Key Points

• Nvidia has ownership stakes in "neocloud" companies Nebius Group and CoreWeave.

• While each company is positioned to benefit from investments in AI infrastructure, CoreWeave's growth prospects appear more robust over the long term.

• Wall Street is forecasting CoreWeave's revenue to triple over the next couple of years, which should help pave a path to profitability.

• 10 stocks we like better than CoreWeave ›

Following the end of each quarter, financial services firms that manage over $100 million in stocks are required to file a form 13F with the Securities and Exchange Commission (SEC). These filings represent an itemized breakdown of all the stocks that the fund bought and sold during the most recent quarter.

While investors may not realize it, corporations can also invest their cash into equity positions of other businesses. According to Nvidia's recent 13F filing, the semiconductor darling currently holds positions across six stocks. Two of its holdings are spread between artificial intelligence (AI) data center stocks, Nebius Group and CoreWeave (NASDAQ: CRWV).

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Fresh off a hot initial public offering (IPO) earlier this year, CoreWeave has emerged as an integral player in the AI infrastructure market. Let's dive into CoreWeave's business and explore how the company is transforming the AI landscape.

What does CoreWeave do?

For the last few years, investors have learned about the important role that advanced chipsets known as graphics processing units (GPUs) play in the development of generative AI. The GPU market is largely dominated by Nvidia and Advanced Micro Devices, both of which are able to command hefty price tags for their coveted data center hardware.

While AI has served as an unprecedented tailwind for the chip market, one of the subtle nuances is that this demand has brought a series of complications to supply and demand dynamics.

This is where CoreWeave comes into play. CoreWeave operates as a "neocloud," which is a specialized type of business that allows companies to access GPU architecture through cloud-based infrastructure. This flexible model appeals to businesses that may not be able to purchase GPUs directly from Nvidia or its cohorts due to rising price dynamics.

By offering an agile and potentially more affordable model than cloud hyperscalers such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform, CoreWeave has been able to attract a number of high-profile customers and ink a series of multiyear, billion-dollar deals.

What does CoreWeave's growth look like?

For the quarter ended March 31, CoreWeave generated $982 million in revenue -- up 420% year over year. While the company's net loss widened more than twofold compared to the year-ago quarter, CoreWeave has some catalysts that should quickly turn around the dynamics of its profitability profile. See estimates in the chart below.

CRWV Revenue Estimates for Current Fiscal Year data by YCharts

During the earnings call, management raised guidance for both revenue and capital expenditures (capex). While more spending may stifle profitability in the short term, these investments are necessary foundations for the longer-term opportunity in AI infrastructure.

As Wall Street's estimates pictured in the chart above showcase, CoreWeave's investments today should help secure more access to Nvidia's Blackwell GPU architecture and should ultimately serve as a tailwind for more accelerated growth down the road.

Is CoreWeave stock a buy right now?

In the chart below, I compare CoreWeave to Oracle on a price-to-sales (P/S) basis. Oracle is also a leading player in infrastructure-as-a-service (IaaS), having just signed a $30 billion cloud deal of its own, so it's comparable to CoreWeave. That single deal is expected to bring in nearly twice the amount of CoreWeave's total 2027 revenue. And yet, investors are placing a twofold premium on CoreWeave's P/S multiple when compared to Oracle.

CRWV PS Ratio data by YCharts

I think there are a couple of nuances to point out when it comes to CoreWeave's valuation relative to a peer such as Oracle.

First, Oracle is experiencing a transition period -- effectively replacing slow-growth (or no-growth) segments of the business with its new, budding data center infrastructure operation. For this reason, investors are likely applying a discount to Oracle relative to a high-growth AI stock such as CoreWeave.

Moreover, CoreWeave completed an IPO earlier this year. Since then, the company has inked an $11.2 billion deal with OpenAI, announced the planned acquisition of Core Scientific to bolster its platform, and earned a spot in some of Wall Street's most respected institutional portfolios.

This confluence of factors is more than enough to garner outsize excitement and enthusiasm from investors. For these reasons, I'm not surprised to see CoreWeave trading at such a premium.

I think the most prudent course of action for investors is to buy CoreWeave stock at different price points over a long-term time horizon. If you invest the same amount of money at set time intervals, that is known as dollar-cost averaging, and can help mitigate risk by removing specific timing and price points from the equation.

Overall, I see CoreWeave as a compelling opportunity that is well positioned to dominate the infrastructure chapter of the AI narrative. If I could buy only one Nvidia-backed data center stock, CoreWeave would be it.

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

Before you buy stock in CoreWeave, consider this:

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Adam Spatacco has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Nebius Group 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

• IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing have reached valuation levels well beyond those seen during prior stock market bubbles.

• Each of these companies has recently raised capital through a series of equity offerings and stock issuances.

• These moves could suggest that the valuation levels for these businesses are not only abnormally high, but unsustainable.

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

Last summer, companies such as IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) were unknown penny stocks.

However, as quantum computing steadily made its way toward center stage in the artificial intelligence (AI) realm, each of these companies witnessed meteoric rises in their share prices. Over the last 12 months, IonQ stock has blasted higher by 517%, while Rigetti, D-Wave, and Quantum Computing have experienced surges of at least 1,500% as of this writing (July 21).

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With valuations reaching historically high levels, could investors be on the verge of witnessing a quantum computing bubble bursting?

Is quantum computing in a bubble?

The chart below illustrates valuation trends among popular quantum computing stocks on a price-to-sales (P/S) basis.

IONQ PS Ratio data by YCharts.

As I outlined in a prior article, the quantum computing stocks above are trading at far higher P/S multiples compared to levels seen during the dot-com and COVID-19 stock bubbles.

For example, during the internet boom in the late 1990s, stocks such as Amazon, Cisco, and Microsoft experienced peak P/S ratios in the range of 30x and 40x. Taking this a step further, popular COVID stocks such as Zoom Communications and Peloton saw P/S multiples top out at 124x and 20x, respectively.

The big theme here is that IonQ, Rigetti, D-Wave, and Quantum Computing are each trading for valuation multiples that could be seen as historically high, even when compared to prior bubble events.

With that said, other AI companies that are also exploring quantum computing -- such as Nvidia, Amazon, Alphabet, and Microsoft -- currently trade for much more reasonable valuation multiples when compared to the companies in the chart above.

For this reason, I do not think the entire quantum computing landscape is at risk of experiencing a bubble-bursting event. However, IonQ and its peers have been dropping some breadcrumbs in recent months that lead me to think the smaller quantum computing players could be on the verge of a harsh sell-off.

What's going on under the hood with quantum computing stocks?

After some digging into certain filings with the Securities and Exchange Commission (SEC), I think IonQ, Rigetti, D-Wave, and Quantum Computing may be trying to signal some important things to investors:

• In February, IonQ announced that it planned to raise up to $500 million through a series of stock issuances. The company doubled down on its capital-raising ambitions more recently, offering 14,165,708 shares at a price of $55.49 -- raising nearly $1 billion in the process.
• In June, Rigetti raised $350 million in capital after completing an at-the-market (ATM) equity offering.
• Between June 11 and June 27, D-Wave Quantum raised $400 million through an ATM offering. Of note: This followed a prior raise of $150 million that occurred in January.
• In late June, Quantum Computing raised $200 million following the issuance of 14 million shares at an average price of $14.25.

What's really going on here? With each of these quantum computing stocks trading near all-time highs, it appears to me that management is looking to take advantage of frothy market conditions.

IONQ data by YCharts.

Quantum computing is a research-heavy, capital-intensive industry. Management at IonQ and its peers surely understand this, and so I see these capital raises as a calculated move to capitalize on inflated, overstretched valuations.

Should you invest in quantum computing stocks?

To me, any hint of a bubble surrounding IonQ and its smaller peers may already be in the process of bursting. Under the surface, the various stock issuances and equity offerings annotated above could suggest that management does not believe current price levels are sustainable.

By using the dot-com and COVID bubbles as benchmarks, history would suggest that a major correction could be on the horizon for these small quantum computing stocks. Issuing stock to raise funds is not sustainable in the long run. Furthermore, consistently diluting shareholders through these offerings could call into question how these companies are allocating capital.

In my eyes, if investors are seeking exposure to the quantum computing industry, they are best off exploring more diversified opportunities in big tech as opposed to the smaller, more speculative players analyzed in this piece.

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Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Cisco Systems, Microsoft, Nvidia, Peloton Interactive, and Zoom Communications. 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

• Palantir has witnessed a meteoric rise in its share price thanks to the company's successful foray into the artificial intelligence (AI) arena.

• Several respected investors on Wall Street have been applying different approaches when it comes to investing in Palantir, making it hard to discern how "smart money" feels about the company.

• Palantir is trading for a historically high valuation, and broader buying and selling themes from institutional money managers could suggest a sell-off is on the horizon.

• 10 stocks we like better than Palantir Technologies ›

Outside of Nvidia, I'd argue that no other company has benefited from the tailwinds of the artificial intelligence (AI) revolution as much as data mining specialist Palantir Technologies (NASDAQ: PLTR).

Over the last three years, shares of Palantir have gained more than 1,300%. Just this year alone, Palantir stock has rocketed by 97%. To put that into perspective, the S&P 500 and Nasdaq Composite indexes haven't even posted gains of 10% in 2025.

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While it can be tempting to follow the momentum in hopes of more outsize gains, smart investors understand that hope is not a real strategy.

Let's explore the catalysts behind Palantir's generational run, and assess some recent trading activity to help discern whether Palantir stock could be headed even higher.

The unprecedented rise in Palantir

When AI first started to emerge as the next megatrend during late 2022 and early 2023, investors were consistently bombarded with news around big tech's splashy investments in the space. Microsoft plowed $10 billion into OpenAI, the maker of ChatGPT. Both Amazon and Alphabet invested hefty sums into a competing platform, called Anthropic. Tesla was touting its advancements in self-driving cars and humanoid robots. You get the drift -- the AI narrative largely hinged on the moves big tech was making.

But in the background, Palantir was building. In April 2023, the company launched its fourth major software suite -- the Palantir Artificial Intelligence Platform (AIP).

PLTR Revenue (TTM) data by YCharts

As the graph above illustrates, Palantir was a relatively slow-growth, cash-burning enterprise prior to the release of AIP. But since AIP's launch a little more than two years ago, Palantir's revenue has accelerated considerably. On top of that, the company has been able to command improving unit economics underscored by a sweeping transition to positive net income and generating billions in free cash flow.

At the end of 2022, Palantir had 367 total customers. As of the end of the first quarter this year, Palantir boasted 769 total customers. Perhaps even more impressive is that the company's commercial customers (non-government) have risen by more than twofold over the last couple of years.

To me, AIP is serving as a gateway for Palantir to expand its reach beyond federal contracts with the U.S. military, which is what Palantir is best known for. AIP represents a transformational shift as a defense contractor to a more ubiquitous software platform capable of penetrating the private sector, despite relentless competition from larger companies such as Salesforce or SAP.

As a Palantir bull myself, I've been blown away by management's ability to outmaneuver big tech and deliver on lofty growth targets time and again. But as an investor, I can't help but wonder if the company's share price trajectory is sustainable.

Is Wall Street trying to tell investors something?

In addition to analyzing financial trends and operating metrics, investors can augment their due diligence process by listening to how Wall Street analysts talk about a company or even dig into the trading activity of notable investors. Thanks to a nifty tool called a form 13F, investors can access an itemized breakdown of all of the buys and sells from hedge funds during a given quarter.

During the first quarter, famed billionaire investor Stanley Druckenmiller sold out of his fund's Palantir position. In addition, Cathie Wood has been trimming exposure to Palantir in Ark's portfolio as well.

On the flip side, billionaire investors Ken Griffin and Israel Englander both added to their funds' respective Palantir positions during the first quarter. Given these dynamics, it might be hard to discern how Wall Street really feels about Palantir.

I think there are some nuances to point out given the details above. First, both Druckenmiller and Wood have been in and out of Palantir stock in the past -- this is not the first time each investor reduced their exposure to the data analytics darling.

On top of that, I think Griffin's and Englander's activity should be taken with a grain of salt. Both investors run highly sophisticated, multistrategy hedge funds. From time to time, some of this activity may include being a market maker.

Although it may appear bullish that Palantir stock is held in Griffin's Citadel and Englander's Millennium Management portfolios, I wouldn't quite buy that narrative. Neither fund is necessarily known for holding positions for the long term.

Moreover, as a multistrategy fund with a number of different teams and objectives, I think that it's highly likely that Citadel and Millennium have a layered and complex hedge strategy when it comes to owning a volatile growth stock such as Palantir.

Where will Palantir stock be at the end of 2025?

The chart below illustrates institutional buying and selling of Palantir stock over the last few years.

PLTR Shares Bought By Institutional Investors data by YCharts

Given that buying (the purple line) remains elevated over selling (the orange line), this could suggest that Palantir remains a favorite among institutional portfolios. However, as I expressed above, not all hedge funds and money managers have the same strategy. In other words, some of this elevated buying could be part of a broader, more complex trading strategy and less so an endorsement of long-term accumulation.

Over the last few months, Palantir stock has become increasingly more expensive. In fact, the company is trading well beyond levels seen during peak days of the dot-com or COVID-19 bubbles.

While it's impossible to know for certain where Palantir stock will be trading by the end of the year, smart investors know that nothing goes up in a straight line forever.

A good indicator for how investors feel about Palantir's prospects should come after the company reports second-quarter earnings in a couple of weeks. As a reminder, shares fell off a cliff for a brief moment following the company's first-quarter blowout report. Expectations are rising with each passing report, and I would not be surprised to see Palantir stock sell off again -- even if its Q2 results are stellar.

Given the convergence between institutional buying and selling, combined with Palantir's increasingly expensive valuation, I can't help but be cautious at this point. I do think a valuation correction could be in store sooner or later and would not be surprised if shares are trading for a considerably lower price by the end of the year.

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

Before you buy stock in Palantir Technologies, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*

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Adam Spatacco has positions in Alphabet, Amazon, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, Palantir Technologies, Salesforce, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Alphabet now expects to lay out $85 billion in capital expenditures this year -- up from a previously planned $75 billion -- and expects to further accelerate that spending next year.

• Alphabet's AI capex will be allocated toward servers, accelerated data center buildouts, and cloud computing infrastructure.

• Rising AI infrastructure spending from hyperscalers such as Alphabet bodes well for Nvidia and its thriving GPU business.

• 10 stocks we like better than Nvidia ›

Over the next several weeks, companies will report financial and operating results for the second quarter of 2025. As usual, technology investors will be focused on one thing: artificial intelligence (AI).

"Magnificent Seven" member Alphabet kicked things off earlier this week, reporting robust results across its search, advertising, and cloud computing divisions.

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While Alphabet shareholders should be encouraged by the internet giant's strong performance, I saw Nvidia (NASDAQ: NVDA) as the real winner from the company's second-quarter performance.

Let's dig into some of the important moves Alphabet is making and assess how Nvidia is benefiting from them.

Alphabet is picking up the pace on AI infrastructure construction

During the Q2 earnings call, Alphabet's management updated some details of its financial guidance. Alphabet now plans to spend around $85 billion on capital expenditures (capex) in 2025. Of note, this is a $10 billion increase over the company's prior guidance.

And there's more. "Looking out to 2026, we expect a further increase in capex due to the demand we're seeing from customers as well as growth opportunities across the company," said Chief Financial Officer Anat Ashkenazi.

Despite its increasingly aggressive spending on AI infrastructure over the last few years, Alphabet has stated that it doesn't plan on slowing down anytime soon. This should be music to Nvidia's ears.

GOOGL Capital Expenditures (TTM) data by YCharts.

Why is this good for Nvidia?

Management consulting juggernaut McKinsey & Company is forecasting that AI infrastructure spending could reach $6.7 trillion by 2030. And its research suggests that almost half of that money will be allocated toward AI hardware for further data center construction.

In addition, research from Goldman Sachs and JPMorgan indicates that generative AI could add between $7 trillion and $10 trillion to global gross domestic product in the long run.

From a macroeconomic perspective, these secular trends bode well for Nvidia's compute and networking empire. Moreover, I think that Alphabet's decision to bump up its AI infrastructure spending again adds some credibility to those industry forecasts.

Alphabet's management specified that it is raising its planned capex in order to accelerate the construction of data centers and position itself to fill the rising demand for capacity on the Google Cloud Platform.

Increased spending on network equipment, servers, and cloud infrastructure should lead to rising demand for graphics processing units (GPUs). I see this as a major positive development as Nvidia is still scaling up production of chips made using its latest Blackwell architecture.

Considering Nvidia holds an estimated 90% share of the data center GPU market, I see Alphabet's investments in AI infrastructure as a major tailwind for the chip king and further propels the company's momentum over competition in the chip space.

Is Nvidia stock a buy right now?

With a market cap north of $4.2 trillion, Nvidia is currently the most valuable company in the world. While this might lead one to assume that the stock is expensive, its underlying valuation trends tell a different story.

NVDA PE Ratio (Forward) data by YCharts

Nvidia currently trades at a forward price-to-earnings (P/E) multiple of 40. While this isn't "cheap" by traditional benchmarks, it is notably lower than the peak levels Nvidia has witnessed during the AI revolution.

What makes these dynamics interesting is that Nvidia's growth trajectory is arguably far stronger today than it was 18 months ago when its forward P/E valuation peaked. The company remains at the center of the AI revolution, providing massive amounts of fast parallel-processing power to hyperscalers and accelerating AI workloads.

To me, buying Nvidia stock at its current price is a no-brainer, and I see Alphabet's rising AI infrastructure spending as a long-term catalyst that should not be overlooked by growth investors.

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 $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,063,471!*

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% 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 21, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Adam Spatacco has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Goldman Sachs Group, JPMorgan Chase, and Nvidia. The Motley Fool has a disclosure policy.

Key Points

• Quantum computing stocks have been on a tear this year, despite the technology's nascent scale and still speculative nature.

• Unlike the broader artificial intelligence (AI) theme, many popular quantum computing stocks are small companies with limited traction.

• While it can be tempting to follow the momentum, several quantum computing stocks boast valuation multiples that echo those seen during prior stock market bubbles.

• 10 stocks we like better than IonQ ›

This year has been tough for investors, particularly those who flock toward growth stocks. Just about every major industry has been impacted in some form or fashion by President Donald Trump's new tariff policies.

While the broader implications of these import taxes are still unfolding, one sector that has faced abnormally large headwinds is technology. For the first time in nearly three years, investing in the artificial intelligence (AI) market hasn't necessarily resulted in outsized gains.

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Nevertheless, one pocket of the AI realm that has managed to circumvent the panic-selling this year is quantum computing. As of this writing (July 17), the Defiance Quantum ETF has gained 17% so far this year -- roughly double the returns seen in the S&P 500 and Nasdaq Composite.

With quantum computing stocks trouncing the broader market, now may be an appropriate time to assess valuations in the sector and compare them to prior periods of heightened enthusiasm.

What is a stock market bubble, and what are some examples?

One of the most basic mistakes investors make is assessing a company's valuation based on its stock price. In other words, if the stock price is low, an investor might mistakenly view the company as "cheap" (and vice versa).

Smart investors understand that there are far more parameters than the share price that help determine a company's valuation. Underlying financial metrics, such as revenue, gross margins, profitability, free cash flow, cash, and debt, should all play a factor in assessing the health of a business.

From there, more sophisticated analysis requires investors to benchmark these figures and their growth rates against a set of peers to get a better sense of how the business in question compares to the broader competitive landscape.

Many investors do not take the time to perform the due diligence exercise above and instead choose to follow broader momentum. Unfortunately, this can lead to abnormally inflated stock prices -- those that are incongruent with the underlying fundamentals of the business.

Generally speaking, reality begins to set in and these companies are unable to sustain their overstretched valuations, eventually leading to harsh, dramatic sell-offs. This phenomenon is known as a stock market bubble.

In the charts below, I've illustrated some valuation trends across two notable stock market bubbles.

AMZN PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

The chart above illustrates the price-to-sales (P/S) ratios for a number of high-flying internet stocks during the dot-com bubble of the late 1990s. As the trends above make clear, each of the companies in the peer set above trades at much more normalized valuation multiples today when compared to their peaks during the internet boom.

ZM PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

Investors witnessed a similar theme in overstretched valuations during the peak days of the COVID-19 pandemic. Companies such as Zoom Communications, Wayfair, and Peloton witnessed abnormal demand for their respective product offerings as remote work became the norm.

As the trends seen above demonstrate, however, these growth tailwinds were not permanent. Today, none of these COVID stocks are seen as compelling growth opportunities, and their cratering valuations are a sobering reminder of the aftermath of bubbles bursting.

How do quantum computing stocks compare to the valuations above?

Over the last year, IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) have emerged as popular names fueling the quantum computing movement.

IONQ PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

With a P/S multiple of over 5,700, the tiny Quantum Computing business is the clear outlier in the quantum computing cohort illustrated above. Even so, Rigetti, IonQ, and D-Wave each boast P/S ratios that are either considerably higher or in line with the darlings of the dot-com and COVID bubbles.

Are we in a quantum computing stock bubble?

The quantum computing stocks referenced above are highly speculative -- arguably even more so than the highfliers during the internet era. Unlike then, today's technology behemoths, such as Amazon, Microsoft, eBay, and Cisco, have evolved into sophisticated platform businesses with diversified ecosystems.

This provides them with the scale and financial flexibility to explore emerging fields such as quantum computing. Smaller players, such as IonQ, Rigetti, D-Wave, and Quantum Computing, currently face intense competition from big tech -- something the dot-com businesses did not.

Given the valuation analyses explored above, many popular quantum computing stocks are clearly trading at abnormally high and historically unsustainable valuation levels. For these reasons, I think companies such as IonQ, Rigetti, D-Wave, and Quantum Computing have entered bubble territory.

With that said, many big tech companies in the "Magnificent Seven" are exploring quantum applications as well. Many of these companies trade for much more reasonable valuations. While I am not convinced the broader quantum computing opportunity is necessarily in a bubble, I believe investors need to be cautious and thoughtful when selecting which quantum computing stocks to invest in.

And the best choices will rarely be high-flying specialists with big dreams and small revenue streams.

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

Before you buy stock in IonQ, 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 IonQ 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Microsoft, Peloton Interactive, VeriSign, Zoom Communications, and eBay. The Motley Fool recommends Wayfair 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

• Ackman holds Alphabet stock and cites the AI trend as a major catalyst for its search and cloud businesses.

• Laffont questions how dominant Google Search will still be in the face of competition from generative AI.

• Alphabet is leveraging OpenAI as a strategic partner, potentially mitigating the risks that concern Laffont.

• 10 stocks we like better than Alphabet ›

Billionaire hedge fund manager Bill Ackman's approach to portfolio management is rather simple. The founder and CEO of Pershing Square Capital Management keeps its portfolio concentrated in a small number of large-cap stocks that he buys when they are arguably trading below their intrinsic values.

Coatue Management founder Philippe Laffont has a different philosophy. Coatue's portfolio boasts a number of high-growth stocks that appear poised to dominate emerging trends.

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One company that Ackman and Laffont seem to have different views on is "Magnificent Seven" member Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG).

Let's start by exploring what drives Ackman's conviction in the megacap artificial intelligence (AI) stock. From there, I'll detail a major risk factor that Laffont recently called out for the stock. Lastly, I'll provide my own breakdown of Alphabet and whether or not the stock could be worth a look right now.

Why does Bill Ackman like Alphabet?

Pershing Square's position in Google parent Alphabet makes up about 14% of the value of its portfolio, based on the fund's most recent 13F filing. In its latest annual investor presentation, the firm identified Alphabet as an "underappreciated" opportunity in the AI landscape.

It went on to highlight new opportunities in digital advertising and cloud computing as catalysts for Alphabet that could drive accelerated revenue growth and profit margin expansion.

For example, Google's search responses now highlight AI-crafted summaries. So far, this feature has shown some encouraging metrics such as higher user engagement trends among those who use the summaries. This puts Google in an advantageous position when it comes to enticing advertisers to its platform.

In addition, Alphabet's cloud computing business has made meaningful investments in cybersecurity tools over the last few years. The integration of AI-powered cybersecurity services into the Google Cloud Platform (GCP) is a major differentiator from peers such as Microsoft Azure and Amazon Web Services (AWS). Moreover, it also opens the door to another enormous addressable market and provides Alphabet with more direct ways to compete with the likes of CrowdStrike and other leading cybersecurity players.

GOOGL Net Income (TTM) data by YCharts.

Over the past year, Alphabet generated more net income than its closest cloud infrastructure peers. Yet it's trading at a forward-price-to-earnings (P/E) multiple of just 18.4 -- roughly half the ratios of Amazon and Microsoft. Given Alphabet's discounted valuation and the potential value to be gained from integrating AI and cybersecurity across its vast ecosystem, I can see why the company earned a position in Pershing Square's portfolio.

Laffont just called out a major risk factor for Alphabet investors

During a recent panel discussion on CNBC's Squawk Box, Laffont detailed his thoughts on Alphabet. The billionaire was bullish on some of its businesses, such as video platform YouTube and autonomous driving company Waymo. However, Laffont expressed concern over the outlook for Google Search. He believes that the rise of OpenAI could pose a threat to Google's search business.

Is Alphabet stock a buy right now?

I completely understand Laffont's stance, and I would go as far as to say that his opinion is rooted in reality. Some search trends have already been indicating that Google is losing some of its momentum, likely due to the rise of OpenAI and competing large language models (LLMs).

With that said, I'd like to call out an interesting development between Alphabet and OpenAI. The two companies recently formed a strategic partnership under which OpenAI will leverage Google Cloud's network.

As Ackman's thesis shows, Alphabet has some creative ways to grow its budding cloud infrastructure business relative to the competition. Considering OpenAI's closest ally throughout the AI revolution has been Microsoft, I see the expansion of its relationship with Google Cloud as an incredibly savvy deal and potentially lucrative opportunity for Alphabet.

Furthermore, if OpenAI does begin to meaningfully take business from Google Search, then Alphabet appears to have identified a new way to offset that headwind while monetizing the very company that potentially threatens it.

Although I understand Laffont's view, I think the bearish sentiment surrounding Alphabet is more academic than reality. Moreover, I think the potential downside is baked into Alphabet's stock at this point, considering the steep discount and wide disparity in valuation multiples it trades at relative to its near peers (despite being the most profitable of the three).

I see Alphabet stock as a dirt-cheap, no-brainer opportunity right now.

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

Before you buy stock in Alphabet, consider this:

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

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

• Microsoft and Amazon were early investors in AI, plowing tens of billions into upstart companies.

• No doubt, OpenAI and Anthropic have helped spur new growth for Microsoft and Amazon.

• Yet, Meta's decision to branch out beyond internally built AI systems and products looks savvy.

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

Big tech has not been shy about opening the pocketbook for artificial intelligence (AI)-related investments over the last few years. While the billion-dollar price tags are what made headlines, the real value of these investments came with their strategic intent. Many of these deals involved alliances with big tech leaders, who swiftly integrated a host of new AI-powered products and services into their legacy ecosystems.

Until recently, Meta Platforms (NASDAQ: META) took a different approach. It chose to allocate its capital expenditure (capex) budget to custom silicon chips, developing new wearable tech, and building its own large language model (LLM). However, following its massive $14.3 billion bet on start-up Scale AI, it's fair to wonder if Meta's approach to building an AI empire is too little, too late.

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Let's explore some of the more notable AI deals that big tech has made in recent years. From there, I'll detail the underlying thesis behind Meta's interest in Scale AI, and why the timing of this deal is so important.

Is Meta late to the AI party?

Microsoft was the first major tech company to make a mark in the AI landscape. In early 2023, the company structured a multi-year investment worth $10 billion in ChatGPT developer OpenAI. The strategic rationale behind this deal was to integrate OpenAI's services into Microsoft's Azure cloud platform.

Amazon followed in Microsoft's footsteps. Amazon initially invested $4 billion into creating an OpenAI competitor, a start-up called Anthropic. Similar to Microsoft's integration of ChatGPT into the Azure ecosystem, the partnership with Anthropic has so far revolved around leading cloud platform Amazon Web Services (AWS). Amazon has now invested a total of $8 billion into Anthropic since the initial investment a couple of years ago.

How have these deals panned out so far?

It's one thing to outlay significant capital toward new assets. But how beneficial have these deals been for big tech so far? Per Microsoft's most recent earnings report, revenue from Azure and other cloud services grew by 33% year over year. Management pointed out that 16 points of this growth (roughly half) were attributable to AI services.

Meanwhile, since Amazon's investment in Anthropic in September 2023, AWS has grown its annual revenue run rate by 27% while expanding operating income margins by roughly 9 percentage points.

While this growth is impressive, there are some subtle nuances that investors should be aware of as well. First, OpenAI recently signed a new cloud deal with Alphabet. OpenAI has also been working closely with Oracle on Project Stargate, a $500 billion AI infrastructure initiative.

These new relationships could suggest that OpenAI is looking for strategic opportunities beyond its existing relationship with Microsoft. For that reason, it's hard to project how accretive Microsoft's investment in OpenAI will be going forward.

On top of that, the Anthropic and OpenAI deals primarily revolve around cloud computing services. While this is a critical component of the AI narrative, it's not entirely related to or competitive with Meta -- which mostly seeks to monetize consumer engagement through social media, gaming, and the metaverse.

Meta is scaling for the future, and its timing looks pretty smart

Then there's Meta Platforms' deal with Scale AI. One of the pillars supporting this deal was that it helped pave the way for a new component of the company's ecosystem, known as Meta Superintelligence Labs (MSL). Scale AI CEO Alexander Wang now leads MSL as Chief AI Officer. In addition to the Scale AI team, Meta has hired a number of technologists and researchers from OpenAI, GitHub, Anthropic, and Alphabet to build the MSL team.

Meta's largest source of revenue and profits stems from its advertising empire. With billions of people engaging with its apps on a daily basis, advertisers are eager to get in front of Meta's users.

However, Meta's advertising model relies on predictive analytics around which ads users actually click on. This data is used to train recommendation models in order to feed ads that will actually convert to clicks and sales from its users. Scale AI is a data labeling platform that can be used to augment and fine-tune Meta's existing ad targeting techniques.

Although Microsoft and Amazon have been able to jump-start their respective cloud operations thanks to their aggressive and early moves in the AI start-up landscape, I think Meta may have been more calculated in the development of its own roadmap.

In my eyes, Microsoft could face rising competition from Oracle and Alphabet in the cloud arena. Meanwhile, investors will likely want to see how Amazon plans to integrate AI beyond AWS to source further growth from its other businesses.

With Scale AI and a host of new hires now closely aligned across Meta's various applications and services, I think the company is uniquely positioned to bolster its existing AI platforms while others in the big tech landscape now face rising competition and may need to pivot.

While it may have looked like Meta's big tech peers were sprinting right by, I think the company's recent investments and creation of its new AI research lab were perfectly timed.

Don’t miss this second chance at a potentially lucrative opportunity

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• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $414,949!*
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. 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. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle. 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

• Archer manufactures electric air taxis that it plans to sell to cities, commercial airlines, and the U.S. military.

• Morgan Stanley estimates that Archer is operating in a market that could be worth $9 trillion in the long run.

• While Archer's potential is exciting, the young company's valuation requires a thoughtful look right now.

• 10 stocks we like better than Archer Aviation ›

When it comes to the electric vehicle (EV) market, most investors probably don't look past companies such as Tesla or Rivian Automotive. While both of these companies have built strong brands in the car landscape, there are other opportunities beginning to emerge within the broader EV realm.

One of the more popular areas includes electric vertical takeoff and landing (eVTOL) aircrafts, such as those built by Archer Aviation (NYSE: ACHR). Archer is looking to disrupt the aviation industry through its futuristic electric air taxis. From offering a new form of mobility in densely populated environments such as cities to introducing new stealth aircraft for the military, Archer has no shortage of interesting use cases. Among its fans is popular tech investor Cathie Wood.

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With shares trading for about $10 as of July 7, is now a good time for investors to invest in Archer? Read on to find out.

Archer Aviation is an exciting company with a lot of potential, but...

Investment bank Morgan Stanley recently published a report in which research analysts estimated the size of what the organization calls the "low altitude market." By 2050, Morgan Stanley is forecasting the total addressable market (TAM) for low altitude aircraft to be around $9 trillion.

While Morgan Stanley's research includes other types of aircraft besides eVTOLs (i.e., drones) in its report, it is encouraging to see Archer's primary opportunity in air mobility is so large. When you explore Archer's potential to disrupt traditional modes of transportation while bringing much-needed innovation to the aviation industry, it's not surprising to learn that companies such as United Airlines and Stellantis have been eager to partner with the company.

On top of that, Archer's recent partnership with Palantir Technologies also suggests the company is exploring how software and artificial intelligence (AI) can play a role in the company's new aviation system.

With an order book worth roughly $6 billion, institutional investor support, partnerships with leading vehicle and aviation businesses, and use cases spanning commercial aviation as well as defense contracting, Archer might look like a no-brainer investment opportunity.

...smart investors understand reality versus narrative

For now, Archer remains a pre-revenue business. In other words, the company's partnerships and growing order book haven't exactly led to tangible sales coming through the door just yet.

ACHR Cash and Equivalents (Quarterly) data by YCharts

While the chart above might imply that Archer's cash balance is strong, the company's rising research and development (R&D) costs and ongoing burn rate could quickly diminish its liquidity position. Despite this financial profile, Archer boasts a market capitalization of $5.4 billion. To me, that valuation reflects an exciting hype narrative as opposed to concrete fundamentals.

Is Archer Aviation stock a buy right now?

Although Archer stock may look "cheap" at $10 per share, the company's multibillion-dollar valuation seems overstretched considering there aren't any sales to back it up yet. In reality, Archer could be seen as analogous to a late-stage venture capital (VC) type of investment. The payoff could be enormous, but the risk profile is equal (if not larger) in size.

Another layer that could complicate the company's commercialization efforts revolves around regulatory approvals from the Federal Aviation Administration (FAA). In my view, there are too many uncertainties around Archer right now. While I am hopeful that the company has the potential to disrupt the aviation world, I think investing in Archer stock right now is too speculative.

It could be years before the company reaches critical scale and the stock price really takes flight. For these reasons, I would encourage investors to monitor Archer's progress but remain on the sidelines when it comes to buying the stock right now.

Should you invest $1,000 in Archer Aviation right now?

Before you buy stock in Archer Aviation, 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 Archer Aviation 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 $687,764!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $980,723!*

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Adam Spatacco has positions in Palantir Technologies and Tesla. The Motley Fool has positions in and recommends Palantir Technologies and Tesla. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Key Points

• Ark Invest has been adding several chip stocks to its portfolio in recent months.

• Advanced Micro Devices and Taiwan Semiconductor Manufacturing now make up sizable positions for Ark.

• Both companies are compelling opportunities for any AI investor right now.

As CEO and chief investment officer of Ark Invest, Cathie Wood might be best known for her high conviction in speculative opportunities across industries such as genomics and cryptocurrency.

When it comes artificial intelligence (AI), many of Ark's biggest positions are in volatile stocks such as Tesla and Palantir Technologies. Over the last couple of months, however, Wood has quietly been rounding out her exchange-traded funds (ETFs) with semiconductor stocks.

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Let's explore two AI chip stocks that have recently become rising stars in the Ark portfolio. Is now the time to follow Wood's moves? Read on to find out.

1. Advanced Micro Devices

While Advanced Micro Devices (NASDAQ: AMD) has been part of Ark's portfolio for quite some time, the investment firm began aggressively adding to its position throughout late April and most of May.

According to public trading data, Ark added approximately 800,000 shares of AMD between June 17 and 30. The position is spread across the Ark Autonomous Technology & Robotics ETF, Ark Next Generation Internet ETF, Ark Fintech Innovation ETF, and Ark Innovation ETF. As of this writing, AMD has now become the 11th biggest position for Ark Invest overall.

In fairness, AMD's rise at Ark has been influenced by some pronounced share price gains in recent weeks too. Since Ark began adding to its AMD position in late April, shares have gained roughly 61%.

In my eyes, AMD's recent gains can be tied to the company's accelerating data center business as well as bullish anticipation for its new AI accelerators during the second half of this year.

Data by YCharts.

Nevertheless, even with such a massive move in the share price, AMD trades for roughly 36 times forward earnings. Although this isn't exactly cheap, shares of AMD are well within their usual valuation range.

My hunch is that AMD is still being discounted by some investors, primarily due to the enormous competitive threat the company faces from Nvidia.

Considering how much momentum is fueling AMD stock right now, I think I'd sit on the sidelines for the time being. To me, the company's long-term prospects are somewhat ambiguous so long as Nvidia remains king of the chip industry. While there is likely still good money to be made in AMD stock, there are more reasonable price points to build a position.

2. Taiwan Semiconductor Manufacturing

Ark complemented its AMD purchases with some exposure to Taiwan Semiconductor Manufacturing (NYSE: TSM) back in May. The firm doubled down on this decision by adding over 190,000 shares of TSMC throughout June.

I see TSMC as the most interesting opportunity within the broader chip landscape. Unlike Nvidia, AMD, Broadcom, or the cloud hyperscalers, TSMC doesn't specialize in designing its own chipsets. Rather, the company offers industry-leading fabrication services that bring semiconductor designs to life.

This puts TSMC in a unique position as the company stands to benefit from rising spend in AI infrastructure over the coming years, regardless of which specific chipsets are witnessing the most demand.

Looked at another way, investors in TSMC need not overanalyze which chip company will sell the most graphics processing units (GPUs). Rather, an investment in TSMC could be viewed similarly to a call option on ongoing investment in data center infrastructure and AI chips for the long term.

Data by YCharts.

While TSMC has witnessed some notable valuation expansion throughout the AI revolution, the company's forward price-to-earnings (P/E) multiple of 25 is still reasonable. Unlike AMD, I do not think rising competition is what concerns investors over a position in TSMC, though.

Rather, it's geopolitical tensions with China that give way to uncertainty over TSMC's growth prospects. Given the company's ongoing investments in geographic expansion, though, I think the concerns over China are exaggerated and likely baked into the stock at this point.

As I wrote a few weeks ago, TSMC might be the best bargain in the AI market right now. Compelling secular tailwinds, combined with an industry-leading position in the fabrication market, strong institutional backing, and a reasonable valuation, make TSMC a no-brainer for long-term investors.

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!*

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*Stock Advisor returns as of June 30, 2025

Adam Spatacco has positions in Nvidia, Palantir Technologies, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Palantir Technologies, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Key Points

• Waymo and Tesla are investing heavily into autonomous driving technology.

• The companies have different approaches in building their self-driving cars, but Waymo may have just unintentionally endorsed its rival.

• While Tesla's approach to autonomous driving seems valid, the company has a long way to go before it catches the competition.

Autonomous driving is emerging as one of the most exciting opportunities in the artificial intelligence (AI) landscape. Developing self-driving vehicles stitches together semiconductors, software development, and robotics. Hence, there are several different ways to invest in the technology.

For now, the most mainstream opportunities in the autonomous vehicle market seem to be through Tesla (NASDAQ: TSLA) and Alphabet, which owns self-driving car business Waymo. What most investors likely overlook is that Waymo and Tesla have approached building fleets of self-driving cars through different lenses.

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While Waymo has a first-mover advantage in scaling self-driving taxi fleets, some findings from the company's recent academic research paper titled "Scaling Laws of Motion Forecasting and Planning" could suggest that Tesla may have a technological edge.

Let's explore Waymo's progress so far and assess why Tesla could be the superior autonomous driving opportunity in the long run.

Waymo beat Tesla to the punch

According to Alphabet's first-quarter earnings report, Waymo completes more than a quarter of a million paid rides on a weekly basis. Not only is this a fivefold increase compared to last year, but Waymo's serviceable markets are still quite limited. For now, Waymo primarily operates in Austin, Texas, and has planned expansions in Washington, D.C., and Miami over the next year.

By contrast, Tesla just launched its long-anticipated robotaxi service in Austin a couple of weeks ago. Considering Waymo's successful early adoption rates, investors may be wondering how Tesla plans to close the gap against competitive forces.

Did Waymo just quietly admit Tesla has an edge?

There are several differences between how Waymo and Tesla have approached building self-driving car fleets. From a technical standpoint, the two companies have opposing views on variables such as mapping, sensors, and developing the compute power needed to train and hone AI models.

Waymo's approach is grounded in simulating real-world environments and driving behaviors. By contrast, Tesla's general approach has been to use a data-heavy feedback loop from its actual drivers.

Tesla vehicles are constantly collecting loads of sample data from drivers such as speed and braking patterns or interventions. Subsequently, Tesla trains and iterates its models on this large and expanding data set to improve its autonomous driving software platform and budding robotaxi fleet. Tesla collected more than 3.5 billion miles' worth of driver data from its Full Self-Driving (FSD) software platform.

In Waymo's research report, the company suggests that "collecting more data" could be advantageous when building and scaling autonomous vehicle platforms. Waymo goes on to say that "every 10 observed miles are equivalent to 2 to 3 demonstrated miles."

To me, these statements seem to suggest that building a sophisticated model alone is not enough to perfect autonomous vehicle software. Rather, collecting data at scale is a critical part of the equation. Furthermore, it appears that Waymo is saying that using large volumes of real driver behavior (i.e., non-autonomous vehicle platforms) is important for training these models over time.

In essence, Waymo's study seems to endorse many of the pillars supporting Tesla's approach to developing self-driving cars -- learning from actual driver behaviors, collecting billions of various data points, and ultimately iterating and scaling the technology based on these takeaways.

Is Tesla stock a buy right now?

At the moment, Tesla stock appears to be pricing in a lot of upside from the robotaxi launch. I wouldn't chase momentum at these valuation levels, per se. Tesla stock often trades on narratives, which smart investors know can change quickly.

As a long-term investor, I encourage readers to think about the bigger picture here. Self-driving cars are still a new, evolving technology and I do not personally think there is a single correct way to build and scale these platforms.

Candidly, I don't see Waymo's study as some sort of veiled admission that Tesla's approach to autonomous driving is right and theirs is wrong. I simply think Waymo's takeaways subtly imply that Tesla's technological approach has some merit.

What will determine who wins the autonomous driving opportunity will boil down to which company can acquire more customers, expand to new markets, strategically partner with existing ridehailing applications, and scale its fleets more rapidly and profitably. For these reasons, I do not think Tesla necessarily has Waymo is a checkmate position -- at least not yet.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $397,573!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,453!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $697,627!*

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

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*Stock Advisor returns as of June 30, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet and Tesla. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.

Since OpenAI released ChatGPT to the world on Nov. 30, 2022, shares of semiconductor powerhouse Nvidia (NASDAQ: NVDA) have risen by 818% (as of June 26). To put that another way, over the last two and a half years, Nvidia's market capitalization went from $345 billion to $3.8 trillion. making it the largest company in the world as measured by market cap.

Some investors are already thinking about who the next breakout candidate in the artificial intelligence (AI) revolution will be, with signs pointing to another chip stock -- perhaps Advanced Micro Devices? What about Broadcom or Taiwan Semiconductor Manufacturing? While each of these companies stands to benefit from rising AI infrastructure spend over the next several years, I see another business that is better positioned as "the next Nvidia."

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You see, Meta Platforms (NASDAQ: META) has been investing in AI over the last couple of years, and the technologies it's developing could transform Meta's social media empire and position the stock for superior gains over the competition.

How can AI transform Meta's ecosystem?

Meta operates across two core segments: advertising and Reality Labs.

Reality Labs represents Meta's metaverse ambitions, which include virtual reality interactions, gaming, and consumer wearables. While Reality Labs stands to benefit from AI, this segment of the company remains unprofitable and is more of a longer-term vision to turn Meta into something beyond just a social media platform.

The main source of revenue and profits for Meta comes from advertising -- specifically, ads that appear across the company's social media platforms: Facebook, Instagram, and WhatsApp. It's this area of the business that is ripe for disruption thanks to the power of AI.

If you have ever scrolled on any of Meta's social media apps, chances are that you've been bombarded with a series of advertisements. However, how many of those ads actually appealed to you?

As sophisticated as Meta's user algorithms have been in the past, my hunch is that you still receive postings or notifications for content, goods, and services that aren't of high interest to you. By leveraging AI, however, Meta can improve its data workloads as it relates to user engagement and consumer behaviors. As a result, the company can improve its predictive analytics to better position more relevant and customized listings for its users.

In turn, advertisers, which can be somewhat unpredictable and exhibit cyclical budgeting strategies, will be more inclined to allocate funds across Meta's various platforms. By keeping advertisers sticky to the ecosystem, Meta has an opportunity to employ pricing power over the competition and accelerate its revenue growth. At the same time, improving ad feeds for its users can also help Meta from a cost structure perspective -- as the unit economics on clicks and customer acquisition should become lower over time.

The combination of accelerating revenue and lower costs could result in meaningful profit margin expansion for Meta in the long run.

What could this mean for Meta's valuation?

Since ChatGPT's release, the share prices of Meta have gained more than 500%. I bring this up to make it clear that Meta has also benefited from the bullish AI trade over the last couple of years.

Data by YCharts.

However, except for a notable spike during the first half of 2023, Meta's price-to-earnings (P/E) multiple has remained fairly consistent over the last 18 months or so.

These dynamics suggest a couple of ideas. First, the relative normalization in Meta's P/E could imply that investors think the company's earnings profile is maturing. In addition, while a P/E of 28 isn't exactly dirt cheap, this valuation is clearly a steep discount based on prior levels.

Meta is positioning itself for a meaningful boost in profitability as AI becomes more integrated throughout its ecosystem. For this reason, Meta's valuation multiples could expand in the coming years as the company's "Nvidia moment" comes into focus. That suggests the company has meaningful upside from current levels.

Is Meta stock a buy right now?

I think Meta is a no-brainer when it comes to megacap AI stocks. The valuation analysis explored above suggests that Meta stock still trades at a reasonable price point despite an already generous return throughout the AI revolution. Moreover, I think the company is still in the early stages of its AI development, and investors have yet to see the full potential these investments could yield for Meta in the long run.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $409,114!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,173!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $713,547!*

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

See the 3 stocks »

*Stock Advisor returns as of June 23, 2025

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. Adam Spatacco has positions in Meta Platforms and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Chances are that just a few years ago you had never heard of a company called OpenAI. But that all changed on Nov. 30, 2022 -- the day OpenAI released ChatGPT to the public and gave birth to the artificial intelligence (AI) megatrend.

Since ChatGPT's debut, no other megacap technology stock has benefited more than semiconductor powerhouse Nvidia (NASDAQ: NVDA). With shares up by more than 750% in less than three years, Nvidia's valuation has climbed by the trillions.

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With so much excitement surrounding the company, though, could Nvidia keep skyrocketing? Billionaire hedge fund manager Philippe Laffont thinks so. Let's dig into what Laffont's investment firm, Coatue Management, has to say about Nvidia's growth prospects over the next five years.

Despite its already epic run, now may still be a lucrative opportunity to buy some shares in the chip designer and hold on tight.

Laffont's hedge fund sees explosive upside for Nvidia

Each year, Coatue hosts a conference called East Meets West (EMW), during which leaders from the technology and investment worlds gather and discuss big trends fueling the market.

According to Coatue's 2025 EMW presentation, the firm sees Nvidia remaining as one of the most valuable companies in the world over the next five years. By 2030, Coatue is forecasting a market capitalization of $5.6 trillion for Nvidia -- implying nearly 60% upside from current levels.

What could the next five years look like for Nvidia?

When it comes to investing in Nvidia, it's important for investors to consider all angles -- whether these are positive tailwinds or negative headwinds. As far as challenges are concerned, Nvidia faces two primary uncertainties.

The first surrounds the company's prospects in China, which could begin to witness notable deceleration as new tariff policies and export controls become established. In addition, rising competition from Advanced Micro Devices in combination with increased investment in custom silicon from some of Nvidia's own customers -- namely Amazon, Microsoft, Alphabet, and Meta Platforms -- could put a dent in the company's data center business.

While both of these scenarios present a degree of uncertainty surrounding Nvidia, I see each of them as short-term issues.

Regarding customer acquisition, ongoing nurturing with emerging customers such as xAI and Oracle suggest that Nvidia shouldn't have much of an issue fulfilling any demand that the company may lose from its "Magnificent Seven" peers. In addition, despite China currently representing a sizable portion of Nvidia's revenue base, new relationships across other geographies -- particularly the Middle East -- have the potential to make up any lost ground in Asia over time.

Thinking longer-term, however, Nvidia's growth prospects appear bright. For starters, following the inauguration of President Donald Trump back in January, Oracle, OpenAI, and SoftBank announced a joint venture called Project Stargate -- which aims to invest $500 billion into AI infrastructure in the U.S. through 2029.

In addition, management consulting firm McKinsey & Company recently reported that AI infrastructure spend could reach $6.7 trillion by 2030. The biggest beneficiary from this spend? Chip designers and AI data centers. That bodes well for Nvidia.

Even though Nvidia's near-term growth may give off the appearance of deceleration given challenges in China and the introduction of more chips, the long-term narrative supports the idea that AI capital expenditures (capex) will continue to build momentum over the next five years. To me, these secular tailwinds suggest that Nvidia's longer-term growth potential far outweighs any bumps the company might experience in the near term.

Is Nvidia stock a buy right now?

When investors see that a stock has risen by several hundred percent over just a few years, they may assume they missed out on the opportunity. But in the case of Nvidia, valuation trends suggest that now could be as good a time as any to buy the stock.

NVDA PE Ratio (Forward) data by YCharts

ChatGPT became commercially available roughly three years ago. During this period, investors have watched Nvidia transform into a company primarily focused on chipsets for high-performance gaming and PCs into an integral player powering generative AI development across the board.

And yet, per the chart above, Nvidia's forward price-to-earnings (P/E) multiple of 34.2 is right in line with its three-year average. Looked at a different way, Nvidia's forward earnings ratio has normalized considerably from prior levels despite the company's impressive growth and robust future outlook.

I am aligned with Coatue's forecast in that Nvidia still has substantial room to run over the next five years. To me, Nvidia stock is trading for a bargain right now and I see the stock as a no-brainer for AI investors.

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 $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. 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.

Over the last several months, a new pocket of the AI realm called quantum computing has started to garner quite a bit of attention from the investment community. What's unique, however, is that the usual suspects of Nvidia, Microsoft, Alphabet, and Amazon aren't really pegged to the rising interest in quantum computing technology.

Rather, a new cohort of rising stars such as Rigetti Computing, D-Wave Quantum, and IonQ (NYSE: IONQ) are among the most popular quantum computing stocks right now. With shares down by 25% from their peak over the last year, IonQ stock trades for roughly $40 as of this writing. Is now a good opportunity to pounce on the stock?

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IonQ's popularity is fueling interest in quantum computing stocks, but...

Quantum computing is not a widely used application in artificial intelligence (AI) today. Yet despite its developmental stage, global management consulting firm McKinsey & Company is forecasting that quantum computing could be a $131 billion opportunity in the coming decades. With the potential for such enormous upside, it's not entirely surprising that investors were quick to look at which companies are involved with quantum computing development.

One reason that I think IonQ has emerged as a favorite in the quantum computing market is the company's impressive partnerships with cloud hyperscalers Microsoft, Amazon, and Alphabet. With the stock sliding as of late, investors may be wondering if the sell-off is an opportunity to buy the dip.

... does the valuation actually make sense?

Despite working with major AI developers, IonQ has little to show in terms of tangible growth. Over the last year, the company has only generated $43 million in revenue. Meanwhile, the company's net losses are in the hundreds of millions (and worsening).

IONQ Revenue (TTM) data by YCharts

In a way, this financial profile actually makes some sense. As I alluded to above, quantum computing is not yet commercially used in AI development. Given those dynamics, IonQ's revenue potential is fairly limited for the time being. The unfortunate reality is that the company will likely remain a high-cash-burn operation as it continues building out its platform.

But still, for just $40 could IonQ be worth a look? Well, smart investors understand that the stock price alone does not determine the worth of a business. As of this writing, IonQ boasts a market capitalization of nearly $10 billion. This implies that IonQ is trading for a price-to-sales (P/S) ratio of 195.

Is IonQ stock a buy right now?

IonQ's P/S ratio is not just high; it is multiples above what investors witnessed during the peak euphoria of the dotcom bubble in the late 1990s. I bring this up because the prospects of quantum computing and the appearance of a low share price might tempt investors into chasing momentum -- mistakenly thinking they are buying a stock for a "cheap" price.

The reality is that IonQ stock is anything but cheap. Given the mounting losses pictured above, I suspect that IonQ could have a tough time financing future projects -- further limiting its ability to monetize and grow.

In my eyes, the current sell-off in IonQ stock could lead to further plummeting in the shares. I would not be surprised if IonQ begins to witness a significant valuation correction as more growth investors come to understand that they have been investing in a narrative around the company as opposed to an actual, concrete long-term thesis.

For these reasons, I would stay away from IonQ right now. Even with a 25% drop in share price, the valuation analysis explored above suggests the stock is still overbought and not yet trading for a reasonable price.

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 992% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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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. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, 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.

By now, my hunch is that you've caught on to some of the major things influencing the stock market this year. As a refresher, mixed economic data, uncertainty surrounding policies from the Federal Reserve, and of course President Donald Trump's tariff agenda have combined to make a series of clouds shading what direction the markets might move next.

But even amid all of this uncertainty, some industries have proven resilient throughout the year. Within the broader technology sector -- which itself has had a tough year so far -- the communication services industry has held up relatively well. If you're unfamiliar with communication services, these are businesses that touch areas such as advertising, entertainment, and internet content consumption.

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When you think about these categories, my guess is your mind rushes straight to Netflix -- and for good reason. As of the closing bell on June 5, shares of Netflix have gained 40% so far this year. That absolutely crushes the breakeven returns of the S&P 500 and Nasdaq Composite.

While Netflix remains a quality business, there is another streaming stock that has been quietly outperforming the competition. With shares up nearly 60% year to date, Spotify Technology (NYSE: SPOT) might be a company to put on your radar.

Below, I'll detail why streaming stocks have outperformed the broader market this year. From there, I'll cover why I think Spotify could be Wall Street's next big stock-split stock and explain how this process works for investors.

Why are streaming stocks crushing the market in 2025?

Perhaps the biggest factor weighing on growth stocks at the moment is how President Trump's tariff policies will shake out. Tariffs are taxes that are placed on goods imported or exported from the country. Usually, tariffs are used as a negotiation tactic in order to change policies with trade partners. While there can be strategic value to implementing tariffs, they can also lead to periods of higher costs (inflation) for businesses.

Unlike many companies in the technology landscape, streaming businesses don't have much to worry about when it comes to tariffs. For the most part, streamers rely on the consumption of digital content such as movies, television, music, or audiobooks. Given these companies don't have much in the way of physical manufacturing or rely on imported or exported goods, streaming is a relatively tariff-resistant business -- making them particularly attractive investments right now.

Why I see Spotify as a prime stock-split candidate

The chart below illustrates Spotify's stock price since its initial public offering (IPO). As investors can see, shares of the streaming giant are hovering near all-time highs.

SPOT data by YCharts

Sometimes when a stock price starts to rise in an exponential fashion, investors will shy away from buying. Said another way, a high share price can be perceived as an expensive stock and investors will begin looking for alternatives.

Considering that Spotify has never split its stock, combined with its climbing share price, I see the company as an interesting stock-split candidate.

How do stock splits work?

Stock splits are a simple form of financial engineering. For argument's sake, let's say Spotify announced a 10-for-1 stock-split. How would this work? Essentially, Spotify's share price of $710 would be split tenfold. In other words, Spotify's split-adjusted stock price would be about $71. At the same time, however, the company's outstanding shares would rise by tenfold.

Given the stock price and the outstanding shares change by the same multiple, the market capitalization of Spotify would remain unchanged.

Should you buy Spotify stock right now?

If the valuation of the company doesn't change, what is the point of a stock split? As I alluded to above, when share prices go higher investors often perceive the stock as expensive -- regardless of what valuation multiples might suggest.

Given a stock split results in a seemingly lower (or less expensive) share price, they often result in a new cohort of investors pouring in and buying the stock. Ironically, this activity can actually fuel the market cap of the company higher on a post-split basis. This means that even if you own more shares at what appears to be a lower share price following a split, you might actually be investing in the company at a higher valuation.

With that in mind, let's explore whether Spotify is a good stock to buy right now -- regardless of whether or not the company chooses to split its stock.

SPOT PE Ratio (Forward) data by YCharts

Per the comparable company analysis pictured above, Spotify trades at a notable premium compared to other streaming and entertainment companies on a forward earnings basis.

In my view, Spotify is a pricey stock right now and the current momentum in share price has led to some notable valuation expansion. Normally, I would not chase at these levels -- as I'd view the stock as overvalued. However, given how sensitive the capital markets are right now on the tariff rhetoric and Spotify's proven resiliency in this environment, I'd consider scooping up shares on any dips that might occur.

In the long run, I see Spotify as a best-in-class opportunity in the streaming landscape and a stock deserving of a premium.

Should you invest $1,000 in Spotify Technology right now?

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

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

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

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*Stock Advisor returns as of June 9, 2025

Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Spotify Technology. The Motley Fool has a disclosure policy.

When it comes to investing in artificial intelligence (AI) stocks, some of the most common opportunities reside in software platforms and semiconductors. But one pocket of the AI realm that is steadily starting to gain some traction is infrastructure.

Think of it this way: When cloud hyperscalers such as Amazon, Microsoft, or Alphabet each say they are spending tens of billions of dollars on AI capital expenditures (capex), only some of this spend is allocated toward chipsets and network equipment supplied by the likes of Nvidia, Advanced Micro Devices, or Broadcom.

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In the background, there are companies that are actually building the data centers and graphics processing unit (GPU) clusters in which they reside. This is where Nebius Group (NASDAQ: NBIS) comes into play.

Let's explore what Nebius does and how the company is riding the tailwinds of rising AI infrastructure investment. Could Nebius be an under-the-radar opportunity for growth investors right now?

What does Nebius do?

Nebius operates across four segments. The company's core business is an infrastructure-as-a-service (IaaS) business -- essentially offering customers the ability to access high-performance compute architecture via the cloud.

In addition, Nebius has three subsidiaries: Avride, Toloka, and TripleTen. Avride is an emerging force in the autonomous vehicle industry, and recently struck a partnership with global car manufacturer Hyundai. Toloka serves as a data partner for large language models (LLMs) and AI developers including Anthropic, Microsoft, and Shopify. TripleTen is a software platform marketed toward the education industry, which is another budding area where AI could lead to some transformative changes.

AI infrastructure is booming

While Nebius is a diversified business and positioned to benefit from AI in many different ways, most investors tend to focus on the company's infrastructure segment. The company works closely with Nvidia, allowing its customers to access a series of different GPU architectures.

At the end of the first quarter, Nebius' IaaS business was operating at a $249 million annual recurring revenue (ARR) run rate. While this might not seem like much at first, consider this: Management is guiding toward an ARR run rate between $750 million and $1 billion by year-end, as well as positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

How is Nebius going to increase its core infrastructure segment by nearly fourfold over the next six months?

For starters, the company's data center footprint is expanding rapidly. In addition to existing projects in France and Finland, the company is also building out new infrastructure in Iceland, Kansas City, and New Jersey.

Moreover, these new data centers will be equipped with the most in-demand GPUs on the market -- of course, I'm talking about Nvidia Blackwell, Grace Blackwell, and Blackwell Ultra architectures.

When you consider that major hyperscalers are on pace to spend more than $300 billion on AI capex just this year, coupled with industry forecasts calling for $6.7 trillion of infrastructure spend by next decade, Nebius appears to have strong secular tailwinds fueling its long-run growth narrative.

Is Nebius stock a good buy right now?

When it comes to investing in Nebius, valuation is a little bit challenging, given the company's corporate history. Toward the end of 2024, Nebius was actually spun out of a Russian internet conglomerate called Yandex. As part of the deal structure, Nebius become an independent entity and listed on the Nasdaq exchange.

Given the limited financial picture available to investors, I don't find traditional valuation metrics such as price-to-sales (P/S) or other ratios entirely helpful when looking at Nebius. Rather, I'd like to look at the company relative to some peers.

NBIS Market Cap data by YCharts

One of the closest comparable public companies to Nebius is AI cloud infrastructure provider CoreWeave, which went public earlier this year. As the graph makes clear, not only does CoreWeave boast a much larger market capitalization than Nebius, but its value is actually expanding.

Granted, there are reasons for this. CoreWeave is a much larger company than Nebius on the sales front, and the company continues to strike lucrative partnerships with AI's biggest developers.

But even so, it's hard to deny CoreWeave's valuation momentum right now compared to the mundane price action in Nebius. To me, Nebius is flying under the radar -- completely overshadowed by CoreWeave's popularity.

I see robust growth ahead for Nebius both in the short and long run, and I think the company's relationships with Nvidia and others in the AI landscape could lead to larger, more strategic deals over time.

For these reasons, I would encourage investors looking for new growth opportunities in the AI space to consider a position in the infrastructure services pocket -- and particularly in Nebius.

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

Before you buy stock in Nebius Group, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, Nvidia, and Shopify. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, Nebius Group, Nvidia, and Shopify. 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.

It's been a hard year for investors so far. As of market close on June 5, the S&P 500 and Nasdaq Composite indexes each have breakeven returns on the year. While this makes it incredibly difficult to make money in the stock market, there have been some pockets during which investors made out well if they chose to engage with higher-than-usual volatility.

By now, you may have come across a new acronym floating around financial circles called the "TACO" trade. Below, I'll detail what this means and why it's important.

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From there, I'll dig into one of the new, hot areas fueling the artificial intelligence (AI) narrative: quantum computing.

Could quantum computing stocks be a good way to play the TACO trade? Read on to find out.

What is the TACO trade?

Even though the S&P 500 and Nasdaq are both flat on the year, the image below illustrates that there have been some pronounced dips and sharp rises across both indexes throughout 2025. The catch is that these volatile movements have been incredibly fleeting.

^SPX data by YCharts

The term "TACO trade" is a cheeky acronym that stands for "Trump always chickens out." Basically, whenever the President voiced some tough rhetoric on his new tariff policies, the markets plummeted. However, when he subsequently eases some of the pressure on the tariff talking points, the markets roar again.

In summary, the TACO trade is simply a new version of buying the dip when stock prices become abnormally depressed.

Are quantum computing stocks a good buy right now?

Two of the most popular quantum computing stocks in the market right now are IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI). During 2024, shares of IonQ soared by 237% while Rigetti stock climbed by a jaw-dropping 1,450% -- both of which completely dominated the broader market.

This year has been a different story, though. As of closing bell on June 5, shares of IonQ and Rigetti Computing have plummeted by 12% and 28%, respectively.

Given these declines, is now a good opportunity to buy quantum computing stocks?

To answer that question, smart investors understand that valuation needs to be a consideration. Per the chart below, Rigetti Computing and IonQ boast price-to-sales (P/S) ratios that seem incongruent with the company's underlying fundamentals.

RGTI PS Ratio data by YCharts

Looked at another way, IonQ and Rigetti Computing have generated a combined revenue of roughly $50 million over the last 12 months -- all while posting a net loss of $460 million between the two businesses.

Given the nominal sales figures and hemorrhaging losses, it's hard to justify the valuation multiples pictured above.

While Rigetti and IonQ have each been on a monster run from a share price perspective, both of these companies appear to be riding high on a bullish quantum computing narrative. In other words, their trading levels are not rooted in the actual performance of the business but rather in a broader macro viewpoint that quantum computing could be a good opportunity in the long run.

Keep the big picture in focus

The big takeaway here is that even though shares of IonQ and Rigetti are down on the year, their respective valuations make it clear that neither of these companies is a good "buy the dip" candidate. Rather, even with their underperformance throughout the year, each stock remains overvalued.

For these reasons, I would not chase any sell-offs in these quantum computing stocks as the TACO trade continues to evolve. My suspicion is that both IonQ and Rigetti will experience some continued valuation compression, and their share prices could very well keep spiraling downward.

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

Before you buy stock in IonQ, 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 IonQ 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

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

Two stocks that have been at the center of financial news stories throughout the year are data mining specialist Palantir Technologies (NASDAQ: PLTR) and health insurance giant UnitedHealth Group (NYSE: UNH).

The reasons these two companies are fetching so much attention, however, couldn't be more opposite.

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Palantir has emerged as a darling of the artificial intelligence (AI) revolution. As of this writing (June 5), shares of the stock have gained nearly 60% on the year -- making it one of the top performers in the S&P 500 and Nasdaq-100 indexes.

By contrast, UnitedHealth Group stock is the worst-performing name in the Dow Jones Industrial Average -- with shares plummeting by more than 40%.

Is now the time to hop on the Palantir train, or should investors take an inventory check on UnitedHealth and choose to buy the dip?

Palantir is on a run for the ages

It's been just over two years since Palantir released its Artificial Intelligence Platform (AIP), a software suite that's proven to be a transformative game changer in the company's pursuit of competing with the largest players in the tech landscape.

PLTR Revenue (Quarterly) data by YCharts

Since releasing AIP, Palantir has unlocked a new wave of revenue acceleration -- thanks in large part to the company's impressive penetration of the private sector. For most of its history, Palantir relied heavily on government contracts from the Department of Defense (DOD).

While deals with the U.S. Military and its allies are still an important cornerstone of Palantir's business, AIP has helped the company break ground in a host of other use cases -- financial fraud, supply chain and logistics, aviation, and much more.

What might be most impressive about Palantir's transformation over the last two years is how rapidly the company transitioned from a cash-burning operation to one that generates consistent profitability. Not only is Palantir acquiring new business, but it's also monetizing these customers in a profitable way. That's a lucrative combination, indeed.

The one idea that's paramount for smart investors to understand is that while Palantir's business is soaring, so is the company's share price. As of this writing, Palantir trades at a price-to-sales (P/S) ratio of 97.

Not only is that magnitudes higher than any of its peers in the software realm, but it is historically high compared to what investors witnessed during the dot-com bubble in the late 1990s.

I don't think I'm the only one who has noticed the pronounced valuation expansion in Palantir, either. Consider that Cathie Wood's Ark Invest portfolio has been trimming Palantir stock as of late, and billionaire money manager Stanley Druckenmiller completely dumped his firm's stake in the AI stock during the first quarter.

UnitedHealth Group can't seem to get out of its own way

UnitedHealth Group's coverage couldn't be any more different than Palantir's. While investors continue to cheer on Palantir's dominance, it seems that only negativity surrounds UnitedHealth at the moment.

At the core of the health insurer's problems are some operational hiccups. Mismanagement in forecasting utilization rates in the company's Medicare Advantage business, as well as some unforeseen challenges in the pharmacy benefits management (PBM) segment, caused management to reduce financial guidance for 2025.

If this weren't enough to get investors worked up, UnitedHealth also replaced its CEO as the company seeks to right the ship and turn things around by next year.

UnitedHealth's downward revision and executive changes were met with a stock sell-off for the ages. Don't believe me? As of this writing, shares of UnitedHealth trade at $296 -- hovering near a five-year low.

Which stock is the better buy?

Despite its near-term headwinds, UnitedHealth stock looks awfully tempting at a forward price-to-earnings (P/E) multiple of just 13. When you consider that insiders have been buying the stock in the aftermath of this epic sell-off, I'm cautiously optimistic that all of the bad news surrounding UnitedHealth is priced in.

UNH PE Ratio (Forward) data by YCharts

On the other side of the equation, I think it's becoming increasingly difficult to argue that max upside isn't already priced into Palantir. Sure, I'm bullish on the company's future, but buying the stock near an all-time high doesn't seem like a prudent idea right now.

Overall, I'd choose to buy the dip in UnitedHealth as opposed to chasing the momentum fueling Palantir stock at the moment.

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 $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

Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

With shares down by more than 40%, UnitedHealth Group (NYSE: UNH) is the poorest-performing stock in the Dow Jones Industrial Average so far this year.

Over the last month or so, there has been no shortage of storylines surrounding America's largest health insurers. And if the share price movements are any indication, most of the news isn't great.

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Let's dig into what has driven UnitedHealth stock off a cliff, and explore whether or not it remains a good buy for long-term investors.

What is going on at UnitedHealth?

A significant influence on a stock price, at least over the short term, is how a company's quarterly earnings are perceived. Generally speaking, if a company beats Wall Street estimates or raises its outlook, shares rise. On the other hand, if investors aren't impressed by the company's performance, they may choose to sell the stock.

During UnitedHealth's fourth-quarter and full-year 2024 earnings call in January, management issued earnings guidance of $28.15 to $28.65 per share.

Things took an unexpected turn when it reported first-quarter earnings on April 17. Management is now guiding in the range of $24.65 to $25.15 for earnings per share (EPS).

Two primary factors contributed to the downward revision. First, utilization rates from the company's Medicare Advantage businesses were higher than management was forecasting. These dynamics increase near-term costs, thereby stifling profitability.

Second, the company's Optum Health division -- which serves as a pharmacy benefits manager -- has been struggling on reimbursement due to a combination of cuts to Medicare as well as changes in insurance plans in certain market demographics.

Unfortunately for investors, UnitedHealth's drama didn't stop at the operational hiccups detailed above. About a month after the first-quarter earnings report, the company announced that CEO Andrew Witty had resigned.

If this weren't enough to get investors hitting the panic button, The Wall Street Journal followed up that news with a report that UnitedHealth was under investigation from the Department of Justice (DOJ) regarding fraudulent activity in Medicare billing.

Management was quick to deny these claims and called the report "deeply irresponsible."

UnitedHealth's valuation is getting clobbered

As of this writing (June 3), shares are trading around $300, near a five-year low.

UNH PE Ratio (Forward) data by YCharts.

The graph above shows that UnitedHealth is valued right in between insurance giants Humana and Cigna on a forward price-to-earnings (P/E) basis.

Is the stock a buy right now?

Just a month ago, the company's forward P/E was roughly twice as high as now and trading for a premium compared to the competition. Given the extreme valuation compression over the last several weeks, I am inclined to think much (if not all) of the bad news is priced into the stock already.

A downward revision in guidance and changes in management are the main talking points surrounding UnitedHealth at the moment. But in the company's first-quarter earnings release and the the announcement of Witty's resignation, management added that the company should return to growth by next year.

The company's new CEO, Stephen Hemsley, purchased $25 million in UnitedHealth stock following the sell-off last month. This was met with another $6.6 million of insider buys from other executives. I think this signals confidence in the company's long-term prospects. In my view, these insider buys suggest management believes that UnitedHealth is poised to return to growth.

While the near-term price action might continue exhibiting some volatility, I think the shares remain a solid opportunity for long-term investors. Given the valuation trends explored in this article, I think now is an opportunity to buy the dip in UnitedHealth Group stock at a bargain valuation.

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

Before you buy stock in UnitedHealth Group, consider this:

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

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

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*Stock Advisor returns as of June 2, 2025

Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Brad Gerstner is the founder and CEO of hedge fund Altimeter Capital. Some of his more notable wins include being an early investor in data cloud company Snowflake and Asian ridehailing leader Grab.

As is the case with many investment funds, Altimeter has made artificial intelligence (AI) stocks a core feature of its portfolio in recent years. According to its most recent 13F filing, Altimeter trimmed its stake in Nvidia during the first quarter while completely dumping its stakes in Micron and Taiwan Semiconductor Manufacturing.

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Interestingly, though, I discovered that Altimeter holds a position in red-hot AI IPO stock CoreWeave (NASDAQ: CRWV). This comes from an investment Altimeter made when CoreWeave was still a private company. As of the close of trading on June 4, Altimeter's 2,999,536 shares were worth about $489 million

Let's explore some of the core themes in the ongoing AI revolution to try and discern what may have motivated these moves. From there, I'll break down CoreWeave's business and recent price action to help determine if the stock is a good buy right now.

Why sell Nvidia, Micron, and Taiwan Semi stock right now?

Considering how robust demand has been for high-end graphics processing units (GPU) and memory storage chips, reducing exposure to names such as Nvidia, Micron, and Taiwan Semi looks like a head-scratcher on the surface. However, this is not the first time that Gerstner has shown some contrarian characteristics in his investment style.

While I cannot say for certain what Altimeter's current thesis is regarding chip stocks or the AI movement more broadly, I've come up with some reasons that may help justify the fund's recent moves.

According to industry estimates, Nvidia currently controls roughly 90% (or more) of the data center GPU market. While a lead like that might suggest Nvidia's moat is insurmountable, there are some risks to consider. First, Nvidia's revenue sources are heavily concentrated among cloud hyperscalers such as Amazon, Alphabet, and Microsoft.

Each of these companies has been developing their own custom AI chips, potentially signaling their intentions to migrate away from Nvidia's architecture over time. When you layer on top that the fact that Advanced Micro Devices has steadily been gaining momentum in the data center arena -- as its deals with Oracle, Microsoft, and Meta Platforms demonstrate -- Nvidia's growth could be on course for some deceleration.

Lastly, one of the storm clouds hanging over Nvidia at the moment is its exposure to China. New U.S. export controls and President Donald Trump's tariffs could cut into its sales there.

Micron operates in a unique pocket of the AI realm. It specializes in memory storage chips, which are vital hardware for data centers, personal computers, and smartphones, among other technologies. With that said, memory chips are relatively commoditized. On top of that, a shift toward cloud-based AI infrastructure could potentially serve as a headwind for Micron's hardware-centric chip memory business.

Taiwan Semiconductor specializes in fabrication services -- its foundries are where chips designed by Nvidia, AMD, Broadcom, and a host of others are actually manufactured. While demand for GPUs and other types of AI chips is strong, a deceleration in sales growth from key customers (i.e., Nvidia) could trickle down to TSMC's business, too.

Furthermore, most of TSMC's factories are located in Taiwan. Given the ongoing geopolitical pressures Taiwan faces from China, it's possible that U.S. chip designers like AMD or Nvidia could begin to turn to alternative foundry providers such as Intel.

What does CoreWeave do?

CoreWeave is a cloud computing infrastructure provider that offers its clients access to Nvidia GPUs and a host of other chip integrations. As such, its business is not as exposed to the time it takes to design and manufacture sophisticated hardware -- unlike the names explored above. In a way, this makes the hyperscaler more nimble than other chip and data center stocks, allowing the company to scale at a faster pace.

CoreWeave is able to take advantage of the booming chip landscape but more so on the AI training and inferencing side. Ultimately, it fills the gap between producing chipsets and accessing optimized AI cloud infrastructure.

It's not that Nvidia, Micron, or TSMC are poor investment choices right now. It's simply that those businesses might be reaching levels of maturity, whereas CoreWeave's model could be in the early phases of exponential expansion.

Is CoreWeave stock a good buy right now?

The chart below illustrates how CoreWeave's price-to-sales (P/S) ratio has progressed since its initial public offering (IPO) earlier this year.

CRWV PS Ratio data by YCharts

There are a couple of big takeaways from this chart. First, it's clear that CoreWeave has experienced notable valuation expansion. In my view, outsize momentum is propelling CoreWeave stock right now -- and buying in the wake of its recent climb could leave you as an unsuspecting bag holder.

In addition, CoreWeave's P/S multiple is almost fourfold that of Oracle -- which also provides core data center infrastructure services. Oracle is a mature, profitable business, unlike CoreWeave's high-cash-burn operation.

While I understand the thesis behind CoreWeave's value proposition in the AI landscape, I think the stock is overbought right now. I would pass on investing at its current valuation, but would keep tabs on the company and its growth prospects.

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

Before you buy stock in CoreWeave, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. 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. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Intel, Meta Platforms, Microsoft, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

On April 2, President Donald Trump announced "Liberation Day" -- marking the event with a host of new tariff policies aimed at virtually all major trading partners. Following the announcement, the capital markets experienced a period of intense selling with the S&P 500 and Nasdaq Composite both dropping by double-digit percentages.

Since the initial shock, however, stocks have started to rebound as positive dialogue with important trade partners including China has come to light. While it appears that some progress is being made, smart investors understand that negotiations and tariff policies can change overnight. For these reasons, investors should be looking for businesses that are insulated from tariffs right now.

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Let's explore why data analytics company Palantir Technologies (NASDAQ: PLTR) fits the bill and could be your best bet given the heightened uncertainty driving the direction of the stock market right now.

What type of companies tend to hold up well in a tariff environment?

Tariffs are taxes placed on imported and exported goods. One important detail to understand about tariffs is that businesses that manufacture physical items tend to be most vulnerable. In addition, tariff policies can exclude certain items underneath a broader category.

In other words, a policy could exempt automobile parts or semiconductor chips, for example. The big idea here is that unless you're following these policies down to the last detail, it can be quite daunting trying to identify a company that could hold up well during a period of pronounced tariffs.

One industry that tends to hold up well regardless of tariffs is software. All things considered, software tends to be relatively immune to tariffs because it's a service-oriented business that doesn't rely on importing or exporting physical goods.

Why Palantir is in a unique position

Software businesses can be indirectly impacted by tariffs in two major ways. First, it's possible that the equipment they rely on to develop their services (i.e., data centers, hardware) is subject to higher prices due to tariffs. In addition, businesses may choose to reduce their IT budgets during periods of higher prices.

Nevertheless, Palantir appears to be in a unique position right now. Shortly after President Trump's "Liberation Day" announcement, Palantir released a new module showcasing how its artificial intelligence (AI) software suite can help retailers analyze the impacts of tariffs on their business.

I found this to be a savvy marketing tactic by Palantir, as it is essentially illustrating how tariffs can actually be a tailwind for the company. In other words, Palantir's ability to help its customers make AI-informed decisions rooted in real-time data indexed against a fluid tariff environment is a major value-add proposition.

I know the scenario above sounds great in theory, but how has Palantir actually held up as of late? Well, during the company's first-quarter earnings call earlier this month, management raised its revenue and profit guidance for the full year -- suggesting strong growth prospects despite a challenging macroeconomic picture featuring higher tariff-induced prices.

To me, this underscores how critical Palantir's products are for its customers, as well as the company's resiliency during a period of uncertainty.

Is Palantir stock a buy right now?

Even though Palantir is in a rare position to be experiencing growth during the current environment, the stock needs a closer look before investors pour in. So far in 2025, shares of Palantir have risen by 67% as of this writing (May 20). To put this into perspective, the S&P 500 and Nasdaq Composite are both at break-even levels for the year.

To better understand Palantir's valuation, just look at the chart below. At a price-to-sales (P/S) ratio of 101, Palantir is the priciest software stock in a cohort featuring both large-cap technology leaders such as Salesforce and SAP, as well as high-growth AI companies including CrowdStrike, Snowflake, and Cloudflare.

PLTR PS Ratio data by YCharts

Each of these companies develops important pieces of software and theoretically stands to thrive in the tariff environment. So why is Palantir stock experiencing such outsized momentum?

To me, I think it all boils down to hype. Palantir has an eccentric, charismatic CEO that is adored by the retail investing community. To boot, it's not uncommon for investors to follow momentum -- especially during a period when finding winners is tougher than usual.

While I think Palantir's current valuation is hard to justify, I do see the stock as a long-term buy. When it comes to AI-powered software businesses, Palantir is my top pick right now. I think the most prudent strategy for investors is to buy shares of Palantir at different price points over the course of many years, with the intention of holding on to the stock for the long run.

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

Before you buy stock in Palantir Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

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

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Adam Spatacco has positions in Palantir Technologies. The Motley Fool has positions in and recommends Cloudflare, CrowdStrike, Datadog, MongoDB, Palantir Technologies, Salesforce, ServiceNow, and Snowflake. The Motley Fool has a disclosure policy.