With a market cap of nearly $500 billion, Mastercard (NYSE: MA) is a true corporate giant. Indeed, it ranks as the 16th-largest American company by market cap, ahead of other financial behemoths like Bank of America, Wells Fargo, American Express, and Morgan Stanley.

But why? And perhaps more importantly, will Mastercard retain its place in the years to come? Let's find out.

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Mastercard's greatest asset is its business model

Like its chief rival Visa, Mastercard has a business model based on payment processing. The company operates a vast network that facilitates payment transactions between merchants, cardholders, and card-issuing institutions.

In other words, Mastercard is the classic middleman. It charges fees for the use of its network. And while -- broadly speaking -- each individual fee is tiny, they really add up.

Over the last 12 months, Mastercard generated $29 billion in revenue. That's up about 12% from a year earlier when the company generated $26 billion in revenue. The increase is thanks to growing global payment volumes as the world steadily moves closer to a cashless society. In particular, emerging market economies continue to transition away from cash and toward cards as living standards increase and internet access expands.

Moreover, Mastercard's network benefits from economies of scale. That is, as the network grows in size, Mastercard can derive more and more profit from it, as the benefits of the network grow faster than its costs.

Indeed, over the last 10 years, Mastercard's operating margin has increased from 53% to 58%, while its net income has soared from $3.7 billion to more than $13.1 billion.

MA Operating Margin (TTM) data by YCharts

How and why Mastercard's stock has thrived

After reviewing its business model, it's no wonder that Mastercard stock has advanced by leaps and bounds. In fact, Mastercard has been one of the best stocks to own over the last 10 years, with a 10-year total return of 518%, easily outpacing the S&P 500's total return of 246% over the same period.

Supporting this excellent performance is Mastercard's solid mix of dividend payments and share buybacks. The company currently pays a modest quarterly dividend of $0.76 per share, generating a dividend yield of 0.55%. Mastercard also announced a $12 billion share repurchase plan in December of 2024, which will help drive shareholder value by reducing outstanding shares.

Mastercard can support these initiatives thanks to its strong free cash flow. Over the last 12 months, the company generated $14.3 billion in free cash flow, or $15.53 per share.

Is Mastercard stock a buy now?

Granted, there are risks to owning Mastercard stock.

For one, the company is subject to massive regulatory risks. Mastercard is subject to several ongoing lawsuits related to antitrust and consumer protection issues. As with any such litigation, legal fees, settlements, or monetary fines could take a bite out of its future profits.

In addition, competitive disruptions like crypto or emerging fintech companies could take market share from Mastercard going forward. Finally, there is the general risk of an economic downturn that would see global payment volumes slow.

However, while each of these risks is to be taken seriously, Mastercard's core business model is simply too good to ignore. Investors would be wise to buy and hold shares of Mastercard if they don't already own them.

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

Before you buy stock in Mastercard, 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 Mastercard 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 $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% 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 23, 2025

American Express is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Jake Lerch has positions in Visa. The Motley Fool has positions in and recommends Bank of America, Mastercard, and Visa. The Motley Fool has a disclosure policy.

ExxonMobil (NYSE: XOM) is one of the oldest and most iconic companies in American financial history. It's also gigantic. With a current market cap of nearly $500 billion, ExxonMobil is the 17th-largest American company overall, and the largest American energy company.

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

But is ExxonMobil stock a good investment? Let's dig into the bull and bear cases.

What the ExxonMobil bulls say

ExxonMobil bulls can point to several key points for why the stock is poised to deliver solid returns.

First, ExxonMobil's global scale and diversification make it a solid choice for investors looking for an energy sector pick. The company has operations spread over dozens of countries, including Indonesia, Guyana, Papua New Guinea, Qatar, and, of course, the United States of America.

In addition to this geographical diversification, the company enjoys diversification among its revenue streams. The company has upstream operations, focusing on exploring for and developing sources of energy. It also has downstream product divisions, which refine and sell fuel, lubricants, and other petrochemical products.

What's more, ExxonMobil does this on a massive scale. Over the last 12 months, the company generated $340 billion in revenue. All of this makes ExxonMobil of central importance to the smooth running of the world economy.

Turning more directly to its financials, the company has generated $33 billion in net income over the last 12 months and $28 billion in free cash flow. Those figures, in turn, help support the company's massive $20 billion annual share buyback program and annual dividend payments of roughly $17 billion.

What the ExxonMobil bears say

For bears, the energy sector itself presents a key risk. To start, commodity prices are famously volatile, leading to difficulty in balancing growth, costs, and investments.

Similarly, geopolitical risks abound. ExxonMobil's global presence makes the company and its global assets vulnerable to war, political upheavals, and natural catastrophes. Furthermore, ExxonMobil faces an endless parade of regulatory and environmental hurdles that can send costs ballooning higher or halt production at any number of facilities.

Finally, and perhaps most importantly, ExxonMobil's stock hasn't performed very well in recent years. Since 2015, shares have logged a total return of 100%. However, that pales in comparison to the S&P 500 index, which has generated a total return of more than 246%.

Is ExxonMobil stock a buy now?

ExxonMobil is one of America's most legendary companies. It has far-reaching operations and generates an astronomical amount of revenue each year.

However, despite its advantages, ExxonMobil stock has underperformed the S&P 500 for years. It is susceptable to massive risks ranging from war to natural disasters. Furthermore, much of its stock's total return comes from its dividend payments. Currently, the stock pays a quarterly dividend of $0.99 per share, amounting to a dividend yield of 3.6%. Considering that ExxonMobil stock has generated a compound annual growth rate (CAGR) of about 7.2% over the last decade, that means that roughly half of the stock's return over the last 10 years has come from its dividend alone.

So, while ExxonMobil stock might be tempting to income-seeking investors, others might want to look elsewhere.

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

Before you buy stock in ExxonMobil, 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 ExxonMobil 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 $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% 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 23, 2025

Jake Lerch has positions in ExxonMobil. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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 »

Investors could be forgiven for thinking May is a terrible month for stocks. After all, most of us have heard the expression "sell in May and go away."

Yet, history paints a different picture than the snappy quote. Moreover, the most recent month of May sent out signals that the stock market is gearing up for a big run-up over the next 12 months. Here's why.

What history says follows an exceptional performance by the S&P 500 in May

First off, last month wasn't just another decent month for the stock market. It was, in many ways, historic. Consider this: In May, the S&P 500 (SNPINDEX: ^GSPC) advanced by 6.2%. That's an excellent return, particularly considering that the average annual return for the S&P 500 since its inception in 1957 is about 9%.

What's more, last month's staggering 6.2% return represented the second-best May performance ever by the benchmark index -- surpassed only by a 9.2% rally in May 1990. Indeed, dating back to 1957, the index had only advanced by more than 5% in May on seven occasions. Before last month, the most recent came in 2009. In other words, May 2025 was a banger month on Wall Street.

However, investors may be even more encouraged by what has followed seven prior occasions. After a May when the S&P 500 registered a gain of 5% or more, the S&P 500 generated an average 12-month return of nearly 20%.

Year	S&P 500 Return in May	S&P 500 Return in 12 Months After
1985	5.4%	30.5%
1986	5%	17.3%
1990	9.2%	7.9%
1997	5.9%	28.6%
2003	5.1%	16.3%
2009	5.3%	18.5%
2025	6.2%	?

Data source:

Moreover, in all six prior occasions, the S&P 500's return after 12 months was positive. The lowest return was a 7.9% gain in 1990; the best was a 30.5% rally in 1985.

What was behind May's big move, and can it continue?

Regardless of past performance, future events will determine where the stock market goes over the next 12 months. So, what drove up stock prices in May, and what risks should investors look for?

In short, the S&P 500's excellent May performance was led by several catalysts, including:

• Tame readings on U.S. inflation and unemployment
• Better-than-expected earnings by corporations
• Encouraging updates related to U.S. trade policy

First, the current U.S. inflation rate of 2.4% remains near the Fed's 2% target. That's significantly below the rates from a few years ago, when inflation was over 6%. Unless inflation rises, there's little risk that the Fed will need to hike rates soon. Furthermore, the unemployment rate remains steady around 4.2% -- indicating a stable jobs market. Both figures are bullish for the stock market.

Second, the most recent earnings season didn't disappoint. Companies continue to beat sales and profit expectations, with the tech and healthcare sectors leading the way. According to an analysis by J.P. Morgan, fully 77% of companies beat estimates.

Finally, there's U.S. trade policy. In particular, May was a bullish month on the trade front. The aforementioned earnings season indicates that the Trump administration's new tariff policy hasn't yet had meaningful negative impacts. In addition, the Trump administration's pause on reciprocal tariffs -- instituted in April -- remains in effect.

Finally, there are reports of progress in negotiations -- or, in some cases, outright agreements -- between the U.S. and key trade partners, including China, the U.K., Canada, Mexico, and Japan.

All that said, the future is never certain. A setback in trade negotiations, higher-than-expected impacts from existing tariffs, or disappointing economic data could all lead to a sharp correction in the stock market. So, one would be wise to adopt a conservative strategy that puts money to work but doesn't try to time the market to perfection.

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 $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $881,731!*

Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

A million bucks. It's something many investors want, but it's not so easy to get your hands on it. Yet, with the right stocks and a long-term buy-and-hold strategy, a $1 million portfolio is within reach for many investors. Let's examine two stocks that could help investors reach this elusive goal.

Spotify

Spotify Technology (NYSE: SPOT) has been a safe haven in a tough year for the stock market. While the major indexes are down anywhere from 10% to 18% year to date, Spotify's stock remains green so far in 2025. Shares of the audio streaming giant are up about 25% as of this writing.

And while its outperformance relative to the major indexes is an important part of its appeal, investors shouldn't overlook the company's excellent fundamentals. As of its most recent quarter (for the three months ended on Dec. 31, 2024), Spotify continued to turn in fantastic growth metrics, including:

• 16% year-over-year revenue growth.
• 12% year-over-year growth in overall monthly active users (MAUs).
• 121% year-over-year growth in free cash flow.

Much like Netflix did years ago, Spotify is now making the transition from a promising upstart into a lucrative juggernaut. The company has boosted its profit margin by cutting costs and raising prices.

Part of the reason the stock has responded so well this year is that Wall Street understands that Spotify -- like Netflix -- has a dedicated subscriber base that will stick around even with occasional price hikes. So, for investors looking for a potential millionaire-making stock, Spotify is a name to consider.

Palantir Technologies

If I told you that Palantir Technologies (NASDAQ: PLTR) was one of the top-performing stocks in the S&P 500 this year, it might come as a surprise. After all, technology stocks have taken it on the chin so far in 2025. Nevertheless, Palantir -- with its 24% year-to-date gain -- is among the top 10 best-performing stocks in the S&P 500.

And why is that? In a nutshell, Palantir's stock continues to advance thanks to the enormous tidal wave of demand for its AI-powered platform. Its customers run the gamut from travel giants like Delta Air Lines and United Airlines to retail businesses like Lowe's Companies and Walgreens.

And there's a reason these companies want Palantir's technology; it's saving them money and making them more profitable. For example, Luis Mesen, an executive for United, said, "We deployed [Palantir's] Chime late last year...we've already saved almost 300 delays, 20 cancellations...this represents millions of dollars of cost avoidance."

Because of real-world examples like this, Palantir's customer base and revenue are both rising quickly. In the company's most recent quarter (for the three months ended Dec. 31, 2024), it generated $552 million in sales, up 52% from a year ago.

The AI revolution rolls on, with Palantir being one of the top beneficiaries. Investors looking for a stock with millionaire-making potential should take notice.

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

Now, it’s worth noting Stock Advisor’s total average return is 829% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Jake Lerch has positions in Spotify Technology. The Motley Fool has positions in and recommends Netflix, Palantir Technologies, and Spotify Technology. The Motley Fool recommends Delta Air Lines and Lowe's Companies. The Motley Fool has a disclosure policy.