Key Points

• The leisure cruise industry is faring far better than it seems like it should be, and an unlikely Carnival is leading the way.

• Although Iovance Biotherapeutics shares have never been lower, the company's never been more promising than it is right now.

• Shopify is capitalizing on a shift in the e-commerce business with all the right technological tools.

• 10 stocks we like better than Carnival Corp. ›

Experienced investors understand that being in the stock market requires a long-term, multiyear mindset. For truly patient people though, the reward is well worth the wait; you'd be hard-pressed to find better returns on your money than the market's average annual gain of about 10%.

Still, sometimes you get the itch for a bit more gain reaped in a little less time. And every now and then the market obliges with the right prospects.

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

If you can stomach their above-average risk, there are stocks that have the potential to quintuple your money within the next five years. Even half of that, of course, would still be worth your while.

Carnival Corp.

Anyone who knows anything about Carnival Corp. (NYSE: CCL) knows the leisure cruise company took on a ton of debt during and because of the COVID-19 pandemic. It needed the cash just to survive. As of May the $40 billion company was sitting on nearly $26 billion worth of long-term obligations costing it roughly $1.4 billion worth of interest payments per year. That's a pretty big bite out of its annualized top line of almost $16 billion, paring its yearly net income back to something in the ballpark of $3 billion. That's why shares are still down on the order of 30% from their price right before the pandemic took hold, and less than half of their 2018 peak price -- investors are simply worried its balance sheet is untenable.

The thing is, this profitable company is managing to continue paying down its debt while also still growing its business. At its early 2023 peak, for perspective, Carnival's long-term debt stood at nearly $33 billion.

While there's obviously plenty of more work to be done before the company is back to its pre-pandemic condition, the demand it requires to do so is most definitely in place. Last quarter's record-breaking revenue of $6.3 billion was turned into record-breaking operating income of over $900 million, extending an ongoing streak of growth for both measures. Look for more of the same, too. See, also as of the end of last quarter the company's total customer deposits toward future trips reached a record-breaking $8.5 billion.

What gives? As it turns out, consumers are still seeking out affordable luxury experiences even if money is tight. The Cruise Lines International Association believes the industry will serve 37.7 million passengers this year, breaking last year's record of 34.6 million en route to 41.9 million in 2028. Carnival is well positioned to capture at least its fair share of this growth.

Just don't tarry if you're interested. More and more investors are seeing this dynamic, given how shares are well up from their 2022 low and still climbing.

Iovance Biotherapeutics

There's a good chance you've never heard of Iovance Biotherapeutics (NASDAQ: IOVA). Its billion-dollar market cap just doesn't turn many heads, and for those who do find it, the unprofitable biopharma outfit with only one expensive therapy in its portfolio seems like anything but a sure thing.

If there was ever a one-trick pony to take a shot on though, this one may be it.

It's called Amtagvi. Only approved early last year, this drug is the first Food and Drug Administration (FDA)-approved cellular therapy (tumor-infiltrating lymphocytes, specifically) to treat certain kinds of melanoma. The underlying science, however, is promising on far more fronts. Amtagvi -- generically called lifileucel -- is also being tested in a dozen other clinical trials, while similarly made treatments are in the midst of eight more testing regimens. And some of these trials are in their latter stages, like the use of lifileucel as a treatment for certain sorts of non-responsive lung cancer.

There is a challenge. That is, Amtagvi is complicated to administer, and expensive. Each patient's one-time treatment is custom-made in a lab for their particular tumor at a cost of around $500,000 apiece. Some insurers are balking, particularly given that it's still a relatively new medicine, and not a more proven "front line" therapy that's also often much cheaper. Anyone who's been watching this company for a while also knows this stock's performed poorly since its 2010 initial public offering (IPO), and even since its 2020 rally when Amtagvi's approval first became imminent.

The fact is, however, Iovance Biotherapeutics' future has never been brighter than it is right now, yet the stock's never been cheaper. The company's also never been closer to profitability than it is at this time. Analysts are expecting bottom-line progress that puts it on a trajectory for a swing to profitability sometime around or even before 2030, when research from Global Data suggests sales of Amtagvi could exceed $1 billion en route to as much as $2 billion per year. This prospect alone is enough to turn up the heat on Iovance stock in the meantime.

Shopify

Finally, add Shopify (NASDAQ: SHOP) to your list of stocks that could turn $1,000 into $5,000 by 2030. The analyst community expects its top line to grow to the tune of 20% per year for the next several years, pumping up its profits at an even faster rate.

It's possible you've used the company's technology without even realizing it. In contrast with Amazon's business model, Shopify helps brands and merchants build their own online stores. This allows for far more customization of the e-commerce experience, ultimately building a stronger -- and more direct -- relationship with consumers as they become customers. Although the company no longer discloses the figure, estimates of the number of online stores put the figure somewhere around 5 million.

The company does, however, still disclose how much business its platform is facilitating. Last year, Shopify's e-commerce technology handled $292.3 billion worth of business on behalf of its customers, generating $8.9 billion worth of revenue for itself. Those numbers were up 24% and 26% (respectively) year over year, extending growth trends that are expected to persist for a long while more.

The key to this growth is the way e-commerce is evolving in the wake of Amazon's heavy-handed dominance of the business.

In its early days Amazon.com was the premier platform for connecting with consumers. As time has marched on, however, Amazon is decreasingly a partner with its sellers, and increasingly a competitor to them. Not only does the e-commerce giant now sell its own merchandise, but it offers third-party sellers the option of paying the company to more prominently feature their goods at the site. Smaller sellers without much of a marketing budget often just can't compete. The issue of fake product reviews also remains a nuisance. All of this dynamic ultimately helps Shopify, of course, by prompting sellers to look for sales platforms where they have more cost-effective control.

Then there's the more philosophical aspect of e-commerce's ongoing evolution. As the industry changes it's increasingly moving toward greater authenticity and more personal connections with consumers. This of course favors Shopify's customizable offerings, and is one of the reasons IMARC Group believes the world's direct-to-consumer market that Shopify serves will grow at an average annualized pace of more than 17% through 2033. Shopify is well positioned to win more than its fair share of this growth.

Should you invest $1,000 in Carnival Corp. right now?

Before you buy stock in Carnival Corp., 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 Carnival Corp. 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

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Iovance Biotherapeutics, and Shopify. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.

Key Points

• Credit card middleman American Express has earned its way to Berkshire's No. 2 spot for all the right reasons.

• While the oil and gas industry may be running on borrowed time, it's borrowed a lot of time, during which there's lot of money to be made.

• The recent purchase of a stake in Pool Corp. seems unusual on the surface. But a closer look reveals the Buffett-like thinking behind the trade.

• 10 stocks we like better than Occidental Petroleum ›

Veteran investors know the market is forever changing, requiring you to change with it. These changes include industry leadership, stock-selection strategies, allocation adjustments, and more.

There are still some reliable constants though. One of them is Warren Buffett, and the picks he makes -- or at least approves -- for Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio. If a stock becomes a Berkshire holding, you can bet it's a quality name with a promising future.

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 »

Here's a closer look at three Warren Buffett picks currently held by Berkshire Hathaway that just might work for your portfolio as well.

1. American Express

Buffett's done a fair amount of selling over the past few quarters, lightening up on Berkshire's positions in Apple, Bank of America, and DaVita, and outright exiting its stakes in Citigroup and Nu Holdings.

One stock has remained conspicuously untouched for years now, however, to quietly become Berkshire Hathaway's second-biggest holding (right behind Apple). That's credit card outfit American Express (NYSE: AXP).

It's not too difficult to see why Buffett's such a fan, though; the company's certainly more than proven it knows how to make its unique business model work.

On the surface it's just another credit card company. Under the hood though, it's more. Unlike Visa and Mastercard, which are only payment networks for card issuers, American Express is both the issuer and the payment middleman.

This leveraged position allows it to offer a perks and rewards program that cardholders are willing to pay up to $700 per year just to access. This annual fee also means American Express' cardholders tend to be a bit more affluent than the average consumer, and as such are less likely to miss payments, and more likely to continue spending even when other people are tightening their purse strings.

And the proof is in the company's results. With the obvious exception of 2020 when the COVID-19 pandemic was in full swing, Amex's top line has improved every year going all the way back to 2017.

Profit growth hasn't been quite as consistent. It's remained reliable enough, however, to make American Express a solid dividend stock. Although the company tends to not raise its dividend payments in times of uncertainty -- like in the wake of 2008's subprime mortgage meltdown or during the COVID-19 pandemic -- it still continues to pay a quarterly dividend, and begins raising these payments again as soon as the economy makes it feasible to do so.

2. Occidental Petroleum

If it seems like the oil and gas business is inching its way to obsolescence, that's because it is. With the advent of electric cars and renewable energy sources, consumers just won't need oil like they have in the past. To this end, Goldman Sachs predicts "peak oil" -- the point at which the planet's daily consumption of crude stops growing and starts shrinking -- will happen in 2035.

There's a reason, however, that Buffett remains enough of a fan of oil giant Occidental Petroleum (NYSE: OXY) to stick with Berkshire's 265 million share position despite the stock's relatively poor performance of late. That is, there's still a great deal of money to be made in the business between now and then, and even after 2035.

See, while demand will likely start to shrink then, it's apt to shrink very, very slowly. Indeed, outlooks from ExxonMobil, OPEC, and Standard & Poor's all suggest that oil will still be the world's top source of energy production as far down the road as 2050. The continued proliferation of alternative energy options just won't be able to keep up with the ever-growing demand for electricity.

And Buffett feels very good about Occidental's ability to deliver, even in an environment where crude oil prices remain subdued. As he noted in 2023's letter (published in early 2024) to Berkshire Hathaway shareholders:

"Under Vicki Hollub's leadership, Occidental is doing the right things for both its country and its owners. No one knows what oil prices will do over the next month, year, or decade. But Vicki does know how to separate oil from rock, and that's an uncommon talent, valuable to her shareholders and to her country."

That's strong personal praise from the Oracle of Omaha.

The kicker: Buffett also touted the potential of the carbon-capture technology that Occidental Petroleum is developing, which literally sucks carbon dioxide out of the ambient air. While it's not quite yet ready for mass commercialization, that day is coming, and soon, putting Occidental into what's apt to be another multibillion-dollar market.

3. Pool Corp.

Finally, add Pool Corp. (NASDAQ: POOL) to your list of Warren Buffett stocks you might want to buy for yourself right now.

It's the smallest and least-known of the three companies in focus here, with a market cap of only $11 billion. It's not a particularly big Berkshire holding either; the conglomerate's 1.5 million Pool Corp. shares are worth less than $500 million, which is less than 4% of Pool itself.

This relatively small stake makes Buffett's interest in the company all the more telling. While owning this much Pool stock doesn't actually do much for Berkshire's bottom line, Buffett and/or his lieutenants waded in anyway. There's a reason, even if it's not yet clear.

But first things first. Yes, this is the company that sells swimming pool supplies. It's the biggest name in the business, in fact, doing $5.3 billion worth of business last year. Of that, $617 million was turned into net income.

Curiously, both of those numbers were down from 2023's comparisons. Neither figure is expected to improve any this year, either. Berkshire bought the stock anyway despite its relatively rich valuation of 28 times this year's expected per-share profit of $10.88. It's a significant vote of confidence in this company's future growth prospects.

The thing is, it may not be a crazy bet at all.

There's no denying this stock's been a poor performer since 2021's peak, largely due to headwinds on the residential real estate front, where costs have soared. Investors are just worried, and understandably so.

As Buffett says though, "Be fearful when others are greedy and greedy when others are fearful." This business may be struggling right now, but it will eventually thrive again once the economy gets back up to full speed and the highly cyclical homebuying and home-improvement markets perk up, in turn driving demand for pools, and, subsequently, demand for pool maintenance supplies. Berkshire's just positioning in a quality company now for whenever that recovery materializes.

Should you invest $1,000 in Occidental Petroleum right now?

Before you buy stock in Occidental Petroleum, 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 Occidental Petroleum 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

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Goldman Sachs Group, Mastercard, and Visa. The Motley Fool recommends Nu Holdings and Occidental Petroleum. The Motley Fool has a disclosure policy.

Key Points

• QuantumScape has figured out how to make electric vehicle batteries better than the current state of the art.

• It's still not actually manufacturing these batteries at scale, and it’s not clear when it might begin doing so.

• This stock’s inability to hold on to its recent gains is a red flag, but the retracement seems exaggerated.

• 10 stocks we like better than QuantumScape ›

The past few weeks have been wild ones for QuantumScape (NYSE: QS) shareholders. After it drifted to a multi-year low in April, something suddenly lit a fire under this electric vehicle (EV) technology stock in late June. Shares were up by more than 200% less than a month later.

That something was a breakthrough in how the company manufactures its high-performance EV battery packs. A key step in the process can now be completed about 25 times faster than before, offering the market some assurance that this pre-commercialization outfit will have the production capacity it needs when it needs it.

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

Nearly half of that gain has unsurprisingly been unwound in the meantime. Investors jumped in response to the news, but eventually remembered that there's more this start-up needs to accomplish before mass commercialization. On the other hand, this pullback could also prove to be a fantastic second chance to dive in at a decent price.

What's QuantumScape?

First things first. What the heck is QuantumScape?

This company makes lithium-based batteries like the ones the majority of modern electric vehicles require. QuantumScape's batteries are better than the standard lithium-ion battery you'll find powering most EVs these days. Not only are its solid-state lithium battery packs capable of storing more energy, they don't require the usual anode, tackling two of the EV battery business' lingering challenges. This simpler design not only translates into lower manufacturing costs, but also lower overall materials costs on a per-watt basis.

The only problem? QuantumScape's batteries aren't actually being manufactured at commercial scale yet. It's not entirely clear how much it will cost or how difficult it will be to do so, either. The only powerpacks it's made so far are prototypes provided to carmakers that want to tinker with the technology in their own electric vehicles.

Still, the science is quite promising. The solid-state batteries the company has made provide on the order of 15% to 40% more driving range than comparable conventional lithium-ion batteries do.

Perhaps more importantly, they're far more durable. QuantumScape's own testing indicates that its powerpacks are capable of holding 95% of their original charge capacity, even after 1,000 recharges. That's about 300,000 miles worth of driving, alleviating one of would-be EV owners' top cost concerns -- the eventual replacement of their electric vehicle's battery at a price tag of anywhere between $10,000 and $20,000.

A big leap forward

Given all this, the company's story is compelling. The question is: How close is QuantumScape to actually manufacturing an affordable and functional solid-state EV battery at scale? Well, it's at least one step closer to this endzone than it was a little over a month ago.

In late June, QuantumScape announced it had successfully integrated its advanced "Cobra" separator process into the production of its baseline lithium cells. That means the ceramic-based separator between its batteries' solid cathodes and the company's anode alternative can now be layered into place about 25 times faster than the company's previous fabrication process.

That's the whole reason for July's brilliant burst of bullishness. Welcome to the world of story stocks.

Still, it's easy to see why the market suddenly became so excited. This is no small matter. This ceramic material negates the need for a porous polymer separator between the liquid electrolyte and lithium metal material found inside most common lithium-based batteries. Not only is the solid nature of QuantumScape's battery materials more efficient at transferring a charge from one side of the battery to another, there's little loss of this efficiency over time, compared to a fluid material.

Liquid electrolytes are also potentially just more dangerous than their solid-state counterparts, since they're more likely to be ignited and burn out of control than solid-state batteries.

More to the point for investors, being one (admittedly big) step closer to being able produce its batteries at scale is a big win for QuantumScape, and its shareholders. Even if the bulls did end up getting ahead of themselves and have since cooled their jets, that's what catapulted the stock higher in July, reminding investors that story stocks like this one can be quite unpredictable.

Don't waste the in-the-meantime

The overarching question remains: Is QuantumScape stock a buy following its battery breakthrough?

One of the key details glossed over by the noise of the recent run-up is that this $5 billion company is still bleeding money. It spent over $500 million last year, mostly on research and development, topping 2024's and 2023's outlays. And there's not a stitch of revenue yet. That's not an unusual situation for a start-up that's still refining what could be a game-changing technology; you have to spend money to make money. But it's a concern when there's less than $1 billion worth of cash and liquid assets on the balance sheet. Fund-raising could be in the cards.

There's also no assurance that paying customers will actually step up once at-scale production becomes possible. The company's said both should materialize sometime in 2026, but such timelines are difficult to predict when a technological solution is as new as this one is. Either way, meaningful revenue wouldn't likely start to flow until 2027 or even 2028, with profits unlikely for at least a while after that.

Nevertheless, Volkswagen -- the world's second-biggest automaker, and one of its biggest EV manufacturers -- has remained interested and financially supportive for years now when it didn't have to do so. It's QuantumScape's single biggest shareholder, in fact. Given how close QuantumScape is to the finish line now, it would be surprising if Volkswagen didn't see the development of these superior EV batteries all the way through.

The only catch is that the massive automaker probably doesn't care at this point if QuantumScape ever actually turns a profit. It just wants the advanced lithium batteries. That's not the case for individual QS shareholders.

Bottom line? Buy it if you're inclined to take a big risk with a potentially big reward. Just be prepared for plenty of volatility, and the possibility of significant losses. Even for most risk-tolerant investors, the odds of any meaningful long-term upside aren't quite high enough here to justify the amount of risk you'd actually be taking on.

Sure, that could change in the future. Just don't miss out on other opportunities in the meantime while you're waiting to see if this story stock that raises more questions than it answers actually pans out. Don't sweat not getting in on the proverbial ground floor, either. If QuantumScape's tech is going to pay off, that will become clear enough once real revenue starts to flow.

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

Before you buy stock in QuantumScape, 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 QuantumScape 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 $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,820!*

Now, it’s worth noting Stock Advisor’s total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Key Points

• Artificial intelligence-powered drug development isn't a mere premise anymore. Recursion Pharmaceuticals has made it a reality.

• The next era of e-commerce favors platforms like Shopify's, which allows brands to connect with consumers outside of massive digital shopping malls.

• U.S. drivers may not be big fans of electric vehicles, but that's not the case everywhere else.

• 10 stocks we like better than Shopify ›

Are Americans saving enough money to fund a comfortable retirement? Probably not. As the Motley Fool's own research indicates, as of 2022 the median retirement savings for U.S. households is a mere $87,000. That means half of the country has saved up more, while the other half has saved less. Even being in the upper half of the crowd, however, isn't necessarily enough.

Committing more of your income to the effort is still only half the battle though. You'll also need to get more out of your money while you're growing your nest egg. This means achieving bigger gains without taking on significantly more risk.

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 »

Here's a closer look at three growth stocks you could buy and hold for decades as a means of supercharging your portfolio's growth. While each of these tickers brings some added risk and volatility to the table that will require regular monitoring, their long-term upside potential is arguably worth the work.

Recursion Pharmaceuticals

While artificial intelligence (AI) still has of room for improvement, the writing is on the wall -- the technology will be tackling complex problems that individuals and institutions just can't. This includes designing and testing pharmaceuticals.

Well, the future is here. Recursion Pharmaceuticals (NASDAQ: RXRX) has built an AI-powered platform capable of virtually testing a drug rather than requiring a full-blown clinical trial of an idea. Leveraging 36 petabytes (36 million gigabytes) of digital biological and chemical data, its so-called Recursion OS can accomplish what would normally take years and millions of dollars in a matter of days at a fraction of the cost.

And it's no mere theory. The technology is not only functioning -- it's commercialized. A handful of pharma companies including Roche and Sanofi are using Recursion OS to tackle some of their own developmental work, while Recursion is working on some drugs of its own. All of these drug candidates will still need to go through the actual clinical trial process to satisfy regulatory agencies like the FDA. Recursion's software facilitates focus though, by virtue of weeding out less promising drug prospects so more resources can be devoted to more promising ones. That's huge.

It's still relatively early for Recursion, and for that matter, the AI-assisted drug-development industry itself. Recursion Pharmaceuticals remains in the red, and will likely remain there for at least a few more years. This arguably makes Recursion the riskiest of the three stocks being put under the microscope here.

Just understand the potential reward is commensurate with the risk. Recursion Pharmaceuticals is nearing a revenue and profit turning point in front of what Straits Research believes will be average annualized growth of nearly 32% for the artificial intelligence drug-development industry through 2030. This tailwind alone should be enough to push Recursion to profitability. That makes this stock's prolonged and persistent weakness since peaking in 2021 is a fantastic buying opportunity.

Shopify

Amazon (NASDAQ: AMZN) is in no immediate danger of being dethroned as the king of North America's e-commerce scene. But it's no longer able to simply bully the rest of the industry. Competitors are successfully pushing back... just not in the way you might have expected. Rather than one or two rival names making inroads, brands and merchants are taking matters into their own hands by setting up their own online stores as a means of working all the way around Amazon's domination.

And they've largely got Shopify (NASDAQ: SHOP) to thank for the option.

In simplest terms, Shopify helps companies establish their own in-house e-commerce presence. From websites to payment-processing to inventory-management to marketing, Shopify can do it all, making it easy for businesses of all sizes to stay focused on more important matters (like running that business). Although the company no longer discloses how many clients are using its technology, it does divulge the scope of its business. Last year, Shopify's solutions facilitated the sale of $292.3 billion worth of goods and services, up 24% year over year to extend a long-established growth streak. Shopify collected $8.9 billion worth of revenue for itself in the process, turning a little over $1 billion of it into net income.

SHOP Revenue (Quarterly) data by YCharts

This growth still only scratches the surface of the opportunity though. Market research outfit eMarketer reports that only a little more than one-fifth of the world's retail spending is currently done online. The rest is still taking place in brick-and-mortar stores.

While certainly some of these sales will never move online, much of it can. Brand-owned and merchant-managed online stores are positioned to capture more than their fair share of whatever growth awaits the e-commerce industry, however, as these players increasingly see the value in establishing their own direct relationships with customers. In this vein, analysts expect Shopify to produce top-line growth in the ballpark of 20% in each of the three years ahead.

Nio

Finally, add Nio (NYSE: NIO) to your list of stocks to buy and hold for decades if you want a shot at building a bigger retirement nest egg.

It wouldn't be surprising if you'd never heard of it. Although it's finding a bit of traction in Europe, the Chinese maker of electric vehicles predominantly serves China itself. It delivered 72,056 electrified cars during the second quarter of this year, up nearly 26% from the year-ago comparison, underscoring production growth that's been in place for some time now.

Think the electric vehicle (EV) market is hitting a wall due to disinterest? Not so fast. That's largely an American phenomenon. Data gathered by CleanTechnica indicates sales of electric vehicles in China soared 25% to 1.1 million units last month, accounting for more than half of the country's entire automobile sales.

That's still just the beginning though. The International Energy Agency expected EVs to account for 80% of China's total car sales by 2030, thanks to supportive policies that encourage the alternative to combustion-powered vehicles. It's making inroads in Europe as well, for the same reason. And, while there's little incentive for the company to make a push into the United States' anemic EV market right now, if and when domestic interest perks up, Nio has maintained tentative plans for that possibility.

It could be a while before Nio works its way out of the red and into the black -- it simply needs more scale. This could make the stock a little less than completely comfortable to own in the interim.

It's making clear progress on the production as well as the profitability front though, and will almost certainly get there sooner or later, and likely sooner. Given how inevitable this outcome now seems, the market's apt to reward the progress en route to fiscal viability.

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.

Key Points

• The IRS eventually comes looking for the tax revenue it didn't get to collect earlier on the money invested within IRAs and other tax-deferred accounts.

• Just because you withdraw money from a tax-sheltered retirement account doesn’t mean it can’t continue providing value, or continue growing.

• There's a financial maneuver that can help negate your need to make future RMDs.

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

Are you going to be 73 years old (or older) at any point in 2025? If so, whether or not you need it -- or even want it -- you will be legally required to start taking money out of most types of tax-deferred retirement accounts you may own. These withdrawals are called required minimum distributions, in fact, or RMDs -- and failing to make those taxable withdrawals each year before the annual deadline can result in decent-sized penalties.

Don't stress out if you just don't need this cash at this time, though. While you can't refuse to withdraw it, you can still do constructive things with it outside of your IRA. Here's a review of your four best options.

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 »

But first things first.

What's an RMD?

If you've already been through your first required minimum distribution, then 2025's RMD isn't your first rodeo. If you're unfamiliar with them, though, here's the deal.

All the money that's been growing tax-free inside your (non-Roth) IRA, 401(k), or similar account? The IRS eventually wants its cut. The federal government's revenue-collection arm figures that 73 years of age is about as late in life as it wants to let you keep this money completely untaxed. And once you start, you'll take these required minimum distributions every year for the rest of your life.

But what's the minimum? It varies with your age. When you're 73, you'll only need to withdraw about 3.77% of your retirement account's value as of the end of the prior year. The proportion gets progressively larger as you age, though, reaching 50% of the prior year's closing value at the rarely seen age of 120. Your brokerage firm or your account's custodian will supply you with the information needed to determine your RMD, and in many cases can figure it out for you. Otherwise, refer to the IRS for instructions.

If you own more than one retirement account, that's OK. You can mix and match your withdrawals from the same kinds of retirement accounts to come up with a sum-total RMD figure, and then make the withdrawal from just one of these accounts, or portions from each. The IRS only cares about the total amount it's owed -- not where the money comes from. However, you can't mix and match among different kinds of retirement accounts, like a 403(b) and a traditional IRA. Both of them do have RMDs, but you'll have to handle each category separately. You can only combine like-categorized retirement accounts for RMD calculation and withdrawal purposes.

There's one exception to this: 401(k) accounts. If you happen to have more than one 401(k), you need to take your calculated RMD for each one from that one.

As for timing, your very first required minimum distribution doesn't need to be completed until April 1 of the year after you turn 73. Past that point, these withdrawals are supposed to be completed by the end of the calendar tax year. That means if you wait to make your first one, you may end up taking two years' worth of RMDs in the year you turn 74.

Options

Suppose you don't actually need all of that money in that year, though. No problem. While you'll still need to make these withdrawals, there are several options for what you may want to do with the cash influx, some of them specific to IRAs.

1. Give it away (tax efficiently)

You can always give money to charitable causes. And, while there are limits, donations to legitimate charities are at least somewhat tax-deductible.

If you're over 70 and a half and are willing to transfer cash or assets directly from your IRA to a charity, though, tax-deductibility limits are much higher. Specifically, by categorizing your RMD as a qualified charitable distribution (or QCD), you can take as much as $108,000 worth of an IRA distribution that would have been considered your taxable income (or up to $216,00 for a married couple) and directly transfer it to a charitable cause -- and that maneuver will still satisfy your minimum distribution requirement. You can't do this with 401(k)s or similar accounts. Contact the charity in question for instructions on how they can receive this gift, and then confirm it for your record-keeping and documentation purposes.

2. Tuck it away for a rainy day

Just because you don't need this money right now doesn't necessarily mean you want to get rid of it altogether, of course. The day may well come when you do need it.

If that's the case, leaving a sizable wad of cash in a checking or savings account is an option, but arguably not your best one. These accounts pay little to no interest. If you're willing to make a minimal amount of effort to shop around, you can find a high-yield money market fund you like instead. Such accounts are currently paying in the ballpark of 4%, and almost all brokerage firms and most online banks offer them.

Now, moving money into and out of such funds involves buying and selling just like an ordinary mutual fund. So, to convert that money back to something liquid and cash-like will take one full business day. It's certainly worth the trouble, though, for a good interest rate on the kind of money you're likely to be reallocating with an RMD.

3. Invest it -- or reinvest it -- with its new taxable status in mind

Most people slated to collect a required minimum distribution who don't actually need the money at that time are likely just going to reinvest it.

However, if you're only going to repurchase the same investments you sold to facilitate the RMD, you need not bother. You can simply request a transfer of assets from an IRA and into an ordinary brokerage account. Just instruct your broker/custodian to do what's called an in-kind transfer. It may take an extra day or two to complete, but you'll still get a precise distribution value figure for the day the transfer was officially done.

That being said, while you're moving things around anyway, you might want to use the opportunity to make some smart changes to your portfolio. Just consider the new taxable status for any freed-up money or assets. Nothing that ever happened within your IRA was a taxable event. Now, everything this money could become presents a potential tax liability. If you want to keep your tax bill to a minimum, you probably won't want to invest your entire RMD in dividend stocks. While they're riskier, buy-and-hold growth stocks are also rather tax-efficient.

4. Start saving for a Roth conversion

Finally, if you know taking taxable withdrawals out of your retirement account every year is going to be more of a drag than you care to deal with, you've always got the option of converting an ordinary IRA into a Roth IRA -- Roths aren't subject to RMDs.

The downside to this move is that when you convert money from an ordinary IRA into a Roth, all the taxes on this withdrawal come due at once. This can get expensive, especially if doing so bumps you into a higher tax bracket for the year. That's why many people who opt for Roth conversions perform them over the course of multiple years, completing the conversion in tranches, each of which is a relatively small income-taxable event. Assuming you'd rather not leave any money out of the newly converted (but still tax-deferring) Roth when you don't have to, you can cover this tax bill with other funds ... including your RMD money.

Just bear in mind that a Roth conversion doesn't satisfy your RMD for that year. And, paying taxes on one doesn't negate the tax bill for the other. Every year's required minimum distribution is already determined at the end of the prior year, and is owed whether you do a conversion that year or not. If you like this idea, you'll simply want to convert as much money as possible as quickly as possible to keep your RMDs -- and the number of years you must take them -- to their lowest-possible minimum.

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

• You don't need to start your Social Security benefits and IRA withdrawals at the same time.

• You may wish to work more years -- and so consider what kind of work you can reasonably do.

• Adding a few more years of wage-producing work could also bolster your calculated benefits.

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

You probably already know that postponing your Social Security retirement benefits will make your eventual payments bigger. Specifically, as things stand right now, for every month after reaching your official full retirement age (or FRA) that you wait to claim, your future payments grow to the tune of 2/3 of 1%. That's 8% per year, for a little more meaningful perspective, which isn't a bad little pay bump.

And the program will continue adding this credit every month you postpone your payments all the way until you turn 70. With the average monthly Social Security check now worth $1,976, waiting this long to file for benefits can mean a few hundred extra bucks per month. It's easier said than done, however. Life's realities -- like health issues or expenses -- can get in the way.

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With that as the backdrop, here's a look at three things you can do to help yourself delay claiming Social Security's retirement payments for as long as possible, beefing up the size of your checks once you do decide to initiate these well-earned benefits.

Start your IRA distributions before your Social Security payments

Many retirees begin collecting Social Security payments and start living on their retirement savings right after they retire. They often have to, in fact -- life requires it. Even if the mortgage is paid off, groceries must still be bought and utility bills need to be paid.

You're certainly not required to tap both sources of retirement income immediately after you stop earning a work-based income. If you only need one or the other, only utilize one and let the other continue growing for at least a little while longer.

But why not claim Social Security benefits first and let your retirement savings continue to grow in the interim? There's certainly a case to be made for this alternative. For instance, if health issues create a better-than-average chance of shortening your life span, you may be better served by collecting as much Social Security as you can while you can. In this same vein, when you initiate your Social Security benefits can potentially impact your spouse's Social Security income later in life.

Conversely, if you've got a sizable stash of money in an ordinary (non-Roth) IRA or 401(k), taking more but smaller taxable distributions from these accounts by starting withdrawals at a relatively early age might reduce your total lifetime tax bill resulting from these distributions. Withdrawals from retirement accounts are also flexible, meaning you can take more, or less, as needed.

That's not the case with Social Security. What you get is what you get, and with one time-limited exception, once you start collecting Social Security you don't have the choice of stopping.

Unfortunately, the only way to know for sure which of these plans makes the most sense for you is by pulling out a pencil and paper and doing a side-by-side comparison. This will require a bit of data-gathering just to make sure you've got all the information you'll need to do the math. But it would be time well spent if you've feasibly got the option of only tapping one source or the other when starting your retirement.

Consider the practicalities of working for more years

That being said, if delaying Social Security benefits for as long as possible means you'll also need to work -- at least part time -- to make ends meet in the meantime, some strategic career planning may be in order. Namely, you'll want to make sure you're able to continue working past an age when many other people are calling it quits.

And it's not just a matter of making sure your age doesn't translate into health-related reasons for leaving the workplace, although this is certainly something to consider. (For example, handling heavy equipment, tools, and materials can take a sizable toll on an older body. If the option to move to a more administrative role materializes, take it.)

Later in your career also isn't a time to sacrifice job security for a chance to work at a start-up that might be out of business within a year, for instance. The point is, you want to give yourself the very best chance of continuing to work well past your earliest eligibility for Social Security benefits.

Make as much money as you (reasonably) can for at least 35 years

Finally, not only will holding off on the initiation of your Social Security benefits make your eventual payments bigger, but postponing these payments could also give you more time to pay more Social Security taxes that bolster your future benefit.

Many people may not realize it, but when the Social Security Administration determines how much it owes you in retirement benefits, it looks at your 35 highest-earning (adjusted for inflation) years. Not working a total of 35 years doesn't mean you won't get anything -- the Social Security Administration simply credits you zero dollars' worth of income for every year less than 35 that you worked.

This, of course, results in a smaller benefit. Even if you're not "maxing out" your taxable work-based income, though, something is better than nothing if you'd otherwise have fewer than 35 years' worth of taxable wages.

But what if you've already worked a full 35 years? There may still be an upside to continuing to work. If you happen to be earning relatively more now than you did earlier in your career, these higher-earning years will replace any lower-earning ones when Social Security determines which of your work years are your 35 best in terms of taxable work-based wages.

Of course, working for longer also allows you to tuck more away into a retirement savings account. Just be realistic. If you physically shouldn't continue to work or if you're miserable while you're working, don't do it. No amount of money is worth lowering your overall mental and physical well-being at any stage of your life.

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

• Amazon’s flexibility is the source of its competitive edge, and the reason it can continue growing indefinitely.

• Uber Technologies is plugged into a major societal shift that could fuel big growth well into the distant future.

• American Express’ business is more -- and more resilient -- than it seems on the surface.

• 10 stocks we like better than Amazon ›

Is your retirement nest egg where it needs to be right now? That is to say, is it big enough at this stage of your life to ensure it will be big enough then?

Most Americans don't think theirs is. Although most people are saving something, as data from The Motley Fool's in-house research arm highlights, only 34% of Americans feel like they're actually on track for the comfortable retirement they're envisioning for themselves. The other 66% fear their golden years are going to be underfunded.

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If you're one of the 66%, although you can't go back in time and change the past, you can change your current growth trajectory by owning more of the right growth stocks. Here's a closer look at three such names that could beef up the returns on your retirement savings.

Amazon

Yes, Amazon (NASDAQ: AMZN) is a frequently recommended trade. It's almost a cliché, in fact. The stock's also one of the market's most reliable long-term performers, with a future that's just as bright as its brilliant past.

Amazon is not only one of the stock market's biggest companies in terms of market cap, it is the top name in North American e-commerce. Numbers from Digital Commerce 360 indicate that Amazon consistently controls roughly 40% of the continent's ever-growing online shopping industry. While its overseas reach isn't nearly as wide, its international arm is now at least reliably operationally profitable as well, thanks to several years of steady growth.

Yet, e-commerce isn't Amazon's breadwinning business. Although it only accounts for about 16% of its total top line, its cloud computing arm, Amazon Web Services, produces on the order of 60% of the company's total earnings. The growth of both types of business has produced consistent double-digit sales growth for years, which is expected to remain firm for least several more.

Amazon's peer-beating growth rate could actually last indefinitely for one overarching reason. That's Amazon's ability and willingness to adapt -- or even enter new lines of business -- as merited.

Think about it. This company hasn't always been in the cloud computing business. That arm wasn't launched until 2006. Amazon Prime didn't exist until 2005. Even its most basic e-commerce operation has evolved since its infancy. While the website still looks about the same as it did years ago, it's now being monetized as an advertising medium more so than an e-commerce platform. Amazon collected more than $56 billion worth of high-margin ad revenue from its sellers last year, in exchange for featuring their goods. For perspective, that's more operating profit than its domestic and international e-commerce arms produced on a combined basis.

There's every reason to believe Amazon can and will remain a growth monster well into the distant future.

Uber Technologies

Ride-hailing outfit Uber Technologies (NYSE: UBER) isn't just catching on with consumers. It's tapped into a massive sociocultural shift. That's the fading interest in car ownership in favor of using alternative forms of personal mobility (like ride-hailing).

Data from the Federal Highway Administration puts things in perspective, highlighting how the number of licensed U.S. drivers between the ages of 16 and 19 has fallen from 65% as of 1995 to only about one-third now. That's just part of a much bigger paradigm. More and more people are never getting their license at any age.

Then again, why would they become licensed drivers if they're less and less likely to own a car to drive?

While older drivers remain relatively interested in ownership of a vehicle, data from a recent survey performed by Deloitte indicates that 44% of Americans between the ages of 18 and 34 would be willing to not own their own car. This disinterest is growing as time marches on, pointing not just to changing preferences, but a major societal shift as to what constitutes "normal" mobility options.

Uber Technologies' results have long reflected its role in this shift. Revenue growth in the mid-teens is the norm now, and likely to remain the norm for a long while as individual car ownership continues to decline. An outlook from Straits Research suggests that the worldwide ride-hailing and taxi market is poised to grow at an average annualized pace of more than 11% through 2033, although this pace of progress could last far longer than that.

UBER Revenue (Quarterly) data by YCharts.

The kicker: People are quickly falling in love with the idea of same-day delivery of online purchases too, which Uber now also offers. On a constant-currency basis, Uber's delivery revenue grew 22% to nearly $3.8 billion in the first quarter of this year, and now accounts for a little over 30% of the company's total top line.

American Express

Finally, add American Express (NYSE: AXP) to your list of stocks you can -- and arguably should -- buy and hold for decades in your retirement account.

Ostensibly it's a credit card outfit, in the same vein as Visa and Mastercard. There are certainly plenty of similarities between the three companies. There are also a couple of critical distinguishing factors, however.

Whereas Visa and Mastercard only manage payment networks and charge a modest fee for each purchase they facilitate, American Express manages its own payment network in addition to being the credit card issuer itself. This is no trivial detail, either. This much control of the purchase and payment process means serious operational savings.

Perhaps the more important factor at work here, however, is the fact that American Express isn't as much of a credit card middleman as it is an operator of a perks and rewards program that just so happens to be built around credit cards. Some people are willing to pay up to $695 per year just to be able to access private airport lounges, enjoy discounted hotel stays, and receive credit toward entertainment purchases and ride-hailing services (and more).

This makes American Express cards particularly appealing to a more affluent crowd that's less likely to curtail their spending or fail to make payments when economic headwinds constrict personal budgets. That's a nuance that the company's management wasn't shy about highlighting following April's release of its first-quarter results.

You'll probably never see double-digit growth from American Express. You certainly haven't in the recent or not-so-recent past! You will, however, see persistent revenue and profit growth supporting consistent dividend growth and stock buybacks, which quietly add value in their own often-overlooked way. That's how an investment in this stock has easily beaten the performance of the S&P 500 over the course of the past 30 years, when reinvesting the dividends it's paid since then.

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. American Express is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Mastercard, Uber Technologies, and Visa. The Motley Fool has a disclosure policy.

Key Points

• Verizon and Realty Income may not offer much growth, but their ability to fund growing dividend payments is rock-solid.

• Pfizer struggled following the wind-down of the coronavirus pandemic, with nothing offsetting declining sales of Paxlovid. That's changing.

• Exchange-traded funds are an easy diversification solution for at least a portion of your dividend portfolio.

• 10 stocks we like better than Pfizer ›

Does the prospect of economic uncertainty have you rethinking your portfolio? Perhaps you'd like to collect a little more cash while the economic headwinds are blowing? It's not an unreasonable concern. Plenty of other investors are already thinking more defensively than they've felt they needed to in a while.

To this end, here's a closer look at five high-yielding dividend stocks to consider adding to your portfolio sooner rather than later, until it's clear the worst is behind us.

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. Verizon Communications

Dividend yield: 6.2%

Verizon Communications (NYSE: VZ) is, of course, one of the country's biggest wireless service providers, boasting well over 100 million paying customers who collectively handed over nearly $135 billion worth of revenue last year alone. Of that, $18 billion was turned into net income, $11.25 billion of which was dished out to shareholders in the form of dividends. That's in line with the company's long-term norms.

There is an arguable downside here. That's growth ... or lack thereof. The well-saturated U.S. wireless market doesn't offer much in the way of upside potential above and beyond simple population growth. Verizon is finding some inroads within the institutional/private 5G communications space, but that's a highly competitive market. There's just not a ton of expansion to be added here either.

What Verizon may lack in growth potential, however, it more than makes up for in consistency and sheer payout. Nobody's interested in giving up their mobile phones, which supports a sizable forward-looking yield of 6.2% that's based on a dividend that has now been raised for 18 consecutive years. Not bad.

2. Realty Income

Dividend yield: 5.6%

Realty Income (NYSE: O) isn't a stock in the traditional sense. Rather, it's a real estate investment trust, or REIT. That just means it owns a portfolio of rent-bearing real estate.

REITs trade just like ordinary stocks do, and pay dividends the same way that dividend stocks do, too. And Realty Income brings something else to the table that's pretty unique in addition to its sizable forward-looking yield of 5.6%. That's a monthly dividend payment, as opposed to the quarterly cadence you'll get with most other dividend stocks.

Realty Income's specialty is retailing real estate. In light of the so-called "retail apocalypse" that seems to never end, this focus seems like a liability. Just take a step back and look at the bigger picture. While numbers from Coresight Research point out that 7,325 U.S. stores were shuttered last year, 5,970 new stores were opened (or reopened). Realty Income further narrows this gap by serving the strongest survivors in the business. Its top tenants include 7-Eleven, Dollar General, Dollar Tree, and FedEx, just to name a few. Underscoring the quality caliber of its renters is the fact that its occupancy rate currently stands at an industry-beating 98.5%, and only fell to 97.9% in COVID-crimped 2020.

This resilience is one of the reasons the REIT has been able to raise its payout annually for the past 30 consecutive years.

3. SPDR Portfolio S&P 500 High Dividend ETF

Dividend yield: 4.6%

Speaking of dividend stocks that aren't actually stocks, add the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) to your watch list, if not to your portfolio.

An ETF (or exchange-traded fund) is a basket of stocks with a common characteristic. In this instance, these tickers are all part of the S&P 500 High Dividend Index, which tracks the 80 highest-yielding names within the S&P 500.

These include Philip Morris, toymaker Hasbro, AT&T, and Ford Motor Company, for reference. None of these names has a great deal of growth firepower. All of them, however, are healthy dividend payers. Most of them also have a solid track record of dividend growth, even if it's not required for inclusion in the underlying index.

Sure, you can probably find higher dividend yields than the one SPYD offers. The aforementioned Realty Income and Verizon both boast bigger ones, for instance. The SPDR Portfolio S&P 500 High Dividend ETF is still an incredibly simple way of achieving a well-diversified mix of dividend stocks though, with a little more potential for capital appreciation than Verizon or Realty Income offer.

4. Pfizer

Dividend yield: 6.9%

It's no secret that drugmaker Pfizer (NYSE: PFE) has underperformed since the wind-down of COVID-19, which upended sales of its Paxlovid approved to treat the disease. The company's top line has slipped from 2022's $100 billion to only $64 billion last year, for perspective, and analysts aren't looking for any sales growth this year or next either. That's the chief reason Pfizer shares continue to flounder.

If you can look just a little further down the road though, some new blockbuster drugs are in the works -- drugs like vepdegestrant, for the treatment of ER+/HER2- metastatic breast cancer. While it will be competing with plenty of other therapies in this same space, it's noteworthy that the FDA fast-tracked this drug, which is being co-developed with Arvinas.

And that's just one. Pfizer got a total of four promising oncology drugs with its 2023 acquisition of Seagen, and now has over 100 clinical trials underway, 30 of which are in phase 3 (late-stage) testing. Indeed, the company believes it's got eight oncology candidates in its developmental pipeline that could become blockbusters by 2030. Little of this long-term upside is being reflected in the stock's present price, however, even though it arguably should be.

More to the point for interested income investors, this pharmaceutical stock's weakness has pushed its forward-looking dividend yield up to nearly 7% at a point where the pharma giant is on the verge of significant prolonged revenue and profit growth.

5. Global X Nasdaq 100 Covered Call ETF

Dividend yield: 14%

Finally, consider adding a stake in the Global X Nasdaq 100 Covered Call ETF (NASDAQ: QYLD) to your dividend portfolio.

It's not a stock. It's an exchange-traded fund. And an unusual one at that. While it holds the same tickers that make up the tech-heavy Nasdaq-100 index, serving as an index fund isn't its primary purpose.

Rather, this ETF's purpose is to generate reliable income that's regularly distributed to shareholders by selling covered calls against the ETF's stock holdings. It's an income-generating process called "buy-write," in fact -- you're buying a stock, and then "writing" (or selling) call options on those shares, essentially using them as collateral.

And the process works. Although the income generated by writing covered calls over and over again can be erratic (don't count on that trailing 14% yield going forward), the resulting reliable yields are typically big even if they're not precisely predictable.

There's also a big downside, though. That is, this fund is almost certainly guaranteed to underperform the Nasdaq-100 itself, even after factoring in all of its sizable dividend payments. That's just the nature of selling covered calls -- the strategy doesn't let you fully participate when the market's rallying the most. Writing options is just a means of monetizing stock holdings when they're mostly moving sideways, or losing ground.

Still, with a double-digit yield, even only capturing a portion of the Nasdaq-100's long-term upside isn't a bad bet. It's just arguably not the only dividend-paying investment you'd want to own at any given time, mostly due to its inconsistent payments.

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 $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

James Brumley has positions in AT&T. The Motley Fool has positions in and recommends FedEx, Pfizer, and Realty Income. The Motley Fool recommends Hasbro, Philip Morris International, and Verizon Communications. The Motley Fool has a disclosure policy.

Key Points

• Future retirees should think in terms of maintaining their standard of living while working.

• Waiting even just a couple more years to retire can make a world of difference to your future retirement income.

• Simply establishing a target and making a plan to reach it is helpful, even if you’re never actually going to meet that goal.

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

Are you creeping up on the age of 65? Or maybe you're already there? If so, even if it's not happened yet, retirement is on your near-term radar.

This raises an important question for anyone around this age, but particularly for those near-65-year-olds who may still be working: How much should you have saved up for retirement by now?

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There's no absolute answer, since everyone's financial situation and needs are different. There is a rather specific rule of thumb, however, that just might help you figure out if you've got enough tucked away.

There is no universal number, but...

The proverbial magic number is $1.26 million, by the way. That's the amount of savings Northwestern Mutual's most recent annual survey of U.S. investors suggests people think they'll need to retire comfortably, down from 2024's figure of $1.46 million.

Just take the number with a grain of salt. It reflects a huge range of inputs. Plenty of people would be satisfied with half that amount. Others would still worry with twice as much.

Perhaps a more meaningful figure, therefore, is a number that would help you maintain the particular standard of living you enjoyed during your working years. A multiple of your current income does the trick, since this amount of savings will ultimately be used to generate retirement income.

That number is? About 10 times your annual salary as of the end of your working years, according to mutual fund company T. Rowe Price. For example, if you're earning $100,000 per year, you'll want to have on the order of $1 million saved up by the time you retire to ensure you're not downgrading your lifestyle.

The figure isn't etched in stone, to be clear. T. Rowe Price concedes that a multiple of anywhere between 7.5 and 13.5 times your late-career yearly earnings would be a reasonably healthy sum.

That range does align with similar suggestions from brokerage firms Charles Schwab and Merrill Lynch, however.

Be ready to make a tough decision

But you're miles away from even the low end of the suggested range? Don't sweat it too much -- most people are. Mutual fund giant and retirement plan administrator Vanguard reports that as of last year, the average account balance for 65-year-old (and up) participants in its retirement plans was just under $300,000, while the median amount was a little less than $100,000. Even adding non-work-related retirement savings to the mix doesn't seem like it would get most of those people to T. Rowe Price's suggested target.

Don't panic if you're part of this crowd. See, you've got options... particularly if you're still working.

Chief among these options is continuing to work for at least a little while longer. Doing so provides a double benefit to your retirement savings efforts. First, it lets you tuck away more income in a tax-deferring account funded by tax-deductible contributions. While this money won't have a great deal of time to grow, it will at least grow without being impeded by taxes. (Even cash-like money market mutual funds are paying on the order of 4% right now. Not bad.) If you're like most of your peers, most of life's major expenses like mortgages and school are in the rearview mirror, so you've got a fair amount of income you can put toward retirement.

The second benefit of continuing to work? It allows you to postpone the initiation of Social Security's retirement benefits.

This is no small matter, either. Even just waiting another two years to reach your full retirement age of 67 would translate into monthly Social Security payments that are about 12% more than what you'd collect beginning at age 65. And if you can wait until you're 70 years old before claiming Social Security, your payments will be about 25% bigger than the ones you'd be getting if filing at 67 years of age.

Just setting a target is a great start

Again, it's just a rule of thumb. Most people survive just fine with far less, while others end up running out of money despite starting out retirement with a far bigger sum. How you handle your finances in retirement -- especially your first few years, when you're also still seeking investment growth -- can make the difference between having plenty and not having enough.

Nevertheless, this is a rule that a bunch of professional planners agree on. Whatever you can do to get yourself as close to this target amount as possible would be time and energy well spent.

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" »

Charles Schwab is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends T. Rowe Price Group. The Motley Fool recommends Charles Schwab and recommends the following options: short June 2025 $85 calls on Charles Schwab. The Motley Fool has a disclosure policy.

Key Points

• The market may be entering a period of subpar performance for growth stocks.

• Safer, income-oriented holdings may be on the verge of a market-beating phase.

• This may be a good time to invest in companies that are more off the beaten path.

• 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›

Want to beat the market? Most investors do. It's just easier said than done. Indeed, the risk and effort needed just to attempt to outperform the market can easily result in your underperforming it. That's why plenty of investors are content to merely match the stock market over the long term by buying and holding index funds.

Every now and then though, it makes sense to rethink the strategy of simply investing in the market as a whole or owning its obvious leading names. This may be one of these times.

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That was the key takeaway from a recent interview with The Motley Fool's co-founder and CEO Tom Gardner. "If you're looking for good returns over the next three to five years that beat the market," he said, "I think you need to look where others aren't looking right now." And he's right.

The question is, what does this mean in practical, actionable terms for the average investor? To answer that, it's helpful to first look three to five years back in time, and then, look back a bit further.

Not the long-term norm

As it is in life, the one constant in investing is change. The way things are now isn't the way they were in the past, nor is it the way they'll be in the foreseeable future. One only has to look back over the past few years to see it.

The so-called "Magnificent Seven" stocks (and their close peers) that have performed so brilliantly since 2020? They weren't exactly superstars in the years prior. Apple was hit-and-miss between 2012 and 2016, for instance, against a backdrop of slowing iPhone sales. Nvidia shares, which soared in the mid-2010s, were wrecked in 2018 when the crypto-mining craze cooled off. Meta Platforms (then Facebook) and Tesla performed equally inconsistently during the half-decade leading up to 2020, even if for different reasons.

But all of these powerhouses happened to benefit from a confluence of events: the explosion of artificial intelligence, rising interest in electric vehicles, and even demand driven by the advent of the COVID-19 pandemic. And due in part to their size, the raw strength of those few companies set the bullish tone for the rest of the market.

AAPL data by YCharts.

That upward push wasn't particularly healthy or sustainable, however. Indeed, it has arguably been unhealthy, by virtue of the lack of overall contribution to it by a broader group of stocks.

For perspective, the S&P 500's seven biggest names today account for roughly one-third of its total value. Most of "the market's" bullishness in recent years was propelled by the aforementioned Nvidia and Meta, along with Microsoft and Amazon -- their far-above-average gains had an exaggerated impact on the S&P 500's performance specifically because they make up such large portions of the cap-weighted index.

To further clarify this, while some of these megacap stocks may now be back to record highs thanks to their big recovery from April's lows, fewer than a tenth of the S&P 500's constituents are actually in record-high territory. Nearly half of the index's tickers are still in the red for the year, in fact.

In short, the S&P 550 -- our most common proxy for the market -- has performed well for a while now thanks almost entirely to the gains of a handful of growth stocks in an environment that firmly favored them. That sort of cyclical dynamic can't be expected to last forever.

Here comes the cyclical shift

So now what?

Broadly speaking, some of the key conditions that tend to move growth stocks out of favor are already in place. Interest rates are higher and the economy has shifted to a slower-growing -- even if stable -- scenario. It's worth adding that the mania for artificial intelligence is finally settling down, with no obvious new trends on the horizon to stoke unchecked bullishness. Previous manias like electric vehicles and renewable energy aren't apt to be renewed either.

Ergo, without anything new or exciting enough to make investors ignore companies' lack of profits or outrageous valuations, Gardner believes "you need to look for dividend payers, more value-oriented investing," which rewards basic attributes like predictability and profitability. Something as simple as the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) or the Vanguard Value ETF (NYSEMKT: VTV) would fit the bill.

Picking stocks that are likely to be among the best performers for the next three to five years doesn't necessarily need to be a black-and-white, value-versus-growth affair, however.

"There are hundreds of good stocks to buy right now and own for the next five years, but they're probably not the most well-known [or] actively followed," said Gardner. "It's probably where people aren't looking. It's probably small caps. It's probably under-followed names."

Translation: Focus less on the now-struggling Magnificent Seven and FAANG components that have been considered must-have holdings for most of the past five years, and instead focus on the stocks of companies that are thriving even without the limelight.

Such businesses perhaps to consider now range from utility giant NextEra Energy to online bank SoFi Technologies to supermarket chain operator Kroger to beverage and snack powerhouse PepsiCo (which at its current share price is yielding 4.2%). These are relatively boring companies, but there's nothing boring about beating the market.

Take your time, but do embrace the change

So should this be an all-or-nothing strategic shift in your portfolio? No. Gardner is not suggesting any investor should simply upheave all of their familiar growth names and replace them with value stocks or dividend payers. Some growth stocks will perform well for the foreseeable future even if most large-cap growth stocks don't. Every prospective stock pick should still ultimately be made on a case-by-case basis based predominantly on the company's particular merits and prospects.

Investors should now be embracing a new philosophical mindset, though. Much of what has worked well in recent years -- like latching onto the market's biggest companies as they got bigger thanks to the advent of AI -- isn't apt to work as well going forward. Value stocks, dividend payers, and the more obscure stories may be better positioned to perform from here. Be sure to adjust your portfolio accordingly.

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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. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Meta Platforms, Microsoft, NextEra Energy, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Value ETF. The Motley Fool recommends Kroger and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Does the goal of saving enough money for a comfortable retirement seem so far out of reach that it's not even worth trying? That's understandable. The $1.26 million that Northwestern Mutual says the average American thinks they'll need to retire comfortably is a large, intimidating number.

Don't dismiss the power of doing just a little bit every day, though. While this approach has a painfully slow start, once it reaches a tipping point, growth can become explosive. In fact, if you do it for long enough, tucking away a mere $10 per day can get you to the million-dollar mark. Here's the math.

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Time and commitment to regular contributions are key

To illustrate the point, a handful of reasonable assumptions are necessary. Chief among them is the assumption that you'll be investing this money in an S&P 500 index fund, which continues delivering the annualized gains of about 10% that it has averaged over the long term. Let's also assume you only set aside $10 on weekdays when the stock market is open. That's about 250 days per year, or $2,500 of annual contributions. Finally, the math assumes this is all being done within an IRA, so your progress made along the way won't be impeded by taxes.

Although the market's volatility means your retirement savings journey wont happen with the same consistent growth the graph below suggests, investing $10 per day in an S&P 500 index fund 250 days per year should get you to $1 million in just a little under 38 years.

That's admittedly quite a long time. If you start investing when you're 18 years old, this plan assumes you'd still be setting that $10 aside every weekday at least until you turn 56. And if you don't start until you're 22 years of age -- perhaps when you wrap up your undergraduate education -- that pushes the seven-figure milestone back to the age of 60.

Let's also not forget that while $1 million is certainly a respectable amount of money, it's not enough to provide a lavish retirement completely free of financial concerns. You could still easily burn through that sum in your golden years if you're not careful.

Also, bear in mind that $1 million won't be the same sort of nest egg in 38 years that it is now. Assuming that inflation continues to average 2.8% annually, in 2063, $1 million will be more like $350,000 in today's dollars. That's a huge difference in actual buying power.

On the other hand, you'll likely receive pay raises as you age, providing you with more investable income. Most people will also be working until they're 62 or older regardless of when they first go to work, giving you a few more high-earning years to make some meaningful contributions to your retirement account -- and a few more years to let compounding growth bolster your portfolio balance.

Just start

If you're still so discouraged about the slow progress you've personally made with your own retirement savings (despite your best efforts) that you're thinking about giving up, realize the start is slow for most people.

Go back and take a good look at the chart above. Notice that the annual net gains on your accumulated savings don't start getting really big until about halfway through that 38-year time frame. Once your yearly investment gains become greater than your contributions of new cash, the growth of your nest egg accelerates sharply.

This might help make the point in a different way: Based on the assumptions mentioned above, every $1 you save and invest now will be worth $2.60 in 10 years. In 20 years, however, that invested dollar will be worth $6.73. And in 38 years, that single dollar will be worth a whopping $37.40, as long as you remain invested and reinvest any dividends dished out along the way.

And to be clear, in all three cases, that's without any additional money being added to the account in the meantime. That's the power of compounding growth, or more accurately, the power of compounding growth plus plenty of time. The key is to get started as soon as you can in life.

Even if you can't consistently come up with an extra $10 every day right now, that's OK. Save what you can when you can do so. Investing something is always better than investing nothing. Setting aside just a few hundred bucks per year now can still make a meaningful difference down the road.

Just be sure you're making the most of your savings. To meaningfully outgrow inflation, you need to be in the stock market for as long as you can. Leaving your savings in the bank -- even in an interest-bearing savings account -- won't be enough.

Fortunately, many discount online brokers such as Schwab and Fidelity have no minimum purchase requirements on some of their funds, and very low minimum purchase thresholds on others. For that matter, they also don't impose minimums to open most kinds of brokerage or retirement accounts. So, regardless of how little you may be able to set aside for retirement at the beginning of your investment journey, there's nothing to stop you from picking out a smart index fund and starting now.

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" »

Charles Schwab is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Charles Schwab and recommends the following options: short June 2025 $85 calls on Charles Schwab. The Motley Fool has a disclosure policy.

Can where you live affect how much of your retirement income you keep? As a matter of fact, it can. A small number of U.S. states are very tax-friendly to begin with, while the majority of states are quite accommodative to most retired people.

Here's what you need to know about each state's current treatment of retirees' income. Just be warned: once you're done reading, you just might be motivated to make a major move.

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 »

Social Security benefits are (almost) always untaxed

It was never intended to be anyone's sole source of retirement income, but Social Security is certainly an important one for plenty of people. The Center on Budget and Policy Priorities reports that the federal entitlement program is the single-biggest source of cash flow for the bulk of its retired beneficiaries, accounting for at least half of the income for 4 out of every 10 recipients.

Given that the program's average monthly benefit is now only $2,002 and caps out at a maximum of $5,108 per month, anyone who's highly dependent on Social Security income isn't exactly living lavishly. Fortunately, most states don't impose any income tax on these benefits. A total of 41 states don't tax Social Security income, in fact, in addition to Washington D.C.:

1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. California
6. Delaware
7. Florida
8. Georgia
9. Hawaii
10. Idaho
11. Illinois
12. Indiana
13. Iowa
14. Kansas
15. Kentucky
16. Louisiana
17. Maine
18. Maryland
19. Massachusetts
20. Michigan
21. Mississippi
22. Missouri
23. Nebraska
24. Nevada
25. New Hampshire
26. New Jersey
27. New York
28. North Carolina
29. North Dakota
30. Ohio
31. Oklahoma
32. Oregon
33. Pennsylvania
34. South Carolina
35. South Dakota
36. Tennessee
37. Texas
38. Virginia
39. Washington
40. Wisconsin
41. Washington, D.C.
42. Wyoming

It's worth mentioning that just because a state doesn't appear on the list above doesn't necessarily mean you'd owe state income taxes on any Social Security benefits you collect while living there. In several cases -- as is the case with federal taxation of your Social Security income -- some or even all of it can qualify as exempt.

You'll want to compare your retirement income to a particular state's tax thresholds to see how much (if any) income taxes you would actually owe there.

Taxation of other retirement income

Tax-free Social Security benefits are obviously a win for retirees. But they're not the only source of income for most seniors even if they're the most important one for many of them. Plenty of retirees also have 401(k) accounts and traditional IRAs, and withdrawals from those accounts are counted as taxable income. Some are also still drawing from pensions, or will eventually do so. What about these sources of retirement income?

Nine states don't tax any retirement income, but not because they're specifically looking to give their senior residents a break. They simply don't impose any state-based income taxes at all. They rely instead on corporate taxes and sales taxes to fund their state government programs. Those nine are:

1. Alaska
2. Florida
3. Nevada
4. New Hampshire
5. South Dakota
6. Tennessee
7. Texas
8. Washington
9. Wyoming

Note that while New Hampshire previously imposed income taxes on its residents' dividends and interest income, as of the beginning of this year, those taxes are no longer in effect.

Then there are four states that do tax the incomes of retired residents, but only ordinary work-based wages. Qualified retirement income coming from pensions, individual retirement accounts, and the like aren't subject to taxation in:

1. Illinois
2. Iowa
3. Mississippi
4. Pennsylvania

Each of these four states still has reasonable rules about who can actually claim eligibility for tax-free retirement income. In Iowa, for instance, you'll still need to be at least 55 years old to qualify. In Mississippi and Pennsylvania, retirees and their plans must also meet certain requirements. Check out each state's tax/revenue website for details if these are states you live in or might retire in.

As for military retirement benefits or pensions offered to state employees (and other comparable pension programs), most states offer some tax breaks for these plans, while several don't tax this income at all. The rules can be a bit inconsistent from one state to another, though, and are regularly changing anyway. So, if this applies to you and there's a certain state you have on your retirement radar, you'll want to check for its specific rules.

Just keep the bigger picture in mind

There's more to the matter than simply minimizing your yearly tax bills, to be clear. For instance, there's also the cost of living -- many of the states that don't have income taxes can also be relatively expensive to live in. There's also quality of life to consider, and the possibility that a move to a tax-free state would take you away from friends and family.

Also bear in mind that while some states may be tax-friendly to retirees, again, you'll still be subject to the same federal taxes no matter which state you live in. This can include a portion of your Social Security income. Federal taxes, of course, account for the bulk of everyone's yearly taxes. So, if you're looking for a huge tax break, moving to a different state probably isn't going to make a life-changing difference on that score.

Still, if you were considering a geography-based lifestyle change anyway, and as much as a few thousand bucks extra a year would make a difference for you, picking a destination that could cut your tax bill certainly isn't the craziest of ideas.

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.

The doubt surrounding this stock makes enough superficial sense. The company took on a massive amount of debt to survive the COVID-19 pandemic, after all. While the contagion is now mostly in the rearview mirror, all this debt is still on the balance sheet.

There are a couple of important details the market's just not taking heed of, however, that make this name a compelling buy.

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The company? Leisure cruise outfit Carnival Corp. (NYSE: CCL). Here's the deal.

Carnival, up close and personal

There's the Carnival you know ... the one consisting of a fleet of 29 boats offering affordable vacation experiences promoted with some rather engaging advertising. Then there's the Carnival you probably don't know. That's brands like Princess, Holland America, Costa, AIDA, and Cunard, which operates the Queen Elizabeth and Queen Mary 2. All told, the corporation owns 93 different ships offering a wide array of travel experiences at a range of price points.

They're all in the same proverbial boat, of course, by virtue of all being part of the same organization that amassed about $24 billion worth of new long-term debt during and because of the coronavirus contagion that's costing it roughly $2 billion in interest payments per year. For perspective, the company's generating about $25 billion in annual revenue right now, roughly $2 billion of which is converted into net income. Carnival's current market cap also stands at just over $30 billion.

This snapshot of the company's condition and capitalization isn't exactly compelling. Indeed, that's a big reason shares still trade well below their pre-pandemic peak -- investors are just fearful that the cruise company may never shrug off the pandemic's impact, particularly if economic weakness stifles consumerism.

There's some other relevant information worth considering here, however.

Carnival has an encouraging past, present, and future

Getting straight to the point, despite all of its presumed problems and pitfalls, Carnival is doing fine. It's doing great, in fact.

Take its first-quarter results as an example. Record-breaking revenue of $5.8 billion was up 7.5% year over year, doubling operating income thanks to improved operating margins.

And Q1 wasn't a one-off event. These numbers extend reestablished growth trends that are expected to persist at least through the remainder of this fiscal year. Its advanced bookings for the rest of the fiscal year remain at record highs reported for last year. That has pushed total customer deposits up to a record-breaking $7.3 billion as of the first quarter. In fact, last quarter and the start of the quarter that end in May were so strong that the company opted to raise its full-year guidance despite what seem to be economic headwinds. What was initially expected to be per-share earnings in the ballpark of $1.70 has since been raised to a bottom line of approximately $1.83 per share. All told, analysts are collectively calling for Carnival's sales to grow on the order of 4% this year, pumping up profits at a considerably faster pace.

What gives?

As it turns out, while consumers may be tightening their belts and purse strings in some ways, in other ways, they're not. When it comes to travel and experiences, for instance, people aren't skimping even if they are adjusting how they're getting the most bang for their discretionary travel buck. Deloitte's most recent ConsumerSignals survey indicates that 53% of U.S. adults still plan on taking a vacation this year despite the concerning economic backdrop, up from 48% at this point in 2024.

And cruising is one of the most likely ways they'll vacation for one overarching reason.

There is an industrywide tailwind pushing Carnival forward

Dollar for dollar, maritime leisure cruises provide vacationers with the best return on their investment. Food, lodging, and transportation to and from tourist destinations are combined into a single, cost-effective package.

And plenty of people are still biting. In its recently published outlook for 2025, the Cruise Lines International Association predicts a record-breaking 37.7 million people will take an ocean cruise this year, up 9% from last year's count of 34.6 million, and en route to 41.9 million cruisers in 2028. The organization notes that these travelers are also opting to take longer cruises, in addition to taking more total cruises.

The biggest impediment to the business's growth? Mostly a lack of boats, including for Carnival.

But that's changing, too. The company expects to take delivery of three more ships between now and the end of 2028, with an average of two new boat deliveries per year beginning in 2029.

That's a lot of additional -- and expensive -- capacity. It's not apt to be a costly problem, however. The Cruise Lines International Association highlights that only 2.7% of the world's international travel and tourism is leisure cruises. This leaves a ton of room for further market penetration. And in this same vein, industry research outfit Precedence Research believes the global leisure cruise market is set to grow at an annualized pace of just under 6% through 2034, held back only by the industry's lack of capacity to build boats faster.

Don't fixate on the wrong details

But that debt? It's a legitimate question to raise. It's not quite the concern it's being made out to be though.

Yes, there's a cost to it. It's a decreasing cost though, with Carnival's interest payments falling from just over $2 billion in 2023 to just under $1.8 billion in 2024. It continued to fall in Q1, too, largely because the company continues to pay off these loans early. Over the course of the past year, total long-term debt has been pared back by nearly $2.5 billion, yet the company's still reporting a profit.

It's not an ideal cost structure, but it is sustainable for as long as the company needs it to be while it whittles down its long-term liabilities.

And as for Wall Street and interested would-be investors, we've seen this stock make a shallow recovery from its 2022 bear market low. It's lagged the overall market though, bogged down by the obvious concerns. Now dig deeper. The stock's trading at less than 13 times the company's full-year earnings guidance of $1.83 per share, which is a bargain price for nearly any company, but a tremendous value for a company as reasonably and reliably profitable as this one is.

And for what it's worth, at least some Wall Street analysts see it. Most of them still rate this subpar performer a strong buy, while supporting a consensus price target of $27.69, nearly 20% above the ticker's present price. That's not a bad way to start out a new trade.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.

If you intend to file for Social Security's retirement benefits in 2025, do you know how big your checks are going to be? The average retiree is seeing monthly payments of $1,976 this year, for perspective, although that's a number made up of a wide range of inputs. Some people are only collecting a few hundred bucks per month, while a small handful of others are enjoying the maximum-possible payment of $5,108.

This begs the question... how exactly does somebody "max out" their Social Security retirement income?

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Here's how.

Time

Yes, the size of your Social Security checks is largely a function of how much money you make during your working years -- the more taxable income you earn, the more you get back in the form of Social Security benefits.

The formula for figuring out your future payments isn't solely based on your lifetime earnings, though. There are three unique components to the calculation.

One is the number of years you regularly worked a paying job. For the purpose of determining your eventual retirement benefit, the Social Security Administration (SSA) credits you for your 35 highest-earning (adjusted for inflation) years.

But you're not going to work a full 35 years? That's OK. That won't prevent you from receiving any Social Security payment. It just means your payment is reduced accordingly. The program will assign you earnings of zero dollars for any years less than 35 that you didn't receive work-based wages.

Working more than 35 years doesn't necessarily help either, by the way, unless some of those years are significantly higher-earning years that will displace lower-earning ones when the SSA looks for your 35 top-earning years.

Income

Simply working a full-time job for a minimum of 35 years, however, still doesn't mean you'll be banking the biggest Social Security payments. The amount of money you earned in each one of those years is also a factor. Anyone lucky enough to be cashing Social Security retirement checks of $5,108 per month now has annually earned at least an inflation-adjusted equivalent to $176,100 (in 2025 dollars) during at least 35 of their working years. The table below lays out the maximum amount of earnings that was subject to taxation by the SSA for each year going back to 1984.

Year	Taxable Income Threshold	Year	Taxable Income Threshold
1984	$37,800	2005	$90,000
1985	$39,600	2006	$94,200
1986	$42,000	2007	$97,500
1987	$43,800	2008	$102,000
1988	$45,000	2009	$106,800
1989	$48,000	2010	$106,800
1990	$51,300	2011	$106,800
1991	$53,400	2012	$110,100
1992	$55,500	2013	$113,700
1993	$57,600	2014	$117,000
1994	$60,600	2015	$118,500
1995	$61,200	2016	$118,500
1996	$62,700	2017	$127,200
1997	$65,400	2018	$128,400
1998	$68,400	2019	$132,900
1999	$72,600	2020	$137,700
2000	$76,200	2021	$142,800
2001	$80,400	2022	$147,000
2002	$84,900	2023	$160,200
2003	$87,000	2024	$168,600
2004	$87,900	2025	$176,100

Data source: U.S. Social Security Administration.

Earning less than these amounts in these years obviously doesn't prevent you from collecting something in retirement, to be clear -- it just means you'll collect less than the maximum when you finally do claim.

However, exceeding these thresholds is of no additional benefit. You'll pay more in ordinary income taxes by making more money than these amounts, but the SSA's cap on its monthly benefits payments also means there's a cap on the amount of wages it taxes for its own purposes. You know these as FICA taxes.

Think strategically about this particular piece of the formula. If you didn't surpass these annual income thresholds in every year earlier on in your career, but are regularly exceeding these income amounts now, it might make sense to continue working until you'll have at least 35 "high-earning" years. These will displace the lower-earning years the SSA would have otherwise incorporated into its calculation of your payment.

Age

Finally, the age at which you file for benefits is one of the three determinants of your eventual Social Security retirement benefits. Anyone collecting monthly checks of $5,108 now didn't initiate their benefits until reaching 70 years of age.

You can certainly claim benefits well before that mark, to be clear. This year's official full retirement age (or FRA) at which you'll receive 100% of your intended benefits is 66 years and 10 months, and slated to rise to 67 full years beginning in 2026. You can even file as early as age 62, or at any age in between.

There's just a downside for doing so.

The younger you are when you file for benefits, the smaller your payment. By claiming at the earliest possible age of 62, for perspective, the size of your monthly payment is reduced to about 30% less than what it would have been had you waited to file at your FRA.

By waiting to initiate your benefits until well after reaching your full retirement age, conversely, your Social Security check ends up being more than what you'd expect when claiming right at your FRA. Indeed, if you're willing to wait until you turn 70 to claim (when the credit for delayed filing maxes out), your payment is a hefty 25% more than what the program was willing to pay you if filing right at your FRA. That's why a few people are collecting seemingly oversized Social Security checks. They waited a long time to start them.

Just bear in mind that the program will be paying you these bigger amounts for a shorter period of total time than it would have had you filed sooner. After all, your life expectancy doesn't change just by initiating your retirement benefits after reaching your official FRA. That's why waiting this long to claim doesn't always make the most sense. It just depends on your situation, and in particular, your health.

Think beyond Social Security

If you're discouraged by the fact that the maximum Social Security payment is simply out of reach for you, don't be. The vast majority of beneficiaries are seeing far, far less. Only about 0.4% of the program's 51.8 million retired recipients are cashing checks of this size, in fact.

Again, the average monthly payment right now is $1,976. While you can do a little to help yourself on this front, there's not a whole lot you can do here -- you're going to get what you're going to get from the government-managed entitlement program.

Rather than lamenting it, remember that that there's still plenty you can do for yourself above and beyond Social Security, whether or not retirement is on your near-term radar. The rate of return on money deposited into an individual retirement account and invested in the stock market, for instance, is far better than the effective return on the money you're taking out of your paycheck and handing over to the SSA every month. The program's returns on the money it's holding in trust barely beat inflation. You just have to give your own money enough time to grow meaningfully, which means starting to save as soon as you possibly can.

If retirement is already in sight, that's OK too. While it may not have been your plan for your golden years, there are worse things than working a bit in retirement to supplement your Social Security income.

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Are you looking for some new growth stocks now that many of the market's usual favorites -- like Apple and Alphabet -- aren't as compelling as they once were? Don't panic. Great stocks are out there. You just have to dig a bit deeper to find the best ones.

With that as the backdrop, here's a rundown of three brilliant growth stock prospects worth stepping into and sticking with for the long haul. Each one has a business that's built to last indefinitely.

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1. Alibaba

There's the Alibaba Group (NYSE: BABA) you know. That's the Alibaba that owns and operates China's popular e-commerce platforms Tmall and Taobao, and its foreign-facing AliExpress that helps Chinese manufacturers sell to overseas customers. Within its home country, the company enjoys a commanding 40% of the online shopping market, according to wealth management outfit DBS Treasures.

Then there's the Alibaba you don't know. This company also offers cloud computing services, operates a digital entertainment arm, and manages its own logistics/delivery business. It's even working on its own artificial intelligence models meant for consumer and corporate use. Remember the Qwen2.5 model unveiled in January that reportedly performed better than DeepSeek (which had only been revealed a few days earlier as a threat to platforms like OpenAI's ChatGPT)? Alibaba is the developer of Qwen.

All of these business lines are going to be marketable in the near and distant future, even if not explosively so. Alibaba's first-quarter revenue improved to the tune of 7% year over year, more or less matching its long-term top-line growth rate that's likely to remain in place for the indefinite future.

But the tariff standoff between China and the United States that's creating a ripple effect outside of both countries? That's just it. Alibaba isn't particularly vulnerable.

Don't misread the message. Anything that slows China's manufacturing exports ultimately threatens the nation's internal consumerism.

It's not a dire threat, though. More than 80% of this company's revenue is generated domestically. And it's largely understood that Chinese companies are expected to use goods and services offered by other Chinese companies whenever there's a choice. Ditto for their foreign business partners. For instance, although Apple prefers OpenAI's ChatGPT everywhere else, in China, its newest AI-capable iPhones sold in that market will utilize Alibaba's Qwen model.

In other words, Alibaba largely operates in a regional silo. As long as the economy within that silo is growing, Alibaba's dominance of its market means it's growing, too. To this end, the International Monetary Fund believes China's GDP will grow on the order of 4% this year, with comparable growth in the cards beyond that once the tariff dust is almost sure to be settled.

2. Uber Technologies

Shares of ride-hailing company Uber Technologies (NYSE: UBER) have taken investors on a bumpy ride since early last year. Although the stock's made net-bullish progress since then, it's also been up-ended several times during this stretch thanks to sales or earnings shortfalls, or disappointing guidance.

Now take a step back and look at the bigger picture. Uber is plugged into a major secular trend that's not apt to end anytime soon, if ever. That's the growing disinterest in driving -- or even automobile ownership -- and a growing willingness to pay for a ride with someone else in their vehicle.

A recent survey performed by Deloitte indicates that 44% of U.S. residents under the age of 34 would be willing to not own a car and instead rely on alternative transportation now that it's readily available, underscoring a much bigger age-driven shift.

Straits Research believes the global ride-hailing and taxi market is set to grow at a healthy annualized pace of 11.3% through 2033, in fact, largely thanks to this ongoing shift.

Uber Technologies is positioned to capture a significant share of this growth, by virtue of its market leadership here and strong presence in several key markets abroad.

Then there's the other reason Uber stock is a long-term buy sooner than later: robotaxis.

Although the underlying technology isn't quite ready for commercial deployment, as CEO Dara Khosrowshahi recently commented, autonomous/self-driving vehicles are "the single greatest opportunity ahead for Uber."

Although it could take 10 to 20 years for self-driving automobiles to fully displace human drivers, once they do it will remove one of Uber's biggest operating expenses. This will in turn lower prices for riders, making its ride-hailing service even more marketable. In this vein, Straits Research believes the worldwide robotaxi market itself is set to swell at an average annualized pace of nearly 68% through 2031.

3. Arista Networks

Finally, add Arista Networks (NYSE: ANET) to your list of brilliant growth stocks to buy now and hold indefinitely.

If you're familiar with the company, then you already know it competes with the much bigger networking powerhouse Cisco. And to be clear, Cisco keeps Arista in check. Arista Networks is evidence, however, that bigger doesn't always mean better within the world of technology. When it comes to technology, better is better.

The key is Arista's EOS, or extensible operating system. That's just a fancy word for the software that makes its networking hardware function. Like most other software, EOS can be rewritten, modified, and updated as needed to meet the specific and ever-changing needs of its customers. It also means its hardware can remain relevant for longer, ultimately saving its customers money by delaying the need for newer tech.

And yes, its ethernet switches are in use in artificial intelligence data centers all over the world, although it also serves more mundane markets like campus WANs (wide area networks), cybersecurity, and simple data storage, just to name a few. As long as the world continues to be digitized and create more and more digital information to handle, there will be demand for tightly focused solutions providers like Arista.

The company's results say as much. Last year's revenue growth of 15% extends an established trend that's expected to persist for at least the next few years, although it's likely to last well into the distant future.

ANET Revenue (Quarterly) data by YCharts

This doesn't mean the stock has always performed well. Indeed, shares have been subpar performers this year, seemingly on worries that broad economic headwinds would undermine this growth.

Don't sweat this weakness too much, though. Rather, capitalize on it.

This might help. Despite the stock's lackluster performance of late, the analyst community is still on board. The vast majority of them rate this ticker as a strong buy, with a consensus price target of $109 that's roughly 15% above the stock's present price. That's not a bad tailwind to start out a new trade with.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Arista Networks, Cisco Systems, and Uber Technologies. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

The premise seems compelling enough. Forego a tax break that may or may not do you much good right now in exchange for tax-free withdrawals in the future -- when your tax rates might be higher. Although nobody knows for sure what the future holds, that's the higher-odds/lower-risk bet most people are making.

Except, Roth retirement accounts' tax-free distributions in retirement aren't necessarily always the right fit. It's possible you'd still be better served by making tax-deductible contributions to an IRA now and paying whatever taxes come due then.

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Here's a closer look at when and why the non-Roth option might make more sense for you.

Roth IRA versus regular

If you're not familiar with the ins and outs of either, here's the deal.

Traditional IRAs -- sometimes called contributory IRAs -- allow you to make yearly tax-deductible contributions to them. Investments made with this money are also allowed to grow tax-free, whether that be through dividends, capital appreciation, or any other form of gain. This money is only taxed (as ordinary income) if and when it's withdrawn from the retirement account.

Roth IRAs work the other way around. While contributions to a Roth retirement account don't reduce your taxable income for the year in which they're deposited, this money is also allowed to grow tax-free, and comes out of these accounts without creating any tax liability. Indeed, since the IRS has nothing to gain from these withdrawals, the agency doesn't even force you to take distributions from Roth IRAs. That's not so with ordinary contributory individual retirement accounts, which of course are subject to required minimum distributions once you turn 73 years old.

Just keep in mind that -- unlike traditional IRAs -- there are income-based limits to Roth IRA contributions.

On balance it doesn't seem to matter much either way. All other things being equal (and assuming you're investing your tax-savings effectively whenever you realize them), paying taxes now or paying taxes then should ultimately leave you with the same amount of spendable cash in retirement. And to be fair, for plenty of people that is the case.

There are some scenarios, however, in which a Roth IRA makes less financial sense than a regular individual retirement account funded with tax-deductible contributions. And one scenario stands out among them all.

When not to use a Roth IRA

Cutting straight to the chase, most investors are best served by paying their IRA-related income taxes when their effective income tax rates are likely to be at their lowest. For example, if you're confident you're earning more in work-based wages now than you'll be collecting in retirement income later in life, your potential tax liability is at its highest right now. Contributing to an ordinary IRA will lower your current taxable income, or more to the point, will postpone the taxability of some of this income -- as well as the investments made with it -- until you retire and you're in a lower tax bracket.

Conversely, if you've got reason to believe that your retirement income will be greater than your current work-based income (perhaps you have a seven-figure IRA, for example), you'll want to minimize your tax liability then even if it means not making tax-deductible contributions now. In this scenario a Roth IRA likely offers you an advantage.

For most people, of course, the former is the more likely scenario.

That's not the only noteworthy scenario in which a Roth IRA might not be ideal, however. If you're going to need to access the money in this account before you turn 59 1/2 and if your account is going to be opened and initially funded for less than five full years, a Roth may not make the most sense. See, although there are some exceptions (like medical bills or the purchase of your first home), if you aren't going to be able to meet both criteria, withdrawals could be subject to penalization or taxation or both.

Withdrawing money from an ordinary IRA before turning 59 1/2 also incurs a penalty, by the way, on top of the taxation that was always going to be paid anyway. At least there's no five-year minimum waiting period, though.

Given this age-based limitation, it's possible you'd be better off not making contributions to any kind of IRA and instead leaving this money invested in an ordinary brokerage account. It may be taxable every year, but at least it's also flexible.

Of course, you've also always got the option of funding a traditional IRA with tax-deductible contributions and then converting some or all of this individual retirement account into a Roth at a point in time of your choosing in the future.

This is a taxable event, and as such could prove expensive if completed in one shot. But this choice allows you to have your cake and eat it too, with no penalty or additional taxation should you decide later in life that you'd rather have a Roth IRA. You can even pay the taxes on these conversions with money found outside of your retirement accounts. Just bear in mind that you'll still need to be at least 59 1/2 to make penalty-free withdrawals from a converted Roth, and that the five-year taxation waiting period on the withdrawal of any gains (be sure to keep good records!) will possibly still apply beginning the year the conversion was completed.

Nevertheless, this flexibility alone is reason enough to not bother with a Roth until you've got more clarity regarding your financial future. Visit here to learn more about Roth conversions.

Crunch your best-guess numbers, and re-crunch them later

Figuring out which individual retirement account works best for you is admittedly easier said than done. Everyone knows their current financial situation. What may not be nearly as clear, however, is where you'll stand in the future. This exercise will require a bit of well-reasoned and honest conjecture, including about future tax rates. If you're in your 30s or 40s, this could prove particularly difficult to do.

Still, to the extent it's possible, making the best possible projections of your retirement income is time well spent. If you're disciplined enough to invest whatever tax savings you achieve when you achieve them you could ultimately lower your tax bill. The savings could be worth thousands of dollars per year, in fact, for most typical households that manage these not-so-little details.

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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" »

The Motley Fool has a disclosure policy.

When most investors are thinking about buying a particular stock, they'll start by looking at the underlying company's recent fiscal results. And to be fair, it's a sound approach. Although past performance is no guarantee of future results, that past gives us a reasonably good idea of what the future likely holds.

Still, sometimes we need to dig deeper and examine the qualitative things a company is doing that could alter its quantitative future.

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With that as the backdrop, although there's not much unpredictability with its business, Walmart (NYSE: WMT) and its stock are apt to be somewhere pleasantly surprising in the next three years. Here's why.

Meet the new-and-improving Walmart

Walmart is the world's biggest brick-and-mortar retailer, with 90% of U.S. residents living within 10 miles of one of its 4,600 domestic namesake stores, or one of its 600 Sam's Club warehouses. There are almost 5,600 other locations outside of the United States as well.

Last year this giant of a company did $681 billion worth of business, turning $19.4 billion of that into after-tax net income, and extending long-standing (even if occasionally bent and sometimes slow) growth trends. And yes, those numbers confirm the retailer continues to dominate at least North America's general merchandise and grocery retailing landscapes.

But the Walmart of yesteryear -- and even the Walmart of today -- isn't quite the Walmart you can expect come 2028. There are several initiatives underway right now that should be measurably more mature three years from now, each of which could make a positive impact on its top and bottom lines.

One of these initiatives is its nascent online advertising business.

If you ever shop at Walmart.com then you've seen advertisements, probably without even giving it a second thought. Every website runs ads these days, after all.

Except, Walmart isn't simply hoping to prompt you into making a purchase of something it's selling. Brands are paying Walmart to promote their particular goods online with these ads. The retailer did $4.4 billion worth of this high-margin advertising business, in fact, up 27% year over year, and bolstering the bottom line for an e-commerce platform Walmart was going to operate anyway. This still only scratches the surface of the opportunity, though. With an ever-growing amount of insight as to what works and what doesn't, this advertising revenue's growth accelerated to a pace of 31% year over year during the first quarter of this year.

While it's not clear exactly where the ceiling is for this business, eMarketer expects average annualized growth of 17.2% for the United States' entire retail media (digital advertising at retailers' e-commerce sites) business. That outlook bodes very well for Walmart.com's long-term ad business growth.

The mega-retailer isn't just looking to the U.S. as a growth engine, however. Indeed, Walmart seemingly understands that it's running out of places within the United States to establish profitable brick-and-mortar stores, having closed 11 of them last year. There's opportunity abroad, and the company is capitalizing on it more than you might realize. In 2023, management announced its goal to grow its international revenue from around $100 billion per year then to $200 billion annually by 2028. After last year's reported tally of $121.9 billion, that target doesn't seem so crazy after all.

Finally, while most investors can acknowledge Walmart has done the unthinkable by building a respectably sized e-commerce business in a market that's dominated by Amazon (NASDAQ: AMZN), they may be underestimating just how well it's doing online. Although the company itself doesn't disclose the specifics, consensus numbers provided by Statista suggest Walmart's worldwide annual online sales have soared from around $25 billion in 2019 to roughly $100 million last year.

That's still only a drop in the bucket, to be clear. Even within the all-important U.S, market, Walmart's 10.6% share of the e-commerce market is a distant second to Amazon's 39.7%, according to data compiled by industry research outfit Digital Commerce 360.

It's worth noting, however, that Walmart's share of the domestic online shopping market has more than doubled since 2017, while Amazon's share has barely budged. Clearly the company is doing something right.

And remember that each of these initiatives is still a work in progress. We're not yet seeing these efforts working at their eventual, refined best.

But tariffs? Arguably more bark than bite. The longer the standoff lingers, the clearer it becomes that President Donald Trump is posturing as a negotiation tactic. He wants trade to flow as freely as much as anyone.

What it means for revenue, earnings, and Walmart stock

So what does it mean for investors? It means don't be surprised if Walmart outperforms expectations over the course of the coming three years.

As of the latest look, the analyst community is calling for full-year revenue of $766 billion for the 12-month stretch ending in 2027. Extrapolating that annualized growth rate of 4% would put calendar 2028's top line in the ballpark of just under $800 billion. Using the same projection math, per-share earnings should swell from last year's $2.41 to roughly $3.60 for the same time frame. Not bad.

Just bear in mind that analysts could be underestimating Walmart's potential upside just as much as average individual investors are. Walmart's yearly sales growth rate has easily exceeded 6% in most years since 2021, and that's without all the growth weapons the company is successfully wielding now.

As for the stock, assuming its current earnings-based valuation of around 42 times its trailing per-share profits, Walmart stock could be priced around $144 three years from now. That's a 47% gain, or an average annualized improvement of roughly 15%.

Just don't get so enamored by the numbers that you look past the bigger and better reason to own a piece of this company (or any other). That is, Walmart is doing a lot of things right, leveraging its strengths while creating new ones. When an organization does that, everything else including progress from its stock tends to fall in line.

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What's the ideal age for claiming Social Security retirement benefits? It depends on who you ask. The earlier you start, the smaller your checks. But, you'll collect these payments for more time. That's the trade-off.

But what exactly are your options, and how much of a difference can claiming later rather than earlier make? The answer might surprise you.

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The cost of claiming early vs. the benefit of waiting

To be a government-run program, Social Security offers taxpayers a respectably wide range of payment options. Eligible individuals can claim as early as the age of 62, but can also wait until they turn 70. Or, they can file at any point in time in between. Each of these choices, however, results in a different monthly payment.

And the disparity between these payments can be stark.

The table below puts things in perspective, comparing the difference in payment size for each age of this nine-year range relative to this year's average Social Security retirement benefit of $1,976 per month. Notice that while there's a progressive reduction in benefits the earlier you claim, there's also an ever-growing benefit for delaying the initiation of benefits beyond your full retirement age (or FRA). This additional benefit, however, stops growing once you turn 70.

Age at Claiming/Initiation of Benefits	Monthly Payment	% vs. Amount When Claiming at FRA
62	$1,383	70%
63	$1,482	75%
64	$1,581	80%
65	$1,713	86.7%
66	$1,844	93.3%
67	$1,976	100%
68	$2,134	108%
69	$2,292	116%
70	$2,450	124%

Data source: Social Security Administration. Note that this year's official FRA is 66 years and 10 months for people born before or in 1959. For those born in or after 1960, it is 67. Payment amounts as well as percentage comparisons to intended payments at FRA have been rounded, and could be different for beneficiaries wishing to name a spouse as a co-beneficiary.

You're reading that right. For the average beneficiary right now, the difference between claiming when you're 62 versus claiming at the age of 70 is over $1,000 per month. That's no small amount for most households. And the bigger your payment, the bigger the potential difference.

Other things to consider

The comparisons are clear -- there's an obvious and meaningful mathematical upside in waiting as long as possible to file for Social Security's retirement benefits.

Except these numbers alone don't necessarily tell the entire story for every individual and their unique situation. It's possible there's a very good reason to claim Social Security benefits as early as you possibly can, like health-related matters. You may also have enough money saved up to tap later in your life (like an IRA) to allow you to begin collecting some income before you otherwise might.

There's another often overlooked upside to claiming at 62 years of age, however, even if you don't need this money yet because you're still gainfully employed. That is, you might be able to do something more financially productive with these cash payments than the Social Security Administration is doing for you on your behalf.

Although the figure's not etched in stone, the average internal rate of return on money withdrawn from your paycheck and forked over to Social Security has been in the ballpark of 4%, after inflation. Sometimes it's more. Other times it's less. Any given year's effective return on this "investment," however, mirrors the average yields on longer-term U.S. Treasury Bonds at the time. Right now that's between 4% and 5%. If you can take these payments and do something more constructive with the money, it makes sense to do so.

But won't collecting Social Security while you're also working possibly reduce your Social Security payment?

If you're below your full retirement age, yes, it can. Specifically, any work-based wages beyond $23,500 you earn this year will start to shrink any Social Security payments you're already collecting. If you're going to earn enough at your job in 2025, in fact, it's possible you could erase all of your current Social Security benefits payments.

You're not actually losing money if this ends up being the case, however. These reductions are ultimately credited toward future Social Security payments, which are no longer reduced by work-based income once you're past your full retirement age. (There's also a very specific income threshold that applies only in the year in which you reach your full retirement age, although that's best left to another discussion.) In many regards this option allows you to have your cake and eat it, too.

For most people though, just know that plans to invest their early Social Security payments rarely pan out as initially intended. Successfully implementing such a plan requires a great deal of discipline.

Just think about it very carefully

Bottom line? There's no one-size-fits-all answer as to when you should claim your Social Security retirement benefits. You'll want to think carefully about your particular situation, including making some predictions as to what it will look like in the future.

Broadly speaking though, it rarely hurts to wait just a little while longer to claim, if only to make sure that plan is going to work for you, or to beef up your numbers just a little bit more.

And you will most definitely want to make sure it works for you before making the decision. The Social Security Administration will allow people who have claimed at or after reaching full retirement age to suspend these payments if they've only been collecting for 12 or fewer months. Anyone initiating these benefits before reaching their full retirement age, however, is permanently locked into their reduced payments.

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.

Are you just as afraid of a market pullback right now as you are of missing out on upside? If so, you're not alone. This is a confusing environment for investors. Major names like Nvidia and Home Depot are sending mixed messages, while the market itself seems to be waiting for more clarity about tariffs and the Trump administration's trade war.

There are some tickers with bullish backstories, though, that are bigger than any environmental or economic backdrop. You just have to look a bit off the beaten path to find them.

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If you've got $1,000 -- or any other amount of money -- lying around available to invest, here are three solid prospects to consider.

CRISPR Therapeutics

Biotech stocks can be tricky investments to handle. Oftentimes, you're betting on a potentially game-changing premise well before it's profitable, or even before there's a marketable product. That's obviously risky. But the potential upside can be tremendous.

CRISPR Therapeutics (NASDAQ: CRSP) is not yet profitable, but the underlying science that makes the drugs it's currently developing possible holds enough promise to eventually get the company out of the red and into the black.

CRISPR Therapeutics specializes in gene editing. Company co-founder Dr. Emmanuelle Charpentier developed a way to cut a strand of damaged DNA and then force the genetic code's own built-in repair process to fix what's broken. While CRISPR's Casgevy (for the treatment of sickle cell disease and beta thalassemia) is its only approved drug based on this science, this biotechnology has a range of potential applications. Treating cancer and autoimmune diseases is arguably the biggest.

That any drugs based on this science have been approved bodes well for the concept, and CRISPR's got a total of five different clinical trials underway right now. Those are what most interested investors are eyeing. Ditto analysts, who collectively sport a consensus price target of $77.38, more than twice the stock's present price.

So why are CRISPR Therapeutics shares still drifting lower from their 2021 peak, knocking on the door of new 52-week lows? That's just part of the challenge of buying, holding, and even selling biotech stocks. Sometimes they reflect potential revenue and earnings too soon. Other times, investors lose interest when they've waited a little too long for results.

Don't overthink it, though. Just take a step back and recognize that analysts expect revenue to jump from $50 million this year to nearly $200 million next year and then to more than double again the year after that. This explosive growth should come on the heels of at least one more drug approval, although more than one approval is just as possible.

This growth will presumably stir up a bullish tailwind for the stock.

Palo Alto Networks

There's no sensational singular bullish argument for owning a stake in Palo Alto Networks (NASDAQ: PANW). There are dozens of solid reasons, though.

On the unlikely chance you've never heard of it, Palo Alto is a cybersecurity company. Firewalls, VPNs, threat detection, and breach response are all in its wheelhouse. There's nothing unique about its offerings, even if the company is the biggest and best-known name in the cybersecurity industry, that's more than reached full maturity.

That's not necessarily a bad thing, however, given the nature of this business.

Think about it. As the world uses computers more and more, it's going to need more and more cybersecurity solutions. That's why Precedence Research believes the global cybersecurity market is set to grow at an annualized pace of 12.6% through 2034. Palo Alto's top line is expected to slightly outpace this industry growth based on the consensus analyst forecast, but only slightly. There's little doubt that it will be able to leverage its size to achieve at least its fair share of this growth, though. Again, cybersecurity is a business that's unlikely to go away.

Don't tarry if you're interested. While this stock looks a bit frothy following its big rebound from its March low, it's still only priced around its early-2024 peak. The lack of net forward progress since then is sure to be catching the eye of many would-be buyers.

NextEra Energy

Finally, add utility name NextEra Energy (NYSE: NEE) to your list of stocks to buy with an idle $1,000.

Utility stocks are usually anything but exciting. That's because the highly regulated industry is anything but a high-growth one, and the business itself hasn't changed much since its inception. Ditto its individual companies. In many cases, these outfits are not only working with the same infrastructure they were working with decades ago, but they're also grappling with legacy capital structures and mindsets.

Not NextEra Energy, though. Although its roots are traditional, over the course of the past several years, this organization has made a deliberate effort not just to embrace cleaner, renewable energy sources, but also to evolve its utility business in a way that makes sense in the modern era. As of the end of last year, more than half of its power production comes from renewables like wind and solar, while roughly one-third comes from natural gas. Another 8% is nuclear, which President Donald Trump just gave a boost to last month with four executive orders aimed at revitalizing the U.S. nuclear energy sector.

Notice fossil fuels aren't part of the mix.

And yet, even though the company is spending more on energy infrastructure than any other utility outfit, it's still profitable.

This utility outfit is largely future-proof. That is to say, even though how utilities will be regulated and restricted by future emissions mandates isn't completely clear right now, all of NextEra Energy's future power production will likely satisfy whatever requirements await.

There won't be any explosive growth from NextEra, in the near or distant future. There should be plenty of reliable growth here, however, regardless of the economic environment.

There's also a respectable amount of reliable recurring income. Newcomers will be stepping into this stock while its forward-looking dividend yield stands at just under 3.4%. Not bad.

That's based on a dividend, by the way, that's more than doubled over the past 10 years and been raised every year for well over two decades. Even if dividend income isn't your big goal right now, this is reliable cash flow that you can use to buy stocks as other opportunities arise.

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

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics, Home Depot, NextEra Energy, and Nvidia. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

Shares of artificial intelligence (AI) company Tempus AI (NASDAQ: TEM) are down to the tune of 15.6% as of 11:13 a.m. ET on Wednesday, upended by a warning from investment management outfit Spruce Point Capital Management.

Just consider the source, and the fact that Spruce Point has something to gain by Tempus AI stock's pullback.

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

Why the name seems familiar

If the name rings a bell, it may be because California Representative Nancy Pelosi disclosed a bullish stake in the company in January of this year, just months after its June 2024 initial public offering. The company's AI-powered platform helps pharmaceutical developers optimize the creation, testing, and commercialization of new drugs, saving time and money.

The potential for such a tool is obvious, as is the reason for Pelosi's interest. Indeed, analysts expect revenue growth of nearly 80% this year and 25% next year, en route to a projected swing to profitability in 2027.

Not every observer is impressed, though, or even convinced. Spruce Point Capital Management publicly cautioned all investors on Wednesday that "Tempus Founder Eric Lefkofsky and his associates have a history of promoting disruptive technology companies, cashing out early, and leaving public shareholders with losses or lackluster returns." All told, Spruce believes Tempus AI stock's value is 50% to 60% below its price prior to Wednesday's plunge.

To be fair, there's some validity to Spruce Point's concerns.

But keep them in perspective. Spruce Point Capital Management and its clients have short positions in Tempus AI stock, meaning they benefit if this ticker loses value. Also bear in mind that one of Spruce's acknowledged focuses is short-selling. In other words, the firm regularly makes such bearish cases for companies, then profits when they decline.

Not a new reason to steer clear

Again, it's not that Spruce's points are incorrect, or that its conclusions are unreasonable. Much of the risk voiced today was already known and accepted, though, and built into this volatile stock's price. Risk is the norm for stocks of this ilk.

That said, it's worth noting that well-established pharmaceutical company AstraZeneca, Henry Ford Health, and the Mayo Clinic, as well as several universities and research hospitals, are using Tempus AI's technology. Although not all of these partnerships and collaboration efforts will necessarily translate into profitable revenue, the caliber and sheer quantity of organizations interested in Tempus AI's capabilities speak volumes.

Bottom line? There's plenty of risk here, to be sure. But there's no new or additional risk being injected by Spruce Point's warning. If you were willing to take this risk yesterday, nothing's actually changed in the meantime except the stock's price.

Should you invest $1,000 in Tempus Ai right now?

Before you buy stock in Tempus Ai, 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 Tempus Ai 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

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James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends AstraZeneca Plc. The Motley Fool has a disclosure policy.