Key Points

• Pfizer's free cash flow should improve.

• The drugmaker's lower leverage ratio target gives it greater financial flexibility.

• New products should cushion the blow from Pfizer's looming patent cliff.

• 10 stocks we like better than Pfizer ›

Many income investors probably have mixed emotions about stocks with ultra-high dividend yields. On one hand, they love the tremendous income these stocks provide. On the other hand, they might worry more often than not about a potential dividend cut.

Pfizer (NYSE: PFE) is a case in point, with its forward dividend yield of 7%. Although the stock is a favorite for many income investors, questions about the sustainability of the dividend persist.

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 »

But there's good news for income investors following Pfizer's second-quarter update on Aug. 5. Here are three reasons Pfizer's juicy dividend is getting safer.

Image source: Getty Images.

1. Free cash flow should improve

The most important number for income investors to watch relating to a company's dividend sustainability is its free cash flow. At first glance, Pfizer's free cash flow might seem to be an area of concern. The company paid out $4.9 billion in dividends during the first half of 2025 but generated free cash flow of only $571 million.

However, Pfizer's financial situation is better than it looks. For one thing, the big drugmaker had to fork over $2.1 billion in tax payment repatriation and a payment to BioNTech for its gross profit split. CFO David Denton said in Pfizer's Q2 earnings call that the company expects improved cash flows in the second half of 2025.

What's more, Pfizer expects to achieve savings in the ballpark of $7.7 billion by the end of 2027 with its cost-cutting initiatives. Denton noted in the Q2 call that around $500 million of these savings will be reinvested in pipeline development. However, the rest could flow down to the bottom line and significantly boost free cash flow.

2. More financial flexibility with a lower leverage target

Pfizer continues to have three priorities in its capital allocation strategy. Income investors will like hearing that the first priority is still maintaining and growing the dividend "over time." The other two priorities are reinvesting in the business and stock buybacks.

However, Pfizer also has a debt load of around $61.7 billion to service. Cash used to pay down this debt reduces the amount available to direct toward the company's capital allocation priorities, including funding the dividend program.

The good news for income investors is that Pfizer has lowered its gross leverage ratio to roughly 2.7. The company's previous target leverage ratio was 3.25. Since Pfizer has already gone below that level, it has set a new target at the current level of 2.7.

Denton told analysts on the Q2 earnings call that the company was able to improve its cash generation faster than anticipated following the Seagen acquisition. While he added that Pfizer will "continue to deliver over time," the company should now have more financial flexibility to achieve its top capital allocation priority of maintaining and growing the dividend.

3. New products will cushion the blow from the patent cliff

What is the single biggest risk to Pfizer's attractive dividend? I'd put the looming patent cliff at the top of the list. The company faces the loss of exclusivity (LOE) for several of its best-selling drugs over the next few years.

Kidney cancer drug Inlyta loses patent exclusivity later this year. Autoimmune disease drug Xeljanz and anticoagulant Eliquis follow in 2026. Breast cancer drug Ibrance and prostate cancer drug Xtandi have LOEs in 2027. Melanoma and lung cancer therapy Mektovi could join them, pending a patent term extension. Pfizer's lucrative Vyndaqel/Vyndamax/Vynmac franchise is set to lose its key U.S. patent in 2028, pending another patent term extension.

The big pharmaceutical company is looking at billions of dollars in lost revenue as generics and biosimilars take market share away from these drugs. That's money that won't be available to go toward dividend payments.

Now for the good news. Pfizer stated in its Q2 update that the upcoming LOEs should "be largely offset by strong revenue growth from recent launches and acquired products." CEO Albert Bourla highlighted a few of them in his Q2 earnings call comments.

Bourla praised Elrexfio, in particular. He believes the drug could become a standard of care in treating multiple myeloma, a market that's projected to reach around $44 billion by 2027. Sales for Elrexfio nearly quadrupled year over year in Q2.

Sigvotatug vedotin (SV) is another highly promising candidate in Pfizer's pipeline. Bourla said that the experimental antibody-drug conjugate (ADC) could be a key growth driver before the end of the decade. SV targets non-small-cell lung cancer, a market that is likely to top $60 billion by 2030.

He also pointed to Pfizer's recent in-licensing agreement with Chinese drugmaker 3SBio for bispecific antibody SSGJ-707. Bourla stated in the Q2 call that this therapy "has the potential to deliver breakthroughs for patients in the next way in PD-1 immunotherapy, which is an established $55 billion market."

Strong floor, no ceiling

How confident is Pfizer's management team about the business going forward? Bourla put it this way: "I will describe Pfizer right now as a company with a very strong floor and no ceiling." That's a description of a stock with a 7% dividend yield that income investors should like to hear.

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

Before you buy stock in Pfizer, 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 Pfizer 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 $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*

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*Stock Advisor returns as of August 11, 2025

Keith Speights has positions in Pfizer. The Motley Fool has positions in and recommends Pfizer. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy.

Key Points

• Amazon's growth in its core e-commerce and cloud businesses could propel it to a $5 trillion market cap.

• The company's forays into new markets, including satellite internet and robotaxis, should be icing on the cake.

• There's no guarantee that Amazon will be worth $5 trillion by 2030, but it's an achievable prediction.

• 10 stocks we like better than Amazon ›

It wouldn't be much of a prediction to forecast that Nvidia will be a $5 trillion company within the next few years. The GPU maker's market cap already tops $4.4 trillion. I suspect that Nvidia will indeed be worth at least $5 trillion in the not-too-distant future.

However, other artificial intelligence (AI) stocks are more of a stretch. Still, I believe that some will join Nvidia in the $5 trillion club. In particular, I predict that Amazon (NASDAQ: AMZN) could hit a $5 trillion valuation by 2030. Here's how.

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.

Looking at Amazon's core businesses

Amazon's market cap currently hovers around $2.36 trillion. It would have to more than double over the next five years for my prediction to be fulfilled. This almost certainly means that the company will need exceptional growth from its core businesses of e-commerce and cloud services. The good news is that both are already growing by double-digit percentages.

Technically, Amazon's North America segment includes businesses outside of e-commerce (notably, Whole Foods). However, most of the segment's revenue stems from e-commerce and advertising on its e-commerce platforms. In the second quarter of 2025, this revenue increased by 11% year over year. Amazon's international segment also consists primarily of e-commerce operations. This segment's revenue jumped 16% year over year in Q2.

Amazon Web Services (AWS), which claims the leading market share among cloud service providers, is growing even faster. The cloud unit's revenue soared 17.5% year over year in Q2.

These revenue growth rates should be nearly (but not quite) enough to propel Amazon to a market cap of $5 trillion over the next five years -- if the company's share price moves in tandem with revenue. However, stock prices tend to correlate even more strongly with earnings growth. Amazon's earnings continue to increase faster than its revenue. For example, the company's earnings skyrocketed 34.8% higher year over year in Q2.

If Amazon continues to deliver anywhere close to this level of earnings growth and its share price rises accordingly, a valuation of $5 trillion by 2030 should be easily attainable. The big question, of course, is whether or not Amazon can keep growing so robustly. I think it can, with AI tailwinds helping boost profits for its e-commerce business and fuel significant growth for AWS.

Newer opportunities

We can't overlook Amazon's opportunities to grow in new markets, though. One major growth driver that's on the way soon is the Project Kuiper satellite internet service, which is scheduled to be available later this year.

Amazon CEO Andy Jassy said in the Q2 earnings call that "an impressive amount of enterprise and government customers" have already signed agreements to use Kuiper's service. He believes Kuiper will have performance and pricing competitive advantages over Elon Musk's Starlink. In addition, Jassy thinks that the integration between Project Kuiper and AWS will be attractive to customers.

Zoox is another Amazon business to watch. Its all-electric robotaxis are already available in Las Vegas. Zoox plans to expand into San Francisco, Austin, and Miami next. Fortune Business Insights projects the global robotaxi market could reach nearly $119 billion by 2031. Zoox won't have to capture of big chunk of this market to generate meaningful revenue for Amazon.

I'm keeping my eyes on Amazon's quantum computing efforts, too. The company's prototype Ocelot chip can reduce the costs of quantum error correction by up to 90% versus current methods. AWS just might become a major player in the quantum computing market, which could be huge in the not-too-distant future.

An ambitious but achievable prediction

Am I 100% confident that Amazon will sport a valuation of $5 trillion or more by 2030? No. A global recession could get in the way. Competition in e-commerce and cloud services could intensify. Amazon's forays into new markets could be less successful than hoped.

The odds are stacked against any stock more than doubling in only five years, especially one with a market cap already topping $2.3 trillion. But while my prediction is ambitious, I think it's achievable. My hunch is that Amazon will be in the $5 trillion club along with Nvidia and perhaps a couple of other companies by the end of this decade.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 182% 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 August 11, 2025

Keith Speights has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.

Key Points

• Vertex Pharmaceuticals' recent sell-off was overdone.

• Nvidia's growth story and dominance in the AI chip market are simply too good to ignore.

• Alibaba provides a great way to invest in AI on the cheap.

• 10 stocks we like better than Alibaba Group ›

What does it take to qualify as a growth stock? Probably the most important criterion is that the stock must be expected to grow significantly faster than the overall market. That definition weeds out a lot of stocks.

However, there's a problem. It's not always easy to determine which stocks are most likely to beat the market. I think, though, that several stocks have what it takes. Here are my picks for three of the smartest growth stocks to buy right now with $1,000 (listed by share price in descending order).

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Image source: Getty Images.

1. Vertex Pharmaceuticals

You might think Vertex Pharmaceuticals (NASDAQ: VRTX) is an unlikely candidate for this list after the biotech stock plunged following its second-quarter update. I have a contrarian view, though: The sell-off makes Vertex even more attractive with its share price below $400.

Vertex didn't report dismal Q2 results, by the way. Instead, the company announced two pipeline updates that disappointed investors. Experimental pain drug VX-993 failed to meet the primary endpoint of a phase 2 study, resulting in Vertex deciding against advancing it into pivotal testing. Also, the U.S. Food and Drug Administration (FDA) told the company that there isn't a path forward for a broad label in peripheral neuropathic pain (PNP) for suzetrigine.

I think the sell-off was overdone considering how much Vertex has going for it. The company's cystic fibrosis (CF) franchise remains strong. The commercial launch of non-opioid pain drug Journavx is going so well that Vertex is expanding its marketing efforts. Meanwhile, the biotech company is prioritizing diabetic peripheral neuropathy as the next indication for the drug and is initiating a second phase 3 study.

There's more. Vertex is on track to file for regulatory approvals of zimislecel in treating severe type 1 diabetes next year, pending positive phase 3 results. It also hopes to file for accelerated approval in the U.S. for povetacicept in treating IgA nephropathy, a kidney disease, assuming all goes well with an interim analysis of a phase 3 study. The company's chances for both programs succeeding in late-stage trials appear to be pretty good.

2. Nvidia

You could argue that Nvidia (NASDAQ: NVDA) is priced at a premium and faces increasing competition, including from some of its top customers. However, the fact remains that the company's growth story and dominance in the AI chip market are simply too good to ignore.

There was a common theme in the recent quarterly updates of several of the biggest tech giants. They're all continuing to invest heavily in data centers to support AI demand. It doesn't take an investing genius to realize this is great news for Nvidia, because its GPUs are still the gold standard in training and deploying AI models.

The company's Blackwell GPU architecture has extended its market lead. Even more powerful chips are on the way, with Nvidia now on an annual cadence of rolling out new products.

Nvidia's AI opportunities aren't limited to data centers, though. The company has massive opportunities in robotics and self-driving cars over the next several years. Another significant pullback in the stock would present a fantastic buying opportunity, but I'm not sure if we'll see one anytime soon. The stock is trading under $200 at the moment.

3. Alibaba Group Holding

If you want to invest in AI on the cheap, Alibaba Group Holding (NYSE: BABA) just might be the best game in town. Its shares trade at roughly 14 times forward earnings. That's only a fraction of the forward earnings multiples for the company's U.S. counterparts.

Of course, Alibaba isn't in town or even in the U.S.; it's headquartered in China. The company's China connection is a big reason behind its attractive valuation. Some investors fret that the Chinese government could interfere with Alibaba's business. They're also worried about export restrictions on U.S. AI chips (especially Nvidia's).

Those are valid concerns. However, the Chinese government wants to succeed in AI -- and it needs Alibaba's cloud unit to succeed to make that happen. Meanwhile, innovative Chinese companies such as DeepSeek could make it easier for Alibaba to host powerful AI apps even if it can't buy the more powerful U.S. chips. Alibaba is currently trading under $150 per share.

Could high U.S. tariffs on Chinese imports hurt Alibaba? Indirectly, yes. However, I think this stock has plenty of room to run regardless of trade challenges.

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

Before you buy stock in Alibaba 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 Alibaba 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 $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,108,033!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 181% 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 August 4, 2025

Keith Speights has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Nvidia and Vertex Pharmaceuticals. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

Key Points

• There are actually multiple average Social Security benefits for age 65.

• You could increase your benefits by waiting until 67 or later to claim Social Security.

• Regardless of your benefit at age 65, it's probably not going to be enough to enjoy a comfortable retirement.

• The $23,760 Social Security bonus most retirees completely overlook ›

Throughout much of Social Security's history, 65 was the magic age for retirement. Waiting to retire until you reached 65 ensured that you'd receive your full benefits. That's no longer the case. Beginning in 2026, the full retirement age will officially be 67 after several decades of gradual increase.

However, 65 remains a popular age to claim Social Security retirement benefits. One reason why is that it's still the eligibility age for Medicare. But how much could you expect to receive if you begin collecting Social Security at 65?

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 »

Image source: Getty Images.

Multiple averages

The latest annual statistical supplement published by the Social Security Administration (SSA) includes lots of data. There are actually multiple average Social Security benefits for age 65, because Social Security has multiple types of benefits. We're focused only on retired worker benefits, though.

The average monthly Social Security benefit for a retired worker aged 65 listed in SSA's report was $1,563.06. That translates to $18,756.72 annually.

However, there is a disparity between the sexes. The average monthly benefit for men was $1,733.08, well above the average monthly benefit for women of $1,409.73. This difference is due to higher average earnings for men.

Keep in mind, though, that the actual averages in August 2025 are almost certainly higher than those numbers. SSA's most recent annual statistical supplement was released in December 2024. Moreover, its figures were based on data from one year earlier.

How much you'll forego by retiring at 65

The amount of benefits you'll receive if you retire at age 65 might not be anywhere close to the average. Your retirement benefit hinges on how much you made during the 35 years of your highest earnings. However, whatever your benefit amount is from retiring at 65, you can calculate how much you're foregoing by retiring before the full retirement age of 67.

Social Security will reduce your benefit by five-ninths of 1% for each month you retire before your full retirement age, up to a maximum of 36 months. If you retired exactly at age 65 and your full retirement age is 67, you'll receive roughly 86.7% of the benefits you'd get if you had waited until 67.

You could be giving up even more than that, though. How? Social Security offers delayed retirement credits for individuals who hold off on claiming retirement benefits until after their full retirement age. For anyone born in 1960 or afterward, your retirement benefit will be increased by two-thirds of 1% for each month you delay claiming benefits. That equates to an annual increase of 8% per year through age 70.

How much money would you forgo claiming retirement benefits at 65 versus waiting until 70? Your Social Security benefit would be a whopping 43.1% higher if you held off until 70 instead of collecting benefits at 65.

Securing greater retirement security

Regardless of what your Social Security benefit will be if you claim at age 65, it's probably not going to be enough to enjoy a comfortable retirement. You'll need to take other steps to secure greater retirement security.

Some retirees will receive money from pension plans. However, pensions aren't nearly as common now as they used to be. In 2024, only 15% of workers in private industries had pension plans, according to the U.S. Bureau of Labor Statistics. If you're not in that group, it's important to save as much as possible for retirement in tax-advantaged accounts such as IRAs and 401(k) plans.

The good news is that most people can contribute to IRAs. Many U.S. employers also offer 401(k) plans or similar retirement plans. And with around 98% of companies with a 401(k) plan also offering matching contributions, saving to supplement your Social Security retirement benefits can be even easier.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

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View the "Social Security secrets" »

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Key Points

• Vertex Pharmaceuticals should deliver exceptional returns, regardless of what the stock market does.

• Dominion Energy is not your father's utility stock.

• UnitedHealth Group looks like a great bad-news buy.

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

When dark clouds appear on the horizon, it's wise to grab an umbrella, even if the sun is still shining overhead. You'll want to be prepared in case a heavy rain is on the way. I think this is a good metaphor for investors to heed.

The stock market is performing well, with the S&P 500 (SNPINDEX: ^GSPC) near its all-time high. However, some warning signs are readily apparent. The ratio of total stock market capitalization to GDP (commonly referred to as the Buffett Indicator) is also at a record high -- and above a level that Warren Buffett referred to as "playing with fire." The latest employment numbers are worrisome. Inflation is creeping upward. And the full brunt of the Trump administration's tariffs has yet to be felt.

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 »

If putting money in the stock market right is the equivalent of going outside with dark clouds on the horizon, what's the "umbrella" for investors? Buying stocks that are poised to perform well even if the overall market sinks. With that in mind, here are my picks for the best stocks to invest $1,000 in right now.

Image source: Getty Images.

1. Vertex Pharmaceuticals

I think taking nearly half of an initial $1,000 and buying one share of Vertex Pharmaceuticals (NASDAQ: VRTX) is a smart move. This biotech stock should deliver exceptional returns, regardless of what the stock market does.

Vertex doesn't have to worry about economic turbulence affecting its revenue and profits. Doctors will prescribe its cystic fibrosis (CF) therapies without missing a beat for a simple reason: There aren't any other approved drugs that treat the underlying cause of the rare genetic disease.

Likewise, the commercial launch of Vertex's newest drug, Journavx, should gain momentum come rain or shine. Journavx fills a key void in treating acute pain. It's highly effective, but isn't addictive like opioids.

Vertex's late-stage pipeline also gives investors several lottery tickets with great odds. The drugmaker is evaluating inaxaplin as a treatment for APOL1-mediated kidney disease. Povetacicept's first targeted indication is another kidney disease, IgA nephropathy. Zimislecel holds the potential to cure severe type 1 diabetes.

I think all of these drugs could be huge winners for Vertex if phase 3 testing goes well.

2. Dominion Energy

To paraphrase an old car commercial, Dominion Energy (NYSE: D) is not your father's utility stock. Its share price is low enough that you can scoop up three or four shares and still have enough left to buy the last stock on our list.

Don't get me wrong, though: Dominion has all the advantages your parents or grandparents would expect from a utility stock. And like most utility stocks, Dominion also pays an attractive dividend. Its forward dividend yield currently stands at 4.37%.

Dominion's business is also rock-solid and protected from competition. The company provides regulated electricity service to around 3.6 million homes and businesses in three Southern states -- Virginia, North Carolina, and South Carolina. It also provides regulated natural gas service to roughly 500,000 customers in South Carolina.

One intriguing thing about Dominion is that it's outperforming the S&P 500 in what has become a pretty good year so far for stocks. Another is the company's solid growth prospects, driven partly by the demand for artificial intelligence (AI). Dominion's home state of Virginia hosts the world's largest data center market.

3. UnitedHealth Group

You might be surprised to see UnitedHealth Group (NYSE: UNH) on the list. But I view this stock as a great bad-news buy, with its share price below $250.

I won't try to sweep UnitedHealth Group's challenges under the rug. The company continues to experience higher-than-anticipated medical costs, especially with its Medicare Advantage plans. It's being investigated by the U.S. Department of Justice for its Medicare billing practices. And UnitedHealth's Optum Rx unit, like other pharmacy benefits managers (PBMs), is under intense political scrutiny.

However, I believe that all these negatives are more than baked into UnitedHealth Group's share price. The stock trades at 10.3 times trailing-12-month earnings, its lowest valuation since the aftermath of the Great Recession.

More importantly, I view the company's issues as temporary. I fully expect premium increases will enable the company to restore earnings growth next year. UnitedHealth Group has survived DOJ investigations in the past and come out on top. I don't think PBMs are going away, either.

If the stock market tanks, my hunch is that UnitedHealth Group will hold up better than most stocks because it's already oversold. And I predict the stock will rebound as it emerges from the shadows cast by its numerous challenges.

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 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500.

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

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*Stock Advisor returns as of August 4, 2025

Keith Speights has positions in Dominion Energy and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool recommends Dominion Energy and UnitedHealth Group. The Motley Fool has a disclosure policy.

Key Points

• Alphabet is playing to win in the quantum computing space.

• Microsoft believes it will build a scalable quantum supercomputer within "years, not decades."

• Nvidia is investing heavily in quantum computing and has an all-star lineup of partners.

• 10 stocks we like better than Alphabet ›

Some things come in pairs. Chopsticks, gloves, salt and pepper, socks, and cartoon characters Tom and Jerry come to mind. Unfortunately, so does investing in quantum computing stocks and a high level of risk.

While quantum computing is highly promising, it's still a largely unproven technology. Several of the small, high-flying quantum computing stocks on the market could become even bigger winners over the next several years -- or they could go bust.

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 »

Want to invest in quantum computing without the crazy risk? Buy these three stocks.

Image source: Getty Images.

1. Alphabet

Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Quantum AI (artificial intelligence) has achieved two major quantum computing milestones in recent years. In 2019, its quantum technology solved a problem in 200 seconds that the company said would have taken the world's fastest supercomputer 10,000 years to handle. In 2023, Google Quantum AI made a big breakthrough in quantum error correction.

Make no mistake about it: Alphabet is playing to win in the quantum computing space. But unlike the smaller quantum computing companies, the Google parent is already highly profitable (raking in over $100 billion in earnings last year). Alphabet is also sitting on a cash stockpile of $95 billion, enough to gobble up all the smaller rivals if it wanted to.

Alphabet isn't generating much money from its quantum computing efforts yet. The company's cash cow is still its advertising business, led by Google Search and YouTube. Google Cloud is also the fastest-growing member of the top-tier cloud providers.

Granted, buying Alphabet comes with some risk. Google is appealing two major antitrust lawsuits, and generative AI could eventually threaten the company's search engine dominance. However, these risks aren't as great as those of some quantum computing companies. I think Alphabet will continue to be a big winner for investors over the long run.

2. Microsoft

Like Alphabet's Google Quantum AI, Microsoft (NASDAQ: MSFT) has accomplished two big milestones on its quantum computing roadmap. In May 2023, it announced a breakthrough that enables the creation of a new type of qubit (the quantum bit that's the basic unit of information in quantum computing). Earlier this year, Microsoft introduced Marjorana 1, a quantum chip that uses the world's first topoconductor (a material that helps create more scalable qubits).

Microsoft's goal is to build a scalable quantum supercomputer in "years, not decades." The company claims that it's "leading the industry with advanced technology that accelerates scientific discovery." For some businesses, those statements might be dismissed as mere hype. But with Microsoft, which made $270 billion in sales over the last 12 months, I wouldn't be so skeptical.

Few companies are as heavily invested in as many high-growth areas as Microsoft. In addition to quantum computing, Microsoft is a leader in artificial intelligence (AI), cloud services, cybersecurity, and augmented reality/virtual reality.

Investing in Microsoft isn't risk-free. The company could stumble, and/or the stock's valuation (shares trade at 33.4 times forward earnings) could become problematic. But the risks associated with this tech titan are trivial compared to those of a business that's burning through cash.

3. Nvidia

Nvidia (NASDAQ: NVDA) CEO Jensen Huang sparked a sell-off of quantum computing stocks early this year after stating that quantum computing won't be "very useful" for at least another 15 years. He later backtracked on those comments.

The reality is that Huang's company is investing heavily in quantum computing. Nvidia is building an accelerated quantum research center in Boston. It has also developed CUDA-QX, a collection of libraries and tools to help quantum researchers use Nvidia graphics processing units (GPUs) to accelerate their applications. And the company is partnering with many of the world's leading quantum computing pioneers.

Does Nvidia's success hinge on quantum computing fulfilling its potential? Not at all. AI should provide a sufficiently strong tailwind to keep Nvidia's revenue and profits growing for a long time to come.

Sure, Nvidia faces some challenges. Rivals and even customers have developed their own AI chips. Chinese tech company DeepSeek has also raised concerns that the underlying technology of AI models could require significantly fewer GPUs, potentially threatening Nvidia's growth. However, Nvidia's chances of delivering market-beating returns over the next decade still look pretty good, in my view.

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

Before you buy stock in Alphabet, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet and Microsoft. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• President Trump's bill won't eliminate federal taxes on Social Security benefits.

• However, a new deduction for seniors should reduce the federal taxes on benefits for many Americans.

• This deduction will be only temporary, though, and could cause Social Security to run out of money sooner.

• The $23,760 Social Security bonus most retirees completely overlook ›

The "One, Big, Beautiful Bill" that includes much of President Donald Trump's domestic agenda is now the law of the land. The Social Security Administration (SSA) began celebrating even before the president signed the bill.

On July 3, 2025, SSA posted to its website that the legislation "ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits." However, reality isn't quite that simple.

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Image source: Getty Images.

A new deduction for seniors

During his campaign for a second term as president, Trump promised to eliminate federal income taxes on Social Security benefits. His "One, Big, Beautiful Bill" doesn't accomplish that goal.

Instead, the bill features a new $6,000 deduction for Americans ages 65 and older. Some proponents of the legislation have referred to this deduction as a "senior bonus."

Before the "One, Big, Beautiful Bill" went into effect, around 64% of seniors ages 65 and older had exemptions and deductions that exceeded their taxable Social Security income. They therefore didn't pay any federal taxes on their Social Security benefits. The White House's Council of Economic Advisors estimates that this percentage will increase to 88% with the additional $6,000 deduction.

Not everyone will qualify for this new deduction. The full deduction will be available only to taxpayers ages 65 and older who have a modified adjusted gross income (MAGI) of up to $75,000 for individual filers and up to $150,000 for couples filing jointly. Each spouse who is at least 65 years old can take the deduction. A reduced deduction is available for higher earners with a MAGI of up to $175,000 for single filers and up to $250,000 for couples filing jointly.

One big, not-so-beautiful catch

SSA's celebration of the passage of President Trump's "One, Big, Beautiful Bill" was arguably overdone. Why? There's one big, not-so-beautiful catch with the new $6,000 deduction included in the legislation: Seniors will exchange short-term gain for long-term pain.

The benefits of the additional deduction for individuals ages 65 and older are indeed only short-term. The $6,000 "senior bonus" will be available only through 2028. While SSA's online post stated that many Americans will "no longer pay federal income taxes on their benefits," the truth is that the reprieve will be relatively short-lived.

The Social Security Commissioner said that the legislation "reaffirms President Trump's promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they've earned." However, his statement ignores the assessment by the nonpartisan Committee for a Responsible Federal Budget (CRFB).

The CRFB estimated that the president's "One, Big, Beautiful Bill" will reduce Social Security's revenue by around $30 billion per year. It projects that the insolvency date for the Social Security trust fund will now be 2032 instead of 2033.

If nothing is done to bolster Social Security before the trust fund runs out of money, benefits will be slashed by around 24%, according to CRFB's analysis. This is the long-term pain seniors will exchange for the short-term gain of not paying federal taxes on Social Security benefits for a few years.

Multiple big, ugly changes to Social Security are probably needed

What will it take to put Social Security on a firm footing so that benefit cuts won't be necessary? The solutions to the serious problem facing Social Security will involve slowing cost growth, increasing revenue, or both.

Slowing cost growth is a nice way of saying that benefits will need to be lower for some. One idea is to gradually increase the full retirement age in the future, a move that has been made in the past. This would reduce the lifetime benefits for younger Americans impacted by the change.

Increasing revenue means tax hikes. Some advocate for raising or eliminating the maximum taxable earnings that are subject to FICA taxes used to fund Social Security.

Reducing the federal taxes seniors pay on their Social Security benefits, even if for only a few years, may be popular. However, what Social Security beneficiaries probably need the most are multiple big, ugly changes that address the program's significant underlying problems instead of making them worse.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

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Key Points

• Several analysts believe the humanoid robotics market could be larger than the robotaxi market.

• Tesla has ambitious plans for its Optimus humanoid robots.

• However, the company faces several challenges to achieve significant success with Optimus.

Tesla (NASDAQ: TSLA) fans should find it easy to identify reasons to buy the stock. For one thing, its shares remain roughly 34% below the previous high. Anyone who believes in Tesla's long-term growth prospects will likely view this as a great opportunity to buy the stock at a discount.

One prominent Tesla bull, Ark Invest founder and CEO Cathie Wood, thinks the autonomous ride-hailing (robotaxi) market makes the stock a fantastic investment opportunity. However, there's a good case to be made that there's an even better reason that makes Tesla a stock to buy hand over fist right now.

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Bigger than robotaxis?

Wood and her Ark Invest team believe the the robotaxi market could skyrocket to around $4 trillion by 2030. They look for Tesla to be the biggest winner in this market, thanks to the company's lower-cost technology and scalability.

However, Ark Invest is much more optimistic about the robotaxi opportunity than most analysts. Fortune Business Insights projects that the robotaxi market could be nearly $119 billion by 2030. Market researcher Research and Markets thinks the robotaxi market could expand by a compound annual growth rate of 45.2% and hit $124.9 billion by 2034.

Tesla could have an even larger opportunity. Morgan Stanley projects that the humanoid robotics market could top $5 trillion by 2050. The financial services giant thinks that the adoption of humanoid robots will accelerate in the 2030s.

Citigroup analyst Wenyan Fei pegs the number at closer to $7 trillion by 2050. He and fellow analyst Rob Garlick think that humanoid robots will be especially helpful in providing home services. They envision the robots folding laundry, mowing lawns, and caring for older adults. And Tesla could be a big player in this market. Fei named Tesla's Optimus robot as "definitely one of the leaders for the market."

Want an even more bullish estimate of the humanoid robotics market? Ark Invest believes the global opportunity could eventually be in the ballpark of $24 trillion. Unsurprisingly, Wood's team thinks that Tesla "could capture a significant share of this multi-trillion-dollar market."

Image source: Getty Images.

Tesla's Optimus ambitions

Tesla certainly has grand ambitions for Optimus. CEO Elon Musk said during the company's 2024 fourth-quarter earnings call that Optimus could eventually generate more than $10 trillion in revenue. He acknowledged that his revenue predictions "sound absolutely insane." However, Musk added that he thinks "they will prove to be accurate."

If Musk's revenue estimate for Optimus is anywhere close to realistic, humanoid robots will be more important for Tesla's future than electric vehicles or robotaxis. But a lot has to happen first.

Musk predicted in Tesla's 2025 Q1 earnings call that the company will produce 1 million Optimus units per year by 2030, and perhaps as early as 2029. Once that production goal is reached, he thinks the production cost for its humanoid robot will be under $20,000. While the list price will be higher than that, Optimus could be affordable for many families.

Tesla plans on using Optimus extensively internally, too. Musk said in the Q1 call, "We expect to have thousands of Optimus robots working in Tesla factories by the end of this year."

The best reason to buy Tesla stock hand over fist?

Is the potential for success in the humanoid robotics market the best reason to buy Tesla stock hand over fist right now? Maybe, but I think investors should be cautious.

For one thing, Tesla is running into problems with its Optimus program. Milan Kovac, the senior vice president in charge of Optimus, left unexpectedly. Production has also reportedly been delayed as the result of a design change.

I suspect Tesla will be able to resolve these issues. However, the bigger challenge for the company is competition. With a market opportunity this large, multiple companies are in the race. Morgan Stanley believes that China is in the driver's seat in developing humanoid robots.

It's also important to remember that the huge humanoid robotics market estimates are for 25 years in the future. Investors should maintain a long-term perspective, but Optimus would need to move the needle in a significant way much sooner for it to be a major factor in buying the stock now.

Still, progress in humanoid robot development is something to keep your eyes on. If Tesla can sell a flexible, multi-purpose Optimus for $30,000 or so by 2030, the company could deliver much greater growth in the next decade than many investors expect.

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 $413,238!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,540!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $699,558!*

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

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*Stock Advisor returns as of June 30, 2025

Citigroup is an advertising partner of Motley Fool Money. Keith Speights 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

• Buffett's Berkshire Hathaway portfolio includes only one ultra-high-yield stock.

• However, his "secret portfolio" is loaded with ultra-high-yielders.

• The best of the bunch has increased its dividend for 30 consecutive years and has solid growth prospects.

Warren Buffett is known as a value investor, not as an income investor. However, that doesn't mean the "Oracle of Omaha" doesn't own stocks that many income investors would find highly attractive.

You might be surprised that Buffett even has positions in nine ultra-high-yield dividend stocks. By the way, the threshold used for a dividend yield to qualify as "ultra-high" is four times the yield of the SPDR S&P 500 ETF. Here are all of Buffett's ultra-high-yield dividend stocks, along with which one is the best of the bunch.

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Image source: The Motley Fool.

Berkshire Hathaway's sole ultra-high-yielder

Buffett's Berkshire Hathaway portfolio features only one ultra-high-yield dividend stock: Kraft Heinz (NASDAQ: KHC). The food and beverage company pays a forward dividend yield of 6%.

Kraft Heinz's dividend yield isn't so high because the company has increased its dividend payout. Instead, it's the result of a steadily deteriorating share price over the last few years, combined with maintaining the dividend at the same level during the period.

Berkshire does have stakes in a couple of other stocks with yields that aren't too far away from meeting the ultra-high threshold. Oil and gas giant Chevron offers a forward dividend yield of 4.61%. Satellite radio and podcast provider Sirius XM Holding's yield is 4.45%. However, the stocks didn't quite make the cut for our list.

Buffett's "secret portfolio"

Where can Buffett's other seven ultra-high-yield dividend stocks be found? In his "secret portfolio." I'm referring to the stocks owned by New England Asset Management (NEAM).

Berkshire Hathaway acquired General Re in 1998, which had acquired NEAM three years earlier. While NEAM reports its stock holdings to the U.S. Securities and Exchange Commission separately from Berkshire, Buffett owns all of the stocks in its portfolio just as much as he does any stock listed in Berkshire's SEC filings.

NEAM's two highest-yielding stocks are both business development companies (BDCs). Globus Capital BDC (NASDAQ: GBDC) pays an especially juicy forward dividend yield of 11.17%. It's followed by Ares Capital, the largest publicly traded BDC, with a yield of 8.57%.

A couple of big pharma stocks in Buffett's secret portfolio pay great dividends. Pfizer's (NYSE: PFE) forward dividend yield is 6.78%, while Bristol Myers Squibb (NYSE: BMY) offers a forward yield of 5.29%.

There's one ultra-high-yield overlap between Berkshire's and NEAM's portfolios -- Kraft Heinz. NEAM also owns another food company with an exceptionally high dividend payout. Campbell's (NASDAQ: CPB), which is best known for its soups, pays a forward dividend yield of 4.99%.

Two real estate investment trusts (REITs) are also in the mix. Realty Income's (NYSE: O) forward dividend yield is 5.6%. Lamar Advertising's (NASDAQ: LAMR) yield is 4.99%.

Finally, Buffett owns a stake in telecommunications giant Verizon Communications (NYSE: VZ) via NEAM's portfolio. Verizon's forward dividend yield is a lofty 6.22%.

The best of the bunch

How can we determine which of these ultra-high-yield dividend stocks owned by Buffett is the best of the bunch? We should obviously consider the dividend yield. In addition, the ability of the company to continue paying (and preferably increasing) its dividend is important. Growth prospects and valuation should be included, too. Based on these criteria, I think three of the nine stocks stand out above the rest.

Ares Capital's sky-high yield is a big plus. The BDC has either maintained or grown its dividend for 63 consecutive quarters (almost 16 years). It's the leader in the fast-growing private capital market. Ares Capital has also trounced the S&P 500 since its initial public offering in 2004.

Verizon is a longtime favorite for income investors. Its juicy dividend appears to be safe with the company's growing free cash flow. Verizon has also increased its dividend for 18 consecutive years. The biggest knock against the telecom provider is that its revenue and earnings growth haven't been spectacular. However, Verizon could enjoy stronger growth going forward once its acquisition of Frontier Communications closes.

The best stock overall of the group, in my opinion, is Realty Income. Its dividend yield is very attractive. Even better, the REIT pays its dividend monthly and has increased its dividend for an impressive 30 consecutive years.

Realty Income has delivered a positive total operational return every year since its IPO in 1994. Its diversified real estate portfolio, with nearly 1,600 clients representing 91 industries, helps make the company's cash flow stable. The REIT also has strong growth prospects, particularly in Europe, where it faces minimal competition.

The main drawback with this stock is its valuation. Realty Income's shares trade at 43 times forward earnings. However, I think the company's sterling track record justifies a premium price tag.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

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*Stock Advisor returns as of June 30, 2025

Keith Speights has positions in Ares Capital, Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, and Realty Income. The Motley Fool recommends Campbell's, Kraft Heinz, and Verizon Communications. The Motley Fool has a disclosure policy.

Key Points

• With inflation rising, retirees are paying higher prices now but won't receive a benefit increase until later.

• The key inflation metric used to calculate the Social Security COLA doesn't fully reflect retirees' higher costs.

• Less accurate data collection this year could increase the odds that the 2026 COLA doesn't keep up with inflation.

What if your Social Security retirement benefits never increased? The buying power of those benefits would steadily erode over time due to inflation. Many retirees would soon find themselves in dire straits.

The good news is that your Social Security benefits usually increase each year to help keep up with inflation. Since 1975, a cost-of-living adjustment (COLA) has been calculated annually and applied to all Social Security benefits.

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But there's bad news, too. Social Security's 2026 COLA is shaping up to be a no-win scenario for retirees.

Image source: Getty Images.

An uncertain COLA but a clear trend

To be sure, we don't know yet what the 2026 Social Security COLA will be. The amount of the benefit increase won't be announced until mid-October. The Social Security Administration must wait for the September inflation data from the U.S. Bureau of Labor Statistics (BLS) before finalizing its calculation of next year's COLA.

However, that doesn't mean we can't have a reasonable idea about what the 2026 Social Security COLA might be as things stand now. Each month, The Senior Citizens League (TSCL), a nonprofit organization dedicated to advocating for seniors, crunches the numbers to project the next COLA.

There has been a clear trend in TSCL's Social Security COLA predictions. For four consecutive months, the projected increase has continued to rise. The organization's latest projected COLA, announced on June 11, 2025, is 2.5%, up from 2.4% the previous month.

This trend is due mainly to slowly rising inflation. And it could keep moving higher. Many economists expect accelerating inflation in the second half of 2025 as the full brunt of the Trump administration's tariffs is felt.

The Social Security COLA is intended to protect benefits from being eroded by inflation. Why would retirees face a no-win scenario if inflation keeps rising? For one thing, the timing works against them. They must pay higher prices now but won't receive a benefits increase until later. The 2026 COLA won't hit Social Security payments until January.

A much maligned metric

There's also another issue. The Social Security COLA is calculated using an inflation metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This metric attempts to measure the price increases experienced by blue-collar workers who live in areas with large populations.

But the CPI-W is a much maligned metric. The Libertarian-leaning Cato Institute has called the CPI-W an "outdated measure" that is "riddled with measurement errors." TSCL has pointed out that the CPI-W assumes workers spend around 7% of their income on healthcare, but seniors can spend 16% or more of their income on healthcare.

The primary issue is that the CPI-W focuses on working Americans rather than retirees. In a 2024 study, TSCL found that the disconnect has caused Social Security recipients to lose roughly 20% of their buying power since 2010.

Several organizations, including TSCL, believe that an alternative metric, the Consumer Price Index for the Elderly (CPI-E), would better reflect the impact of inflation on older Americans. However, the CPI-W will be used for the 2026 Social Security COLA calculation -- and it could perpetuate the cycle of retirees receiving a smaller benefit increase than they probably should get.

Suspect data

To make matters worse, the data used to calculate the CPI-W this year could be significantly less reliable than it's been in the past. Why? According to The Wall Street Journal, a hiring freeze at the BLS has forced the agency to use a less accurate method to estimate prices because it doesn't have enough workers to collect the same amount of information as in previous years. If the CPI-W is based on suspect data, the 2026 Social Security COLA will be suspect.

TSCL executive director Shannon Benton said in a press release, "Inaccurate or unreliable data in the CPI dramatically increases the likelihood that seniors receive a COLA that's lower than actual inflation." She added that this could "cost seniors thousands of dollars over the course of their retirement."

Things could be worse, of course. Any COLA is better than no COLA at all. However, retirees face the prospects of paying higher prices before they receive extra money, a key inflation metric that doesn't fully reflect the prices they pay, and potentially inaccurate inflation data that could skew the COLA amount. Social Security's 2026 COLA really is shaping up to be a no-win scenario for retirees.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Key Points

• Ares Capital has delivered a long-term cumulative return that trounced the S&P 500.

• Enterprise Products Partners is resilient and has better long-term prospects than many might think.

• Verizon Communications has staying power and should be a key player in 6G wireless networks in the future.

True or false: The higher the dividend yield, the more worried you should be.

This is a tricky question, if not a trick question. With some stocks, a high dividend yield can be a cause for alarm. With other stocks, though, a high yield isn't concerning whatsoever.

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I own quite a few stocks with dividend yields of over 5%. I wouldn't necessarily commit to owning all of them over the next 20 years. However, here are three ultra-high-yield dividend stocks I don't plan on ever selling.

Image source: Getty Images.

1. Ares Capital

Ares Capital (NASDAQ: ARCC) is the largest publicly traded business development company (BDC). The company has invested more than $17 billion since its inception in 2004. The BDC focuses on middle-market companies with annual revenue between $10 million and $1 billion.

I really like Ares Capital's dividend, with its forward yield of 8.63%. Even better, the company has either maintained or grown its dividend for 63 consecutive quarters -- a streak that I'm confident will continue.

But I probably wouldn't plan on never selling this stock if all that it had going for it was its juicy dividend. A key factor behind my intention to own Ares Capital over the long run is its position in a growing market. There has been a clear shift in recent years to private capital. Ares Capital targets a total addressable market of around $5.4 trillion. I think it's easily the best BDC around, with its diversified portfolio, strong industry relationships, and rock-solid risk management.

I'm also impressed by Ares Capital's performance. Since its initial public offering (IPO), it has delivered a cumulative total return that's 80% higher than the S&P 500. Maybe the stock won't be able to continue beating the market so handily going forward, but I wouldn't bet against it.

2. Enterprise Products Partners

Enterprise Products Partners (NYSE: EPD) is a master limited partnership (MLP) that is a leader in the North American midstream energy industry. It operates more than 50,000 miles of pipeline in addition to numerous other assets.

Many MLPs pay highly attractive distributions. Enterprise Products Partners is no exception, with its forward distribution yield of 6.81%. Even better, the company has increased its distribution for 26 consecutive years.

Am I crazy to believe that I can own a stock that's dependent on fossil fuels for years to come? I don't think so. Sure, renewable energy sources will almost certainly be more widely used in the future. However, the demand for oil and gas (especially natural gas and natural gas liquids) should continue to grow for decades to come. That means the demand should remain strong for Enterprise Products Partners' pipelines.

This MLP has already proved its resilience. Enterprise Products Partners delivered steady cash flow per unit during every major crisis affecting the oil and gas industry over the last two decades.

3. Verizon Communications

While you might not have heard of Ares Capital or Enterprise Products Partners, odds are that you're quite familiar with Verizon Communications (NYSE: VZ). The telecommunications giant serves millions of customers worldwide.

Many income investors will especially like Verizon. Its forward dividend yield is a lofty 6.22%. The company has also increased its dividend for 18 consecutive years.

I've tried to picture a world where wireless services from companies like Verizon aren't needed, but my imagination just isn't that good. I also seriously doubt any new competition will arise in this market, considering the massive amount of capital required to build out wireless networks. The bottom line is that I believe Verizon has staying power.

Will Verizon be a huge growth machine? Probably not. However, 6G is on the way -- probably by the end of the decade. This new higher-speed wireless protocol could hold the potential for holographic communication, immersive extended reality (think augmented reality and virtual reality at a whole new level), and more. I fully expect Verizon will be a major player in 6G and could deliver more impressive growth in the future.

Should you invest $1,000 in Ares Capital right now?

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Keith Speights has positions in Ares Capital, Enterprise Products Partners, and Verizon Communications. The Motley Fool recommends Enterprise Products Partners and Verizon Communications. The Motley Fool has a disclosure policy.

Kings don't always receive royal treatment. Dividend Kings certainly don't. Target (NYSE: TGT) provides a great example.

Shares of the giant retailer have plunged close to 40% below the high set in October 2024. Some investors have run for the hills. However, there's a case to be made for not overthinking the difficulties that Target faces and just buying the beaten-down stock.

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An off-target Target

Target hasn't hit the bullseye very much lately. The company's first-quarter sales slipped nearly 3% year over. Its earnings were well below expectations. Executives said during the Q1 earnings call that they weren't satisfied with the performance four times. Even worse, Target slashed its full-year earnings guidance and expects sales to decline by a low single-digit percentage.

What's going on? Some of the problems are largely outside of Target's control. For example, inflation has put pressure on discretionary spending. Consumer confidence declined for five consecutive months this year.

President Trump's tariffs create more issues for the entire retail sector. Target is no exception. Many of the products the company sells are imported. While Target has significantly decreased its reliance on products made in China, the level is still around 30%.

Target is responsible for one major headache, though. Management announced earlier this year a rollback of several diversity, equity, and inclusion (DEI) initiatives and a new "Belonging at the Bullseye" strategy for "creating a sense of belonging for our team, guests and communities." This decision sparked a major backlash, including a consumer boycott. Target CEO Brian Cornell briefly acknowledged the pushback in the Q1 earnings call, saying that one of the headwinds the company faces was "the reaction to the updates we shared on belonging in January."

Better news for the beaten-down retailer

However, there is some better news for the beaten-down retailer. For one thing, management isn't trying to sweep the company's problems under the rug. Target established an "acceleration office" led by COO Michael Fiddelke. The purpose of this group will be to facilitate faster decision-making and execution of strategic initiatives to return to growth.

Much of what made Target one of the most successful retailers in the world for years remains in place. Many of the brands offered in its stores remain popular with customers. Target's partnership with Kate Spade was a big hit.

Image source: Target.

The company continues to make solid progress on reducing inventory shrinkage and improving productivity. These efforts should help offset some of the pressures on profits.

Target appears to have a good strategy for dealing with tariffs. It's negotiating with vendors, trying to source from different countries with lower tariff rates where possible, adjusting order pricing, and (as a last resort) increasing prices. Chief commercial officer Rick Gomez thinks that these efforts should "offset the vast majority of the incremental tariff exposure" the company will face.

Then there's the dividend. Target recently announced its 54th consecutive year of dividend increases. Its forward dividend yield stands at 4.67%. Despite the retailer's challenges, it remains in a strong position to continue its impressive streak of dividend hikes with a low payout ratio of 49%.

Don't overthink, just buy

It's easy to overthink Target's problems and overlook its strong points. After all, this is a company that's on track to generate revenue of close to $105 billion this year and deliver solid profits. Target is also, as we've seen, a highly reliable source of dividend income.

We shouldn't leave out the stock's valuation, either. Target's shares trade at only 12.8 times forward earnings.

I expect it will take a while for Target's turnaround to play out. However, I suspect that investors who buy now will enjoy attractive total returns over the long term.

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

Before you buy stock in Target, 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 Target 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

Keith Speights has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

If you follow the world's wealthiest investors, you'll see a wide range of investing styles. Some focus on valuation. Others prioritize growth potential. A few look for arbitrage opportunities.

But there's at least one common denominator among many ultrarich investors these days: They like artificial intelligence (AI) stocks. Billionaires are buying these three AI stocks hand over fist.

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 »

Image source: Getty Images.

1. Alphabet

Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stands out as a top pick for several billionaire investors. Izzy Englander might be the most bullish about the tech stock. His Millennium Management hedge fund upped its position in Alphabet by 150.8% in the first quarter of 2025.

Ken Griffin is another billionaire hedge fund manager who's enthusiastic about Alphabet stock. His Citadel Advisors increased its stake in the tech giant by 55.7% in Q1. Appaloosa's David Tepper also bought over 128,000 additional shares of Alphabet, bumping up his holding in the stock by 6.8%.

What do these billionaire investors like about Alphabet? Its valuation is probably near the top of the list. The stock trades at a forward price-to-earnings ratio below 19. None of the other so-called "Magnificent Seven" stocks comes anywhere close to such an attractive valuation.

Alphabet has also been showing that it's playing to win in the AI space. The company's Google Gemini 2.5 Pro ranks No. 1 overall on the LMArena leaderboard. Google Cloud continues to be the fastest-growing of the top three cloud service providers.

2. Amazon

There isn't as much of a consensus among billionaire investors when it comes to Amazon (NASDAQ: AMZN). Chase Coleman's Tiger Global Management upped its stake in the e-commerce and cloud service giant by 2.7% in Q1 and Englander's Millennium Management boosted its position in Amazon by 5.3%. However, Griffin's Citadel Advisors reduced its Amazon holding by 43.5%. Tepper's Appaloosa trimmed its position in Amazon by 3.5%.

But one billionaire loaded up on Amazon stock in the first quarter. George Soros bought more than 101,000 shares, increasing his hedge fund's stake in Amazon by 30.5%. Amazon is now the 11th largest holding in Soros Fund Management's $5.61 billion portfolio.

Soros probably likes Amazon's bottom-line improvement. In Q1, the company's earnings soared 64% year over year to $17.1 billion. Amazon has been laser-focused on improving profitability -- and its efforts are clearly paying off.

Amazon has also flexed its AI muscle. The company's Amazon Web Services unit still commands the largest market share in cloud services, thanks in part to its Amazon Bedrock platform that supports multiple AI models. Amazon recently introduced Alexa+, its next-generation AI assistant.

3. Meta Platforms

Meta Platforms (NASDAQ: META) elicits different views among billionaire investors as well. It's still the largest holding for Coleman's Tiger Global, but the hedge fund didn't buy or sell shares of Meta in Q1. Englander and Griffin seemed to sour on Meta somewhat, though, slashing their positions in the stock by 38.9% and 44.2%, respectively.

However, Tepper increased Appaloosa's stake in Meta by 12.2%, making it his portfolio's fifth largest holding. Steve Cohen, though, stood out as the biggest Meta bull in Q1. His Point 72 Asset Management increased its position in the Facebook and Instagram parent by a whopping 585%.

What might Cohen find so appealing about Meta? It could simply be the company's continued strength in the advertising market. A staggering 3.43 billion people used Meta's family of apps daily in Q1. The average price per ad shown to those users increased by 10% year over year.

I suspect that Cohen is enthusiastic about Meta's AI initiatives as well. Meta AI now has nearly 1 billion monthly active users. The company is also a leader in AI-powered smart glasses. CEO Mark Zuckerberg believes that glasses are "the ideal form factor" for AI.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, 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 Meta Platforms 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

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

Any negative Nellie can find things to dislike about Amazon (NASDAQ: AMZN). The stock remains down by a double-digit percentage below its previous high. The company could face a bumpy road if the Trump administration's steep tariffs remain in place. The Federal Trade Commission and 17 state attorneys general are going after Amazon in court for alleged monopolistic practices.

However, I think Amazon's positive Pollys have a stronger case than the negative Nellies. The e-commerce and cloud services giant's overall future remains bright, in my view. Here are seven reasons to buy Amazon stock like there's no tomorrow.

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: Amazon.

1. AI is only in its early innings

While artificial intelligence (AI) has impacted the world tremendously already, the technology is still only in its early innings. This bodes well for Amazon. Why? It's the world's largest cloud services provider, and AI will run primarily in the cloud.

I think Amazon is well-positioned to be a big winner as agentic AI hits its stride. The company should also profit hugely if and when artificial general intelligence (AGI) is ready, especially if Anthropic (an AI pioneer in which Amazon has invested heavily) emerges as an AGI leader.

2. E-commerce still has massive growth potential

Amazon generates most of its revenue from e-commerce. Although e-commerce isn't as big a growth driver for the company as its cloud business, it still has massive growth potential.

How much could Amazon's e-commerce business grow? CEO Andy Jassy noted in the company's October 2024 quarterly update that Amazon's share of the global retail market is only around 1%. Between 80% and 85% of that retail market is still in brick-and-mortar stores, with e-commerce making up the rest. Jassy predicted that this "equation is going to flip in the next 10 to 20 years." If he's right, Amazon should be one of the biggest beneficiaries.

3. Multiple other growth opportunities

AI and e-commerce aren't Amazon's only growth opportunities. The company has multiple "other bets" (to borrow a phrase from another giant AI leader) that could drive long-term growth.

Healthcare ranks as one of Amazon's most important areas for growth, thanks to its expansion into the online pharmacy and healthcare provider markets. The company's Project Kuiper satellite network could begin providing internet service later this year. I think Zoox, Amazon's autonomous ride-hailing business, could also move the needle over the long term.

4. An impressive financial pedigree

It takes money to make money. And Amazon has a lot of money. The company's cash stockpile tops $94 billion. Amazon's revenue continues to grow. Its profits are growing even more quickly, soaring 64% year over year in the latest quarter. Amazon is well-positioned to invest in future growth.

5. A culture of innovation

Amazon founder Jeff Bezos instilled a start-up mindset among employees that remains in place today, even though the company is now valued at around $2.2 trillion. He referred to this as a "Day One" culture. Amazon continues to look for new ways to innovate and new opportunities to grow.

Jassy expanded on this "Day One" perspective in his latest letter to shareholders. He wrote that Amazon also has a "why culture." Jassy explained that the company's employees "have to constantly question everything around us." He said that asking "why" has led to the major innovations that have led to Amazon's growth, from shifting from selling only books to selling all types of products to launching Amazon Web Services.

I think Amazon's culture of innovation, based upon thinking like a start-up and continually asking why, will lead to more game-changing products and services in the future.

6. A historically attractive valuation

At least at first glance, Amazon stock doesn't look like much of a bargain. The company's shares trade at nearly 34 times trailing 12-month earnings and more than 32 times forward earnings.

However, Amazon's valuation looks attractive compared to its historical levels. The stock is cheaper now than it's been since early 2009, when the U.S. economy began recovering from the Great Recession.

AMZN PE Ratio data by YCharts

7. There is a tomorrow

Probably the best reason to buy Amazon stock like there's no tomorrow is that there is a tomorrow. Any challenges that the company faces from tariffs and macroeconomic uncertainty will be only temporary. Amazon has proven to be remarkably resilient in the past. It will almost certainly continue to be resilient in the future. If you're a positive Polly about Amazon, I suspect you'll make plenty of money over the long term.

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

Before you buy stock in Amazon, consider this:

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

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

What's the hottest mega-cap stock on the market right now? Palantir Technologies (NASDAQ: PLTR). Shares of the artificial intelligence (AI)-powered software provider have skyrocketed more than 70% year to date. No other stock with a market cap of at least $200 billion has delivered anywhere close to that gain.

While many investors have hopped aboard the Palantir bandwagon, Warren Buffett isn't one of them. Don't expect the multi-billionaire to become a fan of the stock anytime soon, either. Here are three reasons why Buffett wouldn't touch Palantir stock with a 10-foot pole.

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 »

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1. Palantir isn't in Buffett's wheelhouse

I seriously doubt that Buffett has even looked at Palantir's financials. Why? The company's business isn't in Buffett's wheelhouse.

The legendary investor was asked at Berkshire Hathaway's annual shareholder meeting last month if he anticipated being able to put the conglomerate's hefty cash stockpile to use soon. Buffett replied that he'd be willing to invest $100 billion in a company if it met several criteria. First on the list was that he understands the business.

Granted, Berkshire's portfolio has included software companies in the past. Snowflake is a great example. However, CNBC noted shortly after Berkshire invested $800 million in the AI cloud software provider, "It's widely speculated that Buffett lieutenants Todd Combs and Ted Weschler orchestrated the Snowflake bet." I think it's a safe bet that this take is correct.

Buffett has readily acknowledged that he doesn't understand AI. I suspect Palantir's AI-focused business is enough reason by itself for the legendary investor to avoid buying any shares.

2. Buffett couldn't reasonably estimate Palantir's earnings growth

Let's suppose, though, that Buffett didn't shy away from investing in Palantir because of its business. I still don't think he would buy the stock for another critical reason: He couldn't reasonably estimate the company's long-term earnings growth.

Buffett wrote to Berkshire Hathaway shareholders in 2014 that his first step in evaluating a stock (or business) he's considering buying is to try to estimate its future earnings for at least the next five years. He stated, "If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects."

I seriously doubt that Buffett would be able to project Palantir's earnings growth because so much of the company's business stems from U.S. government contracts. How much federal money Palantir might receive depends in large part on which way the political winds are blowing over the next few years. Buffett's nickname is the "Oracle of Omaha," but even he probably wouldn't try to predict what will happen in Washington, D.C.

3. Buffett would find Palantir's valuation shocking

Buffett studied under Benjamin Graham, who is widely recognized as "the father of value investing." Although Buffett isn't as much a purist value investor now as he was in the past, he still looks closely at stock valuations before investing.

I'd bet that Buffett would find Palantir's valuation shocking. Actually, I think many investors would find it shocking. We're talking about a stock that trades at roughly 103.9 times trailing 12-month sales and more than 238 times forward earnings.

The only way those metrics would be justifiable is if Palantir were generating truly spectacular growth. To be sure, the company is growing rapidly -- 39% year over year in the first quarter of 2025. But is this growth rate sustainable? Probably not. Palantir's own revenue guidance for full-year 2025 reflects expected somewhat slower growth of around 36%. The consensus Wall Street estimate is for even more of a slowdown in revenue growth next year.

Could I be wrong that Buffett wouldn't touch Palantir stock with a 10-foot pole? Maybe. But with the AI software company's stratospheric valuation, I'd be comfortable making it a 20-foot pole.

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

Before you buy stock in Palantir Technologies, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Keith Speights has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, Palantir Technologies, and Snowflake. The Motley Fool has a disclosure policy.

If everyone only invested in what they fully understood, I suspect quite a few stocks wouldn't exist today. We can probably put quantum computing stocks in that category. The quantum physics used by companies pioneering quantum computing can make your head spin.

Fortunately for many investors, quantum computing stocks do exist. Two of them have been especially big winners -- D-Wave Quantum (NYSE: QBTS) and IonQ (NYSE: IONQ). D-Wave Quantum has delivered the more impressive performance over the last 12 months. Is it a better quantum computing stock than IonQ?

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 »

Image source: Getty Images.

The case for D-Wave Quantum

Despite the market turbulence experienced in 2025, D-Wave Quantum has generated a staggering return of nearly 1,200% over the last 12 months. Even with this tremendous gain, though, the company's market cap remains below $5 billion.

D-Wave's financial performance has been impressive, too. The company's revenue soared 509% year over year in the first quarter of 2025. Its cash position totaled $304.3 million at the end of Q1. D-Wave's management believes that's enough to fund operations until the company achieves profitability.

The huge stock gains and strong revenue growth are the result of increasing interest in D-Wave's technology. The company boasts the world's largest quantum computer. D-Wave recently introduced its most advanced system to date, its sixth-generation Advantage2 quantum computer. CEO Alan Baratz said this new system is "so powerful that it can solve hard problems outside the reach of one of the world's largest exascale GPU-based classical supercomputers."

D-Wave has completed more than 20 proof-of-concept engagements over the last 18 months. Its customer base includes Deloitte, Fort Otosan (a Turkey-based automaker owned by Ford and Koç Holding), Lockheed Martin, and Japan Tobacco).

The case for IonQ

IonQ hasn't delivered the kind of gains that D-Wave has over the last 12 months, but it's nonetheless been sizzling hot. The quantum computing pioneer's stock is up roughly 380%. Thanks to this great return, IonQ's market cap now tops $9 billion.

At first glance, you might wonder about IonQ's growth. The company's revenue dipped slightly year over year in Q1. However, IonQ's revenue has increased by a compound annual growth rate of 170% since 2021. The company expects that 2025 revenue will nearly double year over year based on the midpoint of its guidance range.

IonQ believes that its ion trap architecture gives it distinct competitive advantages. Its quantum computers can operate at room temperature instead of requiring cooling to zero degrees Kelvin. The company thinks its error correction process is superior to rivals. IonQ also maintains that its architecture is more modular and scalable than the competition.

All three of the largest cloud platforms offer IonQ's quantum hardware, a claim no other quantum computing company can make. IonQ has a growing customer base that includes big companies such as Ansys, AstraZeneca, and Toyota Tsusho.

Better quantum computing stock?

Both D-Wave Quantum and IonQ could have tremendous growth potential. Quantum computing could transform many areas, including drug discovery, logistics, and materials science. Consulting firm McKinsey & Co. estimates that quantum computing and networking could create up to $880 billion in economic value by 2040.

However, these two companies also face significant risks. Neither D-Wave nor IonQ is profitable yet. Although their respective technological approaches show promise, the competition is intense, with some rivals possessing much greater financial resources.

If I had to pick one of these quantum computing stocks right now, I'd go with IonQ. It's generating more revenue than D-Wave. Its intellectual property portfolio is larger, with 950 patents related to quantum computing and networking that should soon be under the company's control.

I also like IonQ's business development strategy. Recent acquisitions of ID Quantique and Lightsynq position IonQ well in the quantum networking space.

Investing in IonQ isn't for everyone because of the inherent risks with a small company in a fledgling market. However, I think aggressive investors could see market-beating returns from this stock over the long run.

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

Before you buy stock in IonQ, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Ansys, AstraZeneca Plc, and Lockheed Martin. The Motley Fool has a disclosure policy.

A healthcare giant. One of only 30 stocks in the Dow Jones Industrial Average. A longtime investors' favorite. UnitedHealth Group (NYSE: UNH) is all those things. However, it's also now a big loser.

Shares of UnitedHealth Group have plunged more than 50% below the peak achieved late last year. Problems have hit the world's largest health insurer wave after wave. In March, every analyst surveyed by LSEG rated UnitedHealth Group as a "buy" or "strong buy." Today, some recommend selling. But is UnitedHealth Group stock instead a brilliant bad news buy?

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 »

Image source: Getty Images.

One thing after another

UnitedHealth Group's challenges began last year. The company experienced a cyberattack in February 2024 that ultimately cost more than $2 billion. It disappointed investors with the outlook provided in the third-quarter update in October. In December, Brian Thompson, CEO of UnitedHealthcare, was shot and killed in New York City. The crime was allegedly due to the accused killer's anger at health insurers.

More bad news came in 2025. UnitedHealth Group reported lower-than-expected first-quarter earnings in April. The company lowered its full-year earnings guidance, citing higher Medicare Advantage costs and "unanticipated changes" in Optum's Medicare membership.

However, the situation soon went from bad to worse. In May, UnitedHealth Group suspended its 2025 outlook. The company said that "care activity continued to accelerate" and that the medical costs of new Medicare Advantage members were higher than expected. At the same time, UnitedHealth announced the abrupt departure of CEO Andrew Witty "for personal reasons."

And that wasn't all. The Wall Street Journal reported that the U.S. Department of Justice (DOJ) had launched a criminal investigation into UnitedHealth Group for potential Medicare fraud. President Donald Trump also said during a press conference that he intends to "cut out the middleman" with prescription drugs, a reference to pharmacy benefits managers (PBMs). UnitedHealth Group's OptumRx ranks as the second-largest PBM.

Temporary issues?

With all this bad news, it's no surprise that UnitedHealth Group's share price has sunk like a brick. However, several of the company's issues could be only temporary.

For example, UnitedHealth Group appears to have moved past the difficulties caused by the cyberattack last year. Insurers have a simple mechanism for addressing higher medical costs: They raise premiums. The higher costs might weigh on earnings over the short term, but profits should rebound relatively quickly. It's a similar story with membership changes that negatively affect financial results in the short term.

UnitedHealth Group stated in a press release that it "expects to return to growth in 2026." I think that's a realistic view.

What about the DOJ investigation? UnitedHealth Group pushed back against The Wall Street Journal article, stating, "We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution." The DOJ hasn't publicly commented on any investigation of UnitedHealth Group.

The company's CEO turnover isn't troubling to me. UnitedHealth Group immediately replaced Witty with Stephen Hemsley, who served as CEO from 2006 through 2017 and remains its chairman of the board of directors. Hemsley knows the business inside and out. I suspect he'll provide the steady leadership UnitedHealth Group needs.

A brilliant bad news buy?

You might have noticed that I didn't include President Trump's desire to "cut out the middleman" in the discussion of UnitedHealth Group's temporary issues. In my opinion, the threat to PBMs is the company's biggest problem. And it's not a temporary one.

That said, I wouldn't bet on PBMs disappearing anytime soon. I also think a strong argument can be made that UnitedHealth Group's problems are fully baked into its share price, with the stock trading at its lowest price-to-earnings multiple in more than a decade.

Is UnitedHealth Group out of the woods yet? No. However, this beleaguered healthcare stock could be a brilliant bad news buy for patient investors.

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

Before you buy stock in UnitedHealth Group, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — 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

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

Only one S&P 500 stock has outperformed Palantir Technologies (NASDAQ: PLTR) so far this year. But it's a pretty close contest. NRG Energy's shares have soared around 76% year to date, while Palantir's gain lags by only a few percentage points.

Despite Palantir's tremendous momentum, many analysts aren't upbeat about the stock's near-term prospects. But do billionaires Ken Griffin and Izzy Englander know something about Palantir that Wall Street doesn't?

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 »

Buying Palantir stock hand over fist

At the end of 2024, Griffin's Citadel Advisors owned 441,755 shares of Palantir. In the first quarter of 2025, the hedge fund more than tripled its position in the artificial intelligence (AI) software provider.

Englander is arguably even more enthusiastic about Palantir. In the first quarter, his Millennium Management hedge fund more than quadrupled its stake to 1,312,758 shares.

Both successful investors also employed options strategies with the stock. Griffin's and Englander's hedge funds held both call and put options for Palantir at the end of the first quarter.

While these two billionaires are indisputably buying Palantir Technologies shares hand over fist, the stock doesn't make up a large percentage of their portfolios. That's not surprising, though, considering that Griffin's Citadel Advisors has more than 5,800 holdings, while Englander's Millennium Management has more than 3,900 holdings.

But Wall Street isn't so upbeat

Wall Street doesn't seem to share Griffin's and Englander's optimism about Palantir. The consensus 12-month price target for the stock among analysts surveyed by LSEG is roughly 22% below the current share price.

Only one of the 25 analysts polled by LSEG in June rated Palantir as a "strong buy." Another three analysts recommended buying the stock. However, seven analysts viewed Palantir as an "underperform" or advised investors to sell. Fifteen analysts recommended holding the stock.

Why isn't Wall Street as enthusiastic about Palantir as the two billionaire hedge fund managers seem to be? Probably the biggest objection for analysts is valuation. Palantir's shares trade at nearly 244 times forward earnings. I'd say that was a nosebleed forward multiple, but that might not be a strong enough description.

Most analysts don't seem to think Palantir's growth prospects justify this sky-high valuation, either. The software company's price-to-earnings-to-growth (PEG) ratio based on analysts' five-year earnings growth projections is 4.22. PEG ratios generally need to be below 1.0 for a stock to be considered attractively valued.

Image source: Getty Images.

Who's right?

Maybe Griffin and Englander do know something about Palantir that most analysts on Wall Street don't. Perhaps the billionaire investors expect much stronger growth from the company than analysts forecast. Maybe they agree with Wedbush's Dan Ives, who predicts that Palantir's market cap will more than triple to $1 trillion over the next two to three years.

I suspect, though, that the more bearish opinion held by Jefferies analyst Brent Thill is a better take. Thill noted on CNBC's Closing Bell Overtime show a few weeks ago that no tech stock has ever been able to sustain a super-high multiple like Palantir's.

Like Thill, I don't question the strength of Palantir's underlying business. The company makes great software. It should have strong growth prospects. Palantir might even enjoy a bonanza if President Donald Trump's Golden Dome missile defense system is funded by Congress and the company wins a lucrative contract to help build it. But this growth still doesn't seem to be enough to justify Palantir's valuation, in my view.

I also wonder whether Griffin and Englander are really as bullish about Palantir as their recent buying indicates. We don't know the detailed information about the option trades they've made. It's possible that those options significantly hedge their positions in Palantir. After all, hedging is what hedge funds do. Maybe, just maybe, Griffin and Englander are more closely aligned with the consensus Wall Street view of Palantir than meets the eye.

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

Before you buy stock in Palantir Technologies, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 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

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

Investors don't need a fortune to begin generating steady income. Many great dividend stocks are available at relatively low prices.

What are the smartest dividend stocks to buy right now if you only have $150 to invest? I can think of lots of good ones, but here are my three top picks.

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. Dominion Energy

It isn't surprising to me in the least that many utility stocks have held up well during this year's market turbulence. You can buy one share of my favorite utility stock, Dominion Energy (NYSE: D), for around $56. And you'll get a big bang for your buck.

Dominion provides electricity service to 3.6 million homes and businesses in its home state of Virginia, as well as in North Carolina and South Carolina. It also provides natural gas service to roughly half a million customers in South Carolina. In addition, Dominion owns offshore wind and solar power facilities.

The company offers a forward dividend yield of 4.76%. Although Dominion cut its dividend in 2020, management appears firmly committed to at least funding the dividend at current levels going forward.

I don't just like Dominion for its dividend, though. The utility company expects to grow its earnings per share by 5% to 7% on average each year. Data centers are a key component of Dominion's growth strategy, particularly given that Virginia ranks as the largest data center market in the world.

2. Enterprise Products Partners

Technically, you can't buy a share of Enterprise Products Partners (NYSE: EPD). That's because it's a limited partnership (LP). Instead of shares, Enterprise has units. But one unit will only cost you roughly $31.

Enterprise Products Partners is a leader in the North American midstream energy market. It owns more than 50,000 miles of pipelines that transport natural gas liquids (NGLs), natural gas, and crude oil. Enterprise can also store over 300 million barrels of NGLs, crude oil, petrochemicals, and refined products, plus 14 billion cubic feet of natural gas.

I suspect many income investors will love this LP's forward distribution yield of 6.94%. Enterprise Products Partners also boasts an impressive 26-year streak of distribution increases.

Another big reason to like Enterprise Products Partners is its stability. The midstream leader has a strong balance sheet. Its business is largely recession-resistant and protected against rising inflation. As a result, Enterprise has been able to generate steady cash flow year in and year out, even during crises such as the Great Recession and the COVID-19 pandemic.

Image source: Getty Images.

3. Realty Income

After buying one share of Dominion Energy and one unit of Enterprise Products Partners, you'd have around $63 left from an initial $150. That's more than enough to scoop up a share of Realty Income (NYSE: O), which currently trades around $56 per share.

Realty Income ranks as the world's seventh-largest real estate investment trust (REIT). It owns 15,627 properties in eight countries. The REIT's tenants include some of the top companies, including 7-Eleven, Dollar General, and Walmart, and its client base is diversified, representing 91 industries.

REITs must return at least 90% of their earnings to shareholders as dividends to be exempt from federal income taxes. Unsurprisingly, Realty Income pays a juicy dividend. Its forward dividend yield currently stands at 5.76%. The company has also increased its dividend for 30 consecutive years. And there's even more good news: Realty Income pays its dividends monthly rather than quarterly. The REIT recently announced its 659th consecutive monthly dividend.

What about growth? Realty Income checks that box, too. It has delivered 29 straight years of positive total operational returns. The total net lease addressable market in the U.S. is around $5.5 trillion. The addressable market in Europe is even bigger -- $8.5 trillion. Realty Income also faces only two major rivals that target the European market.

Should you invest $1,000 in Realty Income right now?

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

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Bill Ackman is highly selective about which stocks he buys. His Pershing Square Capital Management hedge fund currently owns only 12 stocks. And two of those are different classes of shares for the same company -- Google parent Alphabet.

Not too long ago, Alphabet ranked as Ackman's favorite investment. That's no longer the case. The billionaire hedge fund manager is now loading up on Uber Technologies (NYSE: UBER).

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 »

Image source: Getty Images.

Hailing Uber

Ackman revealed in a post on X (formerly Twitter) on Feb. 7, 2025, that Pershing Square began buying shares of Uber in January 2025. He stated at the time that the hedge fund owned 30.3 million shares. That's the same number of Uber shares that Pershing Square disclosed in its 13-F regulatory filing for the first quarter of 2025.

The purchase catapulted Uber into the top spot among Pershing Square's holdings. The stock now makes up 18.5% of the hedge fund's portfolio, edging out Brookfield Corporation at 18.01%. As of March 31, 2025, Pershing Square's stake in Uber was valued at $2.21 billion.

This was the first time for Pershing Square to accumulate a position in Uber. However, it wasn't Ackman's first investment in the transportation company. The billionaire noted in his X post that he was "a day-one investor in the company through a small investment in a venture fund."

Why does Ackman like Uber so much?

Sometimes, when Ackman initiates a new position in a stock, we can only guess why he likes it. But not with Uber. He explained exactly why he bought the stock in his social media post earlier this year.

For one thing, Ackman is very familiar with Uber's business. He said that he has "been a long-term customer." Actor, producer, and director Edward Norton was an early fan of Uber. He showed the Uber app to Ackman. Both men decided to become ground-floor investors in what was then a start-up company.

Ackman is also betting on the jockey to some extent. He noted in his X post that "Uber has suffered from erratic management" in the past. However, he believes that current CEO Dara Khosrowshahi "has done a superb job in transforming the company into a highly profitable and cash-generative growth machine."

The billionaire hedge fund manager also views Uber as attractively valued (or at least did earlier this year). Ackman said, "Remarkably, it can still be purchased at a massive discount to its intrinsic value."

However, Uber isn't as cheap as it was when Pershing Square was scooping up shares in the first quarter. The stock has jumped close to 12% since Ackman's X post on Feb. 7.

Should you buy Uber stock, too?

Most Wall Street analysts seem to agree with Ackman's bullish view on Uber. Of the 54 analysts surveyed by LSEG recently, 13 rated the stock as a strong buy. Another 31 analysts rated Uber as a buy. The remaining 10 analysts recommended holding the stock. The average 12-month price target for Uber reflected an upside potential of roughly 15%.

I think Ackman and Wall Street could be right about Uber. The company continues to deliver strong revenue and earnings growth along with impressive free cash flow. It has multiple paths to growth, including autonomous ride-hailing services, food delivery via Uber Eats, and its Uber Freight transportation and logistics services.

However, the uncertainties Uber faces make me hesitant to jump aboard the bandwagon at this point. First, the company has stiff competition from Lyft in the U.S., Bolt in Europe, and Didi in Latin America. Second, autonomous ride-hailing could present both an opportunity and a threat to Uber. If Tesla is successful with its robotaxi launch, the company might gain market share at Uber's expense.

Ackman believes that Uber is a bargain. But the stock trades at a forward earnings multiple of 30.6. For Uber to be as attractively valued as Ackman thinks, the company will have to deliver exceptionally strong growth over the coming years. With the unknowns related to increasing competition, I'm not confident that it will be able to do so.

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

Before you buy stock in Uber Technologies, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Brookfield, Brookfield Corporation, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.