Key Points

• Energy Transfer has improved its balance sheet and its contract structure.

• The stock has a yield over 7% with a safe and growing distribution.

• The company also is seeing solid opportunities due to increasing natural gas demand.

• 10 stocks we like better than Energy Transfer ›

Energy Transfer (NYSE: ET) isn't a flashy name, but it has one of the best risk-reward profiles in the market right now and a high yield. It's one of the largest holdings in my portfolio.

Here are five reasons to buy the midstream energy company's stock like there's no tomorrow. Keep in mind, however, that investing in a master limited partnership means you'll get a Schedule K-1 tax form and need to take some extra steps with your tax filing.

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 »

1. A rock-solid financial position

After getting overextended during its last growth cycle, Energy Transfer spent the past few years cleaning up its balance sheet. It cut its distribution in 2020 to reduce leverage, and since then, it has paid down debt and funded much of its growth through free cash flow.

Today, leverage is at the low end of the pipeline company's target range. On its most recent call with analysts, management said the balance sheet is the strongest it has ever been. That gives it the flexibility to invest in growth projects and return capital to shareholders without the worry of becoming overextended once again.

2. Predictable cash flow

Roughly 90% of Energy Transfer's earnings before interest, taxes, depreciation, and amortization (EBITDA) is from fee-based services, where it has no exposure to commodity prices. And many of its contracts are take-or-pay, meaning customers pay whether or not they use the service. That creates stable, recurring cash flow, which is exactly what supports its distribution and growth projects.

Last quarter, Energy Transfer said it had a high percentage of take-or-pay contracts. That also helps give the company some of the best visibility it has ever had.

3. A high yield with a safe and growing distribution

The company's stock offers a forward yield of 7.5% as I write this, and it's well covered. It is generating twice the cash it needs to support its distribution. Last quarter's distributable cash flow coverage multiple was 2.1, which gives management plenty of room to continue to increase it.

It has now raised its distribution for 13 consecutive quarters, and it's well above pre-2020 levels when it had to cut it. Given its coverage ratio, strong balance sheet, and take-or-pay contracts, Energy Transfer is well positioned to grow its distribution in the years ahead. Management plans to raise it by 3% to 5% annually.

4. Increasing natural gas demand is a catalyst

Not only has Energy Transfer strengthened its balance sheet and improved its contract structure, the company is also back in growth mode. It plans $5 billion in capital expenditures this year, up from $3 billion last year, and is targeting mid-teens returns on its project slate. These aren't speculative projects; they are tied to real demand with long-term contracts in place.

One of its biggest projects is the Hugh Brinson pipeline, which is designed to move natural gas out of the Permian Basin in West Texas to meet growing power demand elsewhere in the state.

Energy Transfer has also made progress on its long-delayed Lake Charles liquified natural gas (LNG) project and signed a cost-sharing deal with MidOcean Energy and several other agreements. If the project proceeds, it will open up a new growth avenue tied to LNG exports, with demand expected to rise 60% by 2040.

At the same time, artificial intelligence (AI) data centers are becoming a potential source of incremental demand. The company signed a deal with CloudBurst to supply gas to a new AI-focused data center it plans to build in Texas.

Management has also said it's in active discussions with more than 60 power plants and over 200 data centers across 14 states. These opportunities require relatively little capital and can generate quick returns.

5. The stock looks too cheap

Even with everything going right, Energy Transfer still trades at a forward enterprise-value-to-EBITDA multiple of just 8. That's well below its historical average and a discount to most of its peers. Meanwhile, from 2011 to 2016, midstream master limited partnerships (MLPs) traded at an average EBITDA multiple of around 13.7.

Investors still haven't fully adjusted to how much stronger Energy Transfer's business is today. The company has cleaned up its balance sheet, improved its contracts, and is pursuing disciplined growth with solid returns. It offers growth to go along with an enticing yield, making it a solid stock for income-focused investors.

Should you invest $1,000 in Energy Transfer right now?

Before you buy stock in Energy Transfer, 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 Energy Transfer 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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — 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 July 15, 2025

Geoffrey Seiler has positions in Energy Transfer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Alphabet and GitLab are misunderstood stocks that are poised to be AI winners.

• Salesforce and ServiceNow are software companies with big AI opportunities in front of them.

• SentinelOne has a big potential catalyst in the second half as its deal with Lenovo rolls out.

• 10 stocks we like better than GitLab ›

The first half of 2025 wasn't kind to a number of promising artificial intelligence (AI) stocks, particularly in the software space. However, the second half could be very different.

Let's look at five stocks that were AI losers in the first half of 2025 that look poised to rebound in the second half.

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 »

Alphabet

Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) continues to be one of the most misunderstood stocks in the market. Investors keep worrying about AI disrupting its core search business, but that misses the bigger picture. Google isn't a search company -- it's a content discovery platform with a huge distribution advantage and decades of behavioral data behind it.

Alphabet's browser and mobile operating system give it an enormous edge. Chrome commands more than 65% of global browser share, while Android runs on over 70% of smartphones. Meanwhile, Google has revenue-sharing deals to be the default search engine across Apple devices and other browsers. As search and AI evolve, that distribution becomes increasingly important.

At the same time, Google has stepped up its game with its new AI-powered Search Mode. In a recent Oppenheimer survey, 82% of users found it more helpful than traditional search, and 75% preferred it to ChatGPT. Importantly, Google doesn't need to change user behavior and have people switch over to its apps. Its billions of users just need to click AI Mode to get this experience.

Its cloud computing business is also gaining traction. Google Cloud revenue rose 28% last quarter, and the company is investing heavily to build capacity to keep up with demand. Add in under-appreciated assets like its Waymo robotaxi business and its Willow quantum chip, and Alphabet looks ready to rebound in the back half.

GitLab

Another company that is misunderstood is GitLab (NASDAQ: GTLB). Investors are worried that with AI, organizations are going to need fewer coders. However, thus far AI has led to more software development, while GitLab has quietly been transforming itself into a software development lifecycle platform.

The company took a big step forward in this direction with the release of GitLab 18. It added over 30 new features, including its Duo Agent Platform, which allows users to deploy AI agents across the entire development cycle from code generation to testing to compliance. This is important, as according to William Blair, developers only spend about 20% of their time actually writing code.

The company has already been growing revenue at a strong clip, including 27% last quarter. The growth is being driven by new customers as well as existing customers buying more seats and upgrading tiers. GitLab has also been expanding key partnerships, including with Amazon.

As a company that is helping drive end-to-end development workflow efficiency, GitLab has a strong future ahead and looks like a solid rebound candidate.

Salesforce

Salesforce (NYSE: CRM) has spent the last year refocusing its platform around AI. Its new Agentforce platform has over 4,000 paying customers already, and it's at the center of what could become a much bigger digital labor platform.

The company's strategy is to unify apps, data, automation, and metadata to a single framework called ADAM. It will then use this as a foundation to build and scale AI agents, helping create a digital workforce. It also recently rolled out a more flexible pricing model tied to outcomes to help increase adoption.

Salesforce is already the leader in customer relationship management (CRM) software, and its push into AI agents could be a huge growth driver. With the stock lagging in the first half, it could rebound if Agentforce starts to gain more traction.

ServiceNow

ServiceNow (NYSE: NOW) may not be an obvious AI name, but it's also using AI to help transform its business. The company's roots are in IT management, but it has since expanded into human resources, finance, and customer service.

The company's strength has always been connecting siloed departments and helping organizations streamline their operations. It has embedded AI into its Now Platform, helping take these efforts to the next level. It's been seeing strong traction, with AI-driven Pro Plus deals quadrupling year over year last quarter. As organizations increasingly focus on efficiency and automation to help reduce costs, ServiceNow is well-positioned.

While some investors worry about enterprise software budgets, ServiceNow is a cost-saving platform that should continue to perform well in the current environment. That should help set the stock up to rebound later this year.

SentinelOne

SentinelOne's (NYSE: S) stock was under pressure in the first half of the year, but there's a good reason to believe that it will perform much better in the second half. The big reason is that its new partnership with Lenovo is about to ramp up.

Lenovo is the world's largest enterprise PC vendor, and starting in the second half, it will pre-install SentinelOne's Singularity Platform on all new computers it sells. Existing Lenovo users will also be able to upgrade to SentinelOne's AI-powered security platform. That's a huge opportunity for the cybersecurity company.

SentinelOne has already been seeing solid revenue growth, including 23% last quarter. While it's not the leader in the endpoint security space -- that would be CrowdStrike -- its platform receives high marks from Gartner. Meanwhile, its Purple AI solution, which helps analysts hunt complex security threats through the use of natural language prompts, has been the fastest-growing solution in its history.

All in all, SentinelOne is a solid company whose stock trades at a big discount to some of its bigger peers. Meanwhile, the Lenovo deal should be a catalyst in the second half.

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

Before you buy stock in GitLab, 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 GitLab 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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — 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 July 15, 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. Geoffrey Seiler has positions in Alphabet, GitLab, Salesforce, and SentinelOne. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, CrowdStrike, GitLab, Salesforce, SentinelOne, and ServiceNow. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

Key Points

• The S&P 500 has rebounded to reclaim new highs.

• However, that doesn't mean investors should wait for a pullback.

• Vanguard offers a number of great ETFs for investors to begin investing in right now.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

When the market is on a tear, it's tempting to sit back and wait for a pullback. But smart investors know that the best strategy isn't timing the market -- it's time in the market.

The market hitting new highs actually isn't uncommon. In fact, a J.P. Morgan study found that since 1950, the S&P 500 hit a new high on about 7% of its trading days. Meanwhile, on nearly a third of the days it hit a new high, it never traded below that price again.

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That's why dollar-cost averaging is so important. And one of the best investment vehicles to use this strategy with is exchange-traded funds (ETFs). By consistently investing in high-quality ETFs, regardless of market swings, you give yourself the best shot at building serious long-term wealth.

With some of the lowest expenses in the industry, Vanguard ETFs are a no-brainer place to start. Let's look at three Vanguard ETFs to begin buying into for the long term.

1. Vanguard S&P 500 ETF

If you're going to own just one ETF, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is the one. The ETF gives you instant exposure to the 500 largest U.S. companies. That includes the biggest winners of the past decade, including Apple, Microsoft, Nvidia, Alphabet, and Amazon. These five stocks alone make up nearly 25% of the index.

What makes this ETF such a great core holding is how it adapts over time. When winners emerge, they just become a larger part of the index. The index leans into the Darwinian principle of survival of the fittest, letting the strongest stocks lead the way higher while laggards fall by the wayside.

This investment mechanism works and is backed by the Vanguard S&P 500 ETF's strong track record of returns. Over the past 10 years, the ETF has generated an average annual return of 13.6% -- a period that has included both strong bull and bear markets along the way.

As an added bonus, the ETF's expense ratio is just 0.03%. This means most of the index's returns stay in your pocket. If your goal is to build long-term wealth, you won't find a more efficient or reliable option.

2. Vanguard Growth ETF

For investors who want more exposure to the market's top growth stocks, the Vanguard Growth ETF (NYSEMKT: VUG) is a great option. This ETF focuses on large-cap companies with strong earnings and sales growth, and that naturally skews the portfolio toward tech and consumer names. While it officially tracks the CRSP US Large Cap Growth Index, this is essentially the growth side of the S&P 500.

The ETF holds about 165 stocks, so you're still getting diversification, but it's solely focused on large-cap growth stocks. It has many of the same top holdings as the Vanguard S&P 500 ETF, but in a higher concentration. For example, while Nvidia represented a 7.3% position in the Vanguard S&P 500 ETF at the end of June, it was an 11.6% holding in the Vanguard Growth ETF.

With growth outperforming value for a long stretch over the past couple of decades, this ETF has been a strong performer. It has produced an annual average return of 16.2% the past 10 years. That outpaces the broader market and gives you more upside if big tech and other growth leaders keep running. With an expense ratio of 0.04%, it's a cheap way to invest in large-cap growth stocks without having to pick individual names.

If you want to lean into growth, this is a great way to do it.

3. Vanguard Information Technology ETF

If you want to go even deeper into tech, the Vanguard Information Technology ETF (NYSEMKT: VGT) gives you a more concentrated portfolio of the companies helping shape the future. The ETF owns the top players in semiconductors, software, cloud computing, and most importantly, artificial intelligence (AI). With AI changing the world we live in, this is a great way to invest in this trend.

The portfolio is top-heavy, with Apple, Nvidia, and Microsoft making up nearly 45% of its holdings as of the end of June. But the ETF also gives investors exposure to companies like Broadcom, Palantir Technologies, and Advanced Micro Devices in its top-10 holdings, as well. These are some of the top companies that have been leading the charge with AI.

Meanwhile, the ETF's performance has been nothing short of exceptional. Over the past 10 years, it's generated an average return of 21.4% annually. It also has a low expense ratio of just 0.09%. Given its top heaviness and lack of diversification, this would not be the only ETF I'd own, but it's a great way to help potentially juice your returns and beat the market.

Overall, this ETF is for investors who believe the technology tailwinds, especially around AI, aren't slowing down anytime soon.

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 $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — 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 July 15, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. 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. Geoffrey Seiler has positions in Alphabet and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, JPMorgan Chase, Microsoft, Nvidia, Palantir Technologies, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• TSMC has become the undisputed foundry leader.

• This essentially makes it the arms dealer in the AI chip battle, making it a winner no matter who comes out on top.

• The company could be one of the biggest beneficiaries of autonomous driving as well.

• 10 stocks we like better than Taiwan Semiconductor Manufacturing ›

Taiwan Semiconductor Manufacturing (NYSE: TSM) may not design artificial intelligence (AI) chips, but it's a company that every AI chipmaker relies on. The AI giants rely on TSMC to manufacture their number-crunching chip designs. That's why TSMC is the safest long-term play in the AI infrastructure space.

Let's look at what makes the company so special.

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The foundry leader

TSMC is the world's most advanced semiconductor foundry, and it counts the world's leading chip designers among its top customers, including Nvidia, Advanced Micro Devices, Broadcom, and Apple. It has the scale and technological leadership that rivals can't match. Intel has been burning cash trying to establish its foundry business, while Samsung's yield issues continue to be an issue. That has given TSMC a huge market share lead in the advanced node market, and it's not particularly close.

Nodes refer to the size of the transistors used on a chip, measured in nanometers. The smaller the node, the more transistors can be packed onto the chip, which boosts performance and power efficiency. Smaller nodes are becoming a bigger part of TSMC's mix. Chips made on 7nm and smaller nodes made up 73% of its revenue in the first quarter, up from 65% a year ago. Its 3nm node accounted for 22% of revenue, and Apple has booked much of its 2nm supply for future products. Even Intel has been using TSMC's 3nm tech for some of its most advanced chips. That says a lot.

TSMC's clear leadership in the space has also given the company strong pricing power. Between increasing demand and higher prices, this is driving both strong revenue growth and improved gross margins. Last quarter, its revenue jumped 35% to $25.5 billion, led by growth in high-performance computing (HPC). That continued in Q2, with the company reporting preliminary revenue growth of 39% to $31.9 billion, as estimated by Reuters.

Margins remain strong despite new fabs ramping. Gross margin rose 190 basis points to 58.8% in Q1 despite its Arizona and Japan fabs still ramping up and weighing on profitability. TSMC expects these newer facilities to dilute margins by 2 to 3 percentage points this year, but the company is already raising prices to offset the pressure. According to reports, TSMC will increase AI chip prices this year, with Arizona-made chips potentially commanding a 30% premium.

TSMC's business risks

TSMC is not entirely without risks. Geopolitical tensions around Taiwan will always be part of the story, and it's not immune to tariffs and policy shifts in the U.S. However, TSMC is already addressing both by expanding its footprint globally. The company has been building new fabs in the U.S., Japan, and Europe in partnership with its largest customers.

However, what makes TSMC the safest AI semiconductor stock is its position in the semiconductor value chain. It ultimately doesn't matter which company wins the AI chip race. TSMC's success is tied to overall AI chip demand, not any one company's products.

AI chip demand isn't slowing down, either. TSMC previously projected AI-related revenue to grow at a mid-40% compounded average growth rate (CAGR) over the next five years, starting in 2024. It's also working closely with customers to time its capacity expansion accordingly. With its top customers booking future supply, it has solid visibility into future growth.

Meanwhile, it could see a tailwind beyond AI with autonomous driving. Robotaxis are beginning to take off and gain traction, and all of those vehicles will need to be fitted with advanced chips. It's still early, but if robotaxis and autonomous driving become commonplace, TSMC will be a big beneficiary.

Time to buy the stock

In the AI chip battle, TSMC is essentially the AI arms dealer. It doesn't need to bet on who will dominate the chip market, because it sells manufacturing services to all of them. For investors who want exposure to AI semiconductors without betting on a single chipmaker, TSMC is the safest way to play it.

The stock is also attractively valued, trading at a forward price-to-earnings (P/E) ratio of 24 times based on analysts' 2025 estimates and a price/earnings-to-growth ratio (PEG) of less than 0.7. Stocks with PEG ratios below 1 are typically considered undervalued.

Taken all together, TSMC is one of the best and safest stocks to buy in the semiconductor space right now.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, 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 Taiwan Semiconductor Manufacturing 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — 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 July 7, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Key Points

• There is no denying that Palantir has a high valuation.

• However, as a former professional short-seller, I learned to never short a stock on valuation alone.

• Meanwhile, the opportunity in front of Palantir is so large that the company still has strong upside over the long term.

• 10 stocks we like better than Palantir Technologies ›

For several years, I worked as an equity analyst at a long-short hedge fund, with around $600 million in assets under management. While our long book would be larger than our short book, we would be short many more stocks than we would be long in. Typically, we might hold around 15 core long positions, while we could be short more than 70 stocks.

The reason for this was quite simple. On the long side, we typically had a more concentrated portfolio in highly researched names that we had high conviction in. However, shorting individual stocks is inherently riskier, so we would keep individual positions small.

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 »

Since stocks can technically go up indefinitely, you can lose much more than you can make. Meanwhile, if a short goes against you and the stock price goes up, the position size becomes larger, not smaller. This can lead to margin calls, which typically leads to short-sellers being forced to buy back the stock they shorted at a loss.

So why short-sell at all? For one, it's a market hedge. But more importantly, most stocks actually do underperform. According to a JP Morgan Asset Management study, between 1980 and 2020, 40% of stocks in the Russell 3000 index -- which consists of the 3,000 largest U.S. traded stocks -- suffered catastrophic losses of 70% or more from which they never recovered. Meanwhile, 42% of the stocks in the index had negative returns during this period. In addition, two-thirds of stocks underperformed the index.

However, one lesson I learned when looking for stocks to short is never to short on valuation alone.

Palantir and its high valuation

If there was ever a candidate to short solely on valuation, it would be Palantir Technologies (NASDAQ: PLTR). After all, the stock trades at an astonishing 82.5 forward price-to-sales (P/S) multiple. Note that this is sales, not earnings.

However, valuation is not a reason to short a good company without a near-term downward catalyst. The reason for this can be summed up by an old Wall Street adage that is attributed to the British economist John Maynard Keynes: "The market can stay irrational longer than you can stay solvent."

In the context of short-selling, this basically means that a stock can carry high valuation for a very long time, much longer than a short-seller can continue to hold a position.

So, while Palantir's valuation may look extreme, the same could have also been said when it traded at 30 times sales or 60 times sales. After all, at the height of software-as-a-service (SaaS) valuations a few years ago, the average SaaS stock only got up to around a 20 times P/S multiple with over 30% revenue growth.

Meanwhile, the company has been executing strongly. Its revenue growth has accelerated each of the past seven quarters and grew 39% in the first quarter. While high valuations can make a stock more vulnerable to any missteps or disappointments around quarterly earnings, Palantir right now has been firing on all cylinders.

O.K., but would you buy the stock?

Whether to buy Palantir stock is a trickier question to answer, but there is reason to believe that the company could eventually grow to become one of the largest in the world. It started out as a data-gathering and analytics company primarily for the U.S. government, where its technology could be used to discover complex patterns, enabling the government to help track terrorists. But with the advent of artificial intelligence (AI), it has become a major player in the commercial space.

Instead of looking to build a better AI model, Palantir set out to make AI more actionable through its data gathering and analytical capabilities. Its Artificial Intelligence Platform (AIP) gathers data from a variety of different sources and then connects the data to its real-world counterparts. This essentially turns AIP into an operating system where customers use AI models to find solutions to real-world problems.

Today, AIP is being used across an array of industries for remarkably diverse tasks. These include monitoring for sepsis at hospitals, helping a homebuilder streamline its land-development bidding process, and improving the logistics and supply chain of a cereal maker.

The U.S. government uses its technology for mission-critical tasks, including on the battlefield. And even NATO recently signed a big deal with the company.

The breadth of uses for AIP and Palantir's technology is extraordinary and is the reason the company has the potential to grow into one of the biggest in the world.

As such, while I would prefer to buy the stock on a dip given its valuation, I think it has a very good opportunity to be a huge long-term winner.

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

Before you buy stock in Palantir Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — 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 July 7, 2025

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

Key Points

• Nvidia is the dominant player in AI infrastructure, but its size could limit some of its upside.

• AMD and Broadcom, meanwhile, have huge opportunities.

• Given their smaller sizes, the stocks have the potential to outperform Nvidia in the coming years.

• 10 stocks we like better than Advanced Micro Devices ›

Nvidia is the undisputed king of artificial intelligence (AI) infrastructure. The company has a dominant share in the graphics processing unit (GPU) market, where its chips provide the processing power necessary to run AI workloads. Its CUDA software platform has helped create a wide moat, giving the company over 90% market share in the GPU space.

That said, Nvidia has become a mammoth company, recently hitting a $4 trillion market cap. As such, it now faces the law of large numbers. It can keep growing, but it will get more difficult to keep up the same pace.

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 »

That's why the stocks of Advanced Micro Devices (NASDAQ: AMD) and Broadcom (NASDAQ: AVGO) could outperform the GPU leader over the next five years. Both have smaller revenue bases to work from and big potential tailwinds.

Advanced Micro Devices

AMD, as the company is also known, has been seeing strong revenue growth, but its AI opportunity could just be getting started. While it's still a distant second to Nvidia in GPUs, it has been able to carve out a niche in AI inference.

On its last earnings call, AMD said that one of the largest AI model companies in the world is using its GPUs to run a significant chunk of its daily inference workloads. Major cloud providers have been using its chips to run search, recommendation engines, and generative AI tasks. The company's ROCm software platform still trails CUDA, but it's generally considered good enough when it comes to inference.

The reason the stock can outperform, though, largely comes down to size. Nvidia's data center revenue hit $39.1 billion last quarter, while AMD's was just $3.7 billion. It doesn't have to take massive share from the leader to see explosive growth, as even modest wins can make a big impact.

AMD is also a leader in data center central processing units (CPUs), where it has gained meaningful share against Intel. CPUs act as the brains of the operation, so as AI workloads expand, demand for high-performance CPUs will also grow.

Meanwhile, the UALink Consortium which was formed by AMD, Intel, Broadcom, and others, is looking to challenge Nvidia's NVLink and its proprietary interconnects. It wants to develop an open standard for high-speed, low-latency interconnects for AI accelerators in data centers. If successful, it could erode one of Nvidia's biggest advantages and open the door for companies to use clusters of multiple vendors. That would be huge for AMD.

With AI inference expected to eventually eclipse training in size, AMD has a big opportunity.

Broadcom

Broadcom isn't directly chasing Nvidia in the GPU market. Instead, it's competing against the company in AI networking and by helping customers design custom AI chips.

Broadcom makes networking components -- like Ethernet switches and optical interconnects -- that are essential in transferring huge data volumes across large AI clusters. As these clusters get bigger, so do networking demands. This is helping drive the company's revenue growth, and last quarter its AI networking revenue surged 70%.

However, the company's biggest opportunity is in application-specific integrated circuits (ASICs). It helped Alphabet develop its highly successful Tensor Processing Units (TPUs) and is now designing custom AI chips for several other hyperscalers (companies that operate huge data centers). These custom chips can deliver better performance and power efficiency than off-the-shelf GPUs, and demand is growing fast.

Management has said that its three custom AI chip customers that are the furthest along in their development are planning to deploy up to 1 million chip clusters each by its fiscal 2027, representing a $60 billion to $90 billion opportunity. That doesn't even include newer wins like Apple. And given the up-front costs of designing custom chips, they are typically used in large deployments.

Broadcom also owns VMware, which is becoming increasingly important in AI cloud environments. Its Cloud Foundation platform helps enterprises manage AI workloads across hybrid and multi-cloud environments, and it is seeing strong upselling to this platform.

With its networking portfolio, custom chips, and virtualization software, the company has a lot of growth in front of it.

The bottom line

Nvidia is still a great company, and its stock has room to move higher. However, it just saw its data center revenue increase more than ninefold in two years. At some point, it gets harder to keep posting that type of breakneck growth.

Meanwhile, AMD and Broadcom both have much smaller AI-related revenue streams today. If AMD can take some GPU market share in inference, that would be a huge growth driver. And if Broadcom's customers start producing a huge amount of custom chips based on its intellectual property, it could unlock tens of billions in high-margin revenue.

As such, I think both AMD and Broadcom stocks are well-positioned to outperform Nvidia over the next five years.

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

Before you buy stock in Advanced Micro Devices, 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 Advanced Micro Devices 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — 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 July 7, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Intel, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Key Points

• ETFs that have tracked the S&P 500 have always been popular.

• However, with the index getting top-heavy, BlackRock introduced two ETFs to help investors remain invested in the S&P 500 with less megacap exposure.

• After a closer look, it may be best to stick to the original.

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

The largest and most popular exchange-traded funds (ETFs) are those that track the performance of the S&P 500. In fact, the three largest ETFs as measured by assets under management are all ones that mimic the performance of this benchmark index. These funds include the Vanguard S&P 500 ETF (NYSEMKT: VOO), the SPDR S&P 500 ETF Trust (NYSEMKT: SPY), and the iShares Core S&P 500 ETF (NYSEMKT: IVV).

However, some investors have raised concerns about the current heavy concentration of megacap stocks that now dominate the S&P 500. As of July 9, the S&P 500's top three holdings of Nvidia, Microsoft, and Apple made up over 20% of its holdings, while its top 10 holdings represented 38% of the index. With megacap stocks dominating the S&P 500, BlackRock (NYSE: BLK) introduced a couple of new ETFs to let investors invest in the index without the megacap exposure.

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

In April, the company launched the iShares S&P 500 3% Capped ETF (NYSEMKT: TOPC), while earlier this month it introduced the iShares S&P 500 ex Top 100 ETF (NYSEMKT: XOEF). The former ETF tracks the performance of the S&P 500 index, but caps each holding's weighting at a maximum of 3%. For stocks that have a weighting above 3% in the S&P 500, the excess weight is redistributed to companies that have not yet reached the 3% cap. Currently, only its top five holdings have a weighting of 3% or slightly above.

The iShares S&P 500 ex Top 100 ETF, meanwhile, tracks the S&P 500 performance excluding the 100 largest stocks, better known as the S&P 100. BlackRock promotes using the ETF in conjunction with the iShares S&P 100 ETF (NYSEMKT: OEF), so that investors can balance their megacap exposure as they want.

Is it better to stick with an S&P 500 ETF or one of these new BlackRock ETFs?

The recent top heaviness of the S&P 500, especially among megacap technology names, has drawn a lot of attention. As such, it's not surprising that a firm like BlackRock is looking to give investors some alternatives to keep them invested in the index, but with a little less exposure to these megacap tech stocks.

However, these funds don't have much of a track record and come with higher expense ratios. The iShares S&P 500 ex S&P 100 ETF has an expense ratio of 0.2%, while the iShares S&P 500 3% Capped ETF is at 0.15%, although a fee waiver will bring it down to 0.09% until April 3, 2026. That compares to only 0.03% for the Vanguard 500 S&P ETF, which is the most widely held ETF.

The Vanguard 500 S&P ETF, meanwhile, also has a strong, long-term track record. The ETF has generated an average annualized return of 16.6% over the past five years and 13.6% over the past 10 years, as of the end of June.

Arguably, the S&P 500's strong performance over the years stems directly from the index not capping the weighting of its holdings. As a market-cap-weighted index, it lets the best and strongest companies grow to become an ever-increasing percentage of the index. Ultimately, it is these mega-winners that power the market.

A J.P. Morgan study looking at stocks in the Russell 3000, which is comprised of the 3,000 largest U.S. stocks, between 1980 to 2020, found that most stocks underperformed the index, and that it was these mega-winning stocks that were responsible for most of the market's gains. In fact, it found that two-thirds of stocks underperformed the index during this period, while 40% of stocks had negative returns.

As such, while it may sound tempting to reduce megacap exposure, I think the way the S&P has been set up is why it performs so well in the first place. A coach isn't going to want to limit their starters' minutes in an important game or sit them on the bench if they don't have to, and neither should investors look to do this when it comes to investing.

As such, I'd stick to an S&P 500 ETF like the Vanguard 500 S&P ETF, and just use a consistent dollar-cost averaging strategy.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,047%* — a market-crushing outperformance compared to 180% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Nvidia and AMD should continue to be AI infrastructure winners.

• Alphabet and Pinterest are using AI to drive advertising revenue growth.

• Salesforce is looking to create an AI agent workforce.

• 10 stocks we like better than Nvidia ›

While there is still uncertainty surrounding the implementation of tariffs by the Trump administration, at least one sector -- artificial intelligence (AI) -- is starting to regain its momentum and could be set up for another bull run. The technology is being hailed as a once-in-a-generation opportunity, and the early signs are that this could indeed be the case.

With AI still in its early innings, it's not too late to invest in the sector. Let's look at five AI stocks to consider buying right now.

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 »

Nvidia

Nvidia's (NASDAQ: NVDA) stock has already seen massive gains the past few years, but the bull case is far from over. The company's graphics processing units (GPUs) are the main chips used for training large language models (LLMs), and it's also seen strong traction in inference. These AI workloads both require a lot of processing power, which its GPUs provide.

The company captured an over 90% market share in the GPU space last quarter, in large thanks to its CUDA software platform, which makes it easy for developers to program its chips for various AI workloads. In the years following its launch, a collection of tools and libraries have also been built on top of CUDA that helps optimize Nvidia's GPUs for AI tasks.

With the AI infrastructure buildout still appearing to be in its early stages, Nvidia continues to look well-positioned for the future. Meanwhile, it has also potential big markets emerging, such as the automobile space and autonomous driving.

AMD

While Nvidia dominates AI training, Advanced Micro Devices (NASDAQ: AMD) is carving out a space in AI inference. Inference is the process in which an AI model applies what it has learned during training to make real-time decisions. Over time, the inference market is expected to become much larger than the training market due to increased AI usage.

AMD's ROCm software, meanwhile, is largely considered "good enough" for inference workloads, and cost-sensitive buyers are increasingly giving its MI300 chips a closer look. That's already showing up in the numbers, with AMD's data center revenue surging 57% last quarter to $3.7 billion.

Even modest market share gains from a smaller base could translate into meaningful top-line growth for AMD. Importantly, one of the largest AI model companies is now using AMD's chips to handle a significant share of its inference traffic. Cloud giants are also using AMD's GPUs for tasks like search and generative AI. Beyond GPUs, AMD remains a strong player in data center central processing units (CPUs), which is another area benefiting from rising AI infrastructure spend.

Taken altogether, AMD has a big AI opportunity in front of it.

Alphabet

If you only listened to the naysayers, you would think Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is an AI loser, whose main search business is about to disappear. However, that would ignore the huge distribution and ad network advantages the company took decades to build.

Meanwhile, it has quietly positioned itself as an AI leader. Its Gemini model is widely considered one of the best and getting better. It's now helping power its search business, and it's added innovative elements that can help monetize AI, such as "Shop with AI," which allows users to find products simply by describing them; and a new virtual try-on feature.

Google Cloud, meanwhile, has been a strong growth driver, and is now profitable after years of heavy investment. That segment grew revenue by 28% last quarter and continues to win share in the cloud computing market. The company also has developed its own custom AI chips, which OpenAI recently began testing as an alternative to Nvidia.

Alphabet also has exposure to autonomous driving through Waymo, which now operates a paid robotaxi service in multiple cities, and quantum computing with its Willow chip.

Alphabet is one of the world's most innovative companies and has a long runway of continued growth still in front of it.

Pinterest

Pinterest (NYSE: PINS) has leaned heavily into AI to go from simply an online vision board to a more engaging platform that is shoppable. A key part of its transformation is its multimodal AI model that is trained on both images and text. This helps power its visual search feature, as well as generate more personalized recommendations. Meanwhile, on the backend, its Performance+ platform combines AI and automation to help advertisers run better campaigns.

The strategy is working, as the platform is both gaining more users and monetizing them better. Last quarter, it grew its monthly active users by 10% to 570 million. Much of that user growth is coming from emerging markets. Through the help of Google's strong global ad network, with whom it's partnered, Pinterest is also much better at monetizing these users. In the first quarter, its "rest of world" segment's average revenue per user (ARPU) jumped 29%, while overall segment revenue soared 49%.

With a large but still undermonetized user base, Pinterest has a lot of growth ahead.

Salesforce

Salesforce (NYSE: CRM) is no stranger to innovation, being one of the first large companies to embrace the software-as-a-service (SaaS) model. A leader in customer relationship management (CRM) software, the company is now looking to become a leader in agentic AI and digital labor.

Salesforce's CRM platform was built to give its users a unified view of their siloed data all in one place. This helped create efficiencies and reduce costs by giving real-time insights and allowing for improved forecasting.

With the advent of AI, it is now looking to use its platform to create a digital workforce of AI agents that can complete tasks with little human supervision. It believes that the combination of apps, data, automation, and metadata into a single framework it calls ADAM will give it a leg up in this new agentic AI race.

The company has a huge installed user base, and its new Agentforce platform is off to a good start with over 4,000 paying customers since its October launch. With its consumption-based product, the company has a huge opportunity ahead with AI agents.

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 $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $998,376!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — 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 July 7, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet, Pinterest, and Salesforce. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Nvidia, Pinterest, and Salesforce. The Motley Fool has a disclosure policy.

Key Points

• While Tesla has talked a big game about its Optimus robot, Amazon just deployed its 1 millionth robot at its fulfillment centers.

• The company's robots are using AI to help make the company's warehouse operations much more efficient.

• Meanwhile, it's also using AI in areas like delivery and inventory management.

Tesla (NASDAQ: TSLA) gets most of the media attention when it comes to robotics, thanks to its humanoid robot prototype, Optimus, and Elon Musk's bold claims. In fact, last year Musk said that Optimus could eventually be worth more than everything else from Tesla combined.

But while Tesla talks about the future of robotics, Amazon's (NASDAQ: AMZN) robots are already delivering the goods -- both literally and figuratively. In fact, Amazon is already the largest manufacturer and operator of mobile robotics in the world.

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 »

So if you're looking for the real leader in artificial intelligence (AI) robotics, it's Amazon.

1 million robots and counting

Amazon got into the robotics space in 2012 when it acquired Kiva Systems for $775 million. While a small deal at the time, it is really starting to pay dividends for Amazon. Earlier this month, the company surpassed 1 million robots operating inside its fulfillment centers. These robots now assist with about 75% of all customer orders placed through Amazon.com.

Those are some huge numbers, and they are likely only going to get bigger. The company is soon expected to have more robot workers than human ones. Amazon's robots also aren't just moving packages around. They're sorting inventory, lifting heavy loads, unloading trailers, and increasingly handling complex warehouse tasks.

AI gives Amazon an advantage

What sets Amazon apart from other robotics companies is how it's using AI to make its robots smarter to improve efficiency. Its Lab126 team is working on a new generation of warehouse robots that can follow voice commands, adjust to problems in real time, and even fix themselves when something breaks.

Amazon also just introduced an AI model called DeepFleet to manage and coordinate its entire robot fleet. The goal is to move packages faster and at lower cost by making better decisions about what robots should do and when.

These robots also go well beyond moving boxes. They can find specific parts, reroute if an aisle is blocked, and unload trucks without needing everything pre-programmed. Some can even spot damaged items before they're shipped, which should reduce returns and improve customer satisfaction.

Robots also don't take breaks or call in sick, which means they can keep working around the clock. Over time, this should lead to faster shipping, lower labor costs, and stronger operating margins in Amazon's core e-commerce business.

AI in delivery, inventory, and beyond

Robots are just part of Amazon's AI efficiency story. Amazon's new Wellspring system uses AI to map out hard-to-reach delivery locations, such as large apartment complexes and office parks. The data can also be integrated into smart glasses for real-time navigation. This all helps improve delivery times, letting drivers complete more routes per shift.

The company is also using AI to fine-tune its inventory and delivery network. Through its SCOT (Supply Chain Optimization Technology) system, Amazon is now able to forecast demand for specific products by taking into account things like regional preferences, weather, and price sensitivity. Ultimately, this keeps inventory closer to customers, helping reduce shipping costs.

These improvements are already translating into better operating performance. Last quarter, Amazon's North America segment grew operating income by 16% on just 8% revenue growth. That's great operating efficiency.

Is Amazon stock a buy?

Of course, robotics is only one part of the Amazon story. Its cloud computing unit, Amazon Web Services (AWS), is its largest business by profitability, and its fastest growing. Customers continue to turn to Amazon's cloud infrastructure to build, train, and scale their own AI models and apps. Meanwhile, Amazon has developed its own custom AI chips, which help give it a cost advantage.

It also has a fast-growing sponsored ads business that is seeing strong growth. When investors think of digital advertising platforms, they generally think of Alphabet's Google search engine or Meta Platforms' social media apps, but Amazon is actually the third-largest platform in the world. Meanwhile, the company is using AI to help third-party merchants both improve listings as well as better target potential customers.

While the stock has rebounded off its lows this year, the company still trades at a reasonable valuation, with a forward price-to-earnings (P/E) ratio of around 36 times this year's analyst estimates. That's still below its historical average.

Between its strong cloud computing growth, leading e-commerce operations, and the lead it has in automation and robotics, Amazon stock looks like a solid long-term buy.

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 $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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Tesla. The Motley Fool has a disclosure policy.

Key Points

• Nvidia and TSMC are two of the best ways to play the AI infrastructure boom.

• Meta is applying AI across its apps to drive strong growth.

• Alphabet and Amazon are two cloud computing leaders.

Artificial intelligence (AI) is proving to be the next big technology innovation, and investors don't have to look far to find the companies at the center of it. Some of the best opportunities in the tech sector lie with companies that are either powering the infrastructure behind AI or using it to improve their operations.

Let's look at five top tech stocks to buy this month.

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 »

Nvidia

Nvidia (NASDAQ: NVDA) is the top name in AI infrastructure. Its graphics processing units (GPUs) have become the main chips used for training and running AI models, while it also offers networking equipment and can supply large, turnkey rack-scale systems it calls AI factories. However, Nvidia's strength doesn't just come from its powerful hardware. Its CUDA software platform long ago became the standard on which developers learned to program GPUs, creating a wide moat for the company.

Nvidia's dominance in the AI infrastructure market was on full display in the fiscal first quarter, as it captured an over 90% market share in the GPU space. Its new Blackwell architecture is ramping up faster than any chip in its history, and demand for its AI factories continues to surge. At the same time, new verticals like automotive are starting to gain traction.

As AI infrastructure spending continues to ramp up, Nvidia remains one of the best ways to invest in the space.

Taiwan Semiconductor Manufacturing

While Nvidia designs the chips that are powering the AI infrastructure boom, Taiwan Semiconductor Manufacturing (NYSE: TSM) is the company that actually makes them. TSMC is the world's largest semiconductor contract manufacturer, and one of the few companies with the technical expertise and scale to make the advanced chips used for AI. Not surprisingly, this led to strong growth, with the company's Q1 revenue jumping 35%. High-performance computing, which AI is a part of, now makes up nearly 60% of its business.

As demand from AI customers surges, TSMC continues to expand capacity and build new fabs. It's also been raising prices, which is leading to improved margins and growing profits. That's a great combination.

As the undisputed leader in advanced chip manufacturing, TSMC is positioned to continue to benefit from the AI infrastructure boom.

Meta Platforms

One of the world's top digital advertising platforms, Meta Platforms (NASDAQ: META) is using AI to help drive strong growth. Its proprietary AI model, Llama, is boosting user engagement and improving ad performance across its family of apps. That's leading to more inventory and higher ad prices. In Q1, ad impressions rose 5%, while pricing jumped 10%.

However, AI is just one part of Meta's growth story. The company started serving ads on WhatsApp, which has over 3 billion users, and is gradually rolling out ads on Threads, its Twitter-like platform that's already up to 350 million monthly users. These newer properties are just at the beginning of being monetized, which should lead to years of strong growth ahead.

Meta is investing heavily in AI talent, and looks to be one of the companies best positioned to benefit from the technology.

Alphabet

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is one of the most overlooked AI plays in the market. While some investors worry about AI disrupting its search business, the reality is that Alphabet still has big advantages in distribution as well as with its far-reaching ad network.

Meanwhile, Alphabet is investing heavily in AI and other emerging technologies. Its Gemini model is considered one of the best in independent tests, while Google Cloud is the third-largest cloud computing platform and is growing quickly. The company has developed its own custom AI chips, which it both uses internally and rents out. At the same time, the company has a first-mover advantage in autonomous driving and robotaxis with its Waymo unit, while it's also a leader in quantum computing with its Willow chip.

Overall, Alphabet has a strong collection of leading and emerging businesses and a lot of growth opportunities ahead.

Amazon

While Amazon (NASDAQ: AMZN) is most often viewed simply as an e-commerce company, its largest business by profitability and its fastest-growing segment is Amazon Web Services (AWS). Amazon is the market share leader in the cloud computing industry. AI is driving growth in the segment as customers use its services to build and deploy AI models and apps and then run them on its infrastructure. Amazon also designed its own custom chips specifically for AI training and inference, giving it an edge in cost and performance.

Not to be overlooked is the company's leadership in robotics. While Tesla touted its Optimus robot, Amazon already has over 1 million robots working in its fulfillment centers globally. Its entire fleet of robots will soon be powered by a newly launched generative artificial intelligence model called DeepFleet that will coordinate the movement of its robots for faster and more cost-effective package deliveries.

The company even has robots that can spot damaged goods before they are shipped, which helps reduce costly returns. Between its use of AI and robots, Amazon is reducing costs and becoming more efficient within its e-commerce segment.

Amazon is a company at the cutting edge of AI and robotics, and one investors should not sleep on.

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

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.

Key Points

• Amazon and Microsoft are the two largest cloud computing companies.

• Microsoft Azure has been growing more quickly, but a strained relationship with OpenAI leaves some questions.

• Amazon's AWS, meanwhile, has a vertical integration advantage.

When it comes to cloud computing, Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) are the clear leaders. Both are seeing strong growth, both are leaning heavily into artificial intelligence (AI), and both are investing billions to meet increasing demand.

But if I had to pick just one stock to own right now, I'd go with Amazon. Let's break down why.

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 »

Amazon

While best known for its e-commerce operations, Amazon basically invented the cloud computing industry due to its own struggles trying to scale up its infrastructure. Today, Amazon Web Services (AWS) is the largest cloud computing provider in the world, with nearly 30% market share.

AWS is also both Amazon's most profitable segment and fastest-growing, with revenue climbing 17% last quarter. AI has been a big reason for this. Customers are using AWS solutions like Bedrock and SageMaker to help them build and run their own AI models and apps. Bedrock gives companies access to foundation models they can customize, while SageMaker is more of an end-to-end solution. Once these models are built, they then run on AWS infrastructure, locking customers into a recurring, high-margin business.

On top of that, Amazon has built its own custom AI chips through its Annapurna Labs unit. Trainium is designed to train large language models (LLMs), while Inferentia handles inference. These chips are optimized for performance and cost, consuming less power and delivering better results than general-purpose graphic processing units (GPUs) for specific AI tasks. This gives Amazon a cost advantage over rivals like Microsoft and should lead to better operating leverage as usage scales.

Beyond the cloud, Amazon is also using AI to improve its e-commerce business, as well. The company is now using agentic AI to power autonomous warehouse robots. These robots continue to become more sophisticated and can perform multiple tasks. Some can even spot damaged goods before they're shipped, improving customer satisfaction and reducing costly returns. It recently just surpassed 1 million robots in its warehouses.

It's also using AI to improve efficiency in its logistics operations. AI is helping map out better routes, while mapping tools like Wellspring can help delivery drivers better navigate complicated drop-offs at places like large apartment complexes.

Amazon is also using AI tools to help third-party sellers better market products and target customers more effectively. It's worth noting that its sponsored ad business has become one of the largest digital ad platforms in the world and is growing quickly.

Microsoft

There's no denying that Microsoft is a powerhouse. The company has long been the dominant player in worker productivity software with programs such as Word, Excel, and PowerPoint, and its Windows operating system powers most non-Apple computers.

However, Microsoft's cloud computing unit Azure has been its big growth driver, with AI accelerating that momentum. Last quarter, Azure revenue jumped 33% year over year (35% in constant currency), with AI services making up nearly half of the growth.

Azure is currently firing on all cylinders, but Microsoft has been running into capacity constraints. To address that, Microsoft plans to increase its capital spending in fiscal 2026. It will also shift more investment into shorter-lived assets like GPUs and servers, which it said are more directly tied to revenue.

Microsoft made an early and aggressive investment in OpenAI, and the ability to give customers access to the start-up's leading LLM is one of the biggest reasons why Azure has been taking market share in the cloud computing space. Microsoft has also deeply integrated OpenAI's technology into its own products. For example, the technology is used to help power its AI assistant copilots in Word, Excel, and other productivity tools. At $30 per month per enterprise user, Microsoft's copilots have been a nice growth driver for the company.

Microsoft has also expanded AI beyond Office 365. It's added new copilots focused on cybersecurity and even launched Muse, an AI model designed to help develop and preserve older video games. Meanwhile, its GitHub Copilot has been one of its best-performing, helping drive solid growth for its code-hosting and collaboration platform.

However, the company's relationship with OpenAI has become strained. Microsoft is no longer the exclusive data center provider for the company, and the two have been fighting over the terms of Microsoft's investment, including whether it will get access to the intellectual property of OpenAI's pending acquisition of Windsurf.

Microsoft's investment in OpenAI is one of the most attractive parts of its story. It's currently entitled to 49% of OpenAI Global LLC's profits, capped at roughly 10 times its nearly $10 billion investment. But OpenAI is looking to renegotiate the deal as it looks to restructure into a for-profit company.

The better buy

Both Amazon and Microsoft are great companies with strong cloud computing platforms and big AI opportunities. However, Amazon has the edge.

Amazon's biggest advantage is that its cloud computing platform is vertically integrated. It can provide a wide range of services from custom chips to infrastructure to high-margin services. Its Inferentia and Trainium chips are helping lower its cloud computing costs, and AWS offers a wide array of foundation AI models, both from itself and other leading tech companies.

Microsoft, meanwhile, is reliant on expensive chips from Nvidia and AI models from OpenAI, with whom tensions have been growing. Microsoft is looking to develop its own AI chips, but it was recently reported that its next-generation Maia AI chip has been delayed. Azure has been growing more quickly than AWS, but it faces a lot more unanswered questions at the moment.

Microsoft is a solid stock to own long-term, but right now, Amazon is the better buy.

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 $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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• AMD and GitLab are two beaten-down tech stocks seeing strong AI-related growth.

• e.l.f. Beauty's acquisition of Rhode positions it for a rebound.

• While well off their highs, Dutch Bros and Cava are two of the best growth stories in the restaurant space.

While the market has returned to new highs, not every growth stock has rebounded at the same pace. Five stocks still down 20% or more from all-time highs that look attractive are Advanced Micro Devices (NASDAQ: AMD), GitLab (NASDAQ: GTLB), e.l.f. Beauty (NYSE: ELF), Dutch Bros (NYSE: BROS), and Cava Group (NYSE: CAVA).

Let's look at what each of these five discounted growth stocks brings to the table.

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 »

1. Advanced Micro Devices (down 35% from high)

While AMD remains a distant second to market leader Nvidia in graphics processing units (GPUs), it's starting to carve out a meaningful niche in artificial intelligence (AI) inference. That's important because the inference market is expected to become larger than AI training over time, and AMD's cost-effective chips are starting to gain traction.

On its latest earnings call, management said one of the largest AI-model companies is now using its GPUs for a large share of its daily inference workload. Major cloud providers are also turning to AMD chips for AI tasks like search and recommendation engines.

The company already has a leadership position in data central processing units, and its overall data center revenue has been growing strongly. Last quarter, its data center segment soared 57%, helping total revenue climb 36%. AMD doesn't need to unseat Nvidia in the GPU space, it just needs to gain a modest share to drive outsized growth from its smaller base. Given the pullback in the stock, the setup here looks attractive.

2. GitLab (down 65% from high)

GitLab has become one of the most important players in secure software development. Its DevSecOps platform is helping developers build, test, and deploy applications more efficiently in a secure environment, and its recent GitLab 18 launch only strengthens that position. The release includes over 30 new enhancements, including the GitLab Duo Agent Platform, which deploys AI agents across the entire software development life cycle, not just for code but also for documentation, testing, and compliance.

The company is seeing solid growth both from existing customers and new ones. Last quarter, its revenue climbed 27% year over year, while its dollar-based net retention rate was a robust 122%. Much of this growth is coming from existing customers expanding seats and upgrading to higher-tier plans.

While some investors fear that AI will lead to fewer coders over time, thus far, AI has led to an increase in both software development and the number of coders. GitLab stock has fallen too much on this fear, and it looks well-positioned moving forward.

3. e.l.f. Beauty (down 40% from high)

After a red-hot run, e.l.f. shares cooled off after the company's revenue growth slowed significantly to just 4% in its fiscal Q4. However, its recent $1 billion acquisition of Hailey Bieber's Rhode brand has the potential to reaccelerate growth in a big way.

Rhode has already hit $212 million in annual sales with just a handful of products on its website and minimal marketing. With e.l.f.'s strong relationships at Ulta Beauty and Target and Rhode's recent Sephora rollout, e.l.f. has the opportunity to put the brand in front of a lot more consumers. Bieber staying on as chief creative officer ensures brand continuity, and Rhode brings with it premium price points and a strong skincare lineup, which is an ideal complement to e.l.f.'s core mass-market cosmetics strength.

e.l.f. has already proven it can take a lot of market share in mass-market cosmetics, and Rhode adds a big potential growth driver. The company also continues to have opportunities with skincare, international expansion, and potentially moving into other adjacent categories like fragrance over time.

4. Dutch Bros (down 21% from high)

Dutch Bros is still in the early innings of what looks like a multi-year growth story. The drive-thru coffee chain now has over 1,000 locations but sees room for 7,000 over the long term. It's targeting 2,029 shops by 2029, which would still leave it with a long growth runway next decade as well.

Expansion is not the only story with Dutch Bros, though. It's also had strong same-store sales growth, and has an opportunity to continue to ramp it up. Last quarter, its same-store sales rose 4.7%, while company-owned comps climbed 6.9%. However, mobile ordering has just recently been rolled out, and the company has just begun piloting food items. Dutch Bros has admitted that a lack of breakfast offerings has likely cost it sales, and rival Starbucks has shown just how important food items can be, with food representing 19% of its sales last quarter.

Between an opportunity to grow same-store sales and expand its store base, Dutch Bros has a lot of long-term growth ahead of it.

5. Cava Group (down 43% from high)

Another strong growth story in the restaurant space is Cava. The Mediterranean restaurant operator has posted four straight quarters of double-digit same-store sales growth, including 10.8% last quarter. More impressively, traffic was up 7.5%, showing that customers are coming in more frequently despite price increases.

Higher-priced add-ons like pita chips and fresh juice are boosting ticket sizes, and the company is experimenting with new menu items and a tiered loyalty program to keep customers coming back. However, like Dutch Bros, Cava is very much an expansion story.

The company added 15 new restaurants last quarter and plans to open 64 to 68 new locations this year. With just 382 total restaurants as of the end of last quarter and a target of 1,000 by 2032, there's a long runway ahead. Its expansion strategy, dubbed the "coastal smile," has worked well, and a recent push into the Midwest with markets like Detroit and Chicago should accelerate growth even further.

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

Before you buy stock in Advanced Micro Devices, 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 Advanced Micro Devices 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

Geoffrey Seiler has positions in GitLab, LVMH Moët Hennessy - Louis Vuitton, and e.l.f. Beauty. The Motley Fool has positions in and recommends Advanced Micro Devices, GitLab, Nvidia, Starbucks, Target, Ulta Beauty, and e.l.f. Beauty. The Motley Fool recommends Cava Group and Dutch Bros. The Motley Fool has a disclosure policy.

Key Points

• Motley Fool CEO Tom Gardner recently heralded the benefits of investing in the stock market over keeping your money at the bank.

• While stocks will have their ups and downs, over the long term the market tends to greatly outperform.

• The key is to find good stocks to invest in and keep investing in both good markets and bad.

In a recent interview, Motley Fool CEO Tom Gardner said, "The stock market is a bank that pays a higher interest rate than your bank ever will." However, he prefaced this with the fact that not every investment you make is going to go up, and you're not going to have a positive return each and every year.

In fact, Gardner said that if you buy 25 stocks, you need to be comfortable knowing that five of them are likely to be big disappointments. He added that he understands why some people can get intimidated by the stock market, but if you can get past that fear, then you can build a lot of wealth over time. Two of the keys are finding enough good companies to invest in and keeping at it.

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 »

Finding winners

The S&P 500 index generated an average annual return of 10.5% over the past 30 years from 1995 to 2024. With banks notorious for paying very low interest rates and even high-yield savings accounts and money market funds currently paying rates less than 5%, investing in the stock market is highly likely to give you a better return over the long term.

Investing in individual stocks is also not easy, as Gardner points out, and you are inevitably going to have your fair share of losers along the way. In fact, a J.P. Morgan study found that between 1980 and 2020, 40% of the stocks in the Russell 3000 index, which consists of the 3,000 largest companies in the U.S., suffered a "catastrophic stock price loss," which it defined as a 70% drop in price from which a stock never fully recovered. In addition, the study found that two-thirds of stocks underperformed the index and 40% of stocks had negative returns.

That's some pretty scary stuff, but remember the stock market as a whole put up some strong returns during this period. How could that be when most stocks underperformed? The answer is that big winners helped power the market returns. These represent about 10% of the stocks in the Russell 3,000 and accounted for most of the index's gains over this period.

So as Gardner notes, find enough good companies to invest in and you can generate some pretty strong returns over time. There are a lot of well-known names that have been big winners over the years. This includes Amazon, Walmart, Starbucks, Chipotle Mexican Grill, Alphabet (Google), Meta Platforms (Facebook), Netflix, Apple, and Microsoft. These are companies with pretty recognizable businesses that aren't too difficult to understand, so you don't need to be turning over rocks looking for obscure companies no one has ever heard of to find eventual megawinners. They are often right in front of your face.

The ETF route

Of course, if investors don't want to invest in individual stocks, investing in an index exchange-traded fund (ETF) is another good option. An ETF like the Vanguard S&P 500 ETF (NYSEMKT: VOO) will give you instant diversity with a portfolio of approximately 500 stocks, and look to replicate the performance of the S&P 500 index, which is widely considered the barometer of the U.S. stock market.

The S&P 500 is a market capitalization weighted index, which means that the bigger a company gets (shares outstanding multiplied by share price), the larger a percentage of the index it becomes. This plays perfectly into benefiting from megawinners, as the index naturally lets these megawinners run and become bigger contributors over time.

The Vanguard S&P 500 ETF has a strong track record and is a low-cost way to mimic the performance of the S&P 500 index, which, as noted, is sure to give you a better return than a bank over time. ETFs are also great investment vehicles to use a dollar-cost averaging strategy with, where you invest money each month at a set amount no matter how the market is performing.

Whether you choose individual stocks or ETFs, you want to continue to invest in both bear and bull markets. Investing in bear markets can get you some great prices, while the stock market often will set new floors in bull markets. A separate J.P. Morgan study actually found that the S&P 500 hit highs on 7% of trading days since 1950 and that almost a third of the time, this marked a new floor for the market.

So while the market will have its ups and downs, over the long term, it is one of the best ways to build long-term wealth, and is a surefire way to get you a better return than you ever will at your local bank.

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 $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

Now, it’s worth noting Stock Advisor’s total average return is 1,045% — a market-crushing outperformance compared to 178% 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

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. 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. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Chipotle Mexican Grill, JPMorgan Chase, Meta Platforms, Microsoft, Netflix, Starbucks, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Key Points

• Energy Transfer's strong position in natural gas transportation and storage and future Lake Charles LNG export terminal set it up to be an LNG winner.

• Williams' Transco system and strong presence in the Haynesville Basin position it well to serve growing LNG export demand.

• Cheniere Energy is the best pure-play way to invest in the LNG megatrend.

In the energy space, one of the fastest-growing markets is liquified natural gas (LNG). The market is growing quickly as Asian countries shift from coal to natural gas to help reduce emissions. And with an abundance of natural gas, the U.S. LNG export market is taking off. Shell predicts LNG demand to rise by 60% by 2040, showing the long-term growth of this market.

Let's look at three stocks best positioned to benefit from growing U.S. LNG exports that you can buy and hold for the long term.

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 »

Energy Transfer

Energy Transfer (NYSE: ET) operates one of the largest and most integrated midstream energy systems in the U.S. Its assets span natural gas, crude oil, NGLs, and refined product transport, storage, and processing. That scale gives Energy Transfer a competitive advantage in capturing pricing differentials, managing seasonal spreads, and benefiting from rising volumes across the board. However, it is the company's strong position in natural gas transportation and storage that positions it well to benefit from growing U.S. LNG exports.

Energy Transfer is in full-on growth mode, with $5 billion in 2025 capital expenditures (capex) aimed at capturing AI-driven power demand and growing LNG export volumes. It's already signed a deal to supply natural gas directly to an upcoming AI-focused data center, while receiving inquiries from many more. Its Hugh Brinson pipeline out of the Permian is specifically designed to feed Texas' surging power needs. At the same time, it's lining up the final pieces to greenlight its long-awaited Lake Charles LNG export terminal. It has signed a deal with MidOcean Energy for it to fund 30% of the construction costs in exchange for 30% of the offtake, and it also has several long-term LNG supply agreements in place.

Financially, Energy Transfer is arguably in the best shape it has ever been in. Its leverage is now near the low end of its target range, and the distribution is well covered, with over 2x coverage last quarter. Importantly, 90% of its earnings before interest, taxes, depreciation, and amortization (EBITDA) comes from fee-based contracts, with a record-high percentage being take-or-pay. This gives it stable and predictable cash flows.

With a 7.2% yield and 3% to 5% targeted distribution growth, Energy Transfer offers a compelling mix of income, growth, and upside. Once approved, Lake Charles LNG offers it another compelling growth driver.

Williams

Williams Companies (NYSE: WMB) owns arguably America's most important gas pipeline system in Transco. Transco connects prolific Appalachian gas fields to high-growth demand centers along the Southeast and Gulf Coast. As coal plants retire and LNG exports surge, demand for Transco's capacity keeps rising, creating a steady stream of organic growth projects.

Williams has eight major expansions lined up for Transco through 2030, underpinned by long-term contracts. These are low-risk, high-return projects driven by structural trends like coal-to-gas switching and rising export demand. On top of that, the company is leaning into the data center buildout. Its $1.6 billion Socrates power project in Ohio is aimed directly at feeding natural gas to new data centers, while its stake in Cogentrix Energy provides intelligence on electricity market dynamics to help optimize supply and demand in real time.

Not to be overlooked, the company also has a strong position in the Haynesville Basin that it is currently expanding. While not the lowest-cost basin, its proximity to the Gulf Coast sets it up well for future LNG export growth.

All in all, Williams is an attractive growth stock in the pipeline space that should benefit from increasing LNG export demand.

Cheniere Energy

When looking at companies set to benefit from rising U.S. LNG exports, Cheniere Energy (NYSE: LNG) is the purest way to play this megatrend. It owns and operates the Sabine Pass terminal in Louisiana through its stake in Cheniere Energy Partners (NYSE: CQP), and has direct ownership of the Corpus Christi terminal in Texas. These two facilities make Cheniere the largest LNG exporter in the country, and one of the largest globally.

Cheniere's business model is centered around long-term, take-or-pay contracts with global buyers, which insulates the company's cash flows from big commodity swings. Currently, 95% of its capacity is contracted out until the mid-2030s.

Cheniere has been in the process of building seven new trains at Corpus Christi through its CCL Stage 3 project, which will increase the company's capacity by more than 20%. The company said that Train 1 was substantially complete in March and that Train 3 is progressing toward late 2025 completion. The company is already planning final investment decisions for mid-scale Trains 8 and 9, and will decide whether to go through with a Sabine Pass expansion by early 2027.

Even with trade policy noise, Cheniere recently reaffirmed its 2025 guidance of $6.5 billion to $7 billion in adjusted EBITDA and $4.1 billion to $4.6 billion in distributable cash flow. It expects to produce between 47 million and 48 million tons of LNG in 2025, including contributions from the first three trains at CCL Stage 3.

Overall, Cheniere is one of the best ways to play growing global LNG demand.

Should you invest $1,000 in Energy Transfer right now?

Before you buy stock in Energy Transfer, 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 Energy Transfer 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 $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

Now, it’s worth noting Stock Advisor’s total average return is 1,045% — a market-crushing outperformance compared to 178% 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

Geoffrey Seiler has positions in Energy Transfer. The Motley Fool has positions in and recommends Cheniere Energy. The Motley Fool has a disclosure policy.

It's been frustrating to be a Nike (NYSE: NKE) investor the past few years, but investors cheered after new CEO Elliott Hill indicated that the worst was now behind the company after it reported its fiscal fourth quarter results.

Nike shares surged on the results, which topped low expectations, although the stock is still down on the year and more than 20% lower over the past five years.

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

Let's delve into Nike's recent earnings to see why now is a good time to pick up shares in the iconic sneaker and apparel maker.

The worst is over

Hill, who has been on the job for less than a year, has been working hard to help turn around Nike's business following the missteps of former CEO John Donahoe. Hill's predecessor neglected innovation and pushed the company's classic footwear segment, which consists of brands like Air Jordan and Air Force 1. He also made a big direct-to-consumer push while neglecting important wholesale relationships.

Hill has been working to rewind the damage done by Donahoe through his Win Now action plan. The main tenet of his plan is to return Nike to its innovation roots. He has reorganized the business to drive sports-specific innovation across its three main brands: Nike, Jordan, and Converse. The company has seen some early traction with new innovation, with its Vomero 18 running shoe becoming a $100 million-plus franchise with strong sell-through just 90 days after launch.

The company is also working to mend its relationship with wholesalers. On this end, it recently announced a new partnership with Amazon, where the e-commerce giant will carry a select assortment of Nike footwear, apparel, and accessories. Nike also hired retail marketing, visual merchandising, and account managers to work with large wholesalers to help with their presentations and create better consumer connections.

In addition, the company is looking to implement sharper marketplace segmentation in order to serve its customers at different price points. At the same time, it is looking to position Nike Digital and Nike Direct as premium destinations. This means you might be able to get some lower-priced Nike products at a retailer like Kohl's, while Nike will have its high-end products with the newest technology on its apps and in its stores.

While Nike's actual results were still weak, Hill said it's time to turn the page and that he expects Nike's results to improve moving forward.

For fiscal Q4, Nike's revenue declined 12% to $11.1 billion, with Nike brand revenue down 11% to $10.8 billion. Nike Direct revenue sank 14% to $4.7 billion, as digital sales collapsed 26%. This is largely due to the company repositioning its digital app as a premier destination. Wholesale revenue, meanwhile, dropped 9% to $6.4 billion.

China remained a weak spot, with revenue sinking 21% in the quarter to $1.5 billion. Nike has been heavily discounting in China to reset its inventory.

North America revenue dipped 11% to $4.7 billion, with apparel sales down 7% and footwear revenue falling 13%. EMEA (Europe, Middle East, and Africa) sales sank 9%, while Asia Pacific and Latin America sales decreased by 8%.

Heavy discounting to clear inventory continued to weigh on Nike's gross margins, which fell 440 basis points to 40.3%. Between declining sales and gross margins, its earnings per share (EPS) plunged 86% in the quarter to $0.14.

The company said that tariffs would be a significant new cost headwind, representing an estimated $1 billion in gross costs. It said the tariffs would hurt its gross margin by 75 basis points this fiscal year, with the bigger impact in the first half. It is currently working with suppliers and retail partners to mitigate the costs and impact on consumers.

Is Nike stock a buy?

While Nike's progress has not yet shown up in its results, Hill is helping lay the groundwork for the company to get back on track. He's been leaning into innovation, rebuilding wholesale partnerships, repositioning Nike's app and stores as premium destinations, and working to segment the brand into both premium and core offerings depending on the channel.

While the stock trades at a pretty hefty valuation, with a forward price-to-earnings (P/E) ratio of around 39 times analysts' 2026 estimates, that's largely because Nike's earnings have been depressed. If Hill can get Nike's EPS back to the $3.73 it was in fiscal year 2024, the stock would trade at under 20 times earnings.

Nike still has work to do, but now could be a good opportunity to buy the stock when the company is showing signs of a turnaround and the stock is still down on the year.

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

Before you buy stock in Nike, 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 Nike 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nike. The Motley Fool has a disclosure policy.

The secret to retiring a multi-millionaire is quite simple. There is no easier way to accomplish this than by using a consistent dollar-cost averaging strategy. If you start investing early and use this investment strategy, your odds of retiring a multi-millionaire are extremely good.

Dollar-cost averaging is one of the simplest and most effective investing strategies out there. Instead of trying to time the market, you simply invest at regular intervals, regardless of where prices are.

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 »

By investing a fixed amount every month, or every paycheck, you'll buy more shares when prices are low and fewer shares when they're high. Over time, this will smooth out your cost basis and help protect you from big market swings. It's a disciplined approach that will keep you investing through both bull and bear markets.

Some of the best investment vehicles to use this strategy with are exchange-traded funds (ETFs). With ETFs, you can get an instant portfolio of stocks without doing a lot of research. ETFs are also very accessible. You can feel comfortable starting with a small amount -- the key is just investing consistently.

With the power of compounding, dollar-cost averaging consistently into an ETF can help you retire a multi-millionaire. You also don't have to start with a large amount. If you are in your mid-twenties and have 40 years until retirement, a simple $500 investment each month can turn into a nearly $5 million nest egg by the time you hit retirement age with just a 12% average annual return.

If you're older, though, don't fret. A $1,000 investment each month at a 12% annual return can give you a $3 million portfolio after 30 years. However, the sooner you start, the better, as $1,000 each month for 40 years turns into nearly $10 million.

Let's look at five ETFs with strong track records that can help you retire a multi-millionaire.

Vanguard S&P 500 ETF

With a 12.8% return over the past decade, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is one of the first choices that investors should consider when looking to implement a dollar-cost-averaging strategy. The ETF replicates the performance of the S&P 500, which is widely considered the benchmark for the U.S. stock market.

The ETF is a nice blend of growth and value large-cap stocks, and with around 500 stocks in the fund, it gives investors instant diversity.

Vanguard Growth ETF

Growth stocks have been leading the way in the market for the better part of two decades. The Vanguard Growth ETF (NYSEMKT: VUG) is a great way to invest in this dynamic. With a 15.3% return over the last 10 years, this ETF is another solid choice for investors looking to use a dollar-cost-averaging strategy.

While the ETF officially tracks the CRSP US Large Cap Growth Index, this is essentially the growth side of the S&P 500. It's not as diversified as the S&P 500, with only around 165 stocks in its portfolio, but you're getting the best of the large-cap growth stocks through the ETF.

Invesco QQQ Trust

The Invesco QQQ Trust (NASDAQ: QQQ) has quite simply been one of the best-performing non-sector-specific or non-leveraged ETFs over the past decade. The ETF tracks the performance of the Nasdaq-100 index, which is made up of the 100 largest non-financial stocks that trade on the Nasdaq Stock Exchange. The Nasdaq has long been known as the exchange for emerging growth and technology companies, so the ETF is heavily weighted toward these types of stocks.

The ETF has generated an average annual return of 17.7% over the past 10 years, easily ahead of the return of the S&P 500 over the same stretch. Even more impressive is that it has consistently beaten the S&P 500 more than 87% of the time on a 12-month rolling basis.

Schwab U.S. Dividend Equity ETF

Investing in growth and technology stocks is not the only investment style, and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is a nice value investment alternative. The ETF tracks the Dow Jones U.S. Dividend 100 Index, which consists of high-yielding U.S. stocks that have long track records of consistently paying out dividends.

While the ETF has only generated a 10.6% average annual return over the past 10 years, it has produced a 12.2% annual average return since its inception in October 2011. That's a solid long-term track record.

ARK Next Generation Internet ETF

If you're looking to swing for the fences, the ARK Next Generation Internet ETF (NYSEMKT: ARKW) could be right for you. Unlike the other ETFs, it is actively managed and does not follow an index. Instead, it is focused on investing in companies "that benefit from the increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data, the internet of things, and social distribution and media." In addition to investing in stocks, it currently has an investment in an ETF that tracks the price of Bitcoin.

The ETF has been a strong performer, generating an average annual return of 18.2% over the past 10 years. However, you'll need a strong stomach, as the ETF has seen some wild swings over the past few years, as shown in the table below.

Year	2020 Year	2021 Year	2022 Year	2023 Year	2024 Year
Performance	157.08%	-16.65%	-67.49%	96.99%	42.27%

Data source: Ark Invest.

As such, this ETF is only for the most aggressive investors.

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 $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

Geoffrey Seiler has positions in Invesco QQQ Trust and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Bitcoin, Vanguard Index Funds-Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

The technology sector has helped lead the market higher over the past decade, and with new technologies such as artificial intelligence (AI) and autonomous driving continuing to emerge, there is every reason to believe it can do the same over the next decade.

Let's look at three leading tech companies to buy this year.

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 »

1. Nvidia

Graphics processing units (GPUs) maker Nvidia (NASDAQ: NVDA) has established itself as the leading semiconductor company in the world. The strength of GPUs lies in their parallel processing capabilities, which allow them to perform many calculations at the same time. This capability makes these powerful chips ideal for running AI workloads in the data center.

The real secret to Nvidia's successes, though, is its CUDA software program. Created to expand the market for GPUs beyond their original intent of speeding up graphics rendering in video games, Nvidia aggressively pushed the software platform into universities and research labs in its early days, which helped make it the platform upon which developers learned to program GPUs for various tasks.

In the years since, the company has built a collection of tools and libraries that help improve the performance of its GPU for use in running AI workloads. This has helped give the company a dominant market share in the GPU space of more than 80%.

As the AI infrastructure market continues to grow, Nvidia continues to be the biggest beneficiary. However, that's not its only growth market, and the company also sees a big future opportunity in the automobile and autonomous driving sector. After all, autonomous vehicles need to perform quick calculations, which is the strength of GPUs, so they don't crash.

Since Nvidia doesn't have a recurring revenue stream, any slowdown in its end markets is a risk, but right now these markets still appear to be in the early days of their growth cycles.

2. Alphabet

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is certainly not without its risks, as some investors fret over AI disrupting its search business, while at the same time, it faces legal remedies from the U.S. government after losing an antitrust trial. However, the company has a collection of very attractive businesses and investors have largely ignored the advantages in search the company has.

Alphabet is about much more than Google search. Its YouTube business is not only the most-watched streaming platform, but it is also one of the largest digital advertising platforms in the world.

Meanwhile, its cloud computing unit, Google Cloud, is Alphabet's fastest-growing business, as it helps customers build out and run AI models and apps on its platform. Also not to be overlooked is its robotaxi business, Waymo, which has a first-mover advantage in the U.S. and is expanding rapidly.

That said, Google is still Alphabet's bread and butter, but it's not time to write this dominant search engine off just yet. Google has a large distribution and ad network advantage that should not be overlooked. Its distribution advantage comes from its popular Android smartphone operating system and Chrome browser, which use its Google search engine as a default.

Meanwhile, it has a revenue-sharing agreement with Apple and browser companies like Opera to run their search queries, as well. In addition, it has spent decades building one of the largest ad markets on the planet, with an ability to serve not only national advertisers, but also local businesses.

Alphabet also knows how to monetize search better than any company, and as the world moves toward AI search and chatbots, it's focused on profiting from queries that have commercial intent. That's why when it recently launched its new AI search mode, it included several commerce-focused features aimed at enhancing monetization, such as "Shop by AI," which allows users to find products simply by describing them, virtually try on clothes using a photo, and even track prices.

With unmatched distribution, a massive ad network, and a focus on commerce monetization, Alphabet is well situated to be an AI search winner.

3. Salesforce

Salesforce (NYSE: CRM) has long been the leader in customer relationship management software, and now it's setting its sights on becoming a leader in AI agents through its new Agentforce platform.

The company's core value proposition has always been about unifying customer data, and it has expanded this concept into the data center with its Data Cloud offering. Through acquisitions, it's also established a leadership position in employee and customer-facing apps, such as Slack and Tableau. This type of ecosystem is an ideal environment for AI agents to interact with this data and use it to automatically perform tasks.

Agentforce includes pre-built AI agents that can help businesses streamline tasks, as well as low-code and no-code tools that let customers design their own custom AI agents with little technical expertise. It has also established an Agentforce marketplace with more than 200 partners to offer more templates and broaden use cases. Thus far, Agentforce has seen solid momentum, with it already having more than 4,000 paying customers since its October launch and many more in pilots.

Salesforce is looking to lead a digital labor revolution. It plans to accomplish this through its ADAM framework that combines agents, data, apps, and metadata into one platform. It recently introduced a new consumption-based model that better aligns agent costs with business outcomes to help improve customer satisfaction and increase adoption.

Agentic AI is a competitive space, but Salesforce looks like it has the platform to be a winner.

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 $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

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet, Opera, and Salesforce. The Motley Fool has positions in and recommends Alphabet, Apple, Nvidia, and Salesforce. The Motley Fool has a disclosure policy.

With the stock market settling in after a volatile period, now is a good time to start looking at some leading growth stocks that have strong potential over the next decade.

Here are five growth stocks across industries that investors can look to hold for the long term.

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 »

1. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (NYSE: TSM) is one of the most critical players in the artificial intelligence (AI) boom. As the world's leading contract chip manufacturer, TSMC manufactures the advanced semiconductors powering a range of products from AI infrastructure to smartphones and automotive tech.

Producing these chips isn't easy, as it requires leading-edge technology, precision manufacturing, and scale. Few companies in the world have the capabilities or the track record that TSMC does, and with competitors struggling, it has also garnered strong pricing power.

As such, the company has become the go-to partner for top chip designers, thanks to its leadership in advanced nodes and packaging. Advanced nodes refer to manufacturing processes that allow more transistors to be packed onto a chip, which in turn boosts performance and power efficiency.

Meanwhile, demand for high-performance computing, including AI chips, has exploded. With AI workloads growing, TSMC is expanding capacity alongside key customers to meet future demand.

Despite its pivotal role in the AI supply chain, TSMC's stock still looks reasonably valued. For long-term investors looking to benefit from the continued growth in AI infrastructure and semiconductors in general, TSMC is a great stock to hold.

2. Pinterest

Pinterest (NYSE: PINS) has undergone a quiet but powerful transformation under CEO Bill Ready. Over the past three years, the company has invested heavily in technology to turn its massive user base, which now sits at more than 570 million monthly active users worldwide, into a growth engine. Pinterest is no longer just an online vision board; it's become a shoppable platform with growing ad conversion capabilities.

One of the big drivers behind Pinterest's transformation has been its embrace of AI. The company built a multimodal model trained on both images and text to better understand what users are looking for. This powers personalized recommendations, while a visual search feature makes it easier for users to find and shop for products they see in pinned images. On the backend, meanwhile, its Performance+ platform is giving advertisers the tools to run better campaigns.

The results speak for themselves. Last quarter, Pinterest's revenue jumped 16%. Average revenue per user (ARPU) climbed across all regions, especially outside the U.S., where Pinterest is starting to better monetize users in emerging markets through the help of a partnership with Google.

Pinterest's stock still looks attractively valued, and the company is just scratching the surface of monetizing its user base. With AI-powered tools and a more shoppable platform, Pinterest has solid long-term investment potential.

3. Dutch Bros

Dutch Bros (NYSE: BROS) is shaping up to be one of the most compelling expansion stories in the restaurant space. With just over 1,000 locations across 18 states, the company believes it can more than double its footprint to 2,029 shops by 2029, and it sees the opportunity to eventually support 7,000 coffee shops nationwide.

Meanwhile, its small, drive-thru-focused shops are inexpensive to build, have attractive unit economics, and offer fast payback periods.

What makes the story even more attractive, though, is that Dutch Bros is only now starting to unlock other key growth levers. Mobile ordering, for example, is still early but gaining traction, accounting for only 11% of transactions last quarter. Mobile ordering also feeds into its loyalty program, allowing it to personalize its marketing and promotions.

The company is also leaning into food, testing hot items to drive breakfast sales at a few select locations. Food currently makes up less than 2% of sales, compared to nearly 20% at Starbucks, so there's real upside here. With more menu expansion and store openings on the way, Dutch Bros looks like a long-term winner.

4. Philip Morris International

Philip Morris International (NYSE: PM) is a growth stock in a defensive industry. While many tobacco companies are struggling with declining cigarette volumes in the U.S., Philip Morris doesn't have to worry about that because it doesn't sell cigarettes domestically. Instead, its growth is being driven by its smokeless portfolio, led by Zyn and Iqos, both of which have better unit economics than traditional cigarettes.

Zyn, its fast-growing nicotine pouch, has been its biggest growth driver, as evidenced by U.S. shipment volumes jumping 53% in Q1.

Meanwhile, Iqos, its premium heated tobacco product, continues to gain traction in Europe and Japan, with early success in new markets like Mexico City, Jakarta, and Seoul. In addition, after buying back its U.S. rights from Altria, the U.S. has the potential to be its next big growth driver. At the same time, its traditional cigarette business remains stable overseas, helped by strong pricing power and steady demand.

With strong pricing power, local manufacturing that limits tariff exposure, and growing demand for Zyn and Iqos, Philip Morris looks well positioned to keep delivering strong growth in the future.

5. Eli Lilly

Eli Lilly (NYSE: LLY) has emerged as a leader in the booming GLP-1 drug space, with surging demand continuing to drive strong revenue growth. Last quarter, its two key GLP-1 drugs -- Mounjaro and Zepbound -- generated a combined $6.1 billion in revenue, up sharply year over year. While Zepbound is officially approved by the Food and Drug Administration (FDA) for weight loss in obese adults or overweight adults with at least one weight-related condition, and Mounjaro is approved to help adults with type 2 diabetes, the reality is that the growth of these drugs is being driven by their being prescribed off-label for weight loss.

However, the drug that could be the biggest game changer for Lilly is still on its way. Orforglipron, its first oral GLP-1 drug candidate, recently demonstrated in a phase 3 trial that patients who took the drug lost considerable weight. As an oral medication, it is a much more convenient alternative to injectable GLP-1 drugs, making it especially appealing to patients who are wary of needles.

Orforglipron is also easier to manufacture and distribute than injectable drugs, as it doesn't require cold storage or injection pens. This should help Lilly avoid the supply constraints it saw with its injectable GLP-1 portfolio. With orforglipron looking like it has the potential to be the most potent oral GLP-1 weight loss drug on the market, Lilly is well positioned for continued future growth.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, 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 Taiwan Semiconductor Manufacturing 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

Geoffrey Seiler has positions in Philip Morris International and Pinterest. The Motley Fool has positions in and recommends Pinterest and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Dutch Bros and Philip Morris International. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) once again demonstrated rapid growth as demand for its graphics processing units (GPUs) remains robust. Even with new export controls severely limiting its ability to sell into China, the company projects strong revenue growth moving forward as the artificial intelligence (AI) infrastructure buildout continues to march along.

The stock is up an astonishing 1,450% over the past five years, as of this writing. Let's take a closer look at Nvidia's results to see whether the stock still has a lot of growth left in the tank.

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 »

Blackwell leads the way despite China headwinds

The new export controls, which restrict Nvidia's ability to sell its chips in China, are expected to have a material impact on the company's revenue. It will take an $8 billion hit to sales in the second quarter alone. It noted that its H20 chip has been sold in China for more than a year and that no grace period was provided to let it sell through its inventory. In Q1, it generated $4.6 billion in H20 revenue, all of which occurred before April 9, and took a $4.5 billion charge. It said Chinese revenue would have been $7 billion in for the quarter if not for the export controls.

The company made a plea to be allowed to sell into China, stating that not having access to the Chinese market will benefit its foreign competitors in China and worldwide. It said China already has AI, and the assumption that it can't make AI chips is false. It believes the Chinese AI accelerator market will eventually grow to $50 billion, while noting that export restrictions spurred China's innovation and scale.

Even without access to China, however, Nvidia still forecasts its fiscal Q2 revenue to be approximately $45 billion, which would represent 50% growth. This will largely come from the continued ramp-up of its Blackwell GPUs.

Blackwell drove Nvidia's revenue growth in Q1, with the company calling it the fastest ramp-up in its history. Data center revenue surged 73%, with Blackwell contributing nearly 70% of its data center compute revenue in the quarter.

Nvidia stated that AI factory buildouts, which are large-scale rollouts that use its full stack of solutions, not just GPUs, are driving significant revenue growth. It added that AI factory deployments are accelerating, with nearly 100 Nvidia-powered sites in progress this quarter, which was twice as many as last year. Notably, the average number of GPUs per factory has also doubled.

It also said that AI inference demand is soaring, and it believes that demand for AI computing will accelerate as AI agents become mainstream.

Nvidia's other segments were also strong. Gaming revenue jumped 42% to $3.8 billion, while professional visualization revenue rose by 9% to $509 million, and automotive and robotics revenue increased 72% to $567 million.

Nvidia's overall revenue climbed 69% to $44.1 billion, surpassing the $43 billion guidance it issued in February. Adjusted earnings per share (EPS), excluding its H20 write-off, grew 33% to $0.96 and topped the $0.93 analysts' consensus as compiled by LSEG.

Adjusted gross margin, excluding charges, was 71.3%, 220 basis points lower than last year. As Blackwell continues to ramp up, it is looking for gross margins to return to the mid-70% range later in the year.

The company continues to generate a boatload of cash, with operating cash flow of $27.4 billion and free cash flow of $26.1 billion in the quarter. Nvidia ended the quarter with net cash and marketable securities of $53.7 billion and $8.5 billion in debt.

Is Nvidia stock still a buy?

As AI infrastructure spending continues to surge, Nvidia remains the company best positioned to benefit. Its GPUs are still the backbone of AI data centers, and as the market shifts further toward real-time inference, agentic AI, and more advanced reasoning tasks, demand for computing power is expected only to grow. With both industry-leading hardware and a powerful software ecosystem in CUDA, Nvidia's dominance in the AI infrastructure market remains firmly intact.

While the loss of being able to sell into China is a blow to the company, it still has a long runway of growth in front of it. There also is always the possibility that the new export controls will be rolled back as part of the broader trade deal, which would be a huge bonus for the company.

Trading at a forward price-to-earnings (P/E) ratio of 31 times this year's analyst estimates, the stock is still attractively valued.

If AI infrastructure spending is still in its early innings, which it appears to be, Nvidia continues to look like a solid buy at these levels. The biggest risk to the stock would be a sudden slowdown in AI spending, but right now, there are few signs of that.

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

Geoffrey Seiler 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.

While on-again, off-again tariffs have created a lot of uncertainty and volatility in the stock market, one set of companies that should see minimal impact one way or the other are cybersecurity providers. After all, cybercriminals and hackers aren't downsizing their attacks due to tariffs.

Let's look at four top cybersecurity stocks that investors might want to consider buying this month.

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 »

1. Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW) is in the midst of a transformation from being largely a provider of next-generation firewalls to becoming a comprehensive cybersecurity platform. Last year, it embarked on a new "platformization" strategy where it stopped selling new point solutions and began consolidating customers onto one of its three main cybersecurity platforms. To do this, it gave away some of its services for free to entice customers to ditch disparate point solutions and centralize on its platforms.

Thus far, the strategy appears to be working, with 1,150 of its top 5,000 customers now using one of its platforms. It hopes to have 2,500 to 3,500 platformization customers by fiscal year 2030. Its main platform is network security, but it has also been seeing a lot of growth coming from its threat detection and response solution Cortex, and its cloud security solution Prisma Cloud.

While its platformization strategy temporarily slowed its growth, it was the right move for the long term, and investors should be rewarded.

2. CrowdStrike

CrowdStrike (NASDAQ: CRWD) is another cybersecurity company that should benefit from the trend of companies looking to consolidate their cybersecurity needs onto a single platform. The company is best known as the leader in endpoint security, which is the protection of devices connected to a network, such as a smartphone or laptop. In fact, it is regularly at the top of Gartner's rankings for best endpoint security.

The company offers a comprehensive suite of cybersecurity protection, including threat intelligence, zero trust, logscale SIEM (log management and threat detections), and cloud security. And its flexible licensing and procurement service, Falcon Flex, is helping drive adoption of its modules.

Falcon Flex gives customers the flexibility to quickly deploy CrowdStrike solutions when and where they need them. Last quarter, 67% of CrowdStrike's customers deployed five or more of its modules, while 21% used eight or more.

With the impact of its highly publicized information technology outage now in the rearview mirror, and customer commitment packages (a set of incentives offered to affected customers, including discounts, subscription extensions, and other compensation deals) rolling off the books later this year, the company should begin to see growth start accelerating. That makes this a good time to jump into the stock.

3. Zscaler

Zscaler (NASDAQ: ZS) is a leader in zero-trust security, a model based on the principle that no user or device should be trusted. Instead, access to applications and data must be continuously verified, authorized, and revalidated to ensure security at every step.

Zero trust is becoming an increasingly important part of the cybersecurity landscape, and the company has been doing a great job of upselling its customers to new zero-trust systems. These include its Zscaler Private Access, which is being used to replace virtual private networks (VPNs), including within the federal government. Other products gaining traction include Zscaler Digital Experience, Zero Trust for Branch and Cloud, and artificial intelligence (AI) analytics.

It has also moved into data security to help prevent data loss in public AI apps. Last quarter, it saw a 40% increase in annual contract value for its data security products.

Overall, the company is growing, with revenue climbing 23% year over year last quarter. Its net dollar retention rate was 115%, showing its strong growth within its existing customer base. With zero trust and data protection becoming more important, Zscaler has a bright future.

4. SentinelOne

SentinelOne (NYSE: S) is a fast-growing endpoint cybersecurity company, trading at a low valuation. Its forward price-to-sales (P/S) multiple is only 6.6 times, despite having 29% revenue growth last quarter.

The company has a big opportunity in the second half of the year, when personal computer (PC) vendor Lenovo will begin shipping its computers with SentinelOne's Singularity Platform installed. Lenovo is the world's largest enterprise PC vendor, selling 61.8 million PCs last year, so this is a big deal for SentinelOne.

The company has also been doing a good job of upselling its Purple AI, which uses AI to help analysts detect complex security threats through the use of natural language prompts. It predicts that Purple's use of hyper-automation to enhance security operations by automating complex, multi-step processes will become "the bedrock for agentic AI in cybersecurity." Purple can also be run across vendor platforms, including Zscaler and Palo Alto.

Given its growth, the opportunities in front of it, and its valuation, SentinelOne is a stock investors can look to add to their portfolios.

Should you invest $1,000 in Palo Alto Networks right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Geoffrey Seiler has positions in SentinelOne. The Motley Fool has positions in and recommends CrowdStrike and Zscaler. The Motley Fool recommends Gartner and Palo Alto Networks. The Motley Fool has a disclosure policy.