As of market close on April 22, each "Magnificent Seven" stock has a negative price return in 2025. Among this cohort of megacap technology stocks, Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META) have dropped by the least amounts -- falling by 13% and 14.5%, respectively.

Both companies are set to report earnings for the first calendar quarter of 2025 on April 30. Let's explore why Microsoft and Meta could be good buys right now, despite ongoing turbulence in the stock market.

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 »

What road bumps could Microsoft and Meta face in the short term?

I can't think of a bigger potential headwind for technology businesses right now outside of the new tariff policies. Both Microsoft and Meta are investing billions into AI infrastructure -- from Nvidia chips to custom silicon engineering, data center buildouts, and more.

The details surrounding which items and raw materials are subject to tariffs are complex. I think it's reasonable that both Microsoft and Meta could be looking at higher costs related to their AI infrastructure plans. In addition, it's not entirely clear how corporations are planning for how tariffs could impact their business operations.

As a result, companies could be preparing to scale back spending in areas such as cloud computing, cybersecurity, or advertising -- all of which would lead to decelerating sales for Microsoft and Meta. A slowing sales base coupled with rising prices would take a toll on profitability for each business.

One way to mitigate shrinking profits is for Microsoft and Meta to scale back their own AI capital expenditure plans. However, investors may not be encouraged by that choice since AI is the foundation of each company's growth narrative right now. Slowing that down for the sake of near-term profitability may not sit well with investors.

Why I still like Microsoft for the long run

I see the ongoing sell-off across the tech sector as an opportunity to buy the dip in high-quality names. Right now, Microsoft's forward price-to-earnings (P/E) ratio of 28 is slightly below the company's three-year average.

MSFT PE Ratio (Forward) data by YCharts

Even though IT budgets could be operating under tighter controls for the time being, I tend to think that businesses are going to identify cost savings in areas outside of mission-critical infrastructure such as cloud computing and cybersecurity software.

Although I'm not expecting a monster quarter from Microsoft next week, I remain cautiously optimistic that cloud growth from Windows Azure will show some signs of resilience. When you complement this with Microsoft's diversified ecosystem that includes personal computing, social media (LinkedIn), gaming, and more, I see Microsoft as a business that is relatively insulated from a possible economic slowdown caused by the tariff environment.

Why I still like Meta for the long run

On the surface, you might think that Meta is facing outsized pressure compared to its peers given the company really only has two sources of growth: advertising and the metaverse. Candidly, the company's metaverse ambitions are far from reaching widespread scale or profitability, and the digital advertising landscape is packed with competition from the likes of Alphabet, TikTok, and Snap, just to name a few. With that said, I think these are surface-level arguments.

Meta's relative price resilience compared to its Magnificent Seven peers could suggest that investors are less worried about the company's growth prospects. I think this makes sense, too. I don't see tariffs having much of an impact on Meta's business overall. Similar to Microsoft, the company could witness a brief slowdown in revenue growth, but I don't think it will be detrimental.

With leading platforms including Facebook, WhatsApp, and Instagram in its ecosystem, Meta is in a lucrative position to continue monetizing its billions of users -- especially as AI tailwinds unlock new opportunities in the consumer market.

META PE Ratio (Forward) data by YCharts

As of this writing, Meta is trading right in line with its three-year average forward P/E. Considering the company has made huge strides in the world of AI to help diversify the business over the last three years, it would appear that investors aren't applying much value to this potential growth right now.

Remember to think long term

The big thing investors should keep in mind is that these tariff policies could change at any time. Moreover, even if trade negotiations with other countries linger to the point of an economic slowdown, such a cycle won't last forever.

In the meantime, investors are continuing to sell off growth stocks given all of the uncertainty in the market right now. In my eyes, Microsoft and Meta are trading for reasonable valuations and I think investors should take advantage, buy the dip while it lasts, and prepare to hold on for the long term.

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

Before you buy stock in Meta Platforms, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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 April 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

For the last few years, Tesla (NASDAQ: TSLA) CEO Elon Musk has spoken repeatedly about his vision to turn his electric vehicle (EV) company into a full-blown artificial intelligence (AI) operation. One of the primary ways AI is expected to revolutionize Tesla's business is through autonomous driving.

Musk doesn't just want to integrate self-driving technology into Tesla cars for consumers to enjoy, though. Rather, he is looking to create a fleet of autonomous Tesla cars that people can hail at virtually any time. This initiative is known as the Robotaxi, and it's become one of the biggest sources of excitement for Tesla bulls ever since Musk gave the public a sneak peek late last year.

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

While the idea of Robotaxi has certainly garnered a lot of attention, Tesla is not the only major technology company exploring the prospects of AI in the automobile market. In the piece below, I'm going to explore why I think some of the moves billionaire hedge fund manager Bill Ackman has been making as of late could spell trouble for Tesla and its autonomous vehicle vision.

Did Ackman just beat Tesla at its own game? Read on to find out more.

Step 1: Alphabet is rivaling Tesla in the autonomous vehicle market

Ackman is the CEO of hedge fund Pershing Square Capital Management. Unlike other hedge fund managers, one of Ackman's notable attributes is that he tends to keep Pershing Square's portfolio limited to a small number of stocks, generally owning positions in 10 or so companies at a time.

Since AI burst onto the scene as the market's hottest trend a couple of years ago, one mega-cap tech stock that's been relatively polarizing is Alphabet (NASDAQ: GOOGL). Some skeptics argue that Alphabet's dominance in internet search via Google could be threatened by the rise of ChatGPT and other large language models (LLMs). In addition, Meta Platforms and Amazon are becoming increasingly popular areas for advertisers to invest their budget over the likes of Alphabet-owned properties Google and YouTube.

Nevertheless, Ackman took a liking to Alphabet and began building a position in the company a couple of years ago. The obvious thesis around Alphabet as an AI play is that the company has the ability to integrate new services across its ecosystem -- from advertising, cloud computing, cybersecurity, workplace productivity, internet search, and more.

However, one area that receives virtually no attention pertaining to Alphabet's AI ambitions is autonomous driving.

Over the last several years, Alphabet has quietly built an impressive autonomous vehicle operation of its own called Waymo. Today, Waymo taxis are already serving customers in major metropolitan areas, including Phoenix, San Francisco, Los Angeles, and Austin.

Step 2: Robotaxis could revolutionize Uber's business

Earlier this year, Ackman took to social media platform X (formerly Twitter) in which he revealed that Pershing Square took a position in ride-hailing leader Uber Technologies (NYSE: UBER). Similar to Alphabet, Pershing Square's investment thesis around Uber primarily revolved around the company's valuation relative to its growth profile. While the firm thinks Uber's global scale and diversified services operation provide the company with a unique ability to expand profit margins over the coming years, there is a more subtle tailwind that could accelerate its growth as well.

According to Pershing Square's annual investor presentation from February, autonomous vehicle developers may choose to partner with taxi operations, such as Uber, due to the company's existing base of 170 million customers worldwide. In other words, Uber's value proposition is that it already has an enormous, sticky base of consumers that autonomous vehicle businesses wouldn't need to try and acquire themselves. In addition, Pershing Square's stance is that as autonomous vehicle fleets scale and become more mainstream, this dynamic provides an opportunity for the entire rideshare market to expand as well.

You might wonder how autonomous vehicles could benefit Uber's business. Think about other service-oriented businesses that act as distributors. Airbnb doesn't build its own physical infrastructure, unlike hotels. Rather, it serves as a platform on which consumers can book a trip, and Airbnb makes money by brokering that transaction.

In the same way, Uber does not need to spend billions building its own fleet of autonomous vehicles. Rather, it can strike partnerships with other companies developing self-driving technology and simply serve as a distribution channel. This mitigates a lot of risk, as Uber stands to benefit from a number of different companies that may choose to leverage its platform for a robotaxi service. Meanwhile, if Tesla does not pull off its goals in autonomous driving or fails to scale its own fleet, the company will likely be in a tough position in terms of growth opportunities.

Step 3: Hertz could be the missing piece to Ackman's autonomous vehicle vision

Just a few days ago, Ackman took to X again to reveal Pershing Square's latest big move: building a position in car rental stock Hertz (NASDAQ: HTZ). Once again, Ackman provided a long list of detailed financial analyses in his post and made the case for why he thinks Hertz is trading for a great value.

However, there was a sentence in the last paragraph of the post that really caught my eye.

Ackman wrote, "What if Uber partnered with Hertz on an AV [autonomous vehicle] fleet rollout over time?"

Such an idea could make a ton of sense. By merging car rentals, ride-hailing, and autonomous vehicle technology, Hertz could transform into a robotaxi operation of its own. Instead of relying on foot traffic for its services at airports and other venues, Hertz could rent self-driving cars (perhaps from Waymo) on the Uber app. As a result, Hertz removes the variability of the middleman (human drivers) but still benefits from a consistent flow of renters via Uber's installed base. In turn, Hertz could unlock steadier revenue streams and improve its unit economics on its existing vehicle infrastructure.

Ackman could be triangulating an AI trade for the ages

Admittedly, the idea of a three-way partnership between Alphabet (Waymo), Uber, and Hertz might seem like a pipe dream. But remember, Ackman is an activist investor -- often working with a company's executive leadership to identify ways to improve profitability and scale the overall operation.

Given his public statements, I think it's reasonable to say that Pershing Square could see Alphabet, Uber, and Hertz as a cheaper way to invest at the intersection of AI and autonomous driving compared to Tesla and its lofty valuation.

But at a deeper level, I think Ackman could be in the early stages of triangulating an AI trade for the record books. Should Waymo, Uber, and Hertz go on to work together in the world of autonomous vehicle fleets, Ackman would be in a position to benefit from three different opportunities -- as opposed to betting the farm on just one player such as Tesla.

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

Before you buy stock in Alphabet, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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 April 21, 2025

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

At the end of the day, earnings will drive stock prices. A company is worth the cumulative profits it generates for shareholders, discounted back to today. As investors, we want to buy a piece of these earnings -- what you are doing when buying a stock -- as cheaply as possible. One way to measure the cheapness of a stock is to look at its forward price-to-earnings ratio (P/E), which takes the current market cap and divides it by Wall Street estimates for earnings over the next 12 months. The lower the number, the better.

Today, Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) is trading at one of its lowest forward P/E ratios ever. In fact, Alphabet has the lowest forward P/E ratio of any Magnificent Seven stock. Does that mean you should buy the stock for your portfolio today? Let's analyze Alphabet's business in the age of artificial intelligence (AI).

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 »

Discounted forward earnings

Alphabet is the parent company of Google, YouTube, Google Cloud, DeepMind, Waymo, and other technology subsidiaries. Mainly, its profits come from Google Search and related properties.

Historically, Alphabet would get a premium P/E ratio due to the fast growth of Google Search. The minimum trailing P/E ratio -- which takes the current market cap and divides it by trailing earnings -- hit 16.6 in the last 10 years, but was usually well above this level. Today, Alphabet's forward P/E ratio is right around 18, meaning that Alphabet stock is at one of its most discounted levels ever.

All else equal, investors want to buy a stock at the lowest P/E ratio possible. That way, you are buying the stock at the cheapest price possible. You can get a higher dividend payout (Alphabet's dividend yield is currently 0.5%) and more bang for your buck when the company repurchases stock. Alphabet repurchased $62 billion worth of stock in 2024. At that rate of repurchases, it can reduce its shares outstanding by 3.4% a year, which will directly affect earnings per share (EPS) growth.

But why is Alphabet stock so discounted? It comes down to risks from both AI and monopoly lawsuits.

OpenAI growth and monopoly lawsuit

A consumer AI renaissance is upon us. Start-ups across the board are getting billions of dollars in funding to make conversational AI tools useful for everyone around the world. None are more popular than OpenAI's ChatGPT, which has an estimated 400 million active users and a goal to hit 1 billion users by the end of 2025.

OpenAI growth scared investors away from Alphabet, as it looks like the cash cow in Google Search has been disrupted. That could be true, but Alphabet is not taking these competitive threats lying down. It has embedded AI features into Google Search, allows users to search pictures with Google Lens, and is operating its own conversational AI bot called Gemini.

Gemini's advanced tools and the popular NotebookLM product are now a part of the Google One subscription, which gives you a bundle of Google Services for $20 a month. Using its economies of scale, I believe that Alphabet has the power to push back against OpenAI and win the consumer AI race.

Another risk to Alphabet's business is the monopoly lawsuits it is facing. A federal court judge ruled that the company's advertising exchange business is an illegal monopoly, meaning the business is likely to be broken up. While this is not good for Alphabet, the online ad exchange is only a sliver of its overall revenue today.

More important is Google Search, which is in the middle of its own antitrust case. Today, it's unclear what the result of this second antitrust case will be, but there are rumors it could be forced to sell the Google Chrome browser or stop its hardware exclusive deals with phone makers like Apple.

A monopoly antitrust case is a risk to Alphabet's business, but it may not be all sour for the technology giant. It's currently facing new competition from the likes of OpenAI that makes this case increasingly moot, with TikTok and Instagram also serving as new use cases for young people to search. Plus, a ruling that stops Alphabet's payments to hardware makers may actually help the company increase earnings. Bloomberg reported that Alphabet paid Apple $20 billion in 2022 to make Google Search the default on Safari. Take that away, and Alphabet's expenses drop by $20 billion annually, albeit with added risk that search engine competitors could take share on Apple devices.

AMZN PE Ratio (Forward) data by YCharts.

Why Alphabet stock is a buy today

All the noise around AI competition and monopoly lawsuits has investors scared of buying Alphabet stock. There's also the potential effect of tariffs on its business in 2025. That presents a buying opportunity for investors with a longer-term time horizon.

Alphabet has a phenomenal track record of innovation in consumer technology, and billions of people use its services every day around the globe. It was traditionally a monopoly in Google Search. Now, the industry may end up being a duopoly with the rise of the new AI tools like ChatGPT. This is not the end of the world for a growing sector with hundreds of billions in consumer and advertising spending each year (including both traditional search and AI).

Last quarter, Alphabet's overall revenue grew 12% year over year to $96.5 billion. Operating income grew 31% year over year due to strong operating margin expansion. If this fast earnings growth continues, Alphabet's P/E ratio will fall quickly from this already low starting point. This makes the stock a fantastic buying opportunity today for investors with an eye on the future.

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

Before you buy stock in Alphabet, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $566,035!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $629,519!*

Now, it’s worth noting Stock Advisor’s total average return is 829% — a market-crushing outperformance compared to 155% 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 April 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Tesla (NASDAQ: TSLA) stock has climbed 8% after reporting what can only be described as a terrible first quarter of 2025. The company's sales dropped, and it was profitable only because of regulatory credit sales. Travis Hoium digs into the results in this video.

*Stock prices used were end-of-day prices of April 22, 2025. The video was published on April 23, 2025.

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 »

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $256,447!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,869!*
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Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of April 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Mobileye Global. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool recommends General Motors and Mobileye Global. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

When it comes to investing, a $3,000 position may not sound like much. While it's not enough to deploy into multiple individual stocks, it's enough to allow one to take $1,000 positions in three different stocks, and that includes artificial intelligence (AI).

Due to a recent pullback in stocks, many AI stocks are on sale. Thus, now is likely an excellent time to take starter positions, and these stocks could serve investors well.

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

Alphabet

When it comes to AI investing, it's likely too early to count out Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Alphabet first began using AI in 2001, and since then, it has been a pioneer in the technology.

It was only with OpenAI's generative AI breakthrough in 2023 that some began to doubt Alphabet's strength in the AI market. Although the company has followed up with Google Gemini and plans to spend $75 billion in capital expenditures (CapEx) in 2025 alone, Alphabet has not eased doubters' fears.

Nonetheless, the Google parent could easily rebound. Alphabet held about $96 billion in liquidity at the end of 2024, and it generated around $73 billion in free cash flow, a figure that does not include CapEx expenses. Those results show that it can afford such investments. Additionally, its massive ad business continues to grow revenue at double-digit rates, and the 31% revenue increase in Google Cloud shows that it's diversifying its revenue sources.

Investors should also remember that amid doubts, Alphabet stock has risen since OpenAI's generative AI breakthrough in 2023. Moreover, its price-to-earnings (P/E) ratio of 19 sits at a multi-year low, making it increasingly likely that now is an opportune time to add shares of this internet giant.

Meta Platforms

Facebook parent Meta Platforms (NASDAQ: META) built its success on becoming the dominant social media stock and creating a wildly successful digital ad business based on that.

However, with about 3.35 billion users logging on to a Meta-owned social media site daily, its sites seem to be approaching global saturation. Thus, after failing to draw investor interest through the metaverse, the company has pivoted into AI.

It has developed a generative AI assistant that helps Meta users generate images, personalize experiences, and use open-source AI. It just released Llama 4, its latest family of large language models, and a paid subscription service is also in the works. Thanks to sites such as Facebook and Instagram, Meta accumulated a treasure trove of data on much of the population that may give it a competitive advantage.

It holds about $78 billion in liquidity, not including the $52 billion it generated in free cash flow, leaving it with tremendous optionality regarding AI investing. With that, it announced plans to invest $60 billion to $65 billion in CapEx to stay competitive in the AI race.

Like Alphabet, Meta stock has risen steadily since Open AI's generative AI release. With a P/E ratio of 21, investors may want to consider this stock while it trades at a reasonable valuation.

Amazon

Amazon (NASDAQ: AMZN) has been adept at staying at the forefront of tech innovation, and AI is no exception. The company's cloud computing arm, Amazon Web Services (AWS), pioneered the cloud industry and remains the leading provider. However, since the cloud facilitates AI functionality in many cases, Amazon had to become adept with the technology to stay relevant in its field.

The e-commerce side of the business also uses AI. The technology personalizes customer experiences and improves the content and advertising appearing on its platform. In its third-party seller business, AI helps sellers streamline operations and provides overviews to evaluate a seller's performance.

Like its mega-tech peers, Amazon also plans to spend heavily on capital expenditures. It implied that it would spend $100 billion, most of which would go to AI. Investors should also like that it can probably afford these investments because it holds $101 billion in liquidity and generated $38 billion in free cash flow in 2024.

Indeed, Amazon stock has dropped dramatically in recent weeks amid the market sell-off. Nonetheless, investors should note that its P/E ratio has fallen to 31, a multi-year low for Amazon stock. That factor likely makes now a good time to add shares while the stock is comparatively inexpensive.

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

Before you buy stock in Alphabet, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

Now, it’s worth noting Stock Advisor’s total average return is 811% — a market-crushing outperformance compared to 153% 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 April 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

Amazon (NASDAQ: AMZN) is a dominant technology-driven enterprise that has customers all across the globe. It got here thanks to fantastic growth. Between 2014 and 2024, the company's revenue increased at a compound annual rate of 22%. This rapid ascent has made Amazon one of the world's most valuable businesses.

Viewing things with a fresh perspective today, with an eye toward the future, you might be wondering if the company can continue on its impressive trajectory. There are reasons to remain bullish. Here's why Amazon is the smartest growth stock to buy in April with $2,000.

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 »

Massive end markets

If a company is lucky, it'll benefit from one secular trend. Amazon stands out because it has multiple tailwinds working in its favor. Additionally, the business operates in massive global end markets.

Take the e-commerce sector. Almost 40% of all spending online in the U.S. goes through amazon.com. Given that Grand View Research estimates the worldwide retail e-commerce market to grow at a nearly 12% annualized rate from its already large size of $6 trillion, Amazon is set to capture a lot of this opportunity.

Cloud computing is another important area. Amazon Web Services (AWS) posted 19% sales growth in Q4, with a stellar 37% operating margin. It's the industry leader with the most market share. And according to Grand View Research, the global market is worth about $800 billion today and will be worth much more in the future.

There's also digital advertising, a booming money-maker. In 2024, Amazon raked in more than $17 billion in revenue (up 18% year over year), which is surely generating a high margin. Only Alphabet and Meta Platforms have a bigger presence in digital advertising.

Combined, these industries are valued in the trillions of dollars. This gives Amazon plenty of opportunity to drive growth.

What about artificial intelligence?

Another secular trend that has come up in recent years is artificial intelligence (AI). Amazon has already been using AI capabilities throughout its business. For example, the online marketplace uses AI for personalized shopping recommendations. Prime Video uses AI to suggest shows and movies to watch. Alexa also leans on AI to process commands and respond accordingly.

Looking ahead, AI is and will continue to play a more pronounced role for the company, particularly within AWS. AWS offers a broad suite of AI tools and services for clients, like Bedrock for building generative AI apps, Translate for language translation, and Kendra for search functionality.

Amazon is planning to spend $100 billion on capital expenditures in 2025. "The vast majority of that capex spend is on AI for AWS," CEO Andy Jassy said on the Q4 2024 earnings call. He went on to declare that AI "is one of these once-in-a-lifetime type of business opportunities."

Durable growth

Investors gravitate to the fastest-growing companies. Maybe it's because they are the easiest to spot. And for sure it's because they believe they can generate huge returns over time by owning them.

Instead of focusing on how rapid the gains are, perhaps it's a better idea to look for durable growth. These are businesses that should see revenue increase at a much faster clip than GDP over an extended period of time, not just for a few years before fizzling out. While Amazon was an unbelievably fast grower in its early years, it has now transformed into registering healthy expansion.

Having multiple powerful secular trends working in its favor is helpful. What's more, Amazon's wide economic moat, supported by its brand, switching costs, network effects, and cost advantage, substantially decreases the chances the business ever gets disrupted.

These factors make it the smartest growth stock to buy with $2,000, in my opinion. As of April 21, the shares trade at a price-to-sales ratio of 2.9. This is very reasonable for such a dominant enterprise.

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 $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

Now, it’s worth noting Stock Advisor’s total average return is 811% — a market-crushing outperformance compared to 153% 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 April 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

Could investing in a simple, low-fee S&P 500 index fund today set you up for life? You may not want to know the answer. You may prefer to hunt for exciting growth stocks instead. But I'm here to tell you that regularly plunking meaningful sums in an S&P 500 index fund can do wonders over long periods.

Even Warren Buffett has endorsed S&P 500 index funds, stipulating in his will that much of what he leaves his wife should go into one. Here's a look at why you might consider investing in an S&P 500 index fund, too.

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Meet the S&P 500 index

An S&P 500 index fund is an index fund that tracks the S&P 500 -- an index (a grouping) of 500 of the biggest companies in the U.S. The fund will hold roughly or exactly the same stocks in roughly the same proportion, aiming for roughly the same performance -- less fees. And there are some very low fees out there.

Here are the recent top 10 components in the index by weight:

Stock	Percent of Index
Apple	6.63%
Microsoft	6.27%
Nvidia	6.00%
Amazon.com	3.70%
Meta Platforms	2.50%
Berkshire Hathaway Class B	2.12%
Alphabet Class A	1.99%
Broadcom	1.83%
Alphabet Class C	1.64%
Tesla	1.55%

Data source: Slickcharts.com, as of April 16, 2025.

It's worth noting that this index is a market-capitalization-weighted one, meaning that the biggest companies in it will move its needle the most. For example, you can see in the table above that Microsoft's weighting is about four times that of Tesla, so Microsoft's stock-price moves will make a much bigger difference in the index than will Tesla's. Of course, these are still the top 10 components. General Mills is also in the index, recently in 255th place, and with a weighting of just 0.07%. Toy company Hasbro, in 488th place, recently had a weighting of 0.02%.

Altogether, these 500 companies make up about 80% of the total value of the U.S. stock market. Thus, the S&P 500 is often used as a proxy for the market. It's mainly made up of giant, large, and medium-sized companies, though. If you want a more accurate proxy, you might opt for a broader index fund, such as the Vanguard Total Stock Market ETF (NYSEMKT: VTI), which aims to include all U.S. stocks, including small and medium-sized ones, or the Vanguard Total World Stock ETF (NYSEMKT: VT), encompassing just about all the stocks in the world.

Why invest in an S&P 500 index fund?

Here's a top-notch S&P 500 index fund to consider -- the Vanguard S&P 500 ETF (NYSEMKT: VOO). Its expense ratio (annual fee) is a mere 0.03%, meaning that for every $1,000 you have invested in the fund, you'll pay an annual fee of... $3.

Why invest in such a fund? Well, because it can perform really well over time and it's way easier to just keep adding money to it than to spend time studying investing and scouring the stock market for the best investments. Instead of looking for a few needles in a haystack, buy the haystack!

Owning shares of an S&P 500 index fund means you'll quickly own (small) chunks of 500 of the biggest companies in America -- and as some companies grow and others shrink over time, the index will be adding and dropping components accordingly.

The table below shows how big a nest egg you might build over time in an S&P 500 index fund, if your money grows at 8%. For context, the S&P 500 has averaged annual gains of around 10% over many decades -- including dividends and not including the effect of inflation. So using 8% is a mite conservative.

Growing at 8% for	$7,500 invested annually	$15,000 invested annually
5 years	$47,519	$95,039
10 years	$117,341	$234,682
15 years	$219,932	$439,864
20 years	$370,672	$741,344
25 years	$592,158	$1,184,316
30 years	$917,594	$1,835,188
35 years	$1,395,766	$2,791,532
40 years	$2,098,358	$4,196,716

Source: Calculations by author.

If that's not convincing enough, know that you probably can't do as well with some other, managed large-cap stock mutual fund. The S&P 500 index has actually outperformed most such funds, which tend to be run by highly trained financial professionals working hard to outperform the index. Over the past 15 years, for example, the S&P 500 bested 89.5% of all large-cap funds.

Whether you opt for a low-fee S&P 500 index fund or not, be sure to have a solid retirement plan, and to be saving and investing in order to have a comfortable financial future.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 781%* — a market-crushing outperformance compared to 149% for the S&P 500.

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

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*Stock Advisor returns as of April 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard S&P 500 ETF, and Vanguard Total Stock Market ETF. The Motley Fool recommends Broadcom and Hasbro 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.

Finding deals after a sell-off is a great way to make a profit as an investor. Many stocks are currently trading for an absurdly low valuation, even after the bump that stocks got on Wednesday.

Two that look like screaming buys right now are Taiwan Semiconductor Manufacturing (NYSE: TSM) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Each of these stocks is so cheap right now that investors cannot afford to miss out on the deals the market is offering.

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Taiwan Semiconductor Manufacturing

At first glance, Taiwan Semiconductor appears to be an odd pick. President Donald Trump specifically targeted Taiwan with a 32% tariff rate, which could hurt Taiwan Semi since most of the chips it makes are produced in Taiwan. That rate has now dropped to 10% to all countries across the board. However, that ignores a huge piece of information in the tariffs: Semiconductors are exempt. This is a key point that many investors are missing, making Taiwan Semi an intriguing buy right now.

Another factor that could keep Taiwan Semiconductor off of Trump's list of targeted companies is that it's actively working to build new production facilities in the U.S. TSMC recently announced a $100 billion investment in U.S. chip manufacturing facilities, which will include three fabrication facilities, two packaging centers, and one research and development (R&D) facility. That's big news for TSMC, and it's exactly what Trump wants: to move more manufacturing capabilities inside the U.S.

Still, there's fear that a weaker consumer could hurt TSMC's business, as some of its chips are used in consumer-facing products like smartphones or vehicles. While this demand will likely dip, it's bound to be outweighed by massive growth in AI chip demand. Over the next five years, management projects that artificial intelligence (AI)-related revenue will increase at a 45% compound annual growth rate (CAGR). Overall, it expects its total revenue to grow at a 20% CAGR, indicating that the company will be fine.

Investors will hear more commentary on how tariffs will affect Taiwan Semi's demand during its Q1 conference call on April 17, but there's no reason to doubt the stock as much as the market does right now. Following the sell-off, Taiwan Semi's stock now trades for less than 18 times forward earnings.

TSM PE Ratio (Forward) data by YCharts

That's an incredibly cheap price for one of the world's most important companies, especially when you consider its growth and ability to sidestep tariffs. With how cheap the stock is right now, I think it's one that investors can't afford to miss out on, and they should be buying up shares left and right at today's prices.

Alphabet

Alphabet is a member of the "Magnificent Seven," a group of tech stocks that have led the market over the past five years. These stocks were often noted as being expensive, but Alphabet has never fetched a premium valuation.

Many investors are worried that its advertising-focused business model centered around the Google ecosystem may be in trouble as generative AI takes some of its market share. However, the habit of "Googling" something is engrained in the behavior of most users around the world. Plus, Alphabet has already integrated generative AI-powered summaries into Google search results, so it's getting ahead of the curve.

Still, should the economy plunge into a recession caused by tariffs, Alphabet's advertising business won't fare well. Advertising is one of the first places companies look to cut expenses during a downturn, which has historically negatively affected Alphabet.

I don't expect this time to be any different should the economy plunge into a recession, but this is far from the first time the market has been worried about a recession over the past 15 years. Despite that, Alphabet's stock is not far from a 15-year low from a trailing price-to-earnings (P/E) standpoint.

GOOGL PE Ratio data by YCharts

So, even with all the fears caused by tariffs or a recession, Alphabet's stock looks dirt cheap from a historical standpoint. This sell-off has occurred without any confirmation of a recession, only the fear of one.

As a result, I think today marks an excellent buying opportunity for Alphabet stock, as it has rarely been this cheap over the past 15 years. We'll hear more from Alphabet in early May about how it believes tariffs will affect the company, but I think it's an excellent time to scoop up Alphabet shares.

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

Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

There's been no shortage of woes for Tesla (NASDAQ: TSLA) this year.

The company just reported a 13% decline in first-quarter deliveries. The brand is in the midst of an unprecedented crisis due to CEO Elon Musk's political turn, helming the operation known as the Department of Government Efficiency and weighing in on elections across the U.S. and in Europe. And President Donald Trump's tariffs threaten to further weaken the economy, specifically impacting the auto sector.

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Coming into 2025, Tesla was already struggling as deliveries fell in 2024, marking its first annual decline in unit sales.

However, despite those troubles, Tesla stock has been resilient, largely because investors have high hopes for its autonomous vehicle (AV) technology, which Musk said would make Tesla the world's most valuable company. In particular, the Tesla CEO has talked up a robotaxi network from his company, which he believes will be key in achieving that valuation.

The company unveiled its Cybercab robotaxi at a launch last October, but the event underwhelmed Wall Street, and it has not yet performed an autonomous vehicle ride. Tesla plans to begin offering autonomous rides in June in Austin, Texas.

However, the robotaxi market could get crowded quickly as the company seems to have new competition from Amazon (NASDAQ: AMZN).

Here comes Zoox

Amazon is a huge company, best known for its e-commerce and cloud-computing businesses. However, the company also has a self-driving car business after acquiring Zoox for $1.2 billion. Zoox has quietly prepared to launch an autonomous vehicle ride-sharing service in several cities across the country, and it could do so before Tesla.

Zoox announced recently that it was launching its sixth testing site in the U.S., this time in Los Angeles.

Amazon's ride-sharing service is also aiming to begin serving riders in Las Vegas and San Francisco, though it's unclear when. Zoox is different from most of its autonomous vehicle peers as it has four inward-facing seats, allowing for a more social experience than the typical vehicle and it has double doors that allow for easy entry and exit, making it look more like a shuttle van. The company says it's a robotaxi, not a car.

Can Amazon challenge Tesla in AVs?

At this point, it's speculative to assess Zoox's potential in autonomy, but it's clear that the space is becoming more crowded as Alphabet's Waymo continues to spread to new cities and as other companies work toward autonomous ride-sharing.

Tesla is also facing deep-pocketed rivals in Alphabet and Amazon, both of which generate tens of billions of annual free cash flow, some of which they can throw at the autonomous vehicle market.

Tesla does have a singular advantage with millions of cars on the road, but its full self-driving technology still requires supervision. Launch of the ride-sharing service is expected to include unsupervised full self-driving, available to Tesla owners.

If the technology proves to be capable of navigating the roads safely, it could be the game changer that Musk hopes it will be as the millions of Tesla owners could subscribe to FSD and theoretically lease their own vehicles out for ride-sharing -- provided the software is there to support it.

However, the arrival of well-heeled debutantes like Zoox shows that Tesla may not dominate the robotaxi market the way the bulls expect.

It's also worth remembering the safety risks in AVs. Other companies' autonomous dreams have gone up in smoke, including Uber Technologies and General Motors, which recently pulled all its Cruise vehicles off the road and ended that program.

Better buy: Amazon vs. Tesla

At this point, Tesla seems priced for perfection, and that perfection includes unsupervised FSD and a burgeoning ride-sharing network. Amazon, on the other hand, has a much more diversified revenue base, a cheaper valuation, and better growth prospects, considering the problems with Tesla's EV business.

Zoox's ramp-up toward a mainstream AV company is likely to be significantly slower than Tesla's, but safety is the biggest hurdle in the industry, not speed.

Overall, Amazon looks like the better buy here. While Zoox might not be a major factor in its business right now, it could be down the road, and it gives investors potential exposure to the robotaxi market.

Keep an eye on Zoox over the coming months as 2025 looks set to be a big year for robotaxis.

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 $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.

Everyone has been talking about artificial intelligence (AI) over the past couple of years -- and it's easy to understand why. AI has the potential to revolutionize everything from the way you plan your day, thanks to AI assistants, to the way companies run factories and develop products thanks to a wide range of AI tools. Over the past quarters, to help make this happen, companies aiming to benefit from the AI boom have invested billions of dollars in the technology.

Some are makers of AI products and services and will gain by selling these to customers. Others are users of AI and will win as the technology streamlines and improves operations, saving them money. And some companies will reap the rewards in both ways.

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In fact, two in particular already are winning in AI. Let's check out how, today, AI is driving profit growth for the following technology companies.

1. Amazon

Amazon (NASDAQ: AMZN) has established itself as a leader in two major growth areas: e-commerce and cloud computing. In e-commerce, it has more than 200 million members in its Prime subscription service, and it's been using AI to better serve these and other customers. For example, Amazon harnesses the power of AI to design faster and cheaper delivery routes for packages and to streamline operations in fulfillment centers.

All of this is helping it reduce cost to serve, which in turn paves the way to higher profitability.

And through Amazon Web Services (AWS), its cloud computing unit, Amazon sells premium AI products from partners such as Nvidia, as well as its own in-house developed chips and platforms, to customers. These products and services help others easily apply AI to their own businesses, so as more and more companies decide to use AI, AWS, the world's No. 1 cloud services provider, may see more and more demand.

Demand from AI customers already is driving growth at the company, with AWS reaching a $115 billion annual revenue run rate last year. So, as the AI boom continues, this momentum should too.

Amazon already is a highly profitable company, delivering nearly $60 billion in net income last year. Now, the company's use of AI to improve efficiency and its sales of AI products in this high-demand market both could spur a new phase of growth in the years to come.

All this makes Amazon a fantastic buy right now for investors interested in betting on future AI winners.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a lot like Amazon when it comes to AI, as this technology is making an already strong business even better -- and Alphabet's Google Cloud, like AWS, sells AI products and services to customers.

Let's talk about Alphabet's use of AI first. The company has developed Gemini, its own large language model, to power its AI efforts. And you may know Gemini well, as it's one of today's popular AI assistants, popping up on your phone to help you with any of your daily tasks. Importantly, Alphabet also uses Gemini to improve its biggest profit driver: Google Search, the world's most-used search engine.

Advertisers pay to reach their target audience -- you and me -- on the Google platform, and advertising revenue makes up most of the company's total revenue. AI is helping Alphabet improve Google Search, and it's also helping advertisers as they plan their campaigns on the platform.

Like AWS, Google Cloud offers AI to its customers, and thanks to AI infrastructure and generative AI solutions demand, cloud revenue in the most recent quarter jumped 30% to $12 billion. The company said AI offerings have been driving new client wins, and last year, the number of first-time deals doubled from the previous year. And the number of deals greater than $250 million also doubled year over year.

These strengths in AI use and AI development position Alphabet well as growth in this technology continues, making this stock another top AI buy to hang on to for the long term.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.

Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) stock is rising Friday. The tech giant's share price was up 2.4% as of 3 p.m. ET amid a 1.5% gain for the S&P 500 and a 1.7% a gain for the Nasdaq Composite. The stock had been up as much as 3.1% earlier in the daily session.

The stock market has seen a historically volatile stretch of trading this week, but it appears to be poised to end the stretch on something of a high note. After substantial sell-offs yesterday, Alphabet stock is regaining some ground -- but it's still down roughly 17% across 2025's trading.

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 »

Alphabet is rising amid layoff news and rebound momentum for the market

The Information reported today that Alphabet recently laid off hundreds of workers at its platforms and devices segment. While layoffs can sometimes be an indication that a business is struggling overall, that's probably not the case here. Instead, investors seem to be moderately positive on the news because it signals that Alphabet is taking a fiscally disciplined approach amid an uncertain macroeconomic outlook.

The broader market is also seeing recovery momentum Friday on the heels of yesterday's sell-offs on news that U.S. tariffs on imported goods from China would be set at 145% -- ahead of the 125% import tax rate that was mentioned by President Donald Trump on Wednesday. It's been an incredibly wild week for stocks, but Alphabet looks poised to end the week solidly in the green thanks to news that tariffs on all countries except China have been suspended for 90 days.

What's next for Alphabet?

Following market volatility this year, Alphabet is now valued at approximately 17.4 times this year's expected earnings. Given the company's recent sales and earnings momentum and long-term growth potential, the company looks cheaply valued by conventional metrics. But business exposure to the Chinese market and macroeconomic uncertainty suggests that shares could continue to see volatile trading in the near term.

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

Before you buy stock in Alphabet, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% 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 April 10, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

The market has been focused on Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) ability to build artificial intelligence (AI) language models and disruption in search, but a huge growth driver for the company's future could be its AI in hardware. In this video, Travis Hoium digs into the latest new product.

*Stock prices used were end-of-day prices of April 9, 2025. The video was published on April 11, 2025.

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 »

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

Before you buy stock in Alphabet, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% 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 April 10, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

With the S&P 500 (SNPINDEX: ^GSPC) ending last week down more than 10% in two days, the stock market experienced its first crash since March 2020, when the COVID-19 pandemic began to escalate. The culprit this time was the U.S. enacting punitive tariffs against much of the rest of the world and an ensuing trade war. These tariffs were even applied to two islands uninhabited by humans, with the Trump administration saying the duties were added so that other countries could not evade tariffs by shipping goods through the ports of these islands.

With the market in turmoil and a lot of volatility likely ahead, let's look at four ways investors can navigate the current market crash.

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. Have liquidity

In a bear market or an impending bear market, one of the most important things investors can have is liquidity, or cash on the sidelines. By having available cash, investors can then take advantage of market dips.

If you're fully invested, consider selling some of your least favorite positions to raise some cash that can later be used to buy ideas you have more conviction in. If these are in a non-retirement account, you'd also get the potential benefit of a tax loss when you next file.

To be clear, you don't want to start panicking and just sell stocks. Instead, you want to look at this as an opportunity to high-grade (improve the quality of) your portfolio.

2. Create a list of high-quality stocks to buy

Another important thing you can do is create a list of high-quality stocks and the prices at which you'd start buying them. Undoubtedly, there have been stocks you've liked in the past, but their valuations were too high.

This could be highfliers like Palantir Technologies (NASDAQ: PLTR) or Cava Group (NYSE: CAVA) whose businesses are doing great but whose stock valuations just skyrocketed over the past year or two. Perhaps it could be stocks in industries that have always tended to have high multiplies, such as cybersecurity companies like CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW). There could also be blue chip tech names like Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) or Amazon (NASDAQ: AMZN) whose stocks have just gotten cheaper, given their collection of businesses and future prospects.

The key, though, is to gather a list of high-quality stocks you'd be comfortable owning over the long run. And then, when they reach your price target, be ready to start building positions in them. Just do the research beforehand so you're ready to pounce.

3. Consider writing puts

A more advanced strategy to use in a down market is to write (sell) put options. By writing a put option, you collect a cash premium up front, but you are then obligated to buy that stock if the buyer exercises his option to sell it to you. As such, you want to do this only with stocks and at prices where you would want to buy them.

For example, if Amazon was on your list of stocks to buy at $150, you could write a put on Amazon stock with a strike price of $150 and a May 9 expiration and collect around $3.70 in premium. If the stock falls below $150 and the option is exercised, you'd own the stock at $150. Note that each option represents 100 shares. If Amazon doesn't fall to that price, you just collect the premium, which would be worth around $370 for each option.

This strategy's intention is twofold. One is to let you buy into a stock you want to own at a lower price. However, if the stock never reaches that price, you still earn some return.

The downside to this strategy is that it does tie up some capital, which you could potentially use elsewhere. That is why I prefer to keep the expiration dates short, at about a month.

In addition, if the stock blows past your price target on the downside, you are still obligated to buy at the strike price. This is most likely to occur if a major event happened when the market was closed, and it opened way down. However, the assumption we are using is that you'd be a buyer of the stock at the strike price regardless. The other disadvantage is that if the market does make a quick reversal, you would lose out compared to if you had jumped in right away and bought the stock.

However, this is a nice strategy to supplement your investments, allowing you to earn some extra cash as you wait for stocks to hit your buy prices.

4. Dollar-cost average with ETFs

Another strategy investors should consider is dollar-cost averaging. In this strategy, you make investments at set times and dollar amounts regardless of their prices.

This strategy works particularly well with exchange-traded funds (ETFs) such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the Invesco QQQ ETF (NASDAQ: QQQ). These two ETFs track major market indexes that have proven to be long-term winners. The Vanguard ETF tracks the S&P 500, which comprises the 500 largest stocks traded in the U.S., while the QQQ ETF tracks the Nasdaq-100, which is more tech- and growth-oriented.

With ETFs, you don't have to worry about individual stock research. You can buy an ETF that immediately gives you a portfolio of leading stocks. Consistently dollar-cost averaging into index ETFs is a great way to build long-term wealth, and a down market is a great place to start implementing this strategy.

Should you invest $1,000 in S&P 500 Index right now?

Before you buy stock in S&P 500 Index, 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 S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $590,231!*

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Palantir Technologies, and Vanguard S&P 500 ETF. The Motley Fool recommends Cava Group and Palo Alto Networks. The Motley Fool has a disclosure policy.

The market is suffering under the weight of President Donald Trump's tariffs on trading partners, as investors try to understand how they'll affect companies.

One growth stock that's fallen hard this year is Amazon (NASDAQ: AMZN), which is down 20% year to date, as of this writing. That fall is causing some investors to wonder whether it might be a good time to pick up shares, or if it's best to avoid the company during this uncertain time.

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Here's why I think now could be a good time to buy Amazon stock.

One way it will get more difficult for Amazon

It's worth mentioning that Amazon isn't immune to the tariffs. Nearly 25% of the products sold on Amazon come from China. As of this writing, the U.S. has placed a 34% tariff on Chinese goods, on top of a 20% duty previously in place.

Amazon holds about 40% of the e-commerce market in the U.S., but it also has a substantial international footprint, with e-commerce marketplaces in more than 20 countries and shipping to more than 100 countries. So whether it's U.S. sellers that offer products made internationally or international sellers offering products in their own countries, Amazon's global marketplace is likely to be affected by the tariffs if they remain in place.

How Amazon's business may actually benefit

While prices of some goods will no doubt increase on Amazon's platform, the company could also benefit from a new executive order President Trump signed that removed a previous exemption. The de minimis exemption allowed inexpensive international goods to come into the country without U.S. Customs and Border Protection scrutiny and without tariffs.

That previous exemption helped cheap goods pour into the U.S. via China-based platforms Shein and Temu. Those platforms were able to undercut some of Amazon's prices, which led Amazon to launch its own lower-priced marketplace, Amazon Haul, to try to compete. With Shein and Temu no longer able to enjoy those benefits, Amazon could benefit from lower competition.

I think it's also important to point out that even during difficult economic times, and even amid high inflation, Amazon's marketplace has grown. In the first year of the COVID-19 pandemic, Amazon's sales increased 22%, and through the 2008 financial crisis, its revenue jumped 29%.

That doesn't mean the same will happen with tariffs in place, but it does show that Amazon has weathered difficult times in the past and come out ahead.

The secret of Amazon's growth

While Amazon is best known for its e-commerce platform, Amazon Web Services (AWS) is actually its most profitable segment. AWS generated $39.8 billion of operating income in 2024, compared to $25 billion from its North American e-commerce sales.

AWS holds a dominant 30% of the global cloud computing market share, compared to 21% for Microsoft and just 12% for Alphabet.

Cloud computing demand is on the rise, especially amid the development of artificial intelligence applications and more companies looking to add AI into their workflows. Goldman Sachs estimates that AI cloud revenue could reach $2 trillion by 2030, and Amazon, with its leading position, is perfectly positioned to benefit.

Amazon's trading at a discount, but expect more volatility

With Amazon's recent share price dip, the company's forward price-to-earnings multiple is about 26, down from about 42 this time last year. That means the stock is relatively cheaper than it was about a year ago, giving investors a chance to grab shares at a discount.

It's important to note that the tariff uncertainty will likely continue to cause volatility in the market. If there's a reversal on tariffs or significant trade deals are made, stock prices could surge higher. But even if the tariffs remain in place, Amazon's dominance in e-commerce and its long-term prospects in cloud computing still make it a great stock to own for the long term.

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $249,730!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $32,689!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $469,399!*

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

Continue »

*Stock Advisor returns as of April 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) held its GPU Technology Conference (GTC) 2025 last month in San Jose, California. The artificial intelligence (AI) chip leader's annual happening is widely considered the world's leading AI event.

I watched CEO Jensen Huang's two-hour keynote address in real time, caught a couple of his interviews, and viewed several panel discussions about AI and humanoid robots. Great information was shared during all these events, particularly Huang's keynote. It was chock-full of promising new product launches and partnerships, reinforcing my bullish view of Nvidia stock as a long-term investment.

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But there was one incredibly bullish thing he said during GTC week that most investors probably aren't aware of. It wasn't uttered during his keynote or an interview, but at the GTC Financial Analyst Q&A on March 19.

Is Nvidia's AI business better than "just" recession-resistant?

A Wall Street analyst asked this question at the Q&A event: "If there's a recession, what does that do to your business? To AI demand?"

Huang's answer: "If there's a recession, I think that the companies that are working on AI are going to shift even more investment toward AI because it's the fastest growing [area/space]. Every CEO will know to shift toward what is growing."

I think a reasonable interpretation of his answer is that he's suggesting a recession should increase, or at least not decrease, demand for the company's AI-enabling products. Those products, collectively, garnered at least 87% of the company's total revenue in its most recent quarter, which ended in late January. (The data center segment's products are essentially all AI-enabling, and this segment took in about 87% of the company's revenue in the most recent quarter.)

Huang's answer might seem counterintuitive, but it makes sense upon reflection. CEOs, especially in certain industries, realize that AI investments are now so critical that they are a necessity. Innovations in AI are occuring so rapidly that companies that cut back on AI investments even for a relatively brief time will likely fall behind their competitors in AI capabilities. This could lead to an existential crisis from which they might not ever recover.

Let's say that Apple decided to cut back on its AI investments during the next economic downturn or full-fledged recession. It could risk potentially permanently losing some of its iPhone customers to competitors, namely makers of cellphones that use Alphabet's Android operating system. That would be a risky move, since the iPhone is its bread-and-butter product.

As Palantir CEO Alex Karp bluntly put it in the AI-powered data analytics company's third-quarter 2024 earnings release, "The world will be divided between AI haves and have-nots." Indeed, it seems probable that the AI haves, which could be companies or countries, will be winners, and the AI have-nots will be losers.

Nvidia is built to weather tough times

Data by YCharts. Data as of each company's most recently reported quarter. Free cash flow numbers are for the trailing-12-month period.

What if Huang's statement proves inaccurate and demand for AI-enabling products and services -- including Nvidia's -- decreases during the next economic downturn or recession?

Investors should fear not, as Nvidia's balance sheet is hardy. The company is in a better position than most of its peers and competitors to weather a downturn in demand leading to lower revenue, earnings, and cash flows.

As the chart shows, Nvidia's cash position and long-term debt are roughly equal at about $8.5 billion to $8.6 billion. Chipmaker Advanced Micro Devices (AMD) has more cash than long-term debt, so it's also in good shape in this respect. But chipmakers Broadcom and Intel have much more long-term debt than they have cash, so they're using a lot of cash to service their debt. This is an OK situation for Broadcom because it has strong cash flows, at least currently, but Intel is bleeding cash. Over the last year, Intel's free cash flow (FCF) was negative-$15.7 billion, almost double its cash on hand.

Nvidia is an FCF machine. Over the past year, it churned out $60.9 billion in FCF. It could easily use its cash flow to pay down, or even fully pay off, its long-term debt. But it makes sense that it doesn't do so. The company's big cash position coupled with its massive FCF provides it with many options for investing in long-term growth initiatives.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 April 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Intel, Nvidia, and Palantir Technologies. The Motley Fool recommends Broadcom and recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.

Quantum computing specialist Rigetti Computing (NASDAQ: RGTI) has been through a lot in recent months. As of this writing on April 7, the stock is down 61% from January's all-time high. But if you shift your focus to a six-month view, Rigetti has gained a staggering 1,014% in that period.

The company didn't exactly earn its skyrocketing price jump, but the recent drop isn't Rigetti's fault either. Forces way beyond Rigetti's control are playing Wall Street lacrosse with the stock. So what's going on, and is this price dip a good time to buy Rigetti stock?

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The story so far

I'm sure you know the good part. Fellow quantum computing expert Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) developed a new chip with superior error correction in early December. This large step forward helped Alphabet's Google Quantum AI team crush a performance benchmark to smithereens, making modern supercomputers look frozen in time by comparison. This warmly welcome sign of progress sent all quantum single-focus computing stocks skyward, including Rigetti.

But the fun didn't last forever. In January, just a month after the error-correcting breakthrough, Nvidia (NASDAQ: NVDA) CEO Jensen Huang said that truly useful quantum computers were still many years away. Two decades looked like a reasonable estimate in Huang's mind.

And he should know, since Nvidia also competes in this market with a focus on connecting today's digital technology to tomorrow's quantum computers. Huang isn't some anonymous third-party analyst, but a business leader with his fingers deep in the quantum computing pie. He wants to have a large slice of it in the long run.

That statement took the wind out of Rigetti's stock sails, as it did for the other pure-play quantum computing stocks. Huang hit the reset button on this sector's dreams of quick development and nearly immediate riches.

On top of that bubble-popping event, the market isn't terribly fond of speculative growth stocks with negative earnings right now. The growth-oriented Nasdaq Composite (NASDAQINDEX: ^IXIC) market index is down 21.5% in the last three months, with about half of the pain accumulating on Thursday and Friday of last week. Tariffs may not slow down Rigetti's quantum computing research directly, but anything that limits the broader economy's access to borrowed funds could be bad news. Without free-flowing capital, Rigetti and its peers might have a hard time landing business-generating contracts.

Rigetti's stock has actually held up better than the Nasdaq Composite index over the last month, hanging on with a 2.3% price drop while the index plunged 13.7%. But the picture changes dramatically if I adjust that chart by a single day, and the comparative chart looks like this after shifting the time frame by a full week:

RGTI data by YCharts

Rigetti's wild ride

All right, so Rigetti soared thanks to Google's research breakthrough and then started to fall because of a modest analysis by Nvidia's management. The economic backdrop isn't helping. Where does Rigetti's stock land on the scale of "ridiculously cheap" to "way too expensive" today, then?

I'm afraid Rigetti's stock is much too hot to touch at this point. The 61% price drop is a good start, but very far from "good enough."

Even now, Rigetti shares trade at 142 times trailing sales, making even Nvidia's ratio of 18 times sales look affordable. I'd love to talk about profit-based metrics, but Rigetti is burning cash at the rate of $61.7 million per year. At this rate, it could run out of cash reserves in less than three years -- long before quantum computers are supposed to gain game-changing powers.

The company could become a buyout target along the way, or it might sign long-term contracts with plentiful revenue streams in a forward-looking perspective. Otherwise, I expect Rigetti to dip into unwelcome cash sources such as dilutive stock sales or expensive debt papers.

Is Rigetti worth the risk? I'm afraid not.

It's far too early to pick long-term winners among the handful of small and unprofitable quantum computing experts. But you may have noticed that established tech titans like Alphabet and Nvidia have serious interests in this technology, too. Those are the stocks I would pick if I wanted a low-risk connection between quantum computing and my stock portfolio. I can't even pin a target price on Rigetti where I might be interested in pecking at the single-market expert.

Like I said, Rigetti has a long way to go before it can make investors' dreams come true. Many things can go wrong on the way.

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

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

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

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $244,570!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*

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

Continue »

*Stock Advisor returns as of April 5, 2025

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

For the past few years, investors have become enamored with the prospects of artificial intelligence (AI) technology. But for the most part, developers have been touting the same carousel of ideas -- explaining how AI is leading to breakthroughs in training large language models, helping build autonomous systems for vehicles, and bringing unprecedented levels of efficiency to the workplace.

Although these use cases fetched a lot of intrigue for a while, investors are beginning to look for something new to get excited about now. Enter quantum computing -- a pocket of the AI realm management consulting firm McKinsey & Co. estimates to be worth $1.3 trillion by 2035. Essentially, this form of computing uses principles of quantum mechanics to process information exponentially faster than a "classical" computer.

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For the past several months, executives at the largest AI businesses have started talking about the next revolutionary phase of modern computing. As is typical for a new megatrend, loads of companies are now marketing themselves as quantum computing darlings -- parroting talking points about how the technology is poised to benefit high-priority areas in healthcare, cybersecurity, and financial services, just to name a few.

Let's explore which companies are making waves in the world of quantum computing, and assess what opportunities are best for investors with a long-term time horizon.

These quantum computing stocks are getting loads of attention, but...

Seasoned investors know all too well that whenever a hot new area emerges within an already popular theme, opportunities seemingly begin popping up out of the woodwork. Take a look at the chart below and try to spot the anomaly.

RGTI data by YCharts

Do you notice anything a little odd? The share price returns for quantum computing stocks Rigetti Computing, IonQ, Quantum Computing, and D-Wave Quantum absolutely trounce the returns across both the S&P 500 and Nasdaq Composite over the last year. To add an extra layer of weirdness here, the share prices for these quantum computing stocks barely moved between January and October 2024 -- and then suddenly, they popped exponentially.

If you've never heard of these companies, there are good reasons. Chief among them is that each company above is only generating nominal levels of revenue. This makes sense, as quantum computing does not have much in the way of utility given the current state of the AI narrative. In other words, while the idea of quantum computing technology is exciting, there isn't much application for it today.

RGTI Revenue (Quarterly) data by YCharts

Nevertheless, the companies explored above have all managed to trade at valuation multiples that are completely disconnected from their underlying business trends (i.e., low revenue, heavy cash-burning operations).

Given the upside-down financial profiles of these companies, I'm hard-pressed to buy into a narrative that any of them will be around decades from now. Instead, let's look at some other opportunities that look better positioned for the long haul.

...these magnificent opportunities look better positioned for the long term

By now, I'm sure you're well aware that the "Magnificent Seven" stocks -- Amazon (NASDAQ: AMZN), Apple, Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), Meta Platforms, Tesla, and Nvidia (NASDAQ: NVDA) -- dominate the AI narrative. For the most part, each of these companies hovers around overlapping use cases in AI -- from workplace productivity software, semiconductor chips, social media, self-driving cars, cloud infrastructure, and more.

However, Amazon, Alphabet, Microsoft, and Nvidia have all quietly been showcasing their own forms of progress in the area of quantum computing as well. For example, Amazon, Alphabet, and Microsoft have all developed their own series of quantum chips. In addition, Nvidia offers an extension of its compute unified device architecture (CUDA) software platform specifically geared toward quantum computing.

The jaw-dropping returns from IonQ, Rigetti, D-Wave, and Quantum Computing are rooted in hype around the idea of quantum computing and what opportunities might be multibaggers in the future. By contrast, Nvidia, Amazon, Alphabet, and Microsoft all have much stronger financial horsepower that allows them to consistently invest and hone their quantum roadmaps without taking a toll on existing AI initiatives that are actually being monetized as it stands today.

Furthermore, given that these Magnificent Seven cohorts have already built large and thriving AI businesses, quantum computing represents another thread that could stitch their broader AI ecosystems together -- helping them build even stronger businesses poised to grow for decades down the road.

While the Magnificent Seven stocks are currently under pressure during the ongoing Nasdaq sell-off, each company remains in a solid financial position for the long run. I see Nvidia, Alphabet, Amazon, and Microsoft as far superior opportunities compared to the more speculative names I explored above.

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

Before you buy stock in Nvidia, consider this:

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

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 April 5, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

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