Media-streaming technology innovator Roku (NASDAQ: ROKU) is always riding a roller coaster down Wall Street. As of April 23, the stock is trading 36% below its annual peak and 87% down from the all-time highs in the summer of 2021.

But Roku's high-octane growth story is still playing out. The company sacrificed some profits to boost its market reach and sales growth in recent years, and many investors focused on the swooning bottom line instead of the accelerating revenue trend. As a result, Roku's stock now trades at a ridiculously low valuation and I highly recommend buying a few shares in April 2025.

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Roku's value-stock valuation neighbors

So here's the deal. Roku's stock is changing hands at 2.2 times trailing sales. That's an appropriate valuation for mature, slow-growing businesses. For example, The Home Depot (NYSE: HD) carries the same 2.2 price-to-sales (P/S) ratio and Starbucks (NASDAQ: SBUX) hovers just above this unlikely duo with a P/S ratio of 2.6.

Starbucks and Home Depot are perfectly respectable companies. They're great investments in their own right, in large part thanks to their generous dividend policies. Investors expect these retail giants to generate massive cash profits, most of which are distributed to shareholders in the form of buybacks and dividends. Sales growth isn't terribly important in this scenario. It's all about bottom-line profits.

Not your barista's growth trajectory

But Roku isn't running that type of business yet. It could get there in a decade or two, but this company is maximizing its revenue growth and global market reach right now. There was a slowdown in the inflation crisis of 2022, but that's ancient history already. Roku is growing its business much faster than Starbucks and Home Depot:

ROKU Revenue (TTM) data by YCharts

Roku's profit-sapping business growth methods

Roku's impressive sales growth was built on some temporarily painful policies. The company boosted its research and development (R&D) budgets throughout the difficult post-lockdown and high-inflation periods. Did it slow down on sales and marketing efforts? Nope, those budgets rose just as quickly as the R&D spending. At the same time, gross margins headed lower because Roku sold its media players at very low prices in order to win some price-sensitive customers.

Things have changed since then. Roku is pursuing international markets while building its presence in the video-based digital advertising sector. This isn't the most inspiring economy ever for advertising experts, with unpredictable government policies and low consumer confidence, so it could take some time before Roku's ad business starts pulling its weight.

Smart ways to buy a roller-coaster stock like Roku

That's alright, though. I showed you that Roku's revenue growth is accelerating right now. The company's robust American business forms a rock-solid platform from which it can explore opportunities abroad, much like former parent company Netflix (NASDAQ: NFLX) did in the 2010 to 2015 era. I can't promise that Roku will earn a trillion-dollar market cap any time soon, as Netflix hopes to do, but the stock looks incredibly undervalued at today's tiny valuation ratios.

So Roku checks all the boxes for a promising long-term growth investment. It's an exciting growth stock (check!) in a booming global market (check!), trading at bargain-bin prices (check!).

Volatility comes with the territory, and you might want to blunt the price risk by spreading out your Roku investment over time. Buying in thirds is one reasonable approach, or you could make a deeper commitment by setting up a dollar-cost averaging plan. The more you can automate these moves, the better.

And keep an eye on that P/S ratio. Roku's stock doesn't belong in the same value-investing conversation as Home Depot and Starbucks in the long run. Netflix is a more reasonable peer, currently trading at 11 times sales.

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

Before you buy stock in Roku, 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 Roku 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 869% — a market-crushing outperformance compared to 159% 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

Anders Bylund has positions in Netflix and Roku. The Motley Fool has positions in and recommends Home Depot, Netflix, Roku, and Starbucks. The Motley Fool has a disclosure policy.

The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) isn't the most popular exchange-traded fund (ETF) on the market. With $83.7 billion in assets under management, it's not even among the five largest ETFs in the Vanguard family. But it is the biggest name in dividend-oriented ETFs, making it a leading choice for income investors who don't want to worry about picking individual dividend stocks.

So this Vanguard fund is well respected, but is it a good ETF to buy right now? I'll help you take a look. First, let's see what makes this ETF tick.

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Inside the Vanguard Dividend Appreciation ETF

As usual, Vanguard isn't hand-picking stocks for this ETF. It's actually an index fund, tracking the components of the S&P U.S. Dividend Growers index. By handing off the heavy research work to another organization -- S&P Global (NYSE: SPGI) in this case -- Vanguard can automate the fund management and offer the resulting ETF with very low management fees.

So I need to take one more step to figure out how this ETF is designed. As it turns out, the underlying market index picks out proven dividend growth stocks among companies headquartered in the United States.

There's a minimum requirement for the stock's daily dollar-based trading volume. Real estate investment trusts (REITs) aren't allowed because they belong in a different S&P index. Each candidate must have increased its annual dividend payout for at least the last 10 years. Oh, and the highest-yielding 25% of this filtered list are also excluded. The idea here is to reduce the risk that often comes with excessive yields.

That's the selection process. Easy-peasy. Buying shares of the Vanguard Dividend Appreciation ETF gives you exposure to more than 300 consistent dividend growth stocks. The ETF is weighted by market cap, and Vanguard charges a tiny annual fee of 0.05%.

Comparing the Vanguard Dividend Appreciation ETF to its famous S&P 500 cousin

The resulting stock list has a lot in common with the better-known Vanguard S&P 500 ETF (NYSEMKT: VOO). Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are the two largest holdings on both lists. Despite the dividend fund's focus on high-quality payouts, its 1.9% yield is just a little bit higher than the S&P 500 ETF's at 1.4%. Their long-term performance tends to be quite similar, whether you account for reinvested dividends or not:

VOO data by YCharts

But there are significant differences, too. The third- and fourth-largest holdings in the dividend fund are Broadcom (NASDAQ: AVGO) and JPMorgan Chase (NYSE: JPM). Their rankings on the general S&P 500 list are No. 8 and No. 11, respectively. Many of the leading S&P 500 stocks are not in the habit of paying dividends at all, not to mention raising their payouts every year.

The sector-by-sector composition is very different, too. As expected, the dividend appreciation fund owns more stocks in the industrial, healthcare, and finance segments, with a milder focus on consumer goods and technology.

Finally, it's less top-heavy than the ordinary S&P 500 tracker. The top five holdings in the dividend ETF add up to 18.3% of the total portfolio, compared to 24.9% for the five largest S&P 500 components. From this point of view, the smaller fund with just 338 components is more diversified than the 505-ticker S&P 500 ETF.

Who should consider this dividend-focused ETF right now?

Now you know what the Vanguard Dividend Appreciation ETF looks like, and it's time to answer the real question on everyone's mind: Is it a good ETF to buy in April 2025?

Most people should prefer the good old S&P 500 fund, most of the time. Its modest long-term performance advantage can make a significant difference when you're building a nest egg over decades.

But I understand if you prefer a more balanced portfolio in these uncertain times. The tech giants that recently lifted the S&P 500 to all-time highs might be due for a price correction, after all. It's not easy to keep the growth engines running in every possible economy. And the lower-risk dividend fund does have a history of strong performance in troubled times.

The S&P 500-beating periods tend to be fairly short, though. Even if you time your market calls to perfection, you'd still probably be better off in five or 10 years with the ultra-reliable S&P 500 ETF under your belt.

Then again, everyone's financial situation is unique. The Vanguard Dividend ETF can be the way to go if you prefer its blend of stable stocks, robust dividend payouts, and broader diversification. So I'm not throwing this interesting fund under the bus. It can be the right fund for some people, especially in a shaky economy like the current situation. Still, you should take a closer look at the standard S&P 500 option before committing too much capital to this idea.

Should you invest $1,000 in Vanguard Dividend Appreciation ETF right now?

Before you buy stock in Vanguard Dividend Appreciation ETF, 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 Vanguard Dividend Appreciation ETF 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 $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

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*Stock Advisor returns as of April 21, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Anders Bylund has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Microsoft, S&P Global, Vanguard Dividend Appreciation ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Artificial intelligence (AI) is still Wall Street's favorite water-cooler talk. It's also serious business. Finding the right AI strategy can make or break a company's future. That's true even outside the traditional tech sector, and digital entertainment specialist Netflix (NASDAQ: NFLX) is taking it very seriously.

In last week's first-quarter earnings call, co-CEO Ted Sarandos explained how Netflix is thinking about AI nowadays. Let's dig in and see whether his AI comments make sense or not.

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Making movies 10% better beats making them 50% cheaper

Near the end of the earnings call, Morgan Stanley analyst Ben Swinburne asked Netflix's management for an update on the company's AI strategy. To summarize Swinburne's question: Leading directors have started to embrace generative AI technology, so how is Netflix planning to leverage this powerful tool?

Sarandos highlighted Avatar and Titanic director James Cameron's view that generative AI could cut movie production costs in half, and turned in a different direction.

"I remain convinced that there's an even bigger opportunity if you can make movies 10% better," he said. "Traditionally, only big budget projects would have access to things like advanced visual effects (VFX) such as de-aging. So today, you can use these AI-powered tools so to enable smaller budget projects to have access to big VFX on screen."

As an example, the big-budget Scorsese movie The Irishman in 2019 used "very expensive" technologies to make actors look younger, said Sarandos. Five years later, that movie's cinematographer, Rodrigo Prieto, directed another sprawling epic; based on the classic Juan Rulfo book of the same name, Pedro Páramo shows several characters in several time periods, several decades apart. Generative AI is a cost-effective method for achieving the right looks in each period.

"Using AI-powered tools he was able to deliver this de-aging VFX to the screen for a fraction of what it cost on The Irishman," Sarandos said. "In fact, the entire budget of the film was about the VFX cost on The Irishman."

In other words, generative AI tools helped Prieto get this long-suffering project off the ground. Making it without generative AI would have been too expensive, not good enough, or perhaps both.

This is how Sarandos wants to use generative AI in the future -- enabling creative talents to run with ideas that always seemed out of reach without AI assistance.

AI in filmmaking isn't exactly new

So Sarandos added a twist of human talents to the generative AI discussion. Just a couple of days later, the Academy of Motion Picture Arts and Sciences updated its Academy Awards rule book. In the Academy's updated view, the decision to include AI tools will "neither help nor harm the chances of achieving a nomination." Instead, each film will be judged by the human creativity instead of which methods it used.

And this analysis could have been made many years ago. Peter Jackson's digital effects crew put thousands of orcs and elves on the Lord of the Rings battlefields 20 years ago, and they didn't control each animated figure by hand. All three films won the Academy Award for best visual effects, despite their heavy use of automated animation. The Walking Dead added lots of digital zombies to many scenes, as early as 2010. Sure, these lurchers were based on motion-capture filming, but their behavior on the screen was as computer-controlled as any generative AI avatar.

Netflix wants to make premium content with an AI assist

Taken together, Netflix and the Academy are making generative AI look more like an ordinary movie-making instrument than a dangerous replacement of human creativity. Will this message stick? I don't know, but the discussion has been started.

The long-term effects of this generative AI revolution might follow Ted Sarandos' planned path, delivering more and better content to viewers without taking away the human quality of creative work. Critics might argue that this is the wrong idea, and that the entertainment market is about to be drowned in tons of cheap but low-quality shows and movies.

I'm sure you'll see solid examples of both strategies. There's a place for inexpensive mass-market versions of anything and everything, but truly creative efforts will also always find an audience. It looks like Netflix wants to play on the high-end side of this divider, which aligns with the company's stated goals: "Netflix is a focused passion brand, not a do-everything brand: Starbucks, not 7-Eleven; Southwest, not United ; HBO, not Dish."

As a longtime Netflix user and investor, I applaud Sarandos' focus on production quality over cost-cutting. I'd rather see more award-winning nuggets of creative gold than rushed bargain-bin entertainment -- no matter how the content was created.

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

Before you buy stock in Netflix, 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 Netflix 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 $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% 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

Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix, Starbucks, and Warner Bros. Discovery. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

The crypto market has calmed down after a couple of months characterized by price-cutting volatility. Bitcoin (CRYPTO: BTC) is down 8% year-to-date on April 21. That's comparable to the stock market, as the S&P 500 (SNPINDEX: ^GSPC) index fell 13% over the same period. If anything, Bitcoin has been more stable than stocks amid the tariff drama, rising 3% since the end of March while the leading stock index dropped 9% lower.

But if you're planning to buy into the crypto sector in this period of stable prices, you have other options than Bitcoin. The largest crypto's market-beating stability hasn't rubbed off on the entire sector, and many altcoins are available at dramatically lower prices nowadays.

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In particular, I recommend taking a closer look at Polkadot (CRYPTO: DOT) right now. The cross-chain app development coin, managed by the Web3 Foundation, has also outperformed the S&P 500 in April with a smaller 4% price drop. But it's down 42% since the end of 2024, even though a stack of bullish growth drivers is piling up.

I'll give you the lowdown on Polkadot's transformation. If you're still not excited about this promising Web3 investment by the end of this page, you should probably stick to more traditional ideas like Bitcoin and value-oriented stocks. That's OK -- Polkadot is just one of many perfectly reasonable investment ideas in this dynamic market.

Polkadot's special place in the crypto world

Polkadot has two main purposes, and they are tightly related to each other:

• As the official coin and blockchain network of the Web3 Foundation, Polkadot was explicitly designed to support the next generation of the internet. It facilitates privacy, personal data control, and a financial system of peer-to-peer transactions. Getting this dotted ball rolling could disrupt everything from personal finance and media publishing to medical records and social media.
• The Polkadot blockchain network doesn't stand alone. Instead, it can connect to many of the leading blockchains out there, sending and receiving data from one to another. Let's say your Web3 decentralized finance app needs to manage money transfers with the Cosmos (CRYPTO: ATOM) network and store the user's wealth in the form of Bitcoins. The process is handled by Ethereum (CRYPTO: ETH) smart contracts, based on real-world data provided by Chainlink (CRYPTO: LINK). Letting these components talk to each other can be complicated, but Polkadot's integrated development tools make it easy. And that's how you build an advanced Web3 app.

Where are all the Polkadot apps?

So Polkadot's purpose is pretty clear, and I'm looking forward to Web3 ideas making an impact on mainstream culture. I'm not aware of any game-changing examples so far, though the Subsocial content monetization platform and Polkamarkets data forecasting community are off to a good start.

If those early hopefuls don't get the party started, the first Polkadot killer app might be a decentralized game or a mobile network management system. The first big Polkadot apps might not have the cryptocurrency's logo plastered all over it, but it can do the heavy cross-chain communications lifting behind the scenes. The resulting torrent of Polkadot usage will still build real-world value, one microscopic transaction fee at a time.

Polkadot's impressive technical makeover

On top of the incoming Web3 future, Polkadot is upgrading is technical platform at the moment. The original collection of parachains and crowdfunding auctions was powerful but also confusing in many ways. The new Polkadot 2.0 design simplifies everything into a single computing hub, running a massively scalable supercomputer on the blockchain. This platform can execute perfectly ordinary computer programs, such as a playable version of the classic ID Games game DOOM . That's a pretty silly example, but also a colorful demonstration of the next-generation Polkadot ecosystem's flexibility.

Putting this upgraded system in the hands of a global developer community could very well create that long-awaited first Web3 killer app. If this isn't the right market for any of these disruptive ideas, the stage will be set for a longer waiting game. So I can't promise that Polkadot will skyrocket in 2025, or the foreseeable future.

But I don't mind buying coins on the cheap and waiting for the sea change to come -- even if it takes several years. Investing is a marathon, not a sprint.

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

Before you buy stock in Polkadot, 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 Polkadot 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 $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

Now, it’s worth noting Stock Advisor’s total average return is 781% — a market-crushing outperformance compared to 149% 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

Anders Bylund has positions in Bitcoin, Chainlink, Cosmos, Ethereum, and Polkadot. The Motley Fool has positions in and recommends Bitcoin, Chainlink, and Ethereum. The Motley Fool recommends Cosmos. The Motley Fool has a disclosure policy.

The stock market was starting to look overpriced for a while, and then the Great Correction of 2025 came along.

On the morning of April 9, the S&P 500 (SNPINDEX: ^GSPC) market index has dropped 18.5% below February's all-time high. The popular index's average price-to-earnings ratio (P/E) fell back from a lofty 30.0 to a more reasonable 24.7. It's getting easier to find tempting buys in this cooler market.

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I'm particularly interested in big-box retailer Target (NYSE: TGT) right now. Let me explain why the Minnesotan store chain looks so good in April 2025.

Target's dramatic price drop opens a rare buying window

The innovative merchant's stock has plunged 49% over the last year, including a 38% retreat from an attempted recovery that fizzled out on January 27. Long-term investors have taken an even harder hit, harking back to a record price of $266 per share in November 2021 -- just before the inflation panic started.

I'll admit that it's not a perfect setup. Target's revenue growth slowed down dramatically in the era of spiking inflation, while arch rivals Walmart (NYSE: WMT) and Costco (NASDAQ: COST) barely noticed the weaker economy,

But Target was defending its sector-leading profit margins. Whether you're looking at operating margins, bottom-line net margins, or cash flow margins, Target still collects a few more pennies per revenue dollar than Costco or Walmart.

Target is making the most of its flattish revenues. Combining this money-making talent with Target's swooning stock price results in two incredible charts.

First, check out Target's skyrocketing earnings yield:

TGT Normalized Earnings Yield data by YCharts

This isn't the most widely discussed valuation metric in the world, so it might not ring a bell. The earnings yield is essentially the P/E ratio backwards -- divide a company's earnings by the share price. A higher number indicates a more profitable company and lower-priced stock.

And Target looks like a bargain-bin find from this perspective. The stock is more than just modestly priced; it's on fire sale.

Then there's this little tidbit. Target has no reason to stop its annual dividend boosts, and the company has increased its payouts in each of the last 54 years. Through thick and thin, the dividend bumps keep coming. And when you pair that shareholder-friendly tendency with the same negative stock price action as before, you get a very generous dividend yield:

TGT Dividend Yield data by YCharts

There's just no contest if you're looking for a strong income stock in the retail sector. Target is the no-brainer pick, leaving Walmart and Costco far behind.

Why Target's slow sales growth doesn't scare me

So I don't mind Target's slow sales growth, as long as the company keeps making sector-leading profits and passing them on to investors in the form of great dividends.

Moreover, Target isn't sitting on its cash-generating laurels. The company rolled out generative AI tools in 2024, aiming to support store workers and assist shoppers in one fell app. As recently as last month, management unveiled a multi-faceted plan to boost annual revenue by $15 billion over the next five years. This effort relies on the AI assistant, a more selective inventory management system, and more shop-in-shop experiences.

I've been watching Target's turnaround plan from the sidelines for way too long. Don't mind if I pick up a few shares at these rock-bottom prices, locking in a fantastic dividend yield at the same time. With five decades of uninterrupted dividend increases under its belt, I can imagine Target delivering solid income for the foreseeable future.

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

Before you buy stock in Target, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,884!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $700,739!*

Now, it’s worth noting Stock Advisor’s total average return is 820% — a market-crushing outperformance compared to 158% 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

Anders Bylund has positions in Walmart. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

It might sound strange at first, but stablecoins are soaring these days.

I don't mean that the price of Tether (CRYPTO: USDT) or USD Coin (CRYPTO: USDC) is skyrocketing, of course. They are going nowhere from that perspective, essentially pinned to the $1.000 price point as expected. But the entire category of stablecoins is gaining momentum, with lots of new names on the market and a rising tide of trading volumes.

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 »

So let's look at the surging stablecoin category. The calmest corner of the cryptocurrency market can be surprisingly exciting.

What makes stablecoins so... stable?

First, let's think about what stablecoins are good for.

These digital coins have several functions in the crypto world.

With a price permanently pegged to a traditional fiat currency such as the US dollar, the euro, or the Japanese yen, they are a helpful tool for crypto-trading exchanges and banks. Exchanging dollars for Tether or USD Coins is very straightforward, and then you have a crypto-based representation of simple dollars in your digital assets account. From there, you can use the stablecoins to buy other cryptocurrencies, without raising currency exchange questions by involving actual dollars again.

The leading names have become extremely stable over time. Tether prices fluctuated wildly in 2016, ranging from $0.10 to $2.01 when the very concept of stablecoins was new and unproven. The newer USD Coin had a lighter bout of volatility just after its launch in 2018, rising as high as $1.04. But Tether quickly stabilized and hasn't moved more than 1.1% away from a perfect $1.00 in the past five years. USD Coin took a quick 3.4% dip amid the collapse of the experimental Terra stablecoin in 2023.

Any respectable stablecoin looks like a straight horizontal line next to the S&P 500 (SNPINDEX: ^GSPC) stock market index, other cryptocurrency prices, or any other fluctuating economic data point. Here's a five-year stablecoin vs. S&P 500 chart for your amusement. The big blip of USD Coin uncertainty in 2023 is barely visible:

Tether Price data by YCharts

Beyond Tether: The expanding stable of stablecoins

Tether was the first name in the stablecoin game, and it's still the largest and most widely used option. It's essentially your only choice if you want to use a stablecoin that is independent from specific crypto exchanges.

USD Coin was launched by a group including Coinbase (NASDAQ: COIN). It's no surprise to learn that Coinbase defaults to using USD Coin across its trading platforms. That's not the only place you can buy, sell, and hold USD Coin, though. Every major crypto exchange supports it, and there are far more USD Coin transactions on Binance than on Coinbase.

The Sky.money crypto-trading platform is an interesting case. Coinbase launched the USD Coin, but Sky.money worked the other way around. This system started with the USDS (CRYPTO: USDS) stablecoin, formerly known as Dai and Maker. The rest of the trading platform was built around the quirks and requirements of USDS. Sky.money may not ring a bell, but USDS is the third-largest stablecoin by market cap.

And there are many more. For example:

• The Ripple Foundation launched a Ripple USD (CRYPTO: RLUSD) stablecoin in December, basing the coin on US dollars and the XRP (CRYPTO: XRP) cryptocurrency. This coin is helping Ripple's payment services execute international money transfers, serving as a super-liquid pool of cash-backed assets.
• The Tether Holdings group could soon introduce a second version of the Tether coin, specifically aimed at large institutional investors in the United States.
• And this could be the start of a large trend. Asset manager giant Fidelity Investments is planning a stablecoin. Even larger firm Blackrock (NYSE: BLK) introduced one in March 2024. Even Bank of America (NYSE: BAC) is open to the idea of an in-house stablecoin, depending on how American regulations will shape up around this opportunity.

So the stablecoin legion is growing larger and more diverse.

Stablecoin trading volumes speak volumes

Whether you're looking at Tether, USD Coin, or USDS, their average daily trading volume has been bubbling up over the last two years.

Tether's average transaction volume stood at $19 billion in early April 2023. Now it's up to $182 billion per 24 hours. USD Coin's volume rose from $6 billion to $28 billion over the same period. The Dai/USDS ecosystem surged from $130 million per day to $2.7 billion.

This is more than empty talk. People (and automated trading algorithms) are putting these stablecoins to work. In all fairness, the rising interest applies to non-stablecoin cryptocurrencies, too. Bitcoin's daily trading volume is up from $9.4 billion to $101 billion, for instance. But the stablecoin community is taking advantage of broader public crypto interests.

More than just trading tools

Stablecoins can do more than just facilitate trades between fiat currencies and cryptocurrencies. Their powers are growing over time, since every new stablecoin option wants to win customers and usage with their unique features.

Some of them offer generous interest rates, putting most savings and money market accounts to shame. The spare cash in my Coinbase account is earning an annual percentage yield (APY) of 4.1% right now. That's comparable to the best money market yields on the market today.

A few stablecoins rely on a specific blockchain system, like the XRP-based Ripple USD coin. Others pick a proven coin-launching foundation such as Ethereum (CRYPTO: ETH) or Solana (CRYPTO: SOL), depending on their technology to provide data security and smart contract functions. And then there's Tether, which provides transparent support for more than a dozen blockchain networks. That's a diverse approach, protecting Tether holders against platform-specific risks. Tether can always untether itself (har-de-har-har) from any risky or flawed solution, relying on a dozen alternatives instead.

So you see, there's plenty of buzz in the stablecoin sphere right now. There are plenty of alternatives for good reason. These mega-stable coins (often with lucrative yield rates) may look especially attractive when the broader crypto market is experiencing wild volatility, like this week.

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.

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Bank of America is an advertising partner of Motley Fool Money. Anders Bylund has positions in Coinbase Global, Ethereum, Solana, and XRP. The Motley Fool has positions in and recommends Bank of America, Coinbase Global, Ethereum, Solana, and XRP. 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.

I keep calling SoundHound AI (NASDAQ: SOUN) a great company with fantastic technology -- and an overpriced stock.

Has anything changed in the tariff-laden downturn lately, or is this promising stock still too rich for its britches?

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SoundHound AI's price moves

As of this writing on Monday, April 7, SoundHound AI's stock isn't exactly following the broader market. That's no surprise, given the stock's hyper-volatile tendencies and lofty beta value of 3.0.

If you're unfamiliar with that data point, a 1.0 value means the stock generally moves in the same direction as the S&P 500 (SNPINDEX: ^GSPC) index, at a similar speed. A very high value like 3.0 points to a stock that usually jumps 3 times higher or falls 3 times lower than the S&P 500, measured in daily percentage returns.

That's not the whole story, of course. Otherwise, a high beta would guarantee accelerated price changes, always in the same direction as the broader market. As it turns out, SoundHound AI's stock also has a low statistical correlation with the S&P 500 chart, currently standing at 0.4. A leveraged fund that simply triples the daily return of the S&P 500 gets a correlation value of 0.96 or more, with 1.0 being a perfect match.

Long story short, SoundHound AI's stock makes a lot of big moves, and not always in the direction other stocks are moving on the same day.

SoundHound AI is still overpriced

That's enough of my statistical nerdery. In a more practical sense, SoundHound AI's stock is still floating much higher than it should, even after a 68% price drop from mid-December's peak.

It's a very welcome price correction, but it could -- and arguably should -- still go much further down. The stock is still up 48% over the last year, and it looked pricey back then. Traditionalists can take one look at SoundHound AI's valuation and walk away. The price is not even in the same zip code as "reasonable" with a price-to-sales ratio (P/S) of 36 and negative profits across the board.

And the tariff debacle hasn't been very helpful. The S&P 500 fell 9.8% in the two-day span from Wednesday evening to Friday's closing bell. SoundHound AI dropped 10.7% in the same period. That's comparable to the index and far from the 30% drop this stock's risky beta value suggests.

When will I sound the "buy SoundHound AI!" alarm?

So no, not much has changed lately. I recently restocked my portfolio with the same amount of SoundHound AI shares I had sold in December. But I did it reluctantly, and only because I've already secured enough profit from this stock to take some unreasonable risks. The shares I bought six weeks ago are down by 12% so far. I plan to double down on this position someday, but not until the price has reached an objectively reasonable level.

In this case, I'm looking at SoundHound AI's order backlog of roughly $1.2 billion, divided by the average contract length of six years. You're looking at annual revenues of roughly $200 million over the next six years. A sensible P/S ratio for a high-growth tech stock like SoundHound AI could be approximately 10x to 13x. Using these values as a guide, SoundHound AI's market value should be something like $200 million times 13, or $2.6 billion.

The stock still trades 17% above that target, which is on the generous side of my preferred valuation range anyway. And the conversion of long-term contracts into reportable revenues may not be as simple and smooth as it sounds -- I'm still looking at future forecasts and estimates to some degree. So I'm not ready to go on a buying spree yet.

The situation is getting better, as SoundHound AI keeps growing its order book while the stock price correction continues. But most investors should let this two-step process continue for a while. Call me back when this stock drops to the mid-$6 range. That would be my time to buy more and recommend that others start to build a SoundHound AI position at a halfway decent price.

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Anders Bylund has positions in SoundHound AI. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.