Key Points

• Wall Street found things to be disappointed about in Amazon's quarterly report despite a phenomenal quarter, but it's already overcorrected.

• This growing drive-thru chain has an edge that spells excellent long-term prospects.

• This restaurant chain has had a rough year, but a recovery could be around the corner.

• 10 stocks we like better than Amazon ›

Investors should never let market volatility scare them out of a good investment. Stocks of growing companies will usually experience greater volatility than the market average. But investors that ignore those fluctuations and keep regularly buying shares of growing companies will come out ahead over the long run.

Three fool.com contributors see great deals right now for fallen growth stocks like Amazon (NASDAQ: AMZN), Dutch Bros (NYSE: BROS), and Sweetgreen (NYSE: SG). Here's why they believe these stocks are solid investments for a long-term investor.

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 »

Amazon: Down 8.5%

Jennifer Saibil (Amazon): Amazon reported spectacular results for the 2025 second quarter last week, but its stock dropped on the news. While there was a lot to be excited about, the market seemed to home in on certain qualities that didn't fully meet its expectations, and that has created an excellent opportunity for investors who haven't pressed the buy button yet.

Sales growth was strong at 13% year over year, beating expectations. Let's not forget that Amazon is the second-largest company in the U.S. by sales, and to be able to still deliver double-digit sales growth is an impressive feat. It reached $167.7 billion in sales, ahead of Walmart's $165.6 billion in sales in its most recent quarter, and Amazon is on track to become the largest company in the U.S. by sales.

Operating income surged to $19.2 billion, up from $14.7 billion last year, easily topping its guidance. But that wasn't enough for Wall Street.

The market seems to have been spooked by the outlook for operating margin coming in slightly below expectations. Management is shooting for $15.5 billion to $20.5 billion in third-quarter operating income, and Wall Street is expecting $19.5 billion.

It also wasn't thrilled with the performance of Amazon Web Services (AWS), Amazon's cloud business. AWS sales were up 17.5% year over year in the quarter, but that was nowhere near the growth of its two biggest rivals, Microsoft's Azure and Alphabet, which increased 39% and 32%. However, AWS is much bigger than both of them, and in dollar amounts, its increase surpassed them.

CEO Andy Jassy made some remarks about the artificial intelligence (AI) business that may have sounded worse than he expected. He explained that it couldn't meet demand right now, which is why it's investing heavily in the platform. While that could lead clients to find somewhere else to meet their demand, the high demand implied should be great for Amazon down the line, as long as it can build out fast enough to keep it going.

Amazon stock is down 8.5% from its highs, already making its way back up as investors recognize the opportunity to buy on the dip. This was an overcorrection, and now it's a great chance to buy before it reaches new highs.

Dutch Bros: Down 33%

John Ballard (Dutch Bros): Dutch Bros has all the ingredients of a growth stock set up to deliver multi-bagger returns for patient shareholders. It's tapping into growing demand for specialty beverages. The business was founded in 1992, but it's still early in its nationwide U.S. expansion plans.

Analysts expect revenue to grow at a compound annual rate of 23% over the next few years. This is in line with the company's current pace of shop openings and same-shop sales trends, which have hovered around the low to mid-single-digit level over the last few years. It currently has over 1,000 shops in 18 states, but management sees tremendous growth potential supporting as many as 7,000 locations over the long term.

Dutch Bros is outperforming Starbucks, which has experienced problems growing sales recently. One reason for Dutch Bros' success is that it likes to hire shop managers from within the company. Even some of the company's franchise partners started out working for Dutch Bros as "broistas." This can help promote consistency throughout the company's shops, which is an important quality to look for in any restaurant chain.

Another quality that leads me to have high conviction in the future of this brand is that it is very popular among Gen Z. Dutch Bros offers a fun-loving atmosphere and a focus on the drive-thru experience, and it goes out of its way to delight customers with limited time offerings, such as the recent rubber duck giveaway with every purchase. The little things can go a long way in winning loyal customers, and Dutch Bros seems to understand this well.

The stock is currently down about 33% from its 52-week high. I would consider taking advantage of the dip and adding shares, especially for investors who are interested in finding promising new restaurant brands in the early stages of expansion.

Sweetgreen: Down 77%

Jeremy Bowman (Sweetgreen): Restaurant stocks have struggled this year as a combination of fears about tariffs and weak consumer discretionary spending have weighed on both business results and stock performance.

Sweetgreen, the promising fast-casual salad chain, has been one of the worst-performing stocks in the industry. The stock is now down 61% year to date, and is off 77% from its all-time high shortly after the company went public in late 2021.

It's understandable why Sweetgreen is down based on its recent results. In its first quarter, same-store sales declined 3.1%, and revenue rose just 5.4%. Sweetgreen has also been unprofitable throughout its history.

However, the chain is still small with roughly 250 locations, and it is popular as its restaurants generate average sales of $2.9 million. That puts it on par with Chipotle, one of the most successful restaurant stocks in history.

Sweetgreen has also been unprofitable in part because it's invested in its Infinite Kitchen program, an automated system that measures and dispenses ingredients and helps prep its salad bowls. That innovation seems likely to pay off over the long run. Management has said that restaurants with the Infinite Kitchen generate higher sales, as it helps increase throughput and customer service, in addition to saving on labor costs.

Sweetgreen's comparisons are expected to get easier in the second half of the year, which could turn comparable sales positive. The company expects to open at least 1,000 stores over the long term, meaning it has a long growth runway ahead.

Investors who take advantage of the discount are likely to be rewarded.

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 $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,108,033!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 4, 2025

Jennifer Saibil has positions in Walmart. Jeremy Bowman has positions in Amazon, Chipotle Mexican Grill, Starbucks, and Sweetgreen. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Chipotle Mexican Grill, Microsoft, Starbucks, and Walmart. The Motley Fool recommends Dutch Bros and Sweetgreen and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

Key Points

• Joby is buying Blade's air mobility business for up to $125 million.

• The news added nearly $3 billion in market cap to Joby.

• The eVTOL company is still not earning material revenue.

• 10 stocks we like better than Joby Aviation ›

Joby Aviation (NYSE: JOBY) delighted investors on Monday when it announced the acquisition of Blade Air Mobility's (NASDAQ: BLDE) passenger business. The move gives Joby ownership of what might be the best-known brand in the urban air taxi mobility market.

According to the terms of the deal, Joby will pay Blade in up to $125 million in a combination of cash or stock, according to Joby's choosing. The move will give Joby immediate market access in New York City and Southern Europe, as well as ownership of a business that flew more than 50,000 passengers in 2024, primarily in the New York City area.

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Investors loved the agreement, sending Joby stock up 18.8% on Monday, which represented a $2.7 billion gain in market cap. For a price of $125 million, that's an incredible return on investment, at more than 20 times.

However, investors seemed to have second thoughts about the deal on Tuesday, as both stocks pulled back following Blade's second-quarter earnings report. Joby was down 5% in afternoon trading on Tuesday, while Blade, after jumping 17.2% on Monday, was down 10.8% at the same time.

Are investors reading the deal correctly here? Let's take a closer look.

What Blade means for Joby

It's easy to see the appeal of Blade for Joby and its investors: Blade has an existing urban air taxi network. Joby wants to launch them.

The deal does not include Blade's medical division, which will remain a separate publicly traded company renamed Strata Critical Medical, but the two companies are partnering in the medical transportation field, as Joby will become Blade's preferred VTOL partner for Blade's organ transport business.

However, there seems to be a disconnect between the $125 million price that Joby is paying Blade and the nearly $3 billion boost it got in its market cap. The fact that Blade stock jumped also indicates that Blade investors believe they got a good price in the sale.

Blade's second-quarter earnings report indicates why the company didn't value the air taxi business very highly. In the second quarter, revenue fell 13.2% to $25.7 million, due in part to its exit from the Canadian market, and the short-distance segment, which appears to be what Joby is most interested in, also saw reduced demand due to a helicopter accident in New York in April.

Passenger segment adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved from $0.8 million to $2.4 million, though that doesn't include corporate costs.

Are eVTOL stocks in a bubble?

While the Blade deal makes sense for Joby, as it will help boost its ambitions in the urban air taxi market, the market's reaction seems unjustified and is just the latest evidence that electric vertical takeoff and landing (eVTOL) aircraft are in a bubble.

Joby is still a development-stage company with no material revenue, yet its market cap has ballooned to more than $16 billion. That makes it more valuable than both American Airlines and Southwest Airlines, two well-established, profitable airlines. In fact, they're two of the four biggest airlines in the country.

By bidding up stocks like Joby and Archer Aviation, investors seem to be grossly overestimating the market for air travel and the profit potential in the industry, as Blade's relatively small size shows.

Blade's experience also shows that the constraints to scaling an urban air mobility business aren't the advanced technology that eVTOLs provide, such as being emission-free, quieter, or safer, but price and access, which doesn't really change going from a helicopter to an eVTOL. For comparison, a Blade ride from Manhattan to JFK Airport starts at $195 per seat, meaning it's not price-competitive with a taxi, rideshare, or another form of transportation.

With its market cap now at $16 billion, high expectations are baked into Joby Aviation stock even though it's barely made a sale.

Investors seem to be taking the wrong lesson from Blade here. Yes, the helicopter operator could help Joby, but it failed to disrupt urban transportation. The same is likely to be true for Joby.

Should you invest $1,000 in Joby Aviation right now?

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,108,033!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 4, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

Key Points

• This tech leader is seeing growing demand for cloud services, yet its stock trades at just 14 times expected earnings.

• A well-known athleisure superstar looks like it's oversold, and value investors should take a look.

• This diversified apparel company could be at the start of a turnaround.

• 10 stocks we like better than Alibaba Group ›

The stock market has shown incredible resiliency in 2025. After shaking off the trade wars and uncertainty for the economy, the S&P 500 is sitting close to new all-time highs. As August, which is historically a weak month for the markets, approaches, there are solid companies trading at reasonable valuations that are worth buying.

If you have $1,000 to commit to a long-term investment plan, read why three Motley Fool contributors like Alibaba (NYSE: BABA), Lululemon Athletica (NASDAQ: LULU), and VF Corp (NYSE: VFC) right now.

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An undervalued tech giant

John Ballard (Alibaba): Shares of Alibaba are starting to climb out of the slump they've been in for the past few years. This is a great time to consider starting an investment in the tech giant. An improving economy in China and strong demand for the company's cloud services are major catalysts that could potentially double the share price within five years.

Alibaba's e-commerce marketplaces, Taobao and Tmall, are posting steady growth in 2025. The March-ending quarter showed these businesses growing customer management revenue by 12% year over year. This primarily comes from fees charged to third-party merchants that sell goods on these marketplaces, which creates very profitable revenue streams for Alibaba.

Alibaba has multiple levers to grow revenue in its e-commerce business. It credited recent growth from several initiatives, including the integration of its Cainiao logistics in its e-commerce business, in addition to new software service fees that helped capture a higher percentage of revenue from merchant activities.

Another catalyst supporting the stock's recovery is strong growth in Alibaba Cloud. Enterprises are adopting artificial intelligence (AI) services at a rapid rate. Alibaba said its AI-related product revenue has grown at a triple-digit rate for seven consecutive quarters. Its investments in AI are positioning the company for strong growth over the next decade.

Despite positive trends across the company, investors can buy shares at just 13.5 times this year's consensus earnings estimate -- a genuine bargain. The stock could double if investors pay a higher multiple of earnings that is consistent with the average S&P 500 price-to-earnings multiple of 30. Wall Street appears to be in the process of rerating Alibaba shares right now, making it a timely buy for the month of August.

Too cheap to ignore

Jennifer Saibil (Lululemon): Lululemon has been having a very tough time over the past few years, and its stock is down around 45% in 2025 alone. However, at the current price, it looks like the market is overselling it, and it's trading at a bargain price.

After many years of strong growth, that growth has decelerated sharply. There are several factors working against it, including pressure in discretionary spending and increasing competition. Lululemon helped create the athleisure movement, but there are low barriers to entry in its industry. In fact, in the premium athleisure space, customers are often looking for the next important and exclusive brand. On top of that, there have been worries about how Lululemon will be affected by tariffs. It's no wonder investors have been losing enthusiasm for the stock.

The 2025 fiscal first quarter (ended May 4) did little to quell the pessimism. Sales increased 7% year over year in the quarter, but comparable sales (comps) were up only 1%. Even worse, they decreased 2% in the Americas region. Management maintained its guidance for a mid-single-digit increase in revenue for the full year, but it revised its guidance down for full-year earnings per share (EPS).

However, there's reason for optimism. Lululemon stock trades at a P/E ratio of only 14, and at this price, it looks like a good value. Lululemon is highly profitable with an operating margin of 18.5%. That was down 1.1 percentage points from last year in the first quarter, mostly due to tariffs. However, it's still industry-leading, way above similar athletic wear and regular apparel companies.

The tariffs situation could be improving as the Trump administration continues to make deals with other countries. And in terms of other countries, although the Americas market has been disappointing, Lululemon is doing very well in China, where sales increased 22% over last year in Q1.

At the current price, it could finally be time to give Lululemon stock another shot, especially if you're looking for a value stock.

A turnaround is afoot at VF Corp.

Jeremy Bowman (VF Corp): With the broad market at an all-time high, it may be a good time for investors to look to beaten-down stocks that could be undervalued.

VF Corp. looks like one of those stocks right now. The apparel brand manager, which owns brands like Vans, The North Face, Timberland, and Dickies, has been one of the worst-performing apparel stocks in the market over the last five years. The stock is down about 85% from its peak in 2021.

Weakness at Vans, a dividend cut, and broader headwinds on consumer discretionary products all weighed on the stock, but VF Corp. showed signs of a turnaround in the fiscal Q1 earnings report on Wednesday.

While overall revenue was flat, the company delivered solid growth at all of its core brands except Vans, which is going through a "channel rationalization," meaning management is reducing the number of distribution points. However, Timberland was up 11%, and The North Face was up 6%. Vans, on the other hand, was down 14%, but the overall business is healthier than it might look.

If management can stabilize Vans and improve profitability, the company should be on good footing. Its adjusted operating loss was much better than expected in Q1, and management's guidance calls for full-year growth in adjusted operating income and free cash flow.

VF Corp. now trades at a price-to-sales ratio of just 0.5. That gives the stock upside potential if it can achieve a profit margin of just 5%, which would equal a price-to-earnings ratio of just 10 at the current P/S ratio.

For a company with a set of well-known premium brands, that should be achievable. If the turnaround continues to make progress, VF could double or triple from here.

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 $625,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,257!*

Now, it’s worth noting Stock Advisor’s total average return is 1,036% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has no position in any of the stocks mentioned. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

Key Points

• VF beat estimates on the top and bottom lines.

• Vans sales were down sharply due to channel rationalization.

• Other company brands, like Timberland and The North Face, performed well.

• 10 stocks we like better than VF ›

Shares of VF (NYSE: VFC) were moving higher today after the diversified footwear and apparel company posted better-than-expected results on the bottom line, showing that its turnaround efforts are starting to pay off.

As of 12:27 p.m. ET, the stock was up 12.6% on the news.

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VF shows signs of life

The parent company of brands like Vans and The North Face has struggled due to weakness in Vans and a broader slowdown in the consumer discretionary category.

The company's fiscal first-quarter results showed the business starting to stabilize after declining for several quarters. VF reported flat revenue at $1.77 billion, ahead of the consensus at $1.7 billion, and excluding Vans, revenue was up 6%, showing it's executing across the rest of its business.

Vans sales, meanwhile, were down 15%, due in part to channel rationalization, or cutting some points of distribution. Timberland was up 11%, and The North Face grew 6%.

Gross margins improved from 51.2% to 53.9%, showing the impact of the company's cost control efforts, but selling, general, and administrative expenses remained elevated, and the company reported an adjusted loss per share of $0.24. That was an improvement from $0.35 in the quarter a year ago, and beat the consensus at a per-share loss of $0.34.

CEO Bracken Darrell said, "As I pass the two-year mark in my role as CEO, we are on track with VF's transformation. We are lowering costs, improving margins, reducing debt, and transforming the organization."

What's next for VF?

VF's guidance makes it clear that the company is still facing challenges. It expects a 4% decline in revenue for the second quarter, but management forecast adjusted operating income and free cash flow to be up for the year, including the impact of tariffs.

Ultimately, the company needs to refocus and rightsize the Vans business before aiming for top-line growth, so it's not a surprise to see the stock being rewarded for bottom-line improvements, especially given the sharp sell-off in recent years.

There's a lot of upside potential if the business can return to its earlier levels of strength.

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

Before you buy stock in VF, 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 VF 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 $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,075,791!*

Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Jeremy Bowman 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.

Key Points

• Intel is undergoing a large restructuring under new CEO Lip-Bu Tan.

• AMD continues to take market share from Intel in the PC segment.

• TSMC has become the world's dominant chip manufacturer.

• 10 stocks we like better than Taiwan Semiconductor Manufacturing ›

Intel (NASDAQ: INTC) may be unrivaled in the tech sector in its underperformance in recent history. Over the last 10 years, the stock is down 26% even as many of its semiconductor peers and the "Magnificent Seven" have delivered monster returns.

Intel's recent earnings report highlighted the company's multiple challenges as new CEO Lip-Bu Tan has embarked on a massive right-sizing campaign. The company has already laid off 15% of its workforce. It's spinning off its networking and edge business, turning Intel into a stand-alone company that can take on outside investment. It's also taken more impairments for equipment that's no longer useful.

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That's all part of Tan's strategy of refocusing the business on core priorities like AI, its x86 CPU franchise, and the launch of a foundry for its 18A process.

Some investors continue to bet on Intel's eventual turnaround, but the latest report shows that's likely to take longer than investors had hoped. Instead of buying Intel, investors are better off buying these two stocks that are capitalizing on the company's struggles.

1. Advanced Micro Devices

While Intel has struggled over the last decade, Advanced Micro Devices (NASDAQ: AMD) has emerged as a winner, grabbing market share from Intel in the PC-focused client segment.

It's also proven itself to be more nimble, shedding its foundry business to become a fabless designer, and it's emerged as the closest challenger to Nvidia in AI graphics processing units (GPUs), though it's a distant second behind the leader. AMD has made several acquisitions of start-ups in AI to bolster its product offerings and make it more competitive.

AMD is also growing much faster than Intel, showing it's capitalizing on the AI boom. It hasn't reported second-quarter results yet, but in its first quarter, revenue rose 36% to $7.44 billion, driven by its success in both the data center, where revenue jumped 57% to $3.7 billion, and in the client segment, where revenue jumped 68% to $2.3 billion on the strength of its Zen 5 Ryzen processors.

By contrast, Intel reported a 3% revenue decline in its client segment to $7.9 billion. As those numbers show, Intel is still the leader in PC chips, but AMD is rapidly gaining market share. The client segment is also Intel's biggest, making up nearly half of its revenue before intersegment eliminations.

Finally, AMD is in a strong position because it has healthy franchises in both central processing units (CPUs) and GPUs, which should benefit it in the AI era.

2. TSMC

In the foundry business, Intel's primary competitor is TSMC (NYSE: TSM), or Taiwan Semiconductor Manufacturing. In fact, it's not a close competition at this point as Taiwan Semiconductor makes up more than half of the contract chips in the world and roughly 90% of advanced chip production in the world, even manufacturing advanced chips for Intel.

Intel has aspirations of challenging TSMC in the contract business, but at this point, the legacy chip maker is far behind, and it will take years for that strategy to materialize.

In the meantime, Taiwan Semiconductor continues to post blistering growth. In Q2, it reported 44.4% revenue growth in U.S. dollars to $30.1 billion, and profits have soared as well, as earnings per share jumped 60.1% to $2.47.

Thanks to its dominance of the contract foundry business and relationships with tech giants like Nvidia and Apple, TSMC enjoys huge operating margins, which came in at 49.6% in Q2. By comparison, Intel is struggling to turn a profit.

TSMC now makes most of its revenue from advanced chips, which it defines as 7 nanometers (7nm) or less. That strength in advanced chips also positions it to continue to take advantage of growth in AI.

Considering its growth rate, TSMC's valuation also looks attractive at a price-to-earnings ratio of 29. As rivals like Intel and Samsung have faltered, TSMC's leadership position has become even more dominant. The stock looks set to continue being a winner.

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

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,075,791!*

Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Jeremy Bowman has positions in Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Key Points

• Fintech stocks are hot, as the risk-on sentiment has swept the market.

• Upstart is thriving after updating its AI model and making some other key changes.

• Sezzle is delivering sizzling growth thanks to a differentiated approach to BNPL.

• 10 stocks we like better than Upstart ›

Fintech stocks have long been volatile. The sector surged during the pandemic before crashing in the 2022 bear market. However, as digital payments continue to take share from traditional forms of payment and AI ups the stakes in fintech, sector stocks have started to rally again, benefiting from the broader risk-on sentiment since President Trump paused the Liberation Day tariffs.

Several fintech stocks have soared since then, but there are two in particular that look poised to deliver multibagging returns if you have a little bit of cash to invest. Let's take a closer look.

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1. Upstart Holdings

Upstart (NASDAQ: UPST) was a fintech darling of the pandemic era as the stock posted triple-digit growth and delivered double-digit profit margins. However, when interest rates rose, demand for loans from its platform dried up, profits disappeared, and the stock was forgotten.

Since then, Upstart has improved its technology with better models that have led to higher conversion rates. It has strengthened its capital with new funding sources and streamlined its business, and now expects to be profitable again this year.

In addition to those improvements, Upstart is starting to tap into massive loan markets in auto and home as it continues to roll out those offerings in new states. As a result, the business is stronger than ever, though that's not reflected in its stock price. While Upstart stock has gained in recent weeks, the stock is still down roughly 80% from its peak in 2021, and its market cap is just $7 billion.

For a company chasing a massive addressable market and trying to disrupt traditional FICO scores, Upstart has the potential to be much larger than a $7 billion company, especially if interest rates fall again, stimulating loan demand. Even at current interest rates, the business is thriving. In the first quarter, revenue rose 67% to $213 million as fee revenue climbed 34% to $185 million.

Transaction volume doubled to 240,706, showing the benefit of its new, more advanced Model 18. If Upstart can maintain its momentum, the upside potential from here is considerable.

2. Sezzle

Like Upstart, Buy now, pay later (BNPL) companies also had a moment during the pandemic, soaring as demand for the new kind of payment took off before interest in the sector faded in the 2022 bear market.

However, BNPL hasn't gone away, and one of the fastest-growing companies in the space is now Sezzle (NASDAQ: SEZL), a BNPL that initially went public in Australia and has grown its business with a different strategy from most of its competitors. Instead of focusing on the merchant, Sezzle has prioritized the consumer, growing its business through subscription programs, rewards, and new product features like auto-couponing, which automatically finds coupons for customers as they shop.

That strategy seems to be resonating as Sezzle's growth rate has accelerated into the triple digits.

In its first quarter, the company reported revenue growth of 123% to $104.9 million as gross merchandise volume (GMV) rose 64.1% to $808.7 million.

Sezzle's profit margins have also soared alongside that growth as the company reported an operating margin of nearly 50%, showing the business model is highly scalable. The company has also managed its credit risk successfully, and cuts customers off from the product if they miss a payment.

Investors are valuing the stock like its growth story is coming to an end, but BNPL is also a massive addressable market, competing with credit cards, so there's plenty of runway for the company to grow.

At a market cap of $4.5 billion, the stock could easily be a multibagger from here, even as it's already up more than 800% over the past year.

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

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

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

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*Stock Advisor returns as of July 21, 2025

Jeremy Bowman has positions in Upstart. The Motley Fool has positions in and recommends Sezzle and Upstart. The Motley Fool has a disclosure policy.

Key Points

• This growth stock is up over 40-fold since 2015 and is still growing revenue at high rates.

• This e-commerce powerhouse operates in an environment where 85% of sales are still offline, giving it a long growth runway.

• This streaming stock could be at a turning point.

• 10 stocks we like better than Shopify ›

Building wealth in the stock market is not difficult. The biggest challenge is staying focused on the long-term potential of a business when market volatility strikes, as it inevitably will. As long as you invest in competitively positioned companies that have lots of room to expand over the long term, you're going to be successful.

As the markets hit new highs at the midway point of 2025, three Motley Fool contributors believe Shopify (NASDAQ: SHOP), MercadoLibre (NASDAQ: MELI), and Roku (NASDAQ: ROKU) can make solid additions to a long-term investor's portfolio. Here's why these stocks are poised to deliver outstanding returns.

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An excellent stock to invest in e-commerce growth

John Ballard (Shopify): Shopify has been an amazing performer for investors. The shares have rocketed from a split-adjusted share price of about $3 following its initial public offering in 2015 to around $120 today. But what makes Shopify a brilliant growth stock is that it is still growing revenue at over 20% annually, with potential to keep growing at high rates for a long time.

The company's main driver of growth is not subscriptions to its platform, but merchant solutions, such as payment processing, shipping solutions, and capital lending. Shopify has reported 20% or more quarterly revenue growth for the last two years, with merchant solutions now comprising 74% of the business.

Merchant solutions are a high-margin revenue stream for Shopify. Because of this, Shopify continues to invest in driving this side of the business. Over the last year, it doubled the number of markets for Shopify Payments. It is also launching free tools, such as TariffGuide.ai, which uses artificial intelligence to help merchants figure out how to reduce costs in their supply chain based on product details. Shopify's innovation is an advantage in building the go-to operating system for e-commerce.

Of course, merchant solutions only grow if businesses using Shopify's platform are selling more and generating payment fees. This incentivizes Shopify to help merchants succeed. This forms a sort of partnership between the company and its merchant customers, which ultimately benefits the company and shareholders.

E-commerce is a multitrillion-dollar market, yet the total value of transactions completed by a Shopify merchant in the last quarter was less than $75 billion, or $350 billion on an annual run-rate basis. The recent expansion of Shopify Payments to 16 new markets should help it further penetrate this opportunity to drive more growth. All signs point to Shopify growing substantially in the years to come.

Great performance, tons of opportunity

Jennifer Saibil (MercadoLibre): MercadoLibre is an e-commerce powerhouse serving Latin America, and it's demonstrating fantastic growth. Its population is underpenetrated in e-commerce, giving it a long growth runway. It also has a growing presence in financial services, and its wide-ranging businesses in areas that are still adopting technology mean it has years of growth ahead.

In the 2025 first quarter, revenue increased 64% (currency neutral) year over year. Gross merchandise volume (GMV) was up 40%, and total payment volume increased 72%. It's also highly profitable. Operating income increased 45% over last year with a 12.9% margin.

Although e-commerce is growing rapidly, physical stores still account for 85% of sales in the company's regions. As the leader in e-commerce, MercadoLibre has 5% of the total retail market, and it's helping to generate the shift over to digital shopping by improving its value proposition with speedy deliveries, an increased assortment, and more. It's working, and unique active buyers continue to increase, up 25% year over year to 67 million in the first quarter. Like Amazon, it's also monetizing its platform with a lucrative and growing advertising business.

The fintech business is younger and growing even faster. Monthly active users increased 31% year over year in the first quarter to 64 million, and the credit portfolio increased 74%. The large incumbent banks in Latin America still account for the vast majority of banking in the region, but MercadoLibre is capturing market share through offering easy-to-use digital services and high yields on accounts. It's also expanding its platform with new products and features, and it's planning to open a fully digital bank in Mexico and Argentina.

MercadoLibre stock is up 41% year to date, crushing the market. It's been especially attractive to investors this year since it has low exposure to tariffs, but it tends to beat the market at any time. With its well-run business and wide opportunities, it should continue to create shareholder value for the foreseeable future.

This streaming stock could be ready for a breakout

Jeremy Bowman (Roku): There's no doubt that Roku has struggled in recent years. The leading streaming distribution platform is still operating at a loss, even though streaming now has a larger share of viewing in the U.S. than broadcast and cable combined.

The stock has been a laggard as well since a pandemic surge led to a collapse, but it could finally be ready to turn the corner. First, Roku said it expected to report an operating profit on a generally accepted accounting principles (GAAP) basis in 2026, and the company's recent results continue to show it making progress toward that end. In the first quarter of 2025, the company reported revenue growth of 16% to $1.02 billion, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved 37% to $56 million.

Last month, Roku announced a new partnership with Amazon, integrating Roku's authenticated CTV footprint with Amazon's DSP (demand-side platform). The partnership gives Roku a new way to leverage its ad inventory and technology and neutralizes one of its closest competitors in streaming distribution.

Additionally, the recent earnings report from Netflix showed that there's still robust growth in the streaming sector if Roku can take advantage of it. Meanwhile, Alphabet also showed off solid growth in its earnings report with advertising growth at 10%.

Analysts are expecting 11% growth from Roku in the second quarter to $1.07 billion when it reports earnings in August. If the company can top that and take steps toward profitability, there's a lot of upside potential for the stock.

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

Before you buy stock in Shopify, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $636,774!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,942!*

Now, it’s worth noting Stock Advisor’s total average return is 1,040% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Jennifer Saibil has positions in MercadoLibre. Jeremy Bowman has positions in Amazon, MercadoLibre, Netflix, Roku, and Shopify. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, MercadoLibre, Netflix, Roku, and Shopify. The Motley Fool has a disclosure policy.

Key Points

• D.R. Horton reported better-than-expected results in its third-quarter earnings report.

• The company expects to repurchase about 10% of its shares outstanding this year.

• Mortgage rates are likely to remain elevated, putting pressure on homebuilders.

• 10 stocks we like better than D.R. Horton ›

Shares of D.R. Horton (NYSE: DHI) were moving higher this week after the nation's largest homebuilder reported better-than-expected results in its fiscal third-quarter earnings report, despite continued pressure on the housing market, weak consumer sentiment, and elevated mortgage rates.

As of Thursday, at 1:10 p.m. ET, D.R. Horton stock was up 10.1% for the week, according to data from S&P Global Market Intelligence.

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D.R Horton surprises the market

Homebuilders might have an advantage over real estate agencies in the current housing market, as the national housing shortage has led to demand for new homes, but growth has still been challenging in the industry due to high mortgage rates.

Against that backdrop, D.R. Horton a 7% decline in revenue to $9.2 billion, ahead of the consensus at $8.8 billion. Homes closed fell 4% in the quarter to 23,160, ahead of its guidance, and sales orders were flat year over year and up 3% sequentially, a positive sign.

Further down the income statement, the company reported a gross margin of 21.8% and earnings per share of $3.36, which was down from $4.10 in the quarter a year ago, but benefited from a reduction in shares outstanding of 8%. That result was also better than estimates at $2.90.

Management acknowledged that demand is being "impacted by ongoing affordability constraints and cautious consumer sentiment." Its sales incentives have remained elevated in order to drive purchasing, which explains the decline in profits.

What's next for D.R. Horton?

Interest rates seem unlikely to change in the near term, which will continue to put pressure on the stock, but those factors seem to be priced into the stock.

For the full year, the company narrowed its revenue guidance to $33.7 billion-$34.2 billion, and it's targeting share buybacks of $4.2 billion-$4.4 billion. With buybacks at that pace, the stock looks like a reasonable buy, even if profits remain flat.

Should you invest $1,000 in D.R. Horton right now?

Before you buy stock in D.R. Horton, 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 D.R. Horton 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 $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,046,799!*

Now, it’s worth noting Stock Advisor’s total average return is 1,037% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends D.R. Horton. The Motley Fool has a disclosure policy.

Key Points

• The cloud software company recently launched new AI agents.

• Earlier this month, the company acquired Kraftful, an AI startup.

• At a market cap of $1.5 billion, Amplitude still has considerable upside potential.

• 10 stocks we like better than Amplitude ›

Amplitude (NASDAQ: AMPL) caught a lot of attention from investors when it debuted in 2021.

At the time, the cloud software company, which is focused on product analytics, was growing rapidly and tech stocks were still booming from the pandemic-driven tailwinds. However, Amplitude tumbled in the tech crash in 2022. The stock plunged and growth has slowed as many of its customers realized that they overestimated their need for its services, much like they did with most other software products, as the tech industry lost some of its primacy in the economic reopening following the pandemic lockdowns.

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The company was forced to lay off employees and retrench, and after some acquisitions and with the headwinds from the customer spend rationalization finally rolling off, Amplitude looks as strong as it's been in a long time.

In fact, the stock has surged of late, up 56% over the last year as investors have responded to the company's momentum in its product lineup. However, there's one thing investors should be watching now.

What can Amplitude do with AI?

Amplitude, which still trades in a small-cap range at a market cap of less than $2 billion, is arguably as well-positioned as any company of its size to capitalize on AI technology.

The company helps businesses discover and understand how customers use their digital products, like websites, apps, and other devices so they can learn what's working and make improvements.

In the digital era, that's a valuable tool, and it could be greatly enhanced with artificial intelligence, which has the power to automate insights that now require a human to glean through data analysis.

The company introduced its new Amplitude AI agents in June, which will do things like pull dashboards, run queries, test hypotheses, and determine which leads are the most promising.

Among the specific AI agent templates are website conversion agents, onboarding agents, feature adoption agents, and monetization agents, which help improve the nuts-and-bolts points of engagement that most businesses are trying to accomplish online.

Amplitude followed that up in July with its acquisition of Kraftful, an AI-native Voice of the Customer (VoC) start-up. Amplitude will capitalize on Kraftful's proprietary large language model (LLM), which can process massive amounts of user feedback data. The acquisition will help Amplitude further lock the capabilities in the data its software is uncovering, making its product suite even more valuable for customers.

What's next for Amplitude

In its first quarter, Amplitude reported 12% annual recurring revenue growth and 10% overall revenue growth, an improvement from recent years.

The company has seen a jump in remaining performance obligations as well, which rose 30% to $325.9 million, showing that its customers are committing to longer contracts. That's a good sign that growth momentum is returning after years of elevated churn coming off the pandemic.

Amplitude has a large base of more than 4,000 customers, ranging across industries from tech to consumer to industrials, and that includes 27% of the Fortune 100, showing it's landing large companies as well.

Seeing a bump from the new AI agents could take time, but the new products will almost certainly help accelerate Amplitude's growth over the long term.

The company was recently rated No. 1 in product analytics by G2, a research firm, and it has gained market share from larger competitors like Google Analytics and Adobe Analytics, which are more focused on marketing analytics rather than product analytics.

As a leader in an emerging niche in software at a market cap of just $1.5 billion, Amplitude has a lot of upside potential. If its new AI agents gain traction, the stock could soar.

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe. The Motley Fool has a disclosure policy.

Key Points

• Shares of the solid-state battery maker jumped apparently on the Lucid-Uber announcement.

• The stock has soared since it said last month that its Cobra separator had gone into production.

• Lucid has expressed interest in solid-state batteries.

• 10 stocks we like better than QuantumScape ›

Shares of QuantumScape (NYSE: QS) were moving higher again today, even though there was no company-specific news out on the stock. Instead, a combination of excitement around the Uber-Lucid deal and momentum in the stock following last month's announcement seemed to push it higher today.

As of 3:20 p.m. ET, the stock was up 17.9%.

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QuantumScape breaks out again

QuantumScape has surged after announcing a milestone achievement in its solid-state battery technology, going into production with its Cobra separator.

The stock has roughly tripled since then, and today it seemed to gain on the partnership announcement between Lucid and Uber, which could help fuel demand for new battery technology.

As for that deal, Uber will invest $300 million in Lucid in a robotaxi partnership that includes start-up Nuro's autonomous vehicle technology.

Lucid is known for high-performance electric vehicles, but the business has struggled to scale, so Uber's investment could give it a needed boost over the long term.

Meanwhile, QuantumScape's solid-state batteries aren't on the market yet, but Lucid has announced its intention of including solid-state batteries, which are denser than traditional lithium-ion batteries and therefore can charge faster and achieve a longer range, in its EVs. It's unclear who Lucid would partner with on it.

What's next for QuantumScape?

QuantumScape stock continues to trade in high volume, showing renewed interest in the stock, following last month's announcement.

The next update for the company will come next week when it reports second-quarter earnings on July 23. While the numbers are secondary at this point, as QuantumScape is still a development-stage company, any commentary on Cobra or other news could propel the stock higher.

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

Before you buy stock in QuantumScape, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,050,415!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

Key Points

• The meme stock rally continued in Opendoor stock.

• After opening up significantly higher, the stock faded in regular trading.

• With the challenges in the housing market ongoing, the business still seems fundamentally weak.

• 10 stocks we like better than Opendoor Technologies ›

One day after soaring more than 30% on a meme-driven rally, shares of Opendoor Technologies (NASDAQ: OPEN) were up again, though this time there were signs that the rally, which seems to be a combination of a short squeeze and meme stock behavior, was starting to break.

As of 2:36 p.m. ET, Opendoor was up 8.4% on high-volume trading after gaining more than 30% earlier in the session.

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The Opendoor surge continues

Shares of Opendoor have now more than tripled in just a few weeks, seemingly after a post on Reddit's WallStreetBets page argued that the company could be the next Carvana, which has soared more than 10,000% since recovering from near-bankruptcy a few years ago.

As the stock has moved higher, trading volume has soared, and it was over 466 million as of 2:39 p.m. ET, a record for the stock. With just 729 million shares outstanding, that means more than 60% of shares have changed hands, and the session is not yet finished.

Opendoor may also be experiencing an ongoing short squeeze, as 24% of the stock was sold short as of a month ago, and short-sellers have likely moved to close their bets, given the surge in the stock. However, at the current trading volume, shorts shouldn't have a problem covering.

What's next for Opendoor

Opendoor stock surged in premarket trading and peaked in the regular session shortly after the market opened. From there, the stock gave up most of its gains, showing that the rally may have run its course.

The business case for a recovery in the stock seems thin at this point as the housing market continues to be sluggish, and interest rate cuts seem less likely after the latest inflation report. Still, meme traders seem to have taken hold of the stock, and it will likely continue to be volatile over the coming days.

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

Before you buy stock in Opendoor 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 Opendoor 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 $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,050,415!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Jeremy Bowman has positions in Carvana. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Pepsi edged past expectations in its second-quarter earnings report.

• The company is still struggling with headwinds in the domestic market.

• After a recent sell-off, Pepsi's dividend looks attractive.

• 10 stocks we like better than PepsiCo ›

Shares of PepsiCo (NASDAQ: PEP) were climbing today after the packaged food and beverage giant surprised the market with its second-quarter earnings report, beating analyst expectations. While growth was still modest, it did show the company making an improvement from the first quarter.

As of 12:12 p.m. ET, the stock was up 6.8% on the news.

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PepsiCo gets back to growth

PepsiCo stock was struggling coming into the report, so any sign that the business is moving in the right direction was enough to give the stock a boost.

Revenue in the quarter rose 1%, though organic revenue, which factors out the impact of divestitures, acquisitions, and currency exchange, was up 2.1%. Revenue came in at $22.7 billion, which was ahead of estimates at $22.3 billion.

Costs rose faster than revenue as gross profit in the period was down, and core constant-currency earnings per share fell 5% to $2.12, which topped the consensus at $2.03.

International markets remained strong, with organic revenue up 5% or more in three of its four international segments. Pepsi Foods North America, which is primarily made up of Frito-Lay, remained a weak spot with organic revenue down 2%, a sign that consumers may be cutting back or trading, as consumer sentiment has been weak.

CEO Ramon Laguarta said, "We're encouraged by the acceleration in our net revenue growth versus the previous quarter, with our businesses effectively navigating through a challenging environment."

What's next for PepsiCo?

For 2025, PepsiCo expects a low-single-digit increase in organic revenue, and core constant-currency EPS flat.

In the context of the company's broader challenges, that seemed to be enough to please investors. After the recent sell-off, its dividend looks attractive at a yield of 4.3%.

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

Before you buy stock in PepsiCo, 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 PepsiCo 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 $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,050,415!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Jeremy Bowman 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.

Key Points

• CoreWeave announced a $6 billion investment in a new data center in Pennsylvania.

• Nvidia also made a bullish announcement for the semiconductor industry.

• 10 stocks we like better than CoreWeave ›

Shares of CoreWeave (NASDAQ: CRWV), a leader in artificial intelligence (AI) infrastructure, were on the move today after the company announced that it would invest $6 billion to open a new data center in Pennsylvania.

The news shows the company continuing to invest in the rapidly growing market, paving the way for new capacity. Additionally, CoreWeave could be benefiting from news that Nvidia will now be allowed to sell its H20 AI chips in China, which benefits a key ally and investor in the company, and paves the way for other companies to do the same, expanding the semiconductor market.

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The stock closed up 6.2% on the news.

CoreWeave announces a new data center

CoreWeave has been seeing scorching-hot growth since it pivoted its business model to AI infrastructure, providing computing capacity to companies like Microsoft, Nvidia, and OpenAI, and it needs new data centers to fuel that growth.

This morning, CoreWeave said it would commit more than $6 billion for a state-of-the-art data center in Lancaster, Pennsylvania. The announcement will be made at an event with President Trump, with both of its senators and the governor present.

The facility will be one of the first large-scale data centers in that region and will have an initial capacity of 100 megawatts, with the potential to expand to 300 MW.

Including the Lancaster facility, the company will now have 33 AI data centers, including 28 in the U.S.

What's next for CoreWeave?

The AI infrastructure company just wrapped up a quarter where it reported 420% revenue growth, and it's expected to continue to expand at a rapid rate.

While CoreWeave may be a long way from profitability, investing in new data centers makes sense when demand is growing this fast.

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

Before you buy stock in CoreWeave, 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 CoreWeave 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 $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

Now, it’s worth noting Stock Advisor’s total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of July 15, 2025

Jeremy Bowman has positions in Nvidia. 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.

Key Points

• Shares of the tech giant rose on news that Nvidia would begin selling H20 chips to China again.

• Nvidia is a major customer of TSMC, and the news could signal a broader thawing in U.S.-China relations.

• TSMC is set to report second-quarter earnings on Thursday.

• 10 stocks we like better than Taiwan Semiconductor Manufacturing ›

Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) were moving higher as the chip manufacturing giant seemed to benefit from a broader tailwind in the semiconductor industry after Nvidia said it regained approval to sell its H20 artificial intelligence (AI) chip in China. The H20 is a less powerful version of the AI chips it sells in the U.S. and to other allies.

Nvidia is one of Taiwan Semi's biggest customers, and the news set off a broad rally in the sector, with Advanced Micro Devices shares jumping as well.

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As of 10:44 a.m. ET, TSMC, as the company is also known, was up 3%.

China is back open

In a blog post last night, Nvidia said that CEO Jensen Huang met with President Trump and other policymakers in Washington and received assurance that the company would be granted a license to sell the H20 again to China.

That is big news for both the semiconductor industry and U.S.-China relations. Nvidia stock plunged in April when it said it would take an estimated $5.5 billion write-down after it lost the license to sell H20s, dragging the rest of the chip sector down with it.

Nvidia is one of TSMC's biggest customers, and a bellwether for the industry, so the reopening of the Chinese market bodes well both for it and the leading chip manufacturer.

What's next for TSMC?

Taiwan Semi is set to report second-quarter earnings on Thursday, which could prove to be another leg up for the stock. The company has already reported monthly revenue, which was up about 38% in New Taiwanese Dollars in the second quarter, and analysts are expecting earnings per share to rise $1.48 to $2.28.

If the company can top that number, the stock, which is already hit an all-time high today, could make another move higher.

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

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

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

Now, it’s worth noting Stock Advisor’s total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Jeremy Bowman has positions in Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Key Points

• The giant retailer's challenges have continued thus far in 2025.

• It has contended with a boycott and weakness in discretionary spending.

• To return to growth, the company has announced a multi-year acceleration program.

• 10 stocks we like better than Target ›

Target's (NYSE: TGT) troubles have continued thus far in 2025. The retail giant came into the year reeling from market share losses to Walmart, weakness in discretionary categories, and problems with theft -- and many of those challenges have only gotten worse.

Tariffs have put pressure on both consumer spending and its imports, and the company even faced a boycott earlier this year in response to its decision to end its DEI practices. As a result, its financial performance has continued to lag with falling sales and profits, and its guidance has also disappointed the market.

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According to data from S&P Global Market Intelligence, the stock was down 27% through the first half of the year. You can see from the chart below that Target slumped through much of the first quarter due to the issues above. It then missed out on the market recovery that came later after the 90-day tariff pause was announced.

TGT data by YCharts.

Target stock keeps falling

Target's woes this year seemed to begin around the time it said it would roll back DEI programs, including ending an initiative to carry more products from Black and minority-owned businesses. That move led to boycotts against the company that began in February, and seemed to be having at least a modest effect on the business. The company also acknowledged that its reputation has been damaged by the boycotts.

In its fourth-quarter earnings report, which came out in March, the company reported comparable sales growth of 1.5%. Adjusted earnings per share (EPS) fell from $2.98 to $2.41, which still beat estimates at $2.25. Despite the beat, the stock still dropped on the update, as management warned about higher prices and its guidance called for flat top-line growth this year.

The stock then plunged after the "Liberation Day" tariffs were announced. After a modest recovery, the stock fell on its first-quarter earnings report, as comparable sales dropped 3.8% and adjusted EPS tumbled from $2.03 to $1.30. Target also cut its EPS guidance range for the year to $7.00-$9.00.

What's next for Target

Target announced something of a turnaround plan in its first-quarter earnings report, saying that it was establishing a "multi-year acceleration office" and making several leadership changes to make faster decisions and return the company to long-term profitable growth.

Target still has turnaround potential, but it's clear why the stock has continued to lag.

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

Before you buy stock in Target, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Jeremy Bowman has positions in Target. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.

Key Points

• CoreWeave could be the biggest IPO of 2025.

• After a lackluster debut, the stock has soared.

• Revenue is skyrocketing, but the company faces some big risks.

• 10 stocks we like better than CoreWeave ›

Through July, AI infrastructure specialist CoreWeave (NASDAQ: CRWV) has been the biggest initial public offering (IPO) of the year.

CoreWeave's actual public offering was a disappointment. It was both undersubscribed and priced lower than the company intended. In fact, Nvidia (NASDAQ: NVDA) had to come in and help rescue the offering by buying a large position in the IPO. The opening day performance was also a dud, and the stock opened down from its IPO price of $40 and closed even with it, showing underwhelming interest.

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However, since the late March debut, broad market trends have shifted, and AI stocks are back in vogue as concerns about a trade war and a recession have receded.

As a result, CoreWeave stock surged as high as $188 before a recent pullback, though it's still trading at more than triple its IPO price.

What CoreWeave does

CoreWeave was founded as Atlantic Crypto, an Ethereum miner, but pivoted its business model in the crypto winter of 2018-2019 when crypto mining fell on hard times and it discovered that the idle GPUs it owned could be rented out instead as computing capacity to run AI applications and models.

Today, the company provides generative AI-focused cloud computing infrastructure through its CoreWeave Cloud Platform, which combines proprietary software and cloud services to manage and deliver the AI infrastructure needed to power the leading AI models.

As a cloud platform purpose-built for generative AI, CoreWeave is differentiated from the giant hyperscalers -- Microsoft, Amazon, and Alphabet -- some of which are the company's biggest customers. For example, its platform delivers higher performance and more uptime than alternative offerings, allowing its customers to build their AI models faster.

In part because of its close relationship with Nvidia, CoreWeave is also regularly the first cloud provider to deploy new AI instances (i.e., resources). In recent weeks, it has made two such announcements. For example, it became the first company to make Nvidia RTX PRO 6000 Blackwell Server Edition instances generally available, which achieve 5.6 times faster large language model inference than the previous generation.

CoreWeave has some key partners

Among the risks investors pointed out when CoreWeave went public was its customer concentration. Its prospectus said that Microsoft accounted for 62% of its revenue in 2024.

Due to the nature of its business, CoreWeave has a small number of customers, including start-ups like Mistral, Cohere, and OpenAI, and big tech companies like Microsoft, Meta Platforms, Alphabet, IBM, and Nvidia. Management said in its first-quarter earnings report that no company makes up more than 50% of its backlog.

While customer concentration is a risk, the relationships with these companies are also a source of strength, especially with Nvidia, which owns 24.2 million shares of CoreWeave, currently worth roughly $3 billion. OpenAI also invested $350 million in the company in March, which is likely worth several times more today. That came as part of a deal for OpenAI to pay $11.9 billion to CoreWeave over five years.

Because both companies are investors in CoreWeave, they are more likely to remain customers and support its business, creating a symbiotic relationship.

Why CoreWeave has big potential

Management is reporting blistering growth. In the first quarter, revenue jumped 420% to $981.6 million, showing off the surging demand for its services as well as the speed with which it's expanding its capacity.

Demand for AI computing is expected to grow for years, if not decades, and CoreWeave is poised to be a leader in AI cloud infrastructure. The company is still deeply unprofitable due to the need to acquire GPUs to run its cloud platform, but it makes sense to invest when revenue is growing by triple digits.

While CoreWeave is certainly risky, and valuing the stock is difficult right now, it has considerable upside potential, even after tripling from its IPO price in just a few months.

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

Before you buy stock in CoreWeave, 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 CoreWeave 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

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

Key Points

• The Schwab U.S. Dividend Equity ETF is a popular choice for retirees.

• The ETF holds a number of Dividend Kings, which have raised their dividends each year for at least half a century.

• The fund is less volatile than the S&P 500.

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

If you're looking for ETFs, a good first stop is typically an S&P 500 index fund.

After all, the benchmark index includes 500 of the largest American companies across every industry, and it has a track record of delivering an annual average return of 9% over its history. However, retirees often need more stability than what the S&P 500 offers, which is why they tend to seek out lower-risk investments such as dividend stocks and bonds.

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One popular choice among dividend investors is the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). The fund's goal is to track as closely as possible the Dow Jones U.S. Dividend 100 Index, which offers a high yield and quality screen that should be very attractive to retirees.

What's in the Schwab U.S. Dividend Equity ETF?

With net assets of $68 billion, the Schwab U.S. Dividend Equity ETF is one of the larger ETFs available to investors. It has a low expense ratio of just 0.06% and holds 100 stocks as of this writing.

The biggest sector in the ETF is energy, which makes up 21.1%, followed by consumer staples at 19.1% and healthcare at 15.7%. Companies in all three of those sectors are well known for often paying dividends.

Currently, the top three holdings are Texas Instruments, Chevron, and ConocoPhillips. Each stock represents about 4.3% of the fund as of this writing, and they're are solid dividend payers. Texas Instruments offers a 2.6% dividend, while ConocoPhillips and Chevron pay 3.5% and 4.8%, respectively. The Schwab U.S. Dividend Equity ETF itself pays a dividend yield of 4.0%, which is significantly better than the S&P 500's 1.2%.

How has the Schwab U.S. Dividend Equity ETF performed historically?

The Schwab U.S. Dividend Equity ETF has a solid track record of generating positive returns, but it has underperformed the S&P 500 since its inception in 2011, as you can see in the chart below.

Data by YCharts.

However, the chart also shows how the Schwab U.S. Dividend Equity ETF is less volatile than the S&P 500. In 2022, when the S&P 500 suffered through a bear market, the Schwab ETF experienced a more muted pullback because it lacks exposure to the high-profile tech stocks that soared during the pandemic and then crashed in 2022.

This reduced volatility is yet another reason for more conservative investors and retirees to consider the Schwab ETF.

Is SCHD right for you?

For retirees and others looking for a safe dividend ETF, the Schwab U.S. Dividend Equity ETF looks like a good bet.

There are other dividend ETFs available, but SCHD has emerged as one of the most popular choices thanks to its diversification across sectors and a track record of growth balanced with stability. Add to that the high yield and low expense ratio, and it becomes clear why this Schwab ETF is a great starting point for retirees.

Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now?

Before you buy stock in Schwab U.S. Dividend Equity 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 Schwab U.S. Dividend Equity 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 $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $998,376!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Texas Instruments. The Motley Fool has a disclosure policy.

Key Points

• Reddit got a boost after introducing its new Community Intelligence product at the Cannes Lions festival.

• One analyst also said Meta Platforms' deal with Scale AI is positive for Reddit stock.

• The company has delivered impressive growth since it went public a year ago.

Shares of Reddit (NYSE: RDDT) were on a tear last month, as the stock benefited from the broader gains in the stock market, the company released a new Community Intelligence product that impressed the market, and other positive news around artificial intelligence (AI) helped lift the stock.

According to data from S&P Global Market Intelligence, the stock finished the month up 34%.

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 »

As you can see from the chart, most of the stock's gains came in the middle of the month, though it also benefited from a late surge in the broad market as tensions in the Middle East cooled.

RDDT data by YCharts

Reddit rides the AI wave

The big news around Reddit last month was its introduction of Reddit Community Intelligence, which it unveiled at the Cannes Lions Festival. The new platform, which the company described as the "collective knowledge from the billions of human conversations across Reddit," has two main features.

The first is Reddit Insights, a tool that gives marketers real-time insights based on Reddit's 20 years of conversations to help them plan campaigns and make better decisions. The second is Conversation Summary Add-ons, an ad feature that integrates positive content from Reddit users directly below an advertiser's post.

Both products are only in alpha, meaning they're being tested by a small group of customers right now, but the initiative shows Reddit doing more to tap into its trove of user-generated content, which can fuel both AI and the company's own advertising engine. The stock jumped 19.4% over a three-day period during the Cannes festival.

Elsewhere, the company received some bullish analyst commentary around Meta's acquisition of Scale AI, which could raise the premium for the kind of data-licensing business that Reddit is trying to build with its "corpus," or body of content.

What's next for Reddit?

Reddit stock has exploded since its IPO last March, as the company has both delivered strong growth and turned profitable. Reddit had previously been operating at a loss for much of the 20 years prior to going public, and a combination of factors seem to be driving the business, including its utility in the AI era, interest in an alternate social media advertising platform, and attention around the company following its IPO.

The excitement around the new Community Intelligence tool shows that investors seem to believe in the company's potential with AI and advertising. It's unclear if that will move the bottom line anytime soon, but Reddit is a unique asset in its industry. The stock is risky, but it has considerable upside potential.

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

Before you buy stock in Reddit, 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 Reddit 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 $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

Now, it’s worth noting Stock Advisor’s total average return is 1,049% — a market-crushing outperformance compared to 179% 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 30, 2025

Jeremy Bowman 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.

Key Points

• Meta Platforms pushed further into artificial intelligence (AI) last month with a deal to take a 49% stake in Scale AI.

• The company also benefited from lower tensions around the trade war.

Shares of Meta Platforms (NASDAQ: META) were moving higher again in June as the social media giant benefited from the broader uptrend in the stock market, and investors reacted to Meta's deal to take a 49% stake in Scale AI, a data-labeling start-up, for $14 billion.

By the end of the month, Meta stock had finished up 14%, according to data from S&P Global Market Intelligence.

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As you can see from the chart, the stock gained in two separate stages, in the beginning and end of the month.

META data by YCharts

Meta pushes deeper into AI

Meta's ambitions in AI became clearer last month as the company made a splash with the Scale AI deal. The move gives the company near-50% ownership of a promising AI start-up, and also brings Scale AI founder Alexandr Wang into the Meta fold. Wang will head up a new research lab working on superintelligence.

Additionally, other news reports emerged about Meta's poaching AI talent from OpenAI, and it also reportedly tried to buy Perplexity, the AI search-focused start-up now valued at $14 billion, as well as Safe Superintelligence, another AI start-up. Finally, the company is considering raising $29 billion to fund its data center expansion push as part of its AI ambitions.

Early in the month, Meta also signed a 20-year power purchase agreement with Constellation Energy, showing its commitment to securing an adequate source of energy as AI needs grow.

On the device front, the company also introduced Oakley Meta glasses, which it called a new category of Performance AI glasses, featuring a built-in camera, open-ear speakers, and water resistance.

Meanwhile, the stock also benefited from cooling tensions around the trade war, as well as solid economic data showing the job market continuing to expand and inflation remaining in check.

Since nearly all the company's revenue comes from digital advertising, the business is sensitive to the broader economy, so signs of continued growth are good for Meta.

What's next for Meta?

Meta's price-to-earnings ratio has risen to 28 following last month's gains, but that still looks like a fair price to pay for a stock that dominates the social media sector, has a huge competitive advantage in digital advertising, and is investing heavily into its strong AI division.

We'll hear from Meta at the end of the month when it reports second-quarter earnings. Analysts are expecting another strong quarter, with revenue increasing 14% to $44.55 billion and earnings per share rising from $5.16 to $5.84. If Meta can maintain that kind of growth, the stock should continue to move higher.

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*Stock Advisor returns as of June 30, 2025

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. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Constellation Energy and Meta Platforms. The Motley Fool has a disclosure policy.

Shares of Shopify (NASDAQ: SHOP) were moving higher today in line with a number of growth stocks in a day with broad gains across the market.

The e-commerce software company seemed to benefit from favorable comments from Fed Chair Jerome Powell about lowering interest rates. Additionally, stocks rose on news of a ceasefire between Iran and Israel, though that seemed to have less of a direct effect on Shopify.

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As of 3:21 p.m. ET, the stock was up 4.6%. At the same time, the Nasdaq Composite was up 1.6%.

Shopify gets a boost

There was no company-specific news out on Shopify, but as an e-commerce software company with a high valuation, Shopify is sensitive to the macroeconomic cycle, including interest rates.

On Tuesday, Fed Chair Jerome Powell said in remarks before Congress that rate cuts could come "sooner rather than later," though he stressed that the central bank could wait to see how tariffs play out.

In its "dot plot" forecast last week, the Fed maintained its prediction that it would cut the Fed funds rate by 50 basis points over the remainder of the year, the same forecast it made earlier this year, meaning investors should expect two 25 basis-point cuts in the remaining four meetings.

That's good news for Shopify as rate cuts should lower the discount rate in the discounted cash-flow valuation investors use to value stocks like Shopify. Lowering the discount rate increases Shopify's valuation.

What's next for Shopify

With its legions of small-business sellers, Shopify is at risk from higher tariffs, but the company offered strong guidance in its first-quarter earnings report, calling for mid-20s revenue growth rate and a free-cash-flow margin in the mid-teens.

If it can maintain those numbers, the stock should continue to rise over the long term.

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

Before you buy stock in Shopify, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — 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 23, 2025

Jeremy Bowman has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.