Key Points

• Spending on artificial intelligence could reach an astounding $4.8 trillion by 2033.

• Nvidia's GPUs are critical for the training and deployment of complex AI models.

• AI developers want the best cloud infrastructure, and Amazon leads in this area.

• 10 stocks we like better than Nvidia ›

Fortunes have been made by investing in artificial intelligence (AI) stocks. But there's still a lot of room left to go. The United Nations, for instance, believes that the AI market will grow from $189 billion worldwide in 2023 to nearly $5 trillion by 2033. Want to make sure your portfolio benefits? The two AI stocks below are for you.

Nvidia remains the smartest AI investment

When it comes to AI stocks, Nvidia (NASDAQ: NVDA) is king. Even if you're already familiar with this stock, there's a good chance that shares are much cheaper than you realize.

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

If you've been following the AI market, you'll know that Nvidia is the most valuable GPU maker in the world. GPUs sit at the heart of the AI revolution. They're critical for training and deploying complex AI models. They also make it possible for end users to access these models en masse from anywhere in the world.

Right now, Nvidia's GPUs dominate the market. The firm has an estimated 90% market share for AI GPUs. Its performance and ecosystem advantages have granted the company the highest gross margins in the industry. Wall Street analysts are unsurprisingly excited.

Wedbush Securities analyst Dan Ives believes Nvidia's market cap will surge to $5 trillion within months. The biggest near-term catalyst: the decision by the U.S. government to allow Nvidia's new GPUs to be exported to China, a country that previously accounted for around 13% of the company's sales.

While shares are expensive based on trailing earnings, the stock trades at just 39 times forward earnings. Considering the AI boom is expected to persist for a decade or more, expect Nvidia to maintain double-digit annual growth rates for years to come. This should quickly eat into the upfront valuation premium, making shares a relative bargain for patient investors.

Image source: Getty Images.

Amazon is an artificial intelligence powerhouse

Apart from Nvidia, Amazon (NASDAQ: AMZN) stock looks like one of the best ways to invest in the AI revolution over the long term. That's because its most profitable business segment, Amazon Web Services, sits at the center of everything AI.

We've already discussed how Nvidia's GPUs sit between AI developers and the end users themselves. But there's one other industry that also sits at the center of the action: cloud infrastructure providers. Most estimates believe Amazon's AWS division is the largest cloud infrastructure provider in the world. Data compiled by Statista gives AWS a 30% global market share, nearly as much as the next two competitors combined.

While the data center industry is a bit more commoditized than the GPU market, there's clear differentiation by the players that can afford to invest at scale. Developers -- AI developers in particular -- want the best infrastructure possible. That includes the best hardware and the most locations from a geographic perspective. This makes it quicker, cheaper, and more convenient for customers.

As the largest cloud provider in the world, Amazon is second to none in its ability to invest and expand its network. This should continue to place AWS at the center of increased spending.

"Companies are spending and they're spending more, and they plan to spend even more," Baird analyst Colin Sebastian recently told GeekWire. "We did a survey last month of 100 corporations, and 87% of them said they will increase spending on Gen AI over the next year -- and a grand total of zero out of 100 said they would spend less."

The AI spending boom is real. Demand should grow by 20% to 30% annually for years to come. With Amazon trading at 37 times earnings, most of its growth in this area is masked by its relatively slower growing e-commerce division. But as AWS becomes a bigger driver of Amazon's overall business, we could see growth rates accelerate, making shares a relative bargain in hindsight.

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

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

Key Points

• Electric car stocks have surged due to robotaxi optimism.

• But severe near-term challenges remain.

• 10 stocks we like better than Lucid Group ›

Several electric car stocks got huge boosts in recent weeks over enthusiasm for the promise of robotaxis. Tesla launched its robotaxi pilot program in Austin, Texas, last month. Lucid Group (NASDAQ: LCID), meanwhile, recently partnered with Uber Technologies to deliver 20,000 self-driving vehicles alongside a $300 million cash infusion.

But not every analyst is bullish. CNBC's Jim Cramer, for example, recently questioned the value of Lucid's deal with Uber. This month, seven other major Wall Street analysts reaffirmed their price targets for Lucid stock. Everyone predicts that shares will fall in value over the next 12 months.

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

Why is Wall Street still so bearish? There's one obvious culprit.

The near-term reality for EV stocks is frightening

Cathie Wood, CEO of Ark Invest, thinks robotaxis will be a $10 trillion industry long term. That has investors excited.

Over the next 12 to 24 months, however, most EV makers will be feeling the pain. That's because federal tax credits for EVs are set to expire this September, effectively making a new EV purchase $7,500 more expensive. While the exact impact remains unknown, this shift should sizably lower demand growth. Federal automotive regulatory credits, meanwhile, are also set to lose their value given fines for noncompliance are being eliminated. Lucid has earned more than $200 million through these programs. And while it won't lose access to the entirety of this profit source, given that many state and international programs will remain, the financial impact will be sudden and meaningful.

Image source: Getty Images.

Every EV maker will be affected by these regulatory shifts, including Rivian, Tesla, and Lucid. EV sales in the second quarter of 2025 are already down 6.3% year over year. We could see these declines persist, or even accelerate, given reduced incentives.

Lucid's robotaxi opportunity remains lucrative long term. But analysts are rightfully worried about the next year or two when it comes to reduced sales and profit growth.

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

Before you buy stock in Lucid 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 Lucid 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 $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

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool has a disclosure policy.

Key Points

• Artificial intelligence (AI) spending could reach $4.8 trillion by 2033, and this company stands to benefit.

• It's a major AI player and still trading at an attractive valuation for long-term investors.

• 10 stocks we like better than Nvidia ›

If you're looking for massive growth potential, check out artificial intelligence (AI) stocks. According to the U.N., the AI market is set to explode from a $189 billion valuation in 2023 to nearly $5 trillion by 2033. However, despite these massive projections, one of the most popular AI stocks on the market today remains surprisingly cheap.

This popular AI stock is cheaper than you think

Looking for an AI stock that can directly benefit from a massive jump in demand over the next decade and beyond? Check out Nvidia (NASDAQ: NVDA). While many investors are already familiar with the company, you may not realize how cheap the stock actually is. Fortunes have already been made with Nvidia stock. But there's still plenty of room left to run.

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

Before we jump into Nvidia's surprisingly cheap valuation, let's quickly review what makes this stock so special.

Nvidia is the largest GPU stock in the world. Its hardware powers data centers worldwide -- data centers that AI developers rely on to build, train, and deploy their models. End users, too, rely on data centers to use AI services, putting Nvidia's GPUs at the center of the AI value chain. Recent estimates suggest that the company may have a market share of 90% or more for GPUs designed for AI use cases.

How did Nvidia get so dominant? According to William Blair analyst Sebastien Naji, Nvidia invested heavily to develop "the broadest ecosystem" of software tools and developers, which essentially allows it to control both the hardware and software components of its GPUs. "And so it's just so much easier to build an application, build an AI model on top of those chips," Naji adds.

Image source: Getty Images.

Nvidia got a lead on the AI GPU market through early investment. Its software focus, meanwhile, allowed users to customize their chips, creating a "stickiness" to its products. Switching to a competing chip isn't just a matter of hardware, but also software integration, providing Nvidia with a durable moat around its business model.

Nvidia's sales have grown in the heavy double digits for years. And its gross margins lead the industry. And yet, as we'll see, shares remain surprisingly cheap.

Is now the time to invest in Nvidia?

On the surface, Nvidia stock looks expensive. Shares trade at nearly 30 times sales -- a huge premium for a multitrillion-dollar stock. But on a profit basis, the situation improves dramatically.

Yes, Nvidia shares are trading at 54 times trailing earnings. But because sales are growing so quickly, it's important to look at the company's forward valuation. Based on what the company is expected to earn over the next 12 months, shares trade at just 39 times forward earnings.

Meanwhile, Intel, another chipmaker, is struggling to remain profitable. Its revenues are expected to fall by around 5% over the next fiscal year. The firm failed to invest in the AI opportunity, and the company is struggling to remain relevant in the next-gen GPU space. By comparing Intel and Nvidia on some key metrics, we can easily ascertain Nvidia's core strengths. Nvidia is positioned well for the near term and the long term. Intel's fate, meanwhile, remains uncertain for both time frames.

NVDA Revenue Growth Estimate for Current Fiscal Year data by YCharts

Compared to competitors like Intel, Nvidia is doing quite well. But is 39 times earnings actually a "bargain" valuation? It is if you keep doing the math. The AI market is expected to continue growing by 20% to 30% annually for nearly a decade. With the S&P 500 (SNPINDEX: ^GSPC) trading at 30 times earnings, it won't be long until Nvidia stock trades below the general market based on today's trading price.

The key here is patience. If you're willing to hold Nvidia stock for the long term, high sustained growth rates will quickly eat into the up-front valuation premium, making the stock a bargain in hindsight. As with any high-multiple stock, expect plenty of volatility along the way. But if you're betting on AI stocks for the long haul, Nvidia remains surprisingly cheap for patient shareholders.

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

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Key Points

• Ripple is gaining regulatory and industry buy-in.

• The project's potential is greater than many realize.

• 10 stocks we like better than XRP ›

The price of XRP (CRYPTO: XRP) is surging once again. This week, the coin popped nearly 30% in value. Over the past month, the crypto asset has increased in value by roughly 60%. And over the last 12 months, XRP has surged by around 500%.

After blasting through the $3 mark and setting a new all-time high, is Ripple still a buy? If you believe in this story, the token could be a buy at any price under $10. But there are a few things you want to be aware of before loading up.

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

Is Ripple gaining regulatory and industry buy-in?

The biggest cause of Ripple's recent price surge has been growing optimism surrounding the regulatory environment, as well as encouraging signs of potential industry adoption.

For years, Ripple has faced a long list of regulatory and adoption challenges. From a regulatory standpoint, the project has been involved in a lawsuit by the Securities and Exchange Commission (SEC), which charges it with selling unregistered securities in the coin lauch. After roughly five years, the case was finally settled for $50 million in May, unburdening the project from one of its biggest valuation drags.

From an industry buy-in standpoint, the project has long struggled to attract top-tier banks to its novel system of cross-border transactions. That remains a long-term challenge, but ongoing adoption by global banks, including Travelex Bank in Brazil, Axis Bank in India, UnionBank in the Philippines, ChinaBank, and Qatar National Bank, has provided real-world validation of Ripple's network. Partnerships with local banks help the Ripple team make their services easy to use.

The cross-border transactions market is already worth around $200 trillion today. By the end of the decade, its value is expected to approach $300 trillion. Ripple is clearly competing in a gigantic market -- one of the largest total addressable markets in the world. Adoption and regulatory approval have long been the challenge. But improving conditions this year for both of those categories have investors increasingly excited.

Image source: Getty Images.

Buy Ripple today if you fit this one characteristic

Do improving conditions make Ripple a buy today? For many investors, the answer is yes. In fact, Ripple could be a buy as long as it's under $10. At $10, Ripple would have a $600 billion market cap. That's justifiable, assuming Ripple takes only a few percentage points off the market shares of various global payment networks.

The SWIFT network, for example, handles more than $5 trillion in transactions per day. Capturing just 1% of this volume would result in roughly $18 trillion in annual volume for Ripple. At that rate, Ripple would likely be worth significantly more than $10.

If you're an aggressive growth investor seeking maximum upside potential, Ripple looks like a buy at under $10. But if you're looking for a more balanced risk-versus-reward scenario, it's best to look elsewhere. That's because the global payments system is highly consolidated, as SWIFT's massive volumes show.

Financial institutions have long been wary of competing systems and are unlikely to switch en masse to a relatively unproven system like Ripple, even if Ripple's network is superior on paper. Additionally, there is growing competition for alternative payment networks such as Visa's B2B Connect and JPMorgan's Onyx platform.

From a fundamentals perspective, it's still far too early to nail down a fair valuation for Ripple. It remains a very speculative asset. There's huge upside to be sure, but if and when that upside is realized, as well as its ultimate magnitude, is difficult to predict.

Aggressive growth investors should strongly consider a small exposure to Ripple. Most investors, however, are better off elsewhere.

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase, Visa, and XRP. The Motley Fool has a disclosure policy.

Key Points

• Rivian is set to lose automotive regulatory credits that it has been able to sell to other automakers.

• Shares remain cheap enough for long-term investment.

• 10 stocks we like better than Rivian Automotive ›

Rivian Automotive (NASDAQ: RIVN) has an exciting future. This year, the electric vehicle (EV) company achieved several consecutive quarters of positive gross margins. And early next year, management expects to begin production of three new vehicles, all priced under $50,000. That could attract tens of millions of new potential buyers to Rivian's lineup.

Despite the positives, there are some challenges ahead, including one that could eliminate a crucial $325 million profit source.

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

A new budget bill could be costly for Rivian

For years, EV manufacturers have relied on government subsidies to increase demand for their products and help offset the steep cost of scaling up a capital-intensive business. These subsidies have generated billions of dollars in extra cash flow for EV producers over the decades. Several subsidies, however, are likely on their way out.

Following the recent signing into law of President Donald Trump's budget bill -- the so-called "Big Beautiful Bill" -- EV tax credits will be phased out by the end of 2025. Several EV stocks experienced analyst downgrades on the news.

Car buyers are increasingly cost conscious. Recent surveys suggest that more than 80% of them would cancel their orders if prices rose by 25%.

The elimination of federal tax credits, which can total up to $7,500 per buyer, will effectively make EVs more expensive -- a strong headwind. But there's another program that could be even more destructive to the financial viability of EV makers like Rivian.

In 2024, Rivian generated $325 million in revenue from the sale of automotive regulatory credits. State and federal governments were offering these credits as a way to spur production of low-emission vehicles.

EV makers like Rivian earn them for producing low-emission vehicles. They can then sell these credits to other automakers that fail to produce enough low-emission vehicles. Apart from a little overhead, the sale of these credits results in essentially a 100% profit margin.

In the fourth quarter of 2024 alone, Rivian sold roughly $300 million worth of regulatory credits. The company's total gross profit, meanwhile, was around $170 million. Without the sale of these credits, therefore, the company would have produced a sizable negative gross profit.

The new budget bill calls for the elimination of fines for noncompliant automakers. This essentially eliminates any incentive for these automakers to buy excess regulatory credits from their fellow automakers.

Will this result in a huge reduction in revenue and profit for Rivian? To answer that question, a few details need to be resolved.

Image source: Getty Images.

Is Rivian stock still a buy?

It's important to note that only federal regulatory credits will be affected. Credits earned under other government programs -- such as those in California or China -- won't be eliminated.

How much of Rivian's credit sales stem from federal programs? It's tough to tell, given that the company doesn't break down credit sales by source.

But analysts for Tesla believe around 75% of its credits are earned in the U.S., with maybe half coming from federal programs. These are very rough estimates, but using these figures, it's possible that Rivian would have generated around $120 million less in credit sales last year without federal programs -- or around $120 million less in profit.

Given that it produced around $170 million in gross profit last year, the elimination of federal regulatory credits would still have left it with around $50 million in gross profit -- not bad for a business needing to prove to investors that it can sell its vehicles at a profit.

Trading at just 2.8 times sales, expectations for Rivian are already low. And the elimination of federal regulatory credits won't sink the company on its own. But the company's growth timeline is now likely longer than previously expected.

The company will have less cash to invest and may need to shelve some growth initiatives to keep the launch of its mass market vehicles on schedule. Still, for patient investors willing to look far beyond current subsidy changes, Rivian remains a promising long-term growth stock.

Should you invest $1,000 in Rivian Automotive right now?

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Key Points

• Tesla will soon lose a critical profit source.

• This loss will make exciting growth opportunities more difficult to pursue.

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

The future of Tesla (NASDAQ: TSLA) appears very bright. Some experts believe the company's new robotaxi service could add more than $1 trillion in value by the end of 2026.

But there's one challenge few investors are paying attention to. This challenge could swiftly eliminate one of Tesla's most profitable revenue sources.

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

Expect Tesla to lose part of this $2.76 billion revenue source

In recent years, nearly every electric car stock has benefited from automotive regulatory credits. These credits are earned under both state and federal programs, in both the U.S. and abroad. While each program differs in specifics, these credits are generally earned when a company sells low-emissions vehicles. These companies can then sell these credits to automakers that do not sell enough low-emission vehicles. For example, Stellantis bought roughly $2.4 billion of European and U.S. regulatory credits from Tesla between 2019 and 2021.

The idea behind these credits is to encourage investment in and production of climate-friendly transportation options. That is, these credits are designed specifically to spur adoption of things like electric vehicles (EVs). Over the years, these credits have certainly helped keep EV makers like Tesla, Rivian, and Lucid Group financially viable. Rivian recently generated the first positive gross margins in its history, largely thanks to the sale of these credits. Besides a bit of overhead, the sale of these credits results in nearly 100% profit margins -- a huge boon for capital-intensive businesses like auto manufacturing.

Soon, federal regulatory credits in the U.S. are expected to be eliminated due to the passing of President Donald Trump's "big, beautiful bill." According to The Verge, "The bill, which was signed by Trump over the weekend, would eliminate tax credits for EV purchases, zero out fines for automakers who exceed fuel-efficiency targets, and roll back other incentives for wind and solar power." That second point, zeroing out fines for automakers that miss fuel efficiency targets, essentially negates any value in purchasing these credits from an automaker like Tesla. In short, Tesla will very likely lose its ability to accrue and sell federal credits in the U.S. -- an immediate and sizable hit to both revenues and profits.

Image source: Getty Images.

Is TSLA stock still a buy, even if regulatory credits are eliminated?

There are a few important details to stress about the elimination of federal automotive regulatory credits. First, these eliminations affect the U.S. only. While other countries may shift their own policies, they will, for now, remain intact. Second, these eliminations will only affect federal credit programs, not state programs like California's or New York's.

Critically, Tesla does not break down its regulatory credit sales by state versus federal, or even U.S. sales versus international. Therefore, it's difficult to gauge the exact effect from the elimination of federal U.S. programs. Some analysts estimate that roughly 75% of this revenue comes from U.S. sources. Within that portion, most is likely derived from California's state-level program, since that program accounts for the majority of credit value in the U.S. overall.

Last quarter, Tesla's net income plunged 71% versus a year ago to $409 million. Regulatory credits sales, meanwhile, were $595 million last quarter, exceeding a total of $3.3 billion over the last five quarters. While Tesla won't lose access to most of these credits, they are clearly critical to keeping the company profitable. Tesla is one of the only companies in the world capable of pursuing huge growth opportunities like a global robotaxi service. If profits drop by $100 million to $200 million per quarter, however, pursuing these initiatives will grow more challenging.

In short, the elimination of federal regulatory credits in the U.S. won't kill Tesla. But it will make growth more difficult moving forward -- a critical factor for long-term investors to consider.

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 $427,709!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,087!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $671,477!*

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 July 7, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Key Points

• The electric vehicle maker's sales growth is about to take off.

• But Lucid's biggest opportunity may not be making EVs at all.

• 10 stocks we like better than Lucid Group ›

If you want to add significant upside potential to your portfolio, check out electric car stocks. In 2021, electric vehicles (EVs) represented just 3.4% of all vehicle sales in the U.S. By 2030, however, nearly 30% of all vehicle sales are expected to be electric.

As Tesla stock has proven, big gains are possible by investing early. While plenty of risks remain, Lucid Group (NASDAQ: LCID) could very well be the next Tesla, potentially generating huge wealth for your portfolio in the process. Right now, there are two reasons in particular to believe Lucid shares are a compelling "buy it for life" investment.

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

1. Lucid is ready to tap the mass market

One of the biggest drivers of growth in an EV maker's journey is the launch of so-called "mass market" vehicles. These are cars that are affordable to the masses, with price tags typically under $50,000. Yet again, Tesla provides clear proof of how valuable the launch of mass market vehicles can be. Today, its two most affordable models -- the Model 3 and Model Y -- account for more than 90% of its vehicle sales. Without these two models, Tesla would arguably be just a fraction of its current size.

Right now, Lucid is far from achieving Tesla's size and scale. Last year, the company had just one model on the market: The Lucid Air, a sedan that can easily cost more than $100,000 depending on options. In early 2025, Lucid doubled its lineup with the launch of its Gravity SUV platform. Analysts believe that this will help sales grow by 72% this year, with another 97% growth expected in 2026. But the Gravity SUV can also cost upwards of $100,000 depending on options, limiting its appeal to a wide audience.

By the end of next year, however, Lucid expects to start production of two mass market vehicles: a sedan and a crossover, both priced under the critical $50,000 threshold. These vehicles will essentially compete head to head with Tesla's Model 3 and Model Y. "Lucid does not exist to be a niche luxury manufacturer," the company's former CEO, Peter Rawlinson, stressed in February.

Critically, Rawlinson departed Lucid abruptly a few weeks after those comments were made, putting his optimistic timeline in jeopardy. If the launch timeline is maintained, however, we could see Lucid's growth rise exponentially in 2027, following what are expected to be banner years in both 2025 and 2026.

The impending launch of two new mass market vehicles should get investors excited. But there's another growth opportunity that could arguably be even more lucrative in the long term.

Image source: Getty Images.

2. Lucid's biggest growth opportunity won't be making EVs

Rawlinson wasn't shy about his expectations for the company. "We want Lucid to be huge," he said earlier this year before his departure. He wanted the company to produce more than a million cars every year by the early 2030s. Beyond that, he thought Lucid's future might be to simply sell its technology to other automakers -- an arguably more profitable business with greater scaling potential.

Lucid's transition toward this future has already begun. In 2023, it announced a partnership with Aston Martin. The deal made it so that Aston Martin could gain access to Lucid's proprietary powertrain technology, which will be implemented in upcoming Aston Martin EVs.

In December 2024, Lucid teased that it was talking with "a couple" of other manufacturers about similar deals. "It would be lovely if we could supply technology to a traditional car company to help them on their way to sustainability," Rawlinson commented. "Perhaps we can leverage economies of scale with their parts bin and other aspects of the business."

We haven't received any updated commentary from new CEO Marc Winterhoff. But long term, Lucid's car manufacturing business should simply be a way to showcase its technology. If that's true, we could see Lucid transitioning to this business model entirely, since tech licensing typically generates higher profit margins and greater scaling opportunities. As EV penetration takes off, Lucid could essentially sell its technology to the winners, rather than needing to compete directly itself.

While there remains plenty of execution risk, this makes Lucid a promising investment that could generate immense wealth over a multi-decade holding period.

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Key Points

• Rivian's financials are about to improve dramatically.

• The EV maker is set to introduce a lower-priced model.

• But the stock price doesn't fully account for this potential.

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

Rivian Automotive (NASDAQ: RIVN) is one of the most exciting electric car stocks today. Over the next few years, its growth should explode higher thanks to the introduction of new, lower-priced models. But if you think the market is already pricing in this growth, think again. Rivian stock is far cheaper than you might suspect.

Rivian's financials are about to improve greatly

Next year, everything will change for Rivian. That's because the company's new, lower priced R2 model is expected to begin production in early 2026. This will be Rivian's first vehicle priced under $50,000. Two additional vehicles under that price point -- the R3 and R3X -- are expected to launch soon after the R2 begins production.

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

When Tesla launched its first affordable models -- the Model 3 and Model Y -- sales doubled, then tripled in the years that followed. Profits also improved dramatically due to greater economies of scale.

Image source: Getty Images.

As the charts below highlight, Rivian is now expected to surpass Tesla in near-term sales growth. Given several expected model introductions in 2026 and 2027, it's reasonable to expect Rivian to best Tesla's sales growth for several years to come.

Rivian's gross margins are also now on par with Tesla's, though its profit margins remain negative. But that could change in the next few years when the company starts scaling sales for its mass market vehicles.

RIVN PS Ratio data by YCharts

Despite its exciting future, Rivian stock remains priced at a steep discount to Tesla shares. On a price-to-sales basis, shares trade at a discount of roughly 75%. There is still a lot of execution risk ahead. Plus, Rivian's access to capital is significantly limited compared to Tesla's -- a huge disadvantage in a capital-intensive industry.

But with a $15 billion market capitalization, improving margins and sales growth, and a relatively cheap valuation, Rivian stock remains far from overpriced.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,048%* — a market-crushing outperformance compared to 179% for the S&P 500.

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

See the stocks »

*Stock Advisor returns as of July 7, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Elon Musk has been teasing a robotaxi service from Tesla (NASDAQ: TSLA) for years. The wait is over. Tesla's autonomous vehicles -- armed with remote drivers that can step in at any moment -- finally hit the streets of Austin, Texas, this month.

The initial rollout has been bumpy, with several viral videos highlighting safety concerns. But that didn't stop Tesla stock from popping 7% on the day of the launch.

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

Shares have since given back some of the gains, but the question remains: What happens next? Is Tesla about to catalyze a $10 trillion global robotaxi market, as some experts believe? Or is the launch simply a game of smoke and mirrors, with little substance behind it?

The answers to all these questions may surprise you.

These experts think robotaxis are the future

Cathie Wood, the leader ok Ark Invest, has been a big fan of Tesla's stock for years. She's long been known for her incredibly optimistic predictions, but her projections for the global robotaxi market have raised a lot of eyebrows. "We think US$8 [trillion] to US$10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," she told investors at a conference in March.

The cause? Not Tesla's launch event in Austin, but rather the momentum of today's artificial intelligence (AI) revolution. "That's how quickly AI is going to cause these things to happen," she stressed.

What could this mean for Tesla? According to Wood, everything. She thinks 90% of Tesla's market cap will eventually stem from its robotaxi division, helping propel the stock price to $2,600 per share within five years. The average stock price prediction from Wall Street, for reference, calls for a share price of just $320 by the end of 2025.

Wood isn't the only analyst impressed with the potential of robotaxis. Wedbush analyst Dan Ives recently took a ride in one of Tesla's autonomous vehicles, coming away fairly impressed. "Going into it, we expected to be impressed," he later told clients. "But walking away from it, all there is to say is that this is the future."

Ives has a $500 price target on Tesla -- among the highest of any analyst. He thinks that the robotaxi opportunity alone could add $1 trillion to Tesla's market cap by the end of 2026.

Ives concluded:

Taking a step back, we view this autonomous chapter as one of the most important for Musk and Tesla in its history as a company...as we believe the AI future at Tesla is worth $1 trillion to the valuation alone over the next few years. There will be many setbacks...but given its unmatched scale and scope globally, we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the U.S. and around the globe.

Wood and Ives are extremely optimistic about Tesla's autonomous driving aspirations. But will Tesla benefit as quickly as they seem to believe?

Image source: Getty Images.

Will this really add $1 trillion to Tesla's market cap?

Investors should be very cautious about ascribing a huge valuation to Tesla's robotaxi business. Other companies including Uber, Amazon's Zoox, and Alphabet's Waymo have been investing in this space for years -- with very little to show for it. Alphabet alone has poured billions of dollars into its self-driving business, and yet it likely remains unprofitable. Amazon, meanwhile, just opened a new factory this year that will be producing its own self-driving cars, adding more competition to this already crowded market.

Still, robotaxis and self-driving vehicles as a whole will eventually become a large part of society. A rapid reduction in costs, combined with rapid innovation around artificial intelligence, make that a near certainty. But who will win and how the industry will take shape is far from certain. And as analyst Dan Ives cautioned, there will be plenty of bumps along the way.

Buying shares of Tesla for the robotaxi opportunity is a reasonable thing to do. Just know that this story will be measured in decades, not years.

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

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. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.

The price of Bitcoin (CRYPTO: BTC) is back over $100,000. But many experts believe there's a lot more room to run. One major investor, Arthur Hayes, even thinks that Bitcoin's price will rise above the $1 million mark sometime over the next 3.5 years.

If you've been waiting to invest more money into Bitcoin, there are two reasons why you should make a move before 2026 arrives.

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

This is the golden rule of investing in Bitcoin

At their core, currencies are not income-producing assets and they contribute nothing beyond their existence as a transaction-settling financial tool. Everyone believes that a U.S. dollar retains value. In return, a dollar bill has value and can be traded in exchange for something else. Of course, the U.S. government does have taxation and military powers with which it can back up the dollar's value. But in reality, the only foundational value a single dollar bill has is the idea that it has value.

The same can be said of Bitcoin. Yes, there is a decentralized consensus mechanism that is novel, plus a growing ecosystem of applications and services that use Bitcoin as a means of exchange. But most of Bitcoin's value comes from the idea that it has value. It's a financial tool that can settle transactions, not really different from the U.S. dollar. This reality has caused many investors to call Bitcoin a bubble. And in many ways, it is. It is an asset whose valuation is determined by social whims. But again, this isn't much different than any other currency. The main difference here is that traditionally, currencies are backed and controlled by nation-states. Bitcoin, meanwhile, is essentially controlled by a predetermined algorithm that dictates its long-term inflation rate, a rate that will ultimately drop to zero.

While there are many rules to currency investing, there is one old adage applicable to Bitcoin at this stage: The longer a currency has been around, the more legitimacy it has. This makes sense on a fundamental level. If a dollar bill has been used as a means of exchange for centuries, it's probably a good bet that its value will be maintained tomorrow, or even 20 years from now. The longer a currency is recognized by the masses, the more it is accepted by the same crowd. It's a very general rule with plenty of exceptions. But in general, it's a helpful framework for thinking about new currencies like Bitcoin.

The first Bitcoin was minted in 2009. That means Bitcoin has existed for only 14 years. Every year that passes, its legitimacy rises, adding more and more adoption avenues, and thus increasing its value. Following this logic, the earlier you buy Bitcoin for the long term the better. But if you need Bitcoin to have a more tangible use case than that of a speculative currency, the thesis below has you covered.

Image source: Getty Images.

Don't buy gold, buy BTC

Don't believe that Bitcoin has the ability to replace other currencies like the U.S. dollar? No worries. Its place as a store of value asset also provides reason to buy more Bitcoin today rather than wait for next year.

Right now, gold's total market cap is around $23 trillion. Bitcoin's market cap, meanwhile, stops at $2.1 trillion. If Bitcoin closes the gap with gold, there could be roughly 1,000% in potential upside to go.

Every year, more and more major investors allocate capital to Bitcoin. Scores of crypto-related ETFs have launched, many of which invest heavily into Bitcoin. Meanwhile, there's a growing list of billionaires who have put more of their portfolio into Bitcoin. All of these moves add even more credibility to Bitcoin's story. So even if it never takes off as a means of exchange, institutional buy-in legitimizes Bitcoin as a valuable asset simply to hold on to, no different than how we treat gold today.

So whether you like Bitcoin's long-term potential as a currency or simply view it as a digital version of gold, 2025 remains a wonderful time to take a long-term position.

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

Before you buy stock in Bitcoin, 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 Bitcoin 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 $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

The price of Bitcoin (CRYPTO: BTC) is back over $100,000. But according to many experts, the run is far from over. Ark Invest CEO Cathie Wood recently reaffirmed her 2030 price target of $700,000. Long term, she believes a single Bitcoin could eventually be worth several million dollars.

Every investor should have at least a small exposure to Bitcoin, even if it's just $100. That gives you enough cash to easily buy into the two Bitcoin exchange-traded funds (ETFs) below. Just be careful: The two ETFs below provide very different exposures to Bitcoin and crypto in general.

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

This is the largest Bitcoin ETF in the world

The largest Bitcoin ETF right now -- at least measured by the amount of money that has been invested into it -- is the iShares Bitcoin Trust ETF (NASDAQ: IBIT). As of last quarter, the ETF's holdings were worth roughly $70 billion -- more than triple the asset value of the next-largest Bitcoin ETF. Scale allows this ETF to charge lower expense ratios than the competition. The total management fee right now is a reasonable 0.25%. Many competing ETFs charge significantly higher fees.

The best thing about this Bitcoin ETF is that it invests solely in Bitcoin. When you buy Bitcoin directly, you need to deal with a long list of complexities. Taxes can be difficult to track manually, and security issues are commonplace, with many investors falling victim to scams or phishing attempts that drain their accounts with little to no recourse available. By investing in the iShares Bitcoin Trust ETF, all of these complexities become streamlined, just as they would by purchasing any other ETF. As the ETF's prospectus describes, packaging a Bitcoin investment vehicle as a simple ETF helps "remove the operational, tax, and custody complexities of holding bitcoin directly."

Perhaps the best news is that buying a Bitcoin ETF lets you automate your investments. So you can buy $100 today, but you can also tell your brokerage to withdraw another $100 each month, with the proceeds automatically invested in more Bitcoin. This helps you dollar-cost average your Bitcoin investment -- a huge advantage for such a volatile asset.

As you'd expect, more than 99.9% of the trust's holdings are invested directly into Bitcoin, with a tiny amount allocated to cash, mostly to meet daily liquidity needs. With such a low expense ratio, this is one of the fastest and most efficient ways to get Bitcoin exposure. But if you want to invest in more than just Bitcoin, check out the new ETF below.

Image source: Getty Images.

This crypto ETF invests in more than just Bitcoin

Launched in 2023, the Bitcoin & Ether Market Cap Weight ETF (NYSEMKT: BETH) invests primarily in Bitcoin. But as the ETF's name suggests, it also allocates some of your funds into Ethereum.

Ethereum is the second-largest crypto asset in the world today. And while it does have distinct differences when compared to Bitcoin, a very simplistic explanation is that it is essentially "programmable" Bitcoin. That is, it is a decentralized asset that allows for other things to be built on top of it, with the Ethereum virtual machine executing commands in a way that can't be controlled by any one individual. By investing in Ethereum, you're essentially betting that the wide crypto universe will also prevail, not just Bitcoin.

As of last quarter, this ETF's portfolio had 88% exposure to Bitcoin, with the remainder invested in Ethereum. Importantly, exposure is gained through futures contracts, not directly through Bitcoin holdings. This approach adds some correlation risk.

As you can imagine, this increased diversification comes with added costs. The expense ratio for this ETF is around 0.95%. For most investors, the cheaper iShares Bitcoin Trust ETF is a suitable option. But if you'd like to make sure you bet both on Bitcoin and crypto in general, this is a great all-in-one ETF to accomplish that. And as with any other ETF, you can set up automated investments to make sure you're putting more money to work on a regular basis. This way, you don't need much to get started.

Whether you go with the cheaper and arguably more effective IBIT ETF, or get fancier with the BETH ETF, both give your portfolio instant exposure to crypto markets with as little as $100.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

There's a lot to love about Rivian Automotive (NASDAQ: RIVN) stock right now. Over the next 12 to 24 months, the company will experience several major growth catalysts. But as Warren Buffett often advises, keeping an eye on the long term is key to generating the biggest profits.

Where might Rivian end up 10 years from now? The answer might surprise you.

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

Expect these 3 things to revolutionize the business

To understand where Rivian is headed over the next 10 years, we must first look at some near-term factors. That's because Rivian's near-term growth catalysts should help set the company up for the next decade of growth.

When it comes to electric vehicle (EV) stocks, one of the most exciting catalysts involves getting new models to market that the masses can afford. Roughly 70% of Americans want their next car to cost less than $50,000. Getting vehicles to market with starting prices under this threshold is critical to putting growth on overdrive.

But this is a challenge for most EV makers. On average, electric vehicles still cost more to build than conventional ones, and many EV start-ups lack the scale to sell vehicles at low prices. Plus, they often lack the capital runway to take a big financial hit by pricing vehicles that cost a lot to manufacture at a steep discount for consumers.

After years of investment, Rivian is finally poised to release its first "mass market" vehicles. The R2, R3, and R3X are all expected to debut with starting prices under $50,000. The first of these three should start production in early 2026, though I don't expect full production of all three to commence until 2027 at the earliest.

Still, these vehicles have the potential to revolutionize Rivian's business, changing it from a niche EV producer to a nationally recognized brand. Mass market vehicles like these can finally give Rivian the scale it needs to survive long term.

Right now, Tesla's two mass market vehicles -- the Model Y and Model 3 -- contribute more than 90% of its vehicle sales. They are critical for the company's profitability. Rivian's new models hold the same sales growth and profitability potential.

But beyond these three new vehicles, the future of Rivian isn't what you might expect. In fact, over the next 10 years, Rivian's most promising opportunity might not involve manufacturing vehicles at all.

Image source: Getty Images.

Rivian's future might not involve selling cars

Last year, Rivian and Volkswagen agreed to a $5.8 billion deal that would create a joint venture focused not on cars themselves, but on the knowledge and software involved in making them. "The partnership aims to strengthen areas of weakness in both companies, with Volkswagen looking for software expertise and Rivian in need of both manufacturing knowledge and an influx of cash," Car and Driver reported at the time.

The deal gave Rivian a lot of much-needed cash. But it was also a huge vote of confidence in the company's unique approach to software. Rivian's chief software officer, Wassym Bensaid, said that the software and approach to building the R2 -- Rivian's newest mass market model -- will provide "the platform that will underpin actually all future EV products at VW."

Rivian has been designing its own software stack for years. Its unique approach promises to be simpler, faster, and more efficient than existing architects'. As a pure EV maker, Rivian is far more focused on next-gen technology than legacy automakers like Volkswagen are. "What we realized over the last few years is the enormous difficulty for incumbent existing auto manufacturers to develop their own full stack software," Rivian's CEO stressed last summer. "The challenge for an incumbent existing [automaker] is if you built a deep dependency on suppliers for making all these ECUs to flip the switch to move off of that."

Rivian's software allows automakers to bring nearly the entire software stack in house, saving money and streamlining integration. This ability is so valuable that Volkswagen ultimately invested $5.8 billion for a 50% stake in the venture scaling up this architecture. Over the next decade, especially with vehicles becoming more and more connected, this segment of the business could be Rivian's biggest. Software typically has high profit margins, and if it's embedded in millions of vehicles, revenues can be recurring and "sticky."

So while Rivian's new vehicles should get all the attention in coming years, software could ultimately become Rivian's biggest profit generator over the next decade.

Should you invest $1,000 in Rivian Automotive right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Everyone wants to invest in the next Tesla (NASDAQ: TSLA), and an examination of analyst predictions suggests Lucid Group (NASDAQ: LCID) has the potential to be it. Sales are expected to grow by 73% this year, with another 96% growth expected in 2026.

There's just one problem with buying the stock at the moment: Lucid shares trade at 6.7 times sales, a pricey valuation for a business that might be unprofitable for at least the next several years. If you dig deeper, however, Lucid shares might be wildly undervalued despite the high price-to-sales ratio (P/S).

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

Image source: Getty Images.

This chart shows Lucid Group's true potential

Despite generating less than 1% of Tesla's revenue, Lucid Group still trades at roughly half the valuation of Tesla on a price-to-sales basis. That could all change when the company releases its "mass market" vehicles. Management has previously teased three new vehicle models that will all sell for less than $50,000 a piece.

While these vehicles are still a year or two away from production, they should eventually put Lucid's growth in overdrive. Tesla released its Model 3 in 2017, with the Model Y following in 2020. These two affordable vehicles now account for more than 90% of Tesla's sales -- the primary reason that Tesla's sales have gone from a few billion dollars to more than $95 billion today.

Data by YCharts.

Lucid has a very long way to go before matching Tesla's revenue numbers. But releasing more affordable models is the key to closing the gap. If management is to be believed, the first of several mass market models will arrive sometime in 2026, with more on the way in 2027 and beyond.

It should be stressed that Lucid's financial position isn't incredibly strong right now. It has less than $1.9 billion in cash on the balance sheet, yet it lost nearly $2.4 billion over the last 12 months.

More cash will need to be raised to get these new models to market. However, Tesla's success shows Lucid's true potential.

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

Before you buy stock in Lucid 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 Lucid 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 $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $888,780!*

Now, it’s worth noting Stock Advisor’s total average return is 999% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Warren Buffett has long preached the virtues of long-term investing. Buying for the long haul provides plenty of advantages, especially when it comes to compounding and minimizing tax implications. Right now, two Fidelity ETFs seem perfectly designed to provide maximum returns over a long time horizon.

Every investor should own this asset

Most investors don't own any cryptocurrency. And there's good reason for that. Volatility makes most cryptocurrency investments unviable for those seeking safe and reliable returns.

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

Plus, the process of buying and selling cryptocurrencies like Bitcoin can be far too complicated for most people. That's why the Fidelity Wise Origin Bitcoin Fund (NYSEMKT: FBTC) is so attractive. For an expense ratio of just 0.25%, investors can get direct exposure to the crypto without the complex tasks of self-custody and tax tracking.

It can take a lot of education to wrap your head around cryptocurrencies and their potential. The industry is rife with misinformation and misleading promises. But Bitcoin, arguably the original cryptocurrency, is a proven and relatively simple asset. Think of it as digital gold.

There are only so many bitcoins in circulation at any given time. And while there is some marginal inflation over time, its total supply is capped, just as there is only so much gold in the ground to dig up.

To be sure, the crypto has significantly more volatility than gold. But it arguably has more upside as well. Its total market capitalization right now is around $2.2 trillion. Gold's total market cap, meanwhile, is above $23 trillion.

So compared to gold, Bitcoin could have 1,000% more upside to go. And that doesn't even include its value as a transactional currency, an advantage gold is fairly limited in.

Expect a lot of volatility here, but investing even just 1% of your assets into Bitcoin might boost your portfolio's total upside potential significantly. Fidelity's Wide Origin Bitcoin Fund makes adding that exposure as easy as buying any other exchange-traded fund (ETF).

If you're looking for high growth potential with traditional stocks, however, check out the promising new ETF below.

Image source: Getty Images.

This Fidelity ETF has high upside potential

Looking to maximize your chances for long-term growth? Consider the Fidelity Cloud Computing ETF (NYSEMKT: FCLD). It's relatively new and shouldn't replace broad market indexes like those that track the S&P 500. But there's no denying that it could add huge long-term potential to any portfolio.

As its name suggests, the Fidelity Cloud Computing ETF invests primarily in businesses that operate cloud computing infrastructure, like Oracle and Microsoft. It also invests in cloud software-as-a-service (SaaS) stocks like Salesforce.

Cloud computing is perhaps one of the biggest sectors that will benefit from the AI revolution. The United Nations predicts that the market will grow from $189 billion in 2023 to nearly $5 trillion by 2033. Much of that value will accrue to cloud computing businesses. Why? It has everything to do with how AI is trained and deployed.

Artificial intelligence requires a lot of computing power. Instead of building this infrastructure themselves, most developers and businesses outsource it to cloud infrastructure businesses like Microsoft's Azure division.

And when it comes to using AI features, most of them will be deployed via cloud SaaS like Salesforce. From hardware to software, cloud computing businesses will benefit strongly from rising AI demand, which is expected to increase at more than 30% per year for the next decade or more.

Fidelity's Cloud Computing ETF isn't perfect. It does have a relatively high expense ratio of 0.4%. And betting on a single sector isn't for every investor. But if you're looking to build a portfolio with high long-term potential without the complexity of managing individual positions, this ETF looks like a reasonable bet.

Should you invest $1,000 in Fidelity Wise Origin Bitcoin Fund right now?

Before you buy stock in Fidelity Wise Origin Bitcoin Fund, 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 Fidelity Wise Origin Bitcoin Fund 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

Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin, Microsoft, Oracle, and Salesforce. 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.

The AI revolution is here. Over the next decade, many experts believe that the artificial intelligence market will grow from a few hundred billion dollars in value to nearly $5 trillion. Fortunes will be made throughout this growth journey, and one new ETF from popular analyst Dan Ives seeks to give investors a one-stop shop for investing in AI.

Looking to add AI exposure to your portfolio? There are three reasons to consider the Dan IVES Wedbush AI Revolution ETF (NYSE:IVES).

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

1. Experts will guide your AI investments

Many investors love to do their own research and select their own individual investments. But when it comes to investing in AI stocks, having some experts along for the ride can help a lot. Right now, there are many popular AI stocks that growth investors are flocking to. But the winners during the next phase or two of these cycles may not be the winners of today.

"I've started this ETF because it's about the second, third, fourth derivatives of AI playing out, and that's the important thing for investors," Ives recently explained. "The AI revolution is the biggest tech theme we've ever seen," he added."There are plenty of other great vehicles out there, but there's only one that encompasses my investing team and the research that investors have trusted me to deliver."

2. Stay 100% invested in artificial intelligence

There are several new AI ETFs out there, but many invest in companies that aren't directly tied to AI. Amazon, for example, is exposed to AI through its AWS cloud infrastructure division. But that division contributes less than half of its total revenue. The movement of Amazon's stock, therefore, may be unduly influenced by its e-commerce division, not its AWS division, which provides it with its most direct AI exposure.

The IVES ETF, meanwhile, aims to maximize your AI exposure by investing in just 30 companies handpicked from Ives's "AI Revolution Theme," which only aggregates stocks with meaningful exposure to AI infrastructure, deployment, and monetization. That includes AI stalwarts like Nvidia, which produces most of the industry's GPUs, and Microsoft, which has a much higher raw AI exposure than Amazon.

Image source: Getty Images.

3. Get in early

The beauty of ETFs like this is that they let you scale up your exposure quickly. Yes, you are getting expert stock selection. You're also making sure your invested capital is as exposed as possible to the actual AI themes you're attempting to target. But by outsourcing your picks to an ETF, you also give yourself the ability to scale up your exposure at a moment's notice without needing to do a bunch of research on individual selections. In short, vehicles like the IVES ETF let you get quick exposure earlier than you would have if you needed to complete all of your own research and allocation decisions.

"Two trillion dollars is going to be spent over the next three years," Ives estimates. "Now, I believe we're still in the bottom of the first inning in terms of this non-inning game for AI. And the second, third derivative beneficiaries of tech are just starting to focus on AI." If you agree with Ives -- that is, if you think that we are still in the very early innings of the AI revolution -- then getting your money to work today rather than tomorrow may give you a chance to lock in early cycle valuations before the rest of the market catches on.

The IVES ETF isn't perfect. It comes with a very high 0.75% expense ratio, which will cut into your profits. It also has no historical track record, adding some level of uncertainty for its performance potential. Plus, Ives himself has said that he doesn't care much for valuations. "I've never been too focused on valuations," Ives recently said. "It's about the themes, the best places, and the disruptors. That's all the work we do in the field."

Investors looking to do their own research, limit fees, and focus on valuation should likely look elsewhere. But for those willing to get instant exposure to expert AI stock selections, the IVES ETF is a promising new investment vehicle for aggressive 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 $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

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

Nvidia (NASDAQ: NVDA) has already been one of the best long-term investments in history. Since 1999, shares of the chipmaker have increased in value by more than 340,000%. An original investment of just $3 would have turned into $1 million over that timeframe!

But don't think the run is over. The next few decades should see the company grow its sales immensely, leading to big gains for patient investors. Here's why.

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

Nvidia sales will rise for decades to come

Nvidia's business model sits at the very center of the artificial intelligence (AI) revolution. Nearly all AI technologies require massive datasets and compute power to operate. Complex models crunch this data to provide relevant outputs for users. While some models can run locally, most popular models are run on the cloud, using distributed compute power that can scale up and down dynamically based on demand.

What technologies make cloud computing infrastructure possible? Graphics processing units, more commonly referred to as GPUs.

There is a wide variety of companies producing a wide variety of GPUs, each specialized for a different purpose. For a long time, Nvidia specialized in GPUs built for gaming environments. Next-gen gaming consoles and computers need vast amounts of graphics processing power. Specialized chips like Nvidia's allowed the industry to advance, creating better and more visually stunning games for users.

Nvidia recognized the potential of AI before many of its competitors. It invested heavily to make sure its chips and software were able to support the small but promising industry. As The New York Times summarizes:

Over more than 10 years, Nvidia has built a nearly impregnable lead in producing chips that can perform complex A.I. tasks like image, facial and speech recognition, as well as generating text for chatbots like ChatGPT. The onetime industry upstart achieved that dominance by recognizing the A.I. trend early, tailoring its chips to those tasks and then developing key pieces of software that aid in A.I. development.

That software component is perhaps Nvidia's biggest secret weapon. Over the next decade, the AI market is predicted to grow from several hundred billion dollars in value to nearly $5 trillion. Competition for GPUs will surely heat up, but Nvidia's software has created a sort of lock-in for customers.

Scores of AI applications have been built around Nvidia's hardware, and developers have been using its software for years to customize these chips to their exact specifications. Even if its hardware loses its performance edge, this software lock-in should give Nvidia heavy market share for decades to come, not to mention the reputation and capital necessary to continue improving its hardware or purchasing promising upstarts.

Image source: Getty Images.

Big gains will require patience

Trading at 25 times sales, Nvidia stock is far from cheap. But in 2021, shares also traded at roughly 25 times sales, and yet shares have increased in value by nearly 800% since then.

Now that it's a $3.3 trillion business, many argue that Nvidia will face steeper hurdles to fast growth. The law of large numbers may prove this true. After all, it's easier to double in size as a $200 billion company than as a $2 trillion one. But Nvidia has a stranglehold on its market, with some estimates pegging it with a 90% market share for AI GPUs. Meanwhile, the AI market is taking off, and Nvidia's software edge gives it a front-row seat to this growth over the long term.

High-multiple stocks like this can display extreme volatility from year to year. But if you maintain an investing horizon of a decade or more, Nvidia shares can help you turn small amounts into millions of dollars through the magic of compound interest. Just remember: The AI revolution is a multi-decade story, and Nvidia's high upfront premium may take years to fully justify.

But buying high-quality companies with durable competitive advantages operating in long-term growth markets is rarely a poor decision. Just make sure your investing horizon is long enough to fully digest Nvidia's pricey upfront valuation.

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 $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

Rivian Automotive (NASDAQ: RIVN) shares have surged over the past month, rising in value by roughly 50%. But don't think that it's too late to take advantage. The electric vehicle maker is about to experience a huge jump in growth, a surge that could persist for several years.

Shares still look like a strong buy for patient investors, but there is one particular risk that every investor must be aware of before diving in.

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

Rivian's growth is about to explode

It takes a long time to get a new vehicle from the design stage to production and final delivery. A long time. Rivian was initially founded in 2009 as Mainstream Motors. It didn't release its first vehicle, the R1T, until 2021 -- more than a decade later. The R1S, which uses essentially the same platform as the R1T, was released the following year.

It's not surprising that it took Rivian this long. Often, new vehicles from new manufacturers like Rivian involve novel design and engineering concepts, especially for electric vehicles. Production facilities, meanwhile, need to be built and scaled up from scratch. And then you have the litany of regulatory and safety hurdles to pass, nonetheless sourcing various parts from potentially dozens of third-party suppliers.

Production of the R1T was delayed several times simply due to global chip shortages -- a small but critical component that makes the vehicle possible. And in Rivian's case, you also need to develop the software necessary to not only run the vehicle itself, but also deliver on any promised self-driving capabilities.

One of the biggest barriers isn't even about making the car from a physical standpoint, but funding the car from a capital standpoint. It takes billions of dollars to get vehicles like the R1T and R1S to market, not to mention years and years of patient capital. It's hard to find investors willing to fund a company for more than a decade with zero revenue -- a major reason why so many EV start-ups have gone under over the decades.

When the R1T and R1S made it to market, Rivian's sales exploded from essentially zero to more than $5 billion. Revenue has stagnated in recent quarters due to a lack of new models.

But starting next year, we should see growth surge yet again thanks to the introduction of three new vehicles: the R2, R3, and R3X. All are priced under $50,000, making Rivian's vehicles affordable to millions of new buyers. It will likely still be a year or two until all of these models are in production and on the road, but as we've seen, that's nothing compared to the full timeline involved in bringing new models to market.

We are now in the final innings of Rivian's dormant growth phase. Both 2026 and 2027 should see sales surge to historic levels, and despite the recent stock price spike, shares still trade at under 4 times sales. But before you jump in, you must understand the primary risk factor.

Image source: Getty Images.

Don't buy Rivian stock before understanding this risk

Production timelines rarely go according to plan. So while management expects to start production on the R2 in 2026, don't expect a full production ramp-up until late in the year, and possibly even into 2027. The same will be true of the company's R3 and R3X models, which may not reach customers in any meaningful way until 2027.

Compared to full vehicle production timelines, waiting 12 to 24 months is small potatoes. But for the production ramp to translate into significantly higher sales, it could take several years beyond the start of production. That makes Rivian a multi-year story.

Yes, the valuation is cheap, especially compared to other EV stocks. But it will require years of patience for investors to realize the biggest gains. That's easier said than done.Despite the recent stock price spike, Rivian is still a strong buy. But patience will be necessary.

Should you invest $1,000 in Rivian Automotive right now?

Before you buy stock in Rivian Automotive, 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 Rivian Automotive 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

Ryan Vanzo 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.

Since going public in 2021, Lucid Group (NASDAQ: LCID) has seen its stock struggle mightily, losing more than 80% of its value in that time period. After the steep decline, however, shares of the electric vehicle (EV) maker trade at a much lower valuation. Over the next few years, sales should grow tremendously. In 2025 alone, analysts expect the company to nearly double its revenue.

This looks like a great time to buy into an exciting growth stock at a discount. However, there are two risks you'll want to monitor before jumping in.

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

The next three years will be wild for Lucid Group

Starting out as an electric vehicle maker is extremely difficult. Scores have gone bankrupt over the decades. The main issue has been funding. To start a car manufacturer from scratch, billions of dollars need to be invested over many years. Profitability can take a decade or longer to achieve. The trick isn't necessarily to produce great vehicles that consumers love -- it's to survive financially until scaling becomes possible.

Tesla's historic rise was due to a very particular strategy for growth. The company first created a sports car, the Roadster, which had a high price point affordable only to the very rich. This lowered production costs since volumes would be limited. It lowered the concern for cost control, given that the price points would be very high anyway. It also ensured that its cars would be viewed as luxury items.

From there, Tesla was able to leverage its reputation to build more affordable cars like the Model X and Model S. Then, it could reinvest its growing sales base into even more affordable vehicles, like the Model Y and Model 3. Today, more than 90% of Tesla's vehicle sales are dominated by affordable options like the Model Y and 3. However, the process of getting to this scale was gradual and strategic.

Over the next three years, Lucid will attempt to replicate Tesla's massive growth. Right now, the company only has two vehicles in its lineup: the Lucid Air and the Lucid Gravity. The Gravity is a recent introduction, and sales of the SUV are expected to help revenue growth surpass 75% in 2025.

But the most exciting new models will be revealed in 2026 and 2027. Unlike the Air and Gravity models, both of which can cost upwards of $100,000 depending on options, Lucid's future models are expected to debut under $50,000. Crossing that critical threshold helped Tesla's growth go into overdrive. Lucid's management team anticipates the same for its new mass-market models.

So, this year expect Lucid's sales growth to spike heavily thanks to Gravity's sales ramp. Due to new mass-market models, there's a chance this breakneck sales growth pace can be sustained for several years to come. But there are two risks to this story that every Lucid investor should monitor.

Image source: Getty Images.

Make sure to monitor these two risks

If Lucid can continue ramping Gravity sales this year and successfully introduce three new mass-market models in 2026 and 2027 as management expects, the company's sales growth should far exceed most investors' expectations. But the road forward won't be easy. The company's longtime CEO recently departed, and the firm has far less cash on hand than competitors like Rivian Automotive and Tesla. Plus, Lucid loses far more on each vehicle sale than those two competitors.

TSLA Gross Profit Margin data by YCharts

To get its new vehicles to market, Lucid will need a lot more cash. That will require raising new debt, or, more likely, selling more stock, diluting shareholders in the process. There's no guarantee that the market will be willing to finance this new funding on terms attractive to current shareholders. And like the long list of defunct EV makers attests, there's no guarantee that this funding will come through at all.

Lucid shares are cheap compared to their growth potential over the next three years. But gross margin and liquidity concerns should be closely monitored.

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

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

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) has a strong history of beating analyst expectations for quarterly earnings and sales. The company has beaten estimates in 9 of the past 10 quarters. According to data compiled by Barchart, Nvidia stock has risen on a majority of those earnings beats, but still fell on several occasions. So while an earnings beat doesn't guarantee a positive price jump, the odds are certainly stacked in that direction.

With so much market and trade uncertainty, it's reasonable to expect a weak earnings announcement from the company next month. But there's reason to believe the opposite could happen. As we'll see, Nvidia stands a good chance of beating earnings estimates next month. That, coupled with the stock being down more than 30% so far this year, could potentially lead to a sharp bump in valuation.

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

2 Reasons to believe Nvidia will crush earnings

Nvidia's revenue growth estimates have come down sharply in recent months. Geopolitical tensions have generated uncertainty around global supply chains, especially regarding potential impacts from tariffs. Nearly one-third of Nvidia's sales last year may ultimately be tied to China in some way, whether that's through direct sales to China, related sales to Taiwan, or exports to Singapore that are then reexported to China. Rising pressures between the U.S. and China could make these exports more complicated, expensive, or even impossible to execute.

More importantly, however, end market demand -- especially from data centers -- continues to impress. Nvidia's data center segment experienced 93% growth year over year last quarter. Nvidia's management team has long expected this growth tailwind to continue for years to come. Previous estimates called for data center capital expenditures to hit $1 trillion industrywide by 2032, though that forecast has now been pulled forward to 2030. In a nutshell, the biggest driver of Nvidia's growth in recent years remains intact, and may be even stronger near term than many predict.

But it's not just end market demand that could boost results above expectations. Share buybacks could also play a role. Last August, the company announced a $50 billion stock buyback program. As of last quarter, the company has repurchased around $33.7 billion in shares, leaving $16.3 billion remaining. The share buyback program has already helped fractionally boost earnings per share. And if management was feeling aggressive, it may have stepped up these repurchases given Nvidia's weak share price so far this year. If share buybacks accelerate more than expected, we could see that translate into better per-share results, given the total number of outstanding shares would be lower than most analysts are predicting.

NVDA PS Ratio data by YCharts

Should you buy Nvidia stock before earnings next month?

It's important to remember that betting on a stock's quarterly performance is a difficult game. The numbers over such a short period of time can be difficult to guess. As Nvidia's post-results performance has shown over the last 10 quarters, a company can beat earnings and still see its stock price fall.

Betting on Nvidia shares today should be a long-term decision. Growth estimates have come down sharply, but end market demand should remain high, on average, for years to come. Shares are still expensive at 18.4 times sales, but Nvidia's high growth rates could make this valuation look like a steal a few years down the road.

Will Nvidia beat earnings estimates next month? I bet that it will. But from an investment standpoint, I'm focused more on what happens over the rest of this decade versus what happens a few weeks from now. Weak earnings could even provide an extra buying opportunity for patient investors.

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 $287,877!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,678!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $594,046!*

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 April 21, 2025

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

Tesla's (NASDAQ: TSLA) stock has come down considerably since the year began. Shares are down roughly 30% in value so far this year, with the stock's price-to-sales ratio falling from over 15 to just 9.2.

On paper, Tesla's valuation looks compelling. But there's one factor that investors must understand before jumping in.

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

Tesla's stock isn't as cheap as it looks

There's no doubt that Tesla's stock is much cheaper than it was just four months ago. But when you zoom out further, it becomes obvious that most of this crash simply reverted Tesla's valuation to its historical trading average.

In recent years, Tesla's valuation has typically ranged between 5 and 10 times sales. In the closing months of 2024, however, Tesla's valuation soared to more than 16 times sales. The recent correction simply brought the valuation multiple down toward historical norms. In fact, even after the correction, Tesla's price-to-sales multiple remains above its multiyear average, even when including the abnormal levels seen in late 2024 and early 2025.

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

Tesla's growth forecast has picked up since the close of 2024. But even when looking at the company's forward price-to-sales multiple -- a metric that factors in this higher expected sales growth -- Tesla shares still trade a bit higher than their long-term average. And again, those long-term averages include the abnormal levels experienced at the end of 2024 and the start of 2025.

Does any of this mean that Tesla is a poor investment for long-term shareholders? Absolutely not. But the stock isn't as cheap as it seems following the correction, given that the correction began at abnormally high valuation levels.

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 $276,000!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

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 April 21, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.