports to China also weighed on Nvidia's growth potential.

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These concerns resulted in a decline of nearly 30% in Nvidia stock from the start of the year through early April. Since then, though, the stock and the general market have rebounded and even gone on to advance. Nvidia has climbed more than 60% from its low, while the S&P 500 and the Nasdaq have both recorded new record highs. Now, my prediction is that this movement isn't over, and Nvidia will soar in the second half. Let's find out why.

Nvidia wasn't always an AI giant

First, though, let's take a look at the Nvidia story so far to understand what may lie ahead. Nvidia wasn't always synonymous with AI. In fact, the company's graphics processing units (GPUs) were originally most known for powering video games. But the GPU's ability to handle many tasks simultaneously prompted Nvidia to create the parallel computing platform CUDA and expand the chip's uses into other industries, including AI.

This proved to be a key move for the company, as AI has helped revenue skyrocket, as you can see in the chart below.

NVDA Revenue (Annual) data by YCharts.

Importantly, Nvidia isn't just growing revenue but also increasing profitability on sales. We can see this in gross margin figures, which have exceeded 70% in recent quarters. The one exception was in the latest quarter, when the gross margin slipped to 60% due to a charge linked to export controls -- U.S. restrictions blocked planned sales, resulting in a billion-dollar charge. Excluding the charge, though, gross margin still topped 70%.

Nvidia looks reasonably priced

Now, let's consider why Nvidia stock could surge in the months ahead. One major point is that the stock today is reasonably priced at 36 times forward earnings estimates, down from more than 50 times just a few months ago. This offers Nvidia stock plenty of room to run, and recognizing this, investors may pile into the shares.

Also, general trade-related news could act as a catalyst for stock performance. So far, trade talks and deals suggest that tariff levels may not be as high as originally planned, and any confirmation of this moving forward may boost stocks, particularly growth stocks like Nvidia that thrive in strong economic environments.

News from Nvidia itself could boost the stock in the months to come, too. Considering the strong spending plans of Nvidia's customers, from Meta Platforms to Alphabet, and given that the launch of the company's Blackwell platform is rather recent, there's reason to be optimistic about revenue figures in the next quarter.

Since Nvidia has committed to an annual rhythm of chip updates, we should also monitor the rollout of the next one -- the Blackwell Ultra -- in the second half. This has just begun and may act as another positive catalyst. Investors will appreciate seeing evidence that Nvidia is able to keep up this pace of annual updates, potentially resulting in share price gains.

A booming AI market

Finally, the overall AI market is booming, with demand for infrastructure buildout continuing and the next stages of AI, such as the use of AI agents, ready to unfold. This growth environment, with the AI market forecast to reach into the trillions of dollars in a few years, is clearly positive for the leading seller of AI chips.

All this means that Nvidia, even if faced with certain hurdles -- such as a halt in chip sales to China -- has many other growth drivers propelling earnings higher right now. And this could continue well into the future. That's why I predict that Nvidia, after a first half of ups and downs, will soar in the second half of the year.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $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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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

Key Points

• The Wedbush analyst calls right now the "golden age" for tech stocks.

• These two players could keep winning well into the future, driven by strong demand for their AI products.

Technology stocks, last year's big drivers of stock market gains, looked as if they were running out of that positive momentum just a few months ago. President Donald Trump announced plans for import tariffs, and investors worried that the move would crush corporate earnings and the general economy. But recent trade talks and deals reached -- including a trade agreement with China -- have eased investors' fears, allowing tech stocks to resume their upward path.

And this trend may be far from over, according to one of the most watched tech analysts. Dan Ives of Wedbush, in an interview with Bloomberg, predicted a strong second half for technology stocks, calling this the "golden age" for the industry. He spoke of artificial intelligence (AI) stocks as having much more room to run and even said we're at "10 p.m. in the AI party that goes to 4 a.m."

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The infrastructure buildout remains ongoing, and on top of this, new phases of AI growth are just beginning or yet to come, from the widespread use of AI agents for applying AI to real-world situations to the launch of humanoid robots. This is why today's AI market, valued at about $300 billion, is forecast to surpass $2 trillion within 10 years.

Against this backdrop, here are two top AI stocks to buy now to potentially benefit from explosive growth as this story develops.

1. Nvidia

Nvidia (NASDAQ: NVDA) has become an AI behemoth over the past few years, thanks to both its leading AI chips, known as graphics processing units (GPUs), and its full selection of AI tools and services. The company has played a key role in the earliest stages of AI, with GPUs powering the training and inference of models. This has helped Nvidia's earnings roar higher. On a quarterly basis, revenue and net income have increased by double or even triple digits.

Now, Nvidia also has what it takes to accompany customers through the rest of the AI adventure. The tech giant has rolled out enterprise software, networking equipment, and AI systems tailored to specific industries. Nvidia is even getting involved in the hot growth area of quantum computing, as it recently announced the construction of a specific research center in Boston.

All this bodes well for ongoing growth, and in addition to this, Nvidia is making an important move to ensure its leadership over time: The company has put the focus on innovation, committing to updating its GPUs annually. Since Nvidia already sells the highest-performance GPUs, it will be difficult for rivals to catch up.

Today, Nvidia shares trade for 36 times forward earnings estimates, down from 50 times earlier in the year. This is a reasonable price now and may even be considered dirt cheap if we imagine where Nvidia may be a few years down the road.

2. Palantir Technologies

Palantir Technologies (NASDAQ: PLTR) soared 340% last year and climbed 80% in the first half of this year -- and it could still have further to go this year and over the long run. That's because the growth story of its commercial business may be in its early days, and the U.S. government's focus on efficiency could result in ongoing solid growth for Palantir's government business.

Palantir sells software that helps customers aggregate their data and use it to make key decisions, gain efficiency, or advance their strategies. The company launched an AI-powered system, its Artificial Intelligence Platform (AIP), two years ago, and since then, demand and revenue have roared higher.

Quarter after quarter, Palantir has reported double-digit revenue growth for both its government and commercial businesses and has successfully balanced growth and profitability. AIP has particularly supercharged the commercial business, with customers growing from a handful just a few years ago into the hundreds today. And Palantir's bootcamp training sessions, which help customers see how AIP can work for them in a matter of hours, have translated into major deals for the company.

Some investors have balked at the idea of buying Palantir at its current valuation, which exceeds 200 times earnings estimates. But as analyst Dan Ives has said, when looking at certain tech stocks, traditional valuation metrics often overlook the story several years down the road. Palantir's growth is going strong, and the company offers customers an easy and efficacious way to apply AI to their businesses -- and that means this AI giant could continue to roar higher in the second half and beyond.

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

Before you buy stock in Nvidia, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% 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 30, 2025

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

The first half of the year has been somewhat of a rollercoaster ride for stocks -- and investors. Though all three major indexes have now crossed into positive territory, that wasn't the story just a few weeks ago. The S&P 500 index, the Dow Jones Industrial Average, and the Nasdaq Composite each sank in the early months of the year amid concerns that President Donald Trump's import tariff plan would hurt the economy, earnings, and stock performance.

Since then, positive signs, such as initial trade deals and strong earnings reports, have eased investors' minds, and as a result, the indexes rebounded. Still, certain growth stocks, such as some artificial intelligence (AI) players, remain in the doldrums and are heading for a first-half decline. Let's take a look at two that could be poised for a big second-half comeback.

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1. Apple

As Trump announced his tariff plan, investors worried about what it could mean for Apple (NASDAQ: AAPL), in particular, because the company produces most of its iPhones in China, a country most highly targeted by tariffs. Though the president exempted electronics products, this exemption is temporary. He even threatened Apple recently with a 25% tariff on all imported iPhones.

Apple made a move to diversify its manufacturing base, promising that most U.S.-destined iPhones would soon be made in India, but that country faces tariffs, too. All this tariff uncertainty weighed on Apple stock, pushing it down by about 20% so far this year.

So, why should we expect a comeback in the second half? While Trump is serious about bringing manufacturing back to the U.S., it's unlikely that he and his administration would make moves to destroy some of the country's top companies, including Apple. We've seen signs of flexibility in initial U.S. trade deals with the U.K. and China, so it's reasonable to expect a compromise with tech companies that won't limit their growth.

Meanwhile, Apple is a well-established player with a strong financial situation. The company has more than $48 billion in cash and marketable securities. So, it has the resources to address challenges. At the same time, the smartphone giant has a newish growth engine in the form of services. Services revenue, thanks to Apple's huge base of installed devices, has reached record levels quarter after quarter. This growth should continue as loyal Apple users continue to rely on the company for data storage, digital entertainment, and more.

All this means that today, Apple looks like a bargain, trading at 27 times forward earnings estimates, down from more than 35 times late last year. These levels offer it plenty of room to run, and it may do just that on any good news in the second half.

2. SoundHound AI

SoundHound AI (NASDAQ: SOUN) is a specialist in voice AI, with its technology powering voice systems in cars and restaurant ordering systems, to mention just two examples. The stock has plummeted 50% so far this year, but I see this as more of a buying opportunity than a reason to worry, and here's why.

First, after a 150% increase in SoundHound shares over the past year, it's not surprising that some investors may have locked in gains in recent times. Second, growth companies -- particularly young growth companies -- may struggle to expand during rough economic times, so investors' concerns earlier this year led to a sell-off of these sorts of players.

Today, it's important to look at SoundHound's earnings performance and long-term prospects. The company is in high-growth mode, with revenue soaring 150% in the latest quarter as it expands its customer base across various sectors. This is key because use across industries lowers risk, meaning if one customer or industry suffers, SoundHound won't necessarily suffer alongside it.

SoundHound has numerous patents protecting its technology, a system that immediately translates speech into meaning without the speech-to-text step. This results in speed and improved quality.

SoundHound's rapid growth and revenue of $29 million in the quarter, along with the forecasted $140 billion AI voice market size, suggest that much more growth could be ahead for this voice specialist.

All this means that as uncertainty about the general economy lifts and SoundHound continues to deliver growth, the stock could roar higher in the second half of the year.

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

Before you buy stock in Apple, 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 Apple 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 $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% 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

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

A group of technology stocks, known as the "Magnificent Seven" -- a nod to the 1960 Western -- led stock market gains last year and has started to rebound in recent times. Which one makes the best buy for the second half?

The answer to that question is Nvidia (NASDAQ: NVDA), even though the stock has already climbed 800% over the past three years. Let's find out why this top artificial intelligence (AI) stock may still be in the early days of its growth story.

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Nvidia's key position in AI

Nvidia has played a key role since the first days of the AI boom, and this is because it designs the crucial element that makes AI work: chips. They're known as graphics processing units (GPUs), and they power the fundamental step of training AI models, a process that allows those models to then handle complex tasks and solve real-world problems. So, without these chips, we wouldn't have AI. This helped Nvidia's revenue take off a few years ago, as you can see in the chart below.

NVDA Revenue (Annual) data by YCharts.

In Nvidia's earlier days, it primarily served the video gaming market, which resulted in progressive growth, but revenue levels were a far cry from today's AI-driven revenue. This is because companies realize the potential of this technology to save them time and money and even help them develop game-changing products and services, so they're pouring investment into AI. And Nvidia, as the leading chip designer, is benefiting. This potential is further illustrated by forecasts calling for the AI market to reach into the trillions of dollars in a few years from now.

Importantly, Nvidia isn't just about GPUs. The company has built an AI empire, creating software and networking tools, and it even aims to power the humanoid robots of tomorrow. This expansion is key to Nvidia's growth because it enables the company to benefit from every stage of AI development -- not just the early days of infrastructure ramp-up.

Nvidia's annual innovation

Meanwhile, Nvidia has also put the focus on innovation to ensure it stays ahead of its rivals. It has pledged to update its chips yearly and has already offered investors visibility into planned launches over the coming three years. Though rivals are carving out market share -- for example, Advanced Micro Devices recently reported a 57% increase in data center quarterly revenue -- Nvidia's innovation should keep it in the top spot. The enormous demand for AI means that others, like AMD, can succeed without truly encroaching on Nvidia's territory.

The biggest disappointment for Nvidia and investors at this point (and possibly into the future) is the situation concerning exports to China. The U.S. has blocked chip exports, cutting Nvidia out of the market that represented 13% of its revenue last year. This isn't a non-event, and if the situation remains as is, it limits Nvidia's growth opportunities to some degree. The good news is that Nvidia makes most of its revenue in the U.S. and a great deal in other locations as well, so the export situation doesn't necessarily translate to slow growth for this chip giant.

Why buy Nvidia over other Magnificent Seven players?

All this sounds positive, but why is Nvidia the best Magnificent Seven buy for the second half? Nvidia remains the best overall AI bet due to its deep presence across every stage of the technology's growth.

The world's biggest tech companies turn to Nvidia to power their platforms, and that's unlikely to change, as these customers aim to use the fastest processors available -- and those are likely to have the name Nvidia on them well into the future. Nvidia will accompany these customers as they deploy AI agents within their businesses or develop humanoid robots down the road.

At the same time, Nvidia's valuation leaves the stock plenty of room to run. Though it's inched higher in recent weeks, it still trades significantly lower than it did just a few months ago, at 36 times forward earnings estimates compared to more than 50 times.

All these elements, from Nvidia's presence across AI to its price today, support my prediction that this stock will roar higher in the second half and over the long run, too.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% 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

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

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!*

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

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.

Warren Buffett's investing techniques have resulted in big gains for Berkshire Hathaway over the long term and a billion-dollar portfolio. So you may be wondering this: Could one very easy Buffett-approved investment turn $300 per month into $1 million? The answer is yes, if you follow certain key steps.

This particular investment is an S&P 500 index fund, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). When you buy shares of this fund, you're betting on the long-term growth of American companies, something Buffett has done throughout his investing career through individual stocks and exchange-traded funds, including this Vanguard one. This has helped Berkshire Hathaway post a compounded annual gain of nearly 20% over the past 59 years.

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Now it's our turn. Let's find out how you can start with $300 and potentially end up with $1 million.

Why Buffett recommends this investment

First, let's consider why Buffett recommends such an instrument in the first place. The top investor strongly believes in stock picking, but he also emphasizes that investing in a fund that tracks the S&P 500 is the perfect way for nonprofessional investors to gain exposure to America's best companies. You don't have to worry about picking tomorrow's winning stocks -- and this investment also automatically offers you instant diversification across stocks and industries.

It's important to remember that the S&P 500 includes the companies driving the economy of the times -- and the index rebalances quarterly, meaning when you invest in this benchmark, you'll always be invested in the most compelling stocks of the day. Over time, the S&P 500 has delivered an average annual return of 10%, so it's clearly rewarded long-term investors.

Of course, you won't directly buy shares of the index but instead shares of an ETF that tracks the index's performance. The Vanguard S&P 500 ETF holds the same stocks that are in the benchmark and at the same weight, so it can do this job.

Buffett not only recommends this sort of fund to others, but as mentioned above, he's been an investor in S&P 500 ETFs. To further illustrate his commitment to this strategy, he says he's directed a trustee, upon his death, to put most of his cash into such a fund for the benefit of his wife.

Turning a small investment into $1 million

Now, let's consider how you can turn a regular investment of a few hundred dollars into major wealth. It involves the following steps:

• Commit to an investing time period, ideally a long one such as 35 years.
• Make an initial investment in the Vanguard S&P 500 ETF.
• Decide on an amount to add on a monthly basis to this investment and stick to it over your time horizon.
• Watch your investment grow over the long run, thanks to the magic of compounding.

Let's consider a concrete example, using a time period of 35 years and the idea that the index will continue delivering an average annual return of 10%. If you make an initial investment of $1,000 in the Vanguard ETF and go on to invest $300 monthly, the value of your investment could reach $1 million by the end of that time period. You will have invested $127,000 -- and your returns would top $876,000.

If you don't want to set a such a lengthy time horizon or have a smaller amount to invest per month, don't worry. You can adapt this method to your budget and/or invest over a shorter time period, for example 15 to 20 years, and still see significant gains.

So as Buffett has said, an investment in a good index fund offers you a quick and easy way to gain exposure to quality companies that may win over the long run. And by applying the compounding strategy I mention above, you'll truly optimize your investment and may set yourself off on the road to $1 million.

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

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

Now, it’s worth noting Stock Advisor’s total average return is 992% — 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 9, 2025

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

As stock prices decline, you may feel as if you're at the world's biggest sale. Suddenly, stocks that seemed expensive weeks ago are trading at bargain valuations. You may be tempted to jump in and catch that falling knife, hoping you're buying at the best price. Of course, it's nearly impossible to time the market, so you're unlikely to buy a stock at its lowest and sell at its highest.

If you're a short-term investor, this could be a problem. In this case, it's risky to buy a stock as it's dropping because it may take a while for it to recover and go on to gain. Meanwhile, if you aim to sell in a few days or weeks, you may have caught the knife by the blade and find yourself recording a loss.

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 »

However, if you're a long-term investor, the picture looks much different. You can buy stocks during a downturn because, by holding on for five years or more, you're giving those companies time to recover and grow and the share price an opportunity to reflect that progress. Now, let's check out some smart strategies for buying stocks during a downturn.

1. Invest with confidence

Although on the one hand, those bargain stock prices may have caught your eye, you might still worry about investing when the general environment seems uncertain. What if current problems persist? What if stocks fall even further? Those questions could be running through your mind.

This is when it's a good time to consider what history has to say. My colleague Adam Levy recently wrote about what has generally happened after stocks fall into a correction, and this offers us reason to invest with confidence during these periods. The S&P 500 index (SNPINDEX: ^GSPC) has slid into the correction zone 15 times since 2008, Adam wrote, citing Dow Jones Market Data, and in all but two of those times, the index was higher a year later.

This means that corrections offer us a fantastic buying opportunity, one that will generally start delivering in the not-too-distant future. It doesn't matter when you buy during the correction; even if stocks continue to decline, your gain may still be significant once shares recover and travel through stronger market environments. So, the message here is not to hesitate to buy stocks during a correction. History shows that it's been a great bet for long-term investors.

Finally, it's also a smart idea to look at buyback activity in the recent past. In the fourth quarter of last year, for example, S&P 500 buybacks increased by more than 7% to about $243 billion, suggesting companies are confident about the future. So, growth in share repurchases supports the idea of investing regardless of what the market is doing at the moment.

2. Focus on value players before a market downturn

It's impossible to know when the market will enter its next negative phase, but we know it will occur at some point. Markets go through bull and bear markets, as well as many other periods of gains and declines, from rallies to market downturns. Some are short, and some are long. But the good news is that difficult periods don't last forever, and certain types of stocks can help you weather the storm.

Generally, the sort of stock that will help your portfolio during a downturn is a value stock. These stocks are in well-established industries, such as energy, healthcare, or financials, and they generate a considerable amount of cash and pay dividends. They are strong, steady, and reliable, and that's why they tend to outperform during tough times. And, of course, investors are especially appreciative of their dividend payments when markets are down.

The MSCI World Value Index climbed 6.1% in 2022, a down year for the overall market, outperforming the MSCI World Growth Index by more than 26%, according to a report by Quilter Investors.

All this means that when markets are rallying and growth stocks are soaring, stock up on value stocks that may support your portfolio during the next tough period.

3. Consider lump-sum investing and cost averaging

If you have a certain amount of money to invest, you could deploy it all at once in a lump sum or use cost averaging, which involves investing the same amount of money in a particular asset on a regular schedule for a set period. So, for example, in lump-sum investing, you might invest $1,000 right now in Nvidia. In cost averaging, you might invest $100 in Nvidia every Monday for 10 weeks.

Which strategy will produce the best return? A study by Vanguard shows that lump-sum investing beats cost averaging 68% of the time. That said, the study also showed that in the worst market environments, lump-sum investing resulted in bigger losses.

So, which option should you choose? It depends on your relationship with risk. If you're a very cautious investor, you might try cost averaging, at least with certain investments, while aggressive investors may opt for deploying a lump sum right away.

In either case, though, investing is a better idea than just holding onto cash. The Vanguard study also found that both techniques outperformed cash at least 69% of the time. This means that, even in the most difficult of environments, if you're willing to hold on for the long term, you're better off investing than staying out of the market.

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

Before you buy stock in S&P 500 Index, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

Warren Buffett has proven his ability to deliver market-beating gains, and thanks to this, build wealth over the years. The billionaire investor, at the helm of Berkshire Hathaway, posted a 19.9% compounded annual increase over nearly 60 years -- and that's as the S&P 500 index recorded a 10.4% such gain. All of this helped his portfolio reach $258 billion as of the closing of the most recent quarter.

Though Buffett's biggest holding is Apple, the billionaire generally doesn't invest in technology stocks, so you might not think of turning to this top investor for inspiration when shopping for artificial intelligence (AI) players. But here's some good news: We actually can use some of Buffett's investing principles to identify smart buys in any industry.

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 »

Here, I'll consider two elements that consistently drive Buffett's investment decisions, and these are valuation and competitive advantage. He aims to get in on stocks at a cheap or reasonable level, and he favors stocks that have what it takes to stay ahead of rivals over time. Let's check out two Buffett-style AI stocks that are winning in both of these areas -- and could build long-term wealth.

1. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a company that you probably have some interaction with on a daily basis. The company owns Google Search, the world's most popular search engine with about 90% market share -- and this business has driven Alphabet's revenue and net income into the billions of dollars. This is the result of advertisers paying to promote their products and services across the Google platform in order to reach us.

This search business has a solid moat, or competitive advantage, thanks to its performance and position as part of our daily routine -- when we don't know something, we don't just search for it, we "Google it." So, as long as Google Search continues to offer us the performance we expect, it's likely to maintain its leadership.

And here's how Alphabet is ensuring that happens: The company has invested heavily in AI, even developing its own large language model (LLM), Gemini, to improve and expand the capabilities of Google Search. This should please users, and as a result, keep advertisers coming back and potentially even spending more.

On top of this, the AI investment is helping Alphabet's Google Cloud business deliver double-digit revenue gains quarter after quarter. Google Cloud sells various AI products and services to customers, and demand is high as the AI boom continues.

Along with this solid competitive advantage, Alphabet offers a valuation that might even please the bargain-hunting Buffett. Alphabet, trading for 18x forward earnings estimates, is the cheapest of the Magnificent Seven tech stocks by this measure.

2. Nvidia

Nvidia (NASDAQ: NVDA) is clearly on every AI investor's radar screen. The company dominates the AI chip market, and this has helped it generate soaring earnings over the past few years -- with revenue and profit reaching record levels. But this stock doesn't look like it's in a bubble ready to burst. The company's solid reputation for excellence, along with its commitment to innovation, represents a moat. Nvidia aims to launch new AI chip updates on an annual basis, offering rivals little room to jump ahead.

And here's something else Buffett would like: the quality of Nvidia's leadership. Jensen Huang founded Nvidia more than 30 years ago and has successfully guided the company ever since. He's known for his resourcefulness, rapidly finding solutions to problems, and commitment to keeping Nvidia ahead of the pack.

Strong management is crucial for a company's long-term success, and Buffett has recognized the importance of this to him. "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever," he wrote in his 1988 letter to shareholders.

Now, let's look at valuation. Nvidia isn't the cheapest AI stock around, but after recent declines across the sector, valuation has come down -- and today, it's at a very reasonable level considering the company's AI prospects. The stock trades for 31x forward earnings estimates, down from 50x earlier this year.

So, right now, Nvidia's moat, leadership, and reasonable price make it a Buffett-style stock that could help investors build significant wealth over the long term.

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

Before you buy stock in Nvidia, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, and Nvidia. The Motley Fool has a disclosure policy.

The three major benchmarks struggled in the first months of the year as investors worried about the economic situation ahead. President Donald Trump set out a plan to impose tariffs on imports, a move analysts and economists said could weigh on growth. The concern is both businesses and consumers would face higher costs -- a scenario that might hurt corporate earnings.

Over the past few weeks, though, certain positive elements have helped the S&P 500 (SNPINDEX: ^GSPC), the Dow Jones Industrial Average (DJINDICES: ^DJI), and the Nasdaq Composite (NASDAQINDEX: ^IXIC) to rebound. The U.S. reached initial trade deals with the U.K. and China, and the U.S. temporarily exempted the high-growth area of electronics from import tariffs.

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Of course, uncertainty still remains. A federal court ruling recently halted Trump's tariffs, but an appeals court then ruled the U.S. could continue collecting duties. And this legal battle may continue. Meanwhile, tensions between the U.S. and China just intensified again as the U.S. said China breached their trade agreement.

But these latest events could be temporary disturbances and might not hold indexes back for very long. And artificial intelligence (AI) stocks could be the first to benefit, considering the growth potential of that market -- analysts expect it to surpass $2 trillion by the early 2030s. So, if you're bullish on a 2025 rebound, consider these three AI stocks to buy.

1. Advanced Micro Devices

Nvidia dominates the AI chip market, but that doesn't mean there isn't room for other winners. And one that's showing potential is Advanced Micro Devices (NASDAQ: AMD). This chip designer is on the way up, offering an AI chip -- MI300X -- that may not beat Nvidia's top chip, but still offers customers quality performance.

Customers are realizing this, helping AMD's data center revenue to soar 57% in the recent quarter. Year-over-year growth accelerated for the fourth straight quarter, even against the backdrop of a complex economic environment, CEO Lisa Su said. This was done at increasing profitability on sales, with non-GAAP (generally accepted accounting principles) gross margin expanding to 54% from 52% in the year-earlier period.

AMD also is a leader in the central processing unit (CPU) market -- these are the main processors found in standard computers -- and recently gained more than 16% in CPU market share, bringing it close to beating Intel in that market, according to Wccftech.

AMD trades for 27x forward earnings estimates, down from 54x less than a year ago, yet revenue has climbed significantly -- so now looks like a great time to buy.

AMD PE Ratio (Forward) data by YCharts

2. Broadcom

Broadcom (NASDAQ: AVGO) is a networking expert, selling a wide range of products used anywhere from your smartphone to data centers. And speaking of data centers, they're driving growth for the company now as demand from AI customers soars.

In the most recent quarter, the company's AI revenue surged 77% to $4.1 billion, and consolidated revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached record levels. Importantly, the momentum looks set to continue. Broadcom forecast $4.4 billion in AI semiconductor revenue for the second quarter, saying this will be driven by big cloud service providers as they pile into connectivity solutions.

Broadcom also predicted its three major cloud customers will result in a serviceable addressable market of $60 billion to $90 billion in fiscal 2027. And this doesn't even include four other big customers working with Broadcom to develop AI accelerators.

Broadcom stock is trading close to its all-time high, but considering the AI growth ahead and its valuation of 36x forward earnings estimates, there still is room for the stock to run -- and it may gather momentum as the indexes rebound.

3. Oracle

Oracle (NYSE: ORCL) once was mainly known for its database management platform, but in recent times, it's become a significant player in the AI story. This tech giant offers a broad and flexible range of cloud solutions and has seen AI cloud infrastructure revenue take off in recent quarters -- in the most recent period, it soared nearly 50%.

The company's record level of sales contracts in the quarter offer us visibility on what's ahead, and there's reason to be optimistic: This $48 billion in contracts helped remaining performance obligations, or revenue to expect from these deals, to climb 63% to $130 billion.

On top of this, Oracle is involved in the Stargate project to build out AI infrastructure in the U.S., and the company also is playing a key role in an international Stargate effort. Along with partners including AI chip giant Nvidia, Oracle will help build a Stargate campus in the United Arab Emirates.

As for valuation, Oracle looks reasonably priced, trading at 27x forward earnings estimates, considering these catalysts for growth that could push the stock higher in the months and quarters to come. So, if indexes rebound in 2025, Oracle may be one of the big winners.

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

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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 $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!*

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*Stock Advisor returns as of June 2, 2025

Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Oracle. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

In recent days, investors have breathed a sigh of relief. After weeks of concerns about the impact of President Donald Trump's import tariffs, a reason for optimism emerged. The U.S. and China -- the country subject to the highest tariffs -- reached an initial agreement, and one that was better than expected. As a result, the three major benchmarks climbed, with the S&P 500 (SNPINDEX: ^GSPC) even returning to positive territory for the year.

However, amid this excitement about a better situation ahead, billionaire Jamie Dimon remains somewhat cautious. The chief executive officer of JPMorgan Chase in a Bloomberg interview said despite the tariff deal, a recession isn't "off the table at this point." Though the bank's economists lowered their U.S. recession risk forecast to below 50% from 60%, Dimon said current uncertainties such as large deficits and high interest rates could weigh on the economy -- and that market volatility probably isn't over.

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"I think it's a mistake to think we can go through all the things we're going through, and the volatility itself will come down," Dimon told Bloomberg during the bank's conference in Paris.

As CEO since 2005, Dimon has accompanied JPMorgan as its market value soared more than 400% to $743 billion, and he's often looked to for his comments on the general stock market environment to come.

Moving forward, if Dimon is right, the market still may face some challenges even after this week's landmark agreement between the U.S. and China. And that's why it's important to prepare your portfolio to handle any environment. Here are five ways to do just that.

1. Favor diversification

If your portfolio is heavily exposed to just one company or industry -- even if it's a winning one today -- now is a great time to adjust your strategy. We've seen in recent weeks that even the strongest companies -- such as artificial intelligence (AI) chip giant Nvidia -- saw their shares drop amid general tariff and economic concerns. So it's never a good idea to place narrow bets when investing in stocks.

Instead, include at least a few industries and eventually several stocks in your portfolio, so if one faces troubled times, the others may compensate. And if you're not as knowledgeable as you'd like to be about a certain industry that you'd like to invest in, don't worry: There's a simple solution. Try an exchange-traded fund (ETF) revolving around that particular industry. It will offer you immediate diversification and exposure to top companies in the field.

2. Invest in companies that have proven themselves

Well-established companies with a long track record of earnings growth over the years are your best friends during uncertain times. They've proven their ability to handle challenges -- so if their financial situations and strategies haven't significantly changed, there's reason to be confident they can do it again.

An example is Amazon (NASDAQ: AMZN). The e-commerce and cloud computing giant struggled with higher inflation a few years ago and even shifted to an annual loss. But the company didn't sit still, and instead used this as an opportunity to revamp its cost structure -- a move that led it back to profitability a year later and continues to make this market giant more efficient.

So, it's worth looking at how a company has managed past difficulties, and those that have excelled may be great candidates for your buy list.

AMZN Net Income (Annual) data by YCharts

3. Buy dividend stocks

No matter what the market is doing in a given year, your portfolio still could deliver some gains if you invest in dividend stocks. These players offer you passive income just for owning the shares. This is something you'll particularly appreciate when the market is down.

How to choose a top dividend company? Look to the list of Dividend Kings, which includes companies such as Coca-Cola, Johnson & Johnson, and many others across sectors. These companies have boosted their dividend payments for at least the past 50 years, a sign that rewarding shareholders is important to them. So you can buy with confidence that these payments likely will continue well into the future.

4. Commit to an asset that's always won over time

It's impossible to predict the future with 100% accuracy. But one particular asset always has won over time, suggesting it could continue along this path. And this is the stock market as a whole -- from the S&P 500 to the Dow Jones Industrial Average (DJINDICES: ^DJI) and the Nasdaq Composite (NASDAQINDEX: ^IXIC). After each past decline, the indexes have gone on to advance over time.

^SPX data by YCharts

To benefit from this, commit to an asset that tracks one of the three major benchmarks. An example is the Vanguard S&P 500 ETF (NYSEMKT: VOO). The purchase will offer you instant diversification as well as a great chance of scoring a win -- as long as you hold on for the long term.

5. Focus on the long term

It may be very tempting to get in on the trendy stock of the moment and sell it a few weeks later for a profit. But it doesn't always work out that way. In many cases, a few weeks after your purchase, instead of gains, you may see losses -- at least on paper. That's all part of the short-term investing routine, and that puts the pressure on you to "time the market."

But I've got good news for you: You don't have to worry about all of that when you invest for the long term -- and through long-term investing, you may set yourself up for an even bigger win. How to do it? Buy quality stocks with bright future stories when they're trading for reasonable prices -- and hold on for at least five years.

You may experience ups and downs, but you won't have to worry about an economic downturn or recession wiping out your gains. By sticking with solid players throughout business and market cycles, you're likely to position yourself for a win over the long run.

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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:

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*Stock Advisor returns as of May 12, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Everyone has been talking about artificial intelligence (AI) over the past couple of years -- and it's easy to understand why. AI has the potential to revolutionize everything from the way you plan your day, thanks to AI assistants, to the way companies run factories and develop products thanks to a wide range of AI tools. Over the past quarters, to help make this happen, companies aiming to benefit from the AI boom have invested billions of dollars in the technology.

Some are makers of AI products and services and will gain by selling these to customers. Others are users of AI and will win as the technology streamlines and improves operations, saving them money. And some companies will reap the rewards in both ways.

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In fact, two in particular already are winning in AI. Let's check out how, today, AI is driving profit growth for the following technology companies.

1. Amazon

Amazon (NASDAQ: AMZN) has established itself as a leader in two major growth areas: e-commerce and cloud computing. In e-commerce, it has more than 200 million members in its Prime subscription service, and it's been using AI to better serve these and other customers. For example, Amazon harnesses the power of AI to design faster and cheaper delivery routes for packages and to streamline operations in fulfillment centers.

All of this is helping it reduce cost to serve, which in turn paves the way to higher profitability.

And through Amazon Web Services (AWS), its cloud computing unit, Amazon sells premium AI products from partners such as Nvidia, as well as its own in-house developed chips and platforms, to customers. These products and services help others easily apply AI to their own businesses, so as more and more companies decide to use AI, AWS, the world's No. 1 cloud services provider, may see more and more demand.

Demand from AI customers already is driving growth at the company, with AWS reaching a $115 billion annual revenue run rate last year. So, as the AI boom continues, this momentum should too.

Amazon already is a highly profitable company, delivering nearly $60 billion in net income last year. Now, the company's use of AI to improve efficiency and its sales of AI products in this high-demand market both could spur a new phase of growth in the years to come.

All this makes Amazon a fantastic buy right now for investors interested in betting on future AI winners.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a lot like Amazon when it comes to AI, as this technology is making an already strong business even better -- and Alphabet's Google Cloud, like AWS, sells AI products and services to customers.

Let's talk about Alphabet's use of AI first. The company has developed Gemini, its own large language model, to power its AI efforts. And you may know Gemini well, as it's one of today's popular AI assistants, popping up on your phone to help you with any of your daily tasks. Importantly, Alphabet also uses Gemini to improve its biggest profit driver: Google Search, the world's most-used search engine.

Advertisers pay to reach their target audience -- you and me -- on the Google platform, and advertising revenue makes up most of the company's total revenue. AI is helping Alphabet improve Google Search, and it's also helping advertisers as they plan their campaigns on the platform.

Like AWS, Google Cloud offers AI to its customers, and thanks to AI infrastructure and generative AI solutions demand, cloud revenue in the most recent quarter jumped 30% to $12 billion. The company said AI offerings have been driving new client wins, and last year, the number of first-time deals doubled from the previous year. And the number of deals greater than $250 million also doubled year over year.

These strengths in AI use and AI development position Alphabet well as growth in this technology continues, making this stock another top AI buy to hang on to for the long term.

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

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

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.