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

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

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1. AI is only in its early innings

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

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

2. E-commerce still has massive growth potential

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

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

3. Multiple other growth opportunities

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

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

4. An impressive financial pedigree

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

5. A culture of innovation

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

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

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

6. A historically attractive valuation

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

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

AMZN PE Ratio data by YCharts

7. There is a tomorrow

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

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

Before you buy stock in Amazon, consider this:

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

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

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

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

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1. Palantir isn't in Buffett's wheelhouse

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

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

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

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

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

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

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

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

3. Buffett would find Palantir's valuation shocking

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

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

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

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

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

Before you buy stock in Palantir Technologies, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

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

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

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The case for D-Wave Quantum

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

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

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

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

The case for IonQ

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

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

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

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

Better quantum computing stock?

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

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

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

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

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

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

Before you buy stock in IonQ, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

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

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

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One thing after another

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

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

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

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

Temporary issues?

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

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

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

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

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

A brilliant bad news buy?

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

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

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

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

Before you buy stock in UnitedHealth Group, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

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

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

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

Buying Palantir stock hand over fist

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

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

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

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

But Wall Street isn't so upbeat

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

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

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

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

Who's right?

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

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

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

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

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

Before you buy stock in Palantir Technologies, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

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

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

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

1. Dominion Energy

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

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

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

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

2. Enterprise Products Partners

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

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

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

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

3. Realty Income

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

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

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

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

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

Before you buy stock in Realty Income, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Keith Speights has positions in Dominion Energy, Enterprise Products Partners, and Realty Income. The Motley Fool has positions in and recommends Realty Income and Walmart. The Motley Fool recommends Dominion Energy and Enterprise Products Partners. The Motley Fool has a disclosure policy.

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

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

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

Hailing Uber

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

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

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

Why does Ackman like Uber so much?

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

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

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

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

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

Should you buy Uber stock, too?

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

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

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

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

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

Before you buy stock in Uber Technologies, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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

Nvidia (NASDAQ: NVDA) is breathing down Microsoft's neck to become the world's most valuable company. I think it's only a matter of time before the GPU maker takes the No. 1 spot.

In Nvidia's latest quarterly update, CEO Jensen Huang spoke about four artificial intelligence (AI) growth drivers that "are really kicking into turbocharge." Huang was onto something, in my opinion. I even predict that the four explosive AI megatrends he mentioned will catapult Nvidia to a $5 trillion market cap.

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 »

1. Reasoning AI

Huang discussed reasoning AI extensively during Nvidia's first-quarter earnings call. Reasoning AI solves problems step by step. It's also a critical technology for taking AI agents to the next level. Huang noted that there has been "a huge breakthrough in the last couple of years" that has resulted in "super agents" that use multiple tools and work in clusters to solve problems.

These reasoning AI agents will almost certainly become heavily used by lots of companies over the next few years. However, they require exponentially more computing power than past AI models.

That's great news for Nvidia. Huang believes that his company's Grace Blackwell and NVL72 (which connects Grace CPUs to Blackwell GPUs) together make "the ideal engine" for reasoning AI. I think he's right. And I predict the skyrocketing demand for this technology -- and the future newer-generation versions on the way -- will provide a huge tailwind that helps get Nvidia to a $5 trillion market cap.

2. AI diffusion

Huang praised the Trump administration for rescinding the AI diffusion rule established during the Biden administration. This rule, which was originally scheduled to go into effect on May 15, 2025, before its rescission, would have restricted U.S. AI chip exports to many countries.

AI won't be limited to a handful of technologically advanced nations. Jensen correctly observed in the Q1 earnings call that "countries around the world are awakening to the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and start-ups and society." As countries build AI infrastructure, Huang thinks it will create a tremendous opportunity for Nvidia. Again, I fully agree.

3. Enterprise AI

Enterprise AI is the integration of AI throughout a large organization to improve its business processes. Huang said in Nvidia's Q1 call, "Enterprise AI is just taking off."

This megatrend is joined at the hip with reasoning AI. Many of the AI agents that reasoning AI makes possible will be deployed enterprise-wide.

Huang pointed out that enterprise information technology consists of three major components: compute, storage, and networking. These components are also critical for enterprise AI. Nvidia has put all of them together. I expect the company will see strong revenue and earnings growth as a result of its enterprise AI leadership, which will propel its market cap higher.

4. Industrial AI

Industrial AI was the last AI megatrend mentioned by Huang. It's the application of AI to industrial processes to improve efficiency and productivity.

Huang predicted, "[E]very factory today that makes things will have an AI factory that sits with it." He believes these AI factories will create and operate AI for the physical factory, plus "power the products and the things that are made by the factory." His vision also includes robots in the factories.

Nvidia's Omniverse product already helps manufacturers build 3D simulations and "digital twins" of real-world facilities. They can also use Omniverse to train and test autonomous vehicles and robots used in factories.

Is Huang right that "every factory will have an AI factory"? Maybe not. However, I suspect that many factories will. And I predict industrial AI will be a significant growth driver for Nvidia over the next decade that helps catapult the company to a $5 trillion market cap.

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

Before you buy stock in Nvidia, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Keith Speights has positions in Microsoft. The Motley Fool has positions in and recommends 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.

Walmart (NYSE: WMT) easily beat Wall Street's first-quarter earnings estimates. But it didn't matter. The big story in the world's largest retailer's Q1 update was the impact of the Trump administration's tariffs. And that story wasn't great for investors or American consumers.

Walmart is usually viewed as a stock that's resilient during times of economic uncertainty. However, the tariff turmoil raises the question: Is Walmart's share price set to slide?

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 »

Walmart's warning

Many investors celebrated the agreement between the U.S. and China to relax trade tensions at least temporarily. Walmart's executives expressed some relief as well in the company's Q1 earnings call. CEO C. Douglas McMillon thanked President Trump and Treasury Secretary Scott Bessent for lowering tariffs on Chinese imports.

Despite the improvement, though, 30% tariffs will remain in place on Chinese products. McMillon said that Walmart won't be able to absorb all the price increases resulting from the tariffs even at reduced levels.

CFO John David Rainey stated that Walmart thinks the tariffs are still "too high." He added that the prices for some products "are likely going to go up, and that's not good for consumers."

What hurts American consumers could also hurt Walmart. The really bad scenario is if the Trump administration puts the previous steep tariffs back into place. Rainey warned, "[I]f we see a restoration of dramatically high tariff levels, the impact on our financials could be significant and even jeopardize our ability to grow earnings year over year."

Chinese tariffs present the most significant challenge for Walmart, but they're not the only concern for the company. The retailer purchases products from countries around the world that now have tariffs levied on their products, notably including Canada, India, Mexico, and Vietnam. McMillon said in the Q1 earnings call, "The cost pressure from all the tariff-impacted markets started in late April, and it accelerated in May."

What can the giant retailer do?

More than two-thirds of products Walmart sells in the U.S. are made (or, in the case of some foods, grown) domestically. But while the company continues to increase the volume of products sourced in the U.S., it won't be able to reduce imports rapidly. So what can the giant retailer do to reduce the negative impact of the Trump administration's tariffs on its business?

McMillon noted that Walmart is working with suppliers to shift "from tariff-impacted components like aluminum to fiberglass, where there is no tariff." He added, "Our merchants, sourcing team, and suppliers are being creative."

Walmart is also prepared to pass along higher costs to consumers on some products. McMillon acknowledged, "[E]ven at the reduced levels, the higher tariffs will result in higher prices." Could this slow the company's sales growth? Perhaps.

However, Walmart will absorb some tariff-related price increases. McMillon thinks the retailer has some capacity to do so as a result of its diversification of profit streams. He said, "[W]e're positioned to manage the cost pressure from tariffs as well or better than anyone."

A two-part prediction

Is Walmart stock likely to tumble because of tariffs? My prediction is: both yes and no.

Short term, I suspect the negative impacts of tariffs could put pressure on Walmart's share price. Rainey was undoubtedly correct in stating, "[W]e're not fully immune from the financial impacts in the short term."

But McMillon expressed optimism in the Q1 call, saying, "We've been operating in challenging environments for years now, and we'll come through this one stronger than ever, just as we have before." Rainey noted, "We've seen during periods of economic uncertainty in the past, we tend to gain share and come out of the other side in an even stronger position. We expect this period to be no different."

I think they're both right. While Walmart's shares could be volatile over the short term as a result of the tariff-related uncertainty, it remains a solid pick for long-term investors, in my view.

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

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

Two investing adages might seem to contradict each other. Many investors have long followed the maxim to "buy low and sell high." On the other hand, they've also been told: "Don't try to catch a falling knife."

Which of the familiar sayings applies to United Parcel Service (NYSE: UPS)? Shares of the package delivery giant have plunged more than 50% below the high set in 2022. However, I don't view UPS as a "falling knife" to avoid. Instead, I think this ultra-high-yield dividend stock is a great pick for long-term investors to buy right now.

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 »

Why UPS stock is down

When any stock plunges as much as UPS has, it's prudent to understand why. To do that, we need to look back a few years.

After the initial shock of the COVID-19 pandemic, UPS stock went on a tear. The stock skyrocketed nearly 150% between early March 2020 and early January 2022. That's not surprising. With many people working from home and many others trying to minimize contact with people to reduce their chances of getting sick, package delivery volumes rose significantly. UPS beefed up its delivery network operations in response.

The COVID-19 boom was only temporary, though. Once it began drawing to a close, UPS' business slowed down. The company also faced a challenging negotiation with the Teamsters Union. Although a strike was avoided, the ordeal took a toll on UPS' share price. The final agreement with the union also resulted in the company's profits falling.

Another shoe dropped earlier this year, with UPS announcing that it planned to cut its Amazon shipment volume by more than 50% by 2026. UPS stock declined yet again on this news. Amazon ranks as the company's largest customer, accounting for 11.8% of its total revenue in 2024.

Better days ahead?

UPS' earnings are growing again, rising 4.2% year over year in the first quarter of 2025. The higher costs in the Teamsters Union contract were front-loaded. The worst is now behind UPS on that front.

Both U.S. and international revenue are climbing, too. This is notable because the average daily volume associated with Amazon decreased by 16% in Q1 and even ran a little ahead of the company's plan.

UPS CEO Carol Tomé remains convinced that reducing the Amazon business makes sense. She said in the Q1 earnings call: "This volume is not profitable for us, nor a healthy fit for our network. The Amazon volume we plan to keep is profitable and it is healthy volume." UPS' network restructuring related to the Amazon glidedown will cut roughly $3.5 billion in costs this year.

Importantly, UPS is actively working to offset part of the Amazon volume with more profitable shipments. The company is especially focusing on healthcare, international, business-to-business (B2B), and small-to-medium-sized business (SMB) markets. Healthcare presents an especially great opportunity because it tends to be relatively recession-proof and is growing briskly.

Granted, the Trump administration's tariffs create significant uncertainty for UPS and many of its customers. In particular, shipment volumes from China to the U.S. could come under pressure. However, UPS thinks that these lower volumes will be partially offset by increased China-to-non-U.S. shipments and other international-to-U.S. shipments.

Why buy UPS stock now?

Why is UPS a great stock to buy right now? I think there are three key reasons.

First (and most importantly), the company's business will continue to be resilient over the long run. The demand for package deliveries will grow over the next decade and beyond. UPS operates one of the biggest delivery networks on the planet. The prohibitive cost of building such a network gives the company a solid business moat.

Second, UPS' forward dividend yield of 6.58% provides a strong head start for generating attractive total returns. Is the company's dividend safe? I think it's possible that the dividend payout could be cut. However, the focus on boosting profitability could allow UPS to fund dividends at least at current levels.

Third, the stock's valuation is attractive. UPS' shares trade at 14.6 times forward earnings, a historically low level for the company.

Some might view UPS as a "falling knife" to avoid. I believe, though, that buying this beaten-down stock now will pay off handsomely over the next few years.

Should you invest $1,000 in United Parcel Service right now?

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Speights has positions in Amazon and United Parcel Service. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.

Warren Buffett is stepping down as CEO of Berkshire Hathaway but will remain chairman of the conglomerate's board of directors and its largest shareholder. He'll also still be the one and only "Oracle of Omaha." This nickname is well-deserved because of Buffett's staggeringly successful investing track record.

The "Oracle of Omaha" moniker seemed especially applicable at Berkshire's recent annual shareholder meeting. Why? The legendary investor commented on the stock market turmoil experienced this year. More importantly, Buffett made a dire stock market prediction.

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

A "hair curler" is coming

Buffett was unfazed by the recent market volatility. He told Berkshire Hathaway shareholders, "What has happened in the last 30-45 days, 100 days, whatever this period has been, is really nothing." The 94-year-old added, "This is not a huge move."

Perspective is paramount. Buffett noted that the Dow Jones Industrial Average (DJINDICES: ^DJI) hit 381 in September 1929, nearly one year before he was born. It eventually plunged as low as 42, a decline of roughly 89%. With that as background, he stressed, "This [the recent downturn] has not been a dramatic bear market or anything of the sort."

However, Buffett also warned:

You will see a period in the next 20 years that will be a "hair curler" compared to anything you've seen before. The world makes big mistakes, and surprises happen in dramatic ways. The more sophisticated the system gets, the more the surprises can come out of left field.

Importantly, Buffett didn't predict a stock market crash in 2025. He didn't say that stocks would plummet next year but believes that a massive sell-off will occur at some point over the next two decades.

Why is the investing icon so confident about his dire prediction? Buffett explained, "That just happens periodically."

Buffett is right

He's right, by the way. The S&P 500 index (SNPINDEX: ^GSPC) has experienced 20% or more declines from its previous peak nine times since 1950. That translates to a steep plunge, on average, once every eight years or so.

^SPX data by YCharts.

Simply based on history, I suspect Buffett's prediction will be proven right, too. There's never been a 20-year period when the S&P 500 didn't fall by at least 20% at some point. Believe the "Oracle of Omaha" when he prophesies that a "hair curler" market decline is coming in the future.

One of Buffett's most famous quotes is, "Be fearful when others are greedy and greedy when others are fearful." Once again, he was right. Stock market meltdowns present great buying opportunities for long-term investors.

How should investors prepare?

The main problem with Buffett's dire prediction, though, is that we don't know when it will be fulfilled. How should investors prepare?

Probably the most important thing to first do is adjust your mindset. Buffett told Berkshire shareholders at the annual meeting, "I know people have emotions, but you've got to check them at the door when you invest." He said that the stock market is "a good place to focus your efforts if you've got the proper temperament for it. However, Buffett added that it's "a terrible place to get involved if you get frightened by markets that decline and get excited when stock markets go up."

Another key move is to always have some cash ready to invest when the opportunity arises. Buffett practices this principle. When stock valuations are frothy, he builds up Berkshire's cash stockpile. When valuations are attractive, he puts the money to work.

In the meantime, though, don't be afraid to buy stocks that meet your investment criteria. While Buffett has been a net seller of stocks in recent quarters, he has still purchased some stocks for Berkshire's portfolio.

If and when the "hair curler" stock market predicted by Buffett comes, you can be ready for it. Making the right moves will ensure you'll be able to keep your portfolio straight, even when the market gets frizzy.

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 Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

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

Few stocks have sizzled as much as Palantir Technologies (NASDAQ: PLTR) over the last 12 months. Shares of the data analytics software provider more than quadrupled during the period. Palantir stock is up more than 40% year to date.

However, Palantir isn't anywhere near the top of the list of stocks I think will be the biggest winners for investors over the long run. And some of those stocks could outperform through the rest of this decade, too. I predict three stocks will be worth more than Palantir five years from now.

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 »

1. Intuitive Surgical

Intuitive Surgical's (NASDAQ: ISRG) market cap is roughly $70 billion smaller than Palantir's right now. But I suspect the tables could be turned in the not-too-distant future.

Granted, Palantir is growing more rapidly. However, Intuitive Surgical continues to deliver impressive growth, too. The robotic systems pioneer's revenue jumped 19% year over year in the first quarter of 2025. Procedure volume for Intuitive's da Vinci robotic systems should increase by 15% to 17% this year.

Importantly, Intuitive Surgical looks like a bargain compared to Palantir. Sure, Intuitive's shares trade at a sky-high forward price-to-earnings ratio of 68. That seems almost cheap, though, when stacked up against Palantir's nosebleed forward earnings multiple of 196.

What I like most about Intuitive Surgical is the high probability of strong future growth. Around 2.7 million procedures were performed using da Vinci last year. Intuitive estimates roughly 8 million procedures are done annually for which it already has products and clearances. The company is targeting approximately 22 million soft-tissue procedures with products and clearances under development.

2. Alibaba Group

Alibaba Group (NYSE: BABA) is already somewhat larger than Palantir. Based on the two companies' recent revenue growth, though, some might think this dynamic could change relatively soon. I predict, though, that Alibaba will widen its market cap gap over Palantir over the next five years.

Valuation plays a big factor in my projection. We've already seen how mind-blowingly high Palantir's forward earnings multiple is. Meanwhile, Alibaba's shares trade at only 12.5 times forward earnings. The company's growth prospects make its valuation look even more attractive: Alibaba's price-to-earnings-to-growth (PEG) ratio based on analysts' five-year earnings projections is a low 0.71.

Artificial intelligence (AI) demand could serve as a bigger tailwind for Alibaba than it will for Palantir. Alibaba's AI-related product revenue has grown by triple-digit percentages for six consecutive quarters. Its cloud business is also directly benefiting from AI.

Could my prediction about Alibaba be wrong? Maybe. If it is, the most likely culprit that limits the company's growth could be the Chinese government. However, assuming Alibaba is allowed to meet customers' needs relatively unfettered, it should remain bigger than Palantir by the end of the decade.

3. Alphabet

You might wonder why Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is on the list. After all, the tech giant is over 7x bigger than Palantir right now. It seems to be a no-brainer that Alphabet will still be larger in five years.

However, I included Alphabet because there's rampant pessimism about the company. Some have proclaimed that generative AI presents an "existential threat" to Google Search. Google has lost two major antitrust lawsuits. One potential outcome is that the business could be broken up.

I don't buy into the gloom and doom surrounding Alphabet, though. I'm confident that it will continue to thrive despite these challenges.

AI, including generative AI, is helping Google a lot more than it's hurting. Google Cloud's business is booming as customers develop generative AI apps in the cloud. AI Overviews in Google Search have increased search usage and customer satisfaction. I expect Alphabet's revenue will grow as it rolls out more agentic AI capabilities.

What about the antitrust rulings? Admittedly, they could present problems for Alphabet. However, it will almost certainly take years for a final resolution. Alphabet could ultimately prevail. Even if not, the remedies the company is forced to make might not be too terribly bad.

Regardless, I'd rather own shares of Alphabet over the next five years than I would Palantir.

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

Before you buy stock in Alibaba Group, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet and Intuitive Surgical. The Motley Fool has positions in and recommends Alphabet, Intuitive Surgical, and Palantir Technologies. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

British rock group Dire Straits had a monster hit back in the 1980s with their song Money for Nothing. While the instantly recognizable guitar riff was arguably the song's main appeal, its sentiment is attractive, too. Most people would love to have money for nothing. That's what passive income is all about. You reap rewards without having to work for them beyond the initial steps.

If you want to enjoy decades of passive income, I think Vanguard offers a good way to achieve your goal. Here's one of its exchange-traded funds (ETFs) to buy and hold forever.

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 »

A proven winner

Since we're talking about passive income and Vanguard, you might think the ETF I have in mind is the Vanguard High Dividend Yield ETF. After all, this fund has "high dividend yield" in its name. That will sound great to income investors.

As good of a pick as the Vanguard High Dividend Yield ETF is, though, I'd argue there's an even better choice in the Vanguard family right now: the Vanguard Utilities ETF (NYSEMKT: VPU). This ETF offers a 30-day SEC yield of 2.89%, higher than any other stock ETF Vanguard offers (including the Vanguard High Dividend Yield ETF). A fund's SEC yield is calculated via a formula developed by the Securities and Exchange Commission that looks at a fund's hypothetical annualized income as a percentage of its assets.

Unsurprisingly, the Vanguard Utilities ETF invests in utility stocks. It currently owns 69 stocks, with top holdings including NextEra Energy, Southern Company, Duke Energy, Constellation Energy, and American Electric Power. These five stocks comprise nearly 35% of the ETF's assets.

This Vanguard ETF has delivered an average annual total return of 9.58% since its inception in January 2004. It's been an especially strong performer over the last 12 months, soaring close to 19%. The fund has even held up well during the recent stock market plunge.

Like all Vanguard ETFs, the Vanguard Utilities ETF is inexpensive to own. Its annual expense ratio is only 0.09%, well below the average expense ratio of 1.01% for similar funds.

Why this Vanguard ETF is a passive income machine

I don't think there's any question that the Vanguard Utilities ETF is a passive income machine. But why? Several reasons stand out.

First, many of the utility companies in the fund's portfolio are regulated monopolies. This means they have predictable and stable cash flow. And that translates to steady dividends.

Are utilities risk-free? Unfortunately not. Utility companies sometimes borrow too much and have to cut their dividends. Their share prices aren't immune to volatility, either. However, utility stocks are typically less risky than most stocks.

Importantly, dividends often make up a core part of the investment thesis for utility stocks. The management teams of utility companies recognize this. As a result, they emphasize consistent dividend payments and dividend growth as a key part of the corporate culture. For example, NextEra Energy and Southern Company (the Vanguard Utilities ETF's top two holdings) have increased their dividends for 31 and 24 consecutive years, respectively.

Also, utilities usually compete in relatively mature markets. This gives them flexibility to return more of their profits to shareholders via dividends.

One caveat

The Vanguard Utilities ETF is a great pick for investors seeking passive income. However, growth-oriented investors might prefer other ETFs offered by Vanguard. The Vanguard Utilities ETF ranks behind 29 other Vanguard ETFs based on average annual total return since inception.

That said, I think the Vanguard Utilities ETF could be poised for stronger growth in the coming years than it has delivered in the past. The rising adoption of artificial intelligence (AI) is fueling the construction of more data centers. These data centers require massive amounts of electric power. This presents great growth prospects for electric utility companies, natural gas utility companies, and renewable power companies that make up the lion's share of this Vanguard ETF's portfolio.

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

Before you buy stock in Vanguard Utilities 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 Utilities 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!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — 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 21, 2025

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy, NextEra Energy, and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.

The U.S. Congress might not be the place you want to look for guidance on anything financial-related. After all, the national debt is over $36.7 trillion and growing, and every penny of the money spent by the federal government had to be approved by Congress.

On the other hand, quite a few individual congressional representatives and senators have made some excellent stock picks through the years. Following their trades has become a pastime for some investors looking for stocks to buy. It doesn't make sense to mimic anyone's stock trades without thought, but Congress can be a place to find stocks worth checking out.

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While the so-called "Magnificent Seven" stocks aren't very magnificent in 2025 so far, several members of the group remain popular on Capitol Hill. Members of Congress are especially buying one beaten-down Magnificent Seven stock.

The favored "Magnificent Seven" stock

Nvidia and Tesla have taken the worst shellacking among the Magnificent Seven stocks this year. Nvidia's shares are down more than 30% from the peak set earlier in 2025, while Tesla's shares have plunged more than 40%.

So, do these two rank among the favorite Magnificent Seven stocks of Congress right now? Nope. Representatives and senators have sold Nvidia and Tesla more often than they've bought the stocks over the last 90 days, according to data at capitoltrades.com. It's a similar story for Apple, Google parent Alphabet, and Microsoft.

Members of Congress have bought shares of Meta Platforms (NASDAQ: META) more than they've sold the stock. However, their favorite Magnificent Seven stock based on net buying versus selling these days is Amazon (NASDAQ: AMZN).

The stock of the e-commerce and cloud services giant has enjoyed bipartisan support on Capitol Hill. Democratic representatives Dwight Evans of Pennsylvania and Ro Khanna of California have bought Amazon stock over the last 90 days (including four separate purchases for Khanna). Four GOP House members -- Marjorie Taylor Greene of Georgia, Scott Franklin of Florida, David Taylor of Ohio, and Thomas Kean Jr. of New Jersey -- picked up shares of Amazon. So have two Republican senators, John Boozman of Arkansas and Markwayne Mullin of Oklahoma.

Amazon's appeal

Federal regulations require members of Congress to disclose their stock trades, but not the reason behind them. We don't know why any of these people bought Amazon stock. However, we can make a pretty good guess as to why Amazon has been so appealing to multiple representatives and senators. It likely appeals to them for the same reasons it appeals to all kinds of investors.

Amazon's business remains rock-solid. The company raked in revenue of $638 billion last year. Its profits totaled $59.2 billion, a greater amount than the market caps of over two-thirds of stocks in the S&P 500.

Growth isn't a problem for Amazon, either. The rising demand for artificial intelligence (AI) continues to provide a seemingly unstoppable tailwind for its cloud division, Amazon Web Services (AWS). The Amazon Prime membership program has proven to be a cash cow that attracts consumers to the company's e-commerce platform.

One knock against Amazon stock in the past has been its sky-high valuation. That's not nearly as much of an issue now, though, with the stock's price-to-earnings-to-growth (PEG) ratio at 1.3.

Granted, President Donald Trump's tariffs could take a toll on Amazon over the near term. The good news on that front, however, is that cost-conscious consumers should still purchase heavily from Amazon. The company recently launched Amazon Haul, which offers ultra-low prices.

Should you buy Amazon stock,too?

Don't buy any stock solely because a politician bought it. For that matter, don't sell a stock just because a politician sold it. However, I think the Democrats and Republicans who bought Amazon in recent weeks made smart moves, if they hold onto their shares.

The current pullback presents a tremendous opportunity for long-term investors to buy Amazon at a discount. I expect AWS to continue to deliver strong growth as AI adoption rises. I predict Amazon's efforts to improve operational efficiency will keep driving profits higher. And I think the company's expansion initiatives into healthcare, satellite internet, and other areas will pay off.

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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. Keith Speights has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. 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.

Here's a Social Security trivia question for you: What's the most popular age for Americans to claim their retirement benefits? You win 10,000 points if your answer was 62. Those points can be used anywhere they're accepted (which, unfortunately, is nowhere -- but at least you can enjoy the satisfaction of being right).

You probably already know this, but 62 is the earliest age Social Security retirement benefits can be received. Should you claim benefits as early as possible, like so many other Americans? It depends on your reason for doing so.

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Some good reasons to claim Social Security at 62

Most financial planners could rattle off several great reasons to wait at least until you reach your full retirement age (which is 67 for anyone born in 1960 or afterward) to claim Social Security retirement benefits. The most important of those reasons is that you'll avoid the early retirement penalties that can add up to 30% of your benefits if you begin receiving Social Security at age 62.

However, there are also some good reasons to claim Social Security as early as you can. For example, I know a man whose close relatives all died at relatively early ages. He believes genetics aren't in his favor for living beyond his early 70s. As a result, he plans to claim Social Security at age 62 because doing so could increase his total lifetime benefits. If you're in a similar situation, this approach could make sense for you as well.

Another good reason for taking Social Security at 62 is that you have health problems that don't allow you to work full-time. Before you claim retirement benefits, though, you should first check to see if you qualify for Social Security disability benefits. However, if not, claiming Social Security at 62 could be your smartest move.

Some people lose their jobs and opt to retire early. If you're in this boat, Social Security benefits at 62 could be the difference-maker financially.

The best reason of all

I think the No. 1 reason to claim Social Security at age 62, though, is that it's the best option to achieve your retirement goals. How do you determine if the strategy is your best option? You'll have to make that call (ideally, with input from your family and help from a respected financial planner). However, several steps are important in making the decision.

First, you'll need to nail down what your retirement goals are. Do you want to travel extensively? Do you want to volunteer with non-profit organizations? Spend more time with family? Whatever your goals are, write them down.

Second, create a detailed budget to make sure you can afford to quit working at 62. Don't forget to include any costs related to your retirement goals. If you want to travel around the world, it can be expensive. Also, be sure to factor in the likelihood that your healthcare costs will rise as you grow older.

Third, consider alternatives that could still allow you to achieve your retirement goals while holding off on claiming Social Security. Maybe you could work part-time for a while to make enough money to delay receiving benefits while still being able to do much of what you want to do in retirement. It's possible that claiming at 62 is still the best option for you, but evaluating alternatives can help you make a better decision.

Different strokes for different folks

Both of my parents claimed Social Security benefits at age 62. However, I don't plan to do so.

I have a flexible job that will allow me to cut back on working gradually while doing most of the things I want to do in retirement. I don't have any health problems that would force me to retire early. Most of my older close relatives have lived into their 80s, 90s, or even past 100. Genetics (I hope) are on my side.

Studies have found that delaying filing for Social Security retirement benefits increases the lifetime amount received for most Americans. But you're not "most Americans." And while financial considerations are important, they're not the only thing to consider in deciding when to claim Social Security. As the old saying goes, "Different strokes for different folks."

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

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Shares of Tempus AI (NASDAQ: TEM) were skyrocketing 16.5% higher as of 10:39 a.m. ET on Wednesday. The big gain came after the healthcare artificial intelligence (AI) company announced a multiyear partnership with AstraZeneca and Pathos AI to build a multimodal foundation model for cancer drug discovery and development.

Tempus AI has invested heavily over the last decade to create one of the world's largest libraries of multimodal data that can be used in developing precision medicines. The company's de-identified oncology data will be critical in building the foundation model that AstraZeneca hopes to use to accelerate its development of new cancer drugs and increase the chances of success in clinical testing for its candidates.

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What this deal means for Tempus AI

Tempus AI will receive $200 million in data licensing and model development fees from AstraZeneca. This amount almost exactly matches the amount of revenue the company generated in the fourth quarter of 2024.

The healthcare AI company will also be able to use the multimodal foundation model it's building in collaboration with AstraZeneca and Pathos AI in its own efforts to improve patient care. This could bode well for Tempus AI's appeal to other big drugmakers seeking to harness the power of AI in their drug development processes.

Is Tempus AI stock a smart pick to buy now?

Risk-averse investors probably should look to other stocks to buy instead of Tempus AI. The company continues to lose money and is difficult to value. However, I think Tempus AI could be a smart pick for aggressive growth investors to buy and hold. The deal with AstraZeneca underscores the promise of its AI platform and data.

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

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

Americans work hard and pay taxes throughout their career. When they retire, they no longer have to work as hard.

But paying taxes? That's a different story. Taxes are seemingly inescapable, no matter how old you are.

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However, there's some good news for retirees, depending on where you live. As of 2025, 41 states don't tax Social Security benefits.

The nine states that do tax Social Security

Before we get to those 41 states that don't tax Social Security, let's look at the outliers that do. Nine U.S. states continue to require retirees to pay state income taxes on their Social Security benefits:

1. Colorado
2. Connecticut
3. Minnesota
4. Montana
5. New Mexico
6. Rhode Island
7. Utah
8. Vermont
9. West Virginia

Not every retiree will have to pay state taxes on Social Security in these states, though. For example, Connecticut seniors who are single filers or married filing separately are exempt from state taxes on Social Security benefits if their adjusted gross income (AGI) is below $75,000. Those who are married filing jointly or who file as head of household don't have to pay state taxes if their AGI is below $100,000. Minnesota, New Mexico, Rhode Island, and Vermont have similar income tax regulations with different AGI thresholds.

Also, West Virginia is transitioning from taxing Social Security benefits. The Mountain State allows residents to subtract 65% of their Social Security benefits from their AGI in 2025. However, next year, the amount will increase to 100%.

States that don't tax Social Security

Now for the states that don't tax Social Security. The list currently includes 41 states, up from 39 just a couple of years ago:

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

Nine of these states don't tax any income:

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Mississippi also recently passed legislation that could phase out its state income tax by 2040. However, specific triggers related to revenue and spending must be met for the Magnolia State's planned tax cuts.

Speaking of Mississippi, it's one of 13 states that don't tax any retirement income from 401(k) plans, IRAs, or pensions. Of course, this list includes the nine states without income taxes. It also includes Illinois, Iowa, and Pennsylvania.

Uncle Sam still has his hand out

Regardless of which state you live in, you could have to pay federal taxes on your Social Security benefits. Whether your benefits will be taxed and how much tax you'll have to pay depends on how much money you make. The table shows what the current levels are:

Filing Type	Combined Annual Income	Percent of Social Security Benefits Taxable
Married filing jointly	Up to $32,000	0%
	$32,000 to $44,000	Up to 50%
	More than $44,000	Up to 85%
Individual	Up to $25,000	0%
	$25,000 to $34,000	Up to 50%
	More than $34,000	Up to 85%

Data source: Social Security Administration. Table created by author.

To determine your combined annual income, add half of your Social Security benefits plus all other income. Other income includes money received from capital gains, dividends, interest, pensions, and wages.

Could Uncle Sam join the 41 states that don't tax Social Security benefits? Maybe. President Trump has proposed eliminating federal taxes on retirees' Social Security benefits. While the idea is relatively popular, though, it comes with a significant downside: Ending federal taxation on Social Security could speed up how quickly the program's trust funds run out of money.

The $22,924 Social Security bonus most retirees completely overlook

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

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

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Income investors could pay attention to the price fluctuations of the assets they own. But they don't have to. What really matters for them is that the dividends and distributions keep flowing steadily -- and the higher the yield, the better.

Where can you find great candidates to achieve these objectives? Investing $60,000 in these three closed-end funds (CEFs) could generate an annual income of over $6,500.

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1. BlackRock Debt Strategies Fund

The BlackRock Debt Strategies Fund (NYSE: DSU), which is managed by giant investment company BlackRock, boasts a lofty distribution rate of 12%. If you invested $20,000 (one-third of your initial $60,000) in this CEF, your annual income would total $2,400 at that rate.

This CEF invests primarily in secured and unsecured U.S. corporate loans. Its portfolio includes 1,253 holdings. None comprise more than 3% of total assets, with most holdings below 1%.

Why should income investors like the BlackRock Debt Strategies Fund (aside from its juicy yield)? For one thing, Morningstar gives it a five-star rating (the highest score possible) based on its risk-adjusted total return. The CEF pays a monthly distribution and is trading at a discount of more than 3% below its net asset value (NAV).

There are some downsides to the fund, though. It's exposed to some risk if companies default on their loans (although that risk is mitigated somewhat by its highly diversified portfolio). The BlackRock Debt Strategies Fund uses leverage, which increases its risk to sharp interest rate spikes. However, its leverage ratio of 15.43% isn't super high. The CEF also has a gross expense ratio of 2.33%. The good news on that front is that its distribution is net of expenses.

2. abrdn Healthcare Opportunities Fund

Aberdeen Investments' Abrdn Healthcare Opportunities Fund (NYSE: THQ) currently offers a distribution yield of 11.33%. Buying $20,000 worth of this CEF would generate $2,266 in annual income at that level.

As its name hints, this fund invests in the healthcare sector. It owns 110 holdings, including common stocks, preferred stocks, and debt of healthcare companies. The CEF's top holdings are Eli Lilly, UnitedHealth Group, AbbVie, Abbott Laboratories, and Merck stocks.

The Abrdn Healthcare Opportunities Fund pays its distributions monthly. The CEF is also available at a small discount right now, trading at 0.78% below its NAV. Since healthcare stocks often hold up relatively well in volatile markets, the fund could be an especially good pick in the current environment.

On the negative side, this fund uses more leverage than some investors will prefer, with its leverage ratio of 22%. It also has a high annual expense ratio of 3.1%.

3. BlackRock Enhanced Large Cap Core Fund

Investing in another CEF managed by BlackRock could also enable income investors to rake in money. The BlackRock Enhanced Large Cap Core Fund (NYSE: CII) pays a distribution yield of 9.28%. Buying $20,000 of this fund would give you $1,856 in annual income at that rate, bringing our total income for these three CEFs to $6,522.

This CEF owns 222 large-cap stocks, of which nearly 95% are based in the U.S. Its top holdings include Microsoft, Amazon, Meta Platforms, Visa, and Cardinal Health. The fund also sells call and put options to boost income and reduce portfolio volatility.

Morningstar gave the BlackRock Enhanced Large Cap Core Fund four out of five stars. Like the other two CEFs on our list, it pays distributions monthly. The fund's annual expense ratio of 0.93% is relatively low for CEFs. You can also buy the fund at a discount of roughly 7% below its NAV.

The main drawback to owning the BlackRock Enhanced Large Cap Core Fund is that its price can decline significantly at times (such as during the recent market sell-off). However, the fund's options strategy provides a cushion to some extent.

Should you invest $1,000 in BlackRock Enhanced Large Cap Core Fund right now?

Before you buy stock in BlackRock Enhanced Large Cap Core Fund, consider this:

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

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*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. 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. Keith Speights has positions in AbbVie, Abrdn Healthcare Opportunities Fund, Amazon, BlackRock Debt Strategies Fund, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Amazon, Merck, Meta Platforms, Microsoft, and Visa. The Motley Fool recommends UnitedHealth Group 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.

Many retirees are watching their 401(k) and individual retirement account (IRA) balances sink further seemingly daily. Whatever you might think about President Donald Trump's steep tariffs, they're indisputably wreaking havoc on the stock market.

Could tariffs even impact retirees' Social Security benefits? The answer just might be "yes." Here's what President Trump's tariff turmoil could mean for your next Social Security cost-of-living adjustment (COLA).

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Calculating the COLA

To understand how the president's tariffs could impact your next Social Security COLA, we must first delve into how the COLA is calculated. The good news is that the formula is simple, and the math is easy.

For decades after Social Security was created, any adjustment to benefits required an act of Congress. However, an automatic annual adjustment went into effect in 1975. This adjustment was intended to keep Social Security benefits from being eroded by inflation.

With this goal, it makes sense that inflation would be the key factor used to calculate the COLA. Economists use several inflation metrics. However, the Social Security Administration (SSA) uses one called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This inflation metric measures price changes for primarily blue-collar workers in urban areas.

The CPI-W is published monthly by the U.S. Bureau of Labor Statistics. The SSA calculates the COLA using the difference between the average CPI-W for the third quarter of the current year and the average for the same period in the prior year, rounded to the nearest one-tenth of a percent. If the Q3 average CPI-W for the current year is less than the Q3 average for the previous year, no adjustment is made to Social Security benefits.

How tariffs could impact your next Social Security COLA

President Trump's tariffs will impact your next Social Security COLA if and only if they affect the CPI-W in the third quarter of 2025. Could that happen? It's a definite maybe.

Some might think tariffs are paid by the countries on which they're levied. However, that's not how tariffs work. Instead, the companies importing products from other countries must pay the U.S. government any tariffs due.

The big question relates to how those importers handle the higher costs incurred. Some importers might absorb most of the tariffs as a cost of doing business in the U.S. Others, though, could pass the higher costs along to their customers. When this happens, the prices of imported products increase. This could lead to a higher inflation rate, which could then cause the next Social Security COLA to be higher than it would otherwise be.

Tariffs could even impact the prices of products made in the U.S. One way this can happen is when components used in those products are imported from countries impacted by high tariffs. Another is if U.S. companies raise their prices to take advantage of an opportunity to make more money when their foreign rivals' prices are higher.

Many economists project higher inflation if the president's tariffs remain in effect. Predictions vary for just how much higher inflation will go. For example, Comerica Bank chief economist Bill Adams told CNBC he thinks tariffs could cause inflation to jump 2% this year from 2.8% to 4.8%. EY Chief Economist Gregory Daco expects a smaller impact, telling CBS News recently that he expects inflation will rise by 1% to nearly 4%.

The potential for a higher Social Security COLA might sound good to some retirees. However, benefit adjustments don't always fully keep up with price increases incurred by older Americans. Also, higher-than-anticipated COLAs could cause the Social Security trust funds to run out of money sooner than projected.

Don't put the cart before the horse

There are several potential scenarios wherein inflation doesn't rise in the third quarter of this year. The president could again pause tariffs or reduce them as he did last week. A lawsuit claiming that President Trump's tariffs are unconstitutional could be affirmed by federal courts. Some economists think steep tariffs could cause a recession, which could hold inflation down.

Retirees shouldn't count on higher Social Security COLAs yet. However, the president's tariffs could very well impact your next COLA.

The $22,924 Social Security bonus most retirees completely overlook

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

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Shares of Recursion Pharmaceuticals (NASDAQ: RXRX) were skyrocketing around 20% higher as of 11 a.m. ET on Friday. The big gain for the biotech stock came after the U.S. Food and Drug Administration (FDA) announced on Thursday that it plans to replace the use of animals in testing drugs with "more effective, human-relevant methods," including artificial intelligence (AI) models.

Recursion uses AI in its drug discovery and development processes. The company built one of the largest datasets in the biopharmaceutical industry with over 60 petabytes of data.

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What will the FDA's move mean for Recursion?

The FDA will initially focus on monoclonal antibodies with its initiative to replace animal testing and later expand to other types of drugs. How will the agency's move impact Recursion? It's too soon to know for sure.

However, it's possible that other drugmakers could be more interested in teaming up with Recursion with the FDA promoting the use of AI models in drug development. Recursion already partners with four big pharmaceutical companies: Bayer, Merck KGaA, Roche's Genentech unit, and Sanofi.

Is Recursion Pharmaceuticals stock a buy?

Recursion Pharmaceuticals stock isn't a good fit for risk-averse investors. The company remains unprofitable and is losing more money as it ramps up clinical development of several candidates. Recursion's most advanced program is only in phase 1/2 testing. There's no guarantee that any of the pipeline candidates will be successful in clinical studies and win regulatory approvals.

However, aggressive investors could find Recursion Pharmaceuticals attractive. Its collaborations with big drugmakers give it more stability than many clinical-stage biotech companies have. The company is also backed by Nvidia. Recursion's AI-driven processes hold significant potential. This is a risky pick, but one that just might pay off handsomely over the long run.

Should you invest $1,000 in Recursion Pharmaceuticals right now?

Before you buy stock in Recursion Pharmaceuticals, 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 Recursion Pharmaceuticals 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!*

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*Stock Advisor returns as of April 10, 2025

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.