Key Points

• One of the companies discussed in this article is using AI to win a bigger share of the lucrative digital advertising market.

• The other company in focus in this piece is enabling the AI revolution through its semiconductor manufacturing equipment, and it seems well-positioned to accelerate its growth.

• 10 stocks we like better than Meta Platforms ›

Artificial intelligence (AI) is projected to have a profound impact on the global economy in the long run by driving up productivity levels, spurring customers and businesses to spend money on AI-related applications. According to market research firm IDC, AI could account for 3.5%, or almost $20 trillion, of the global gross domestic product (GDP) by the end of the decade.

This explains why investors have been betting big on AI stocks over the past three years, and that's why many of the names benefiting from the rapid adoption of this technology are now trading at expensive multiples. Hardware giants such as Nvidia and Broadcom sport rich earnings multiples, while software specialists such as Palantir and Snowflake are also expensive.

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 »

However, if you have missed the AI-fueled rally in shares of the above-mentioned companies in the past year, it would be a good time to take a closer look at Meta Platforms (NASDAQ: META) and Lam Research (NASDAQ: LRCX). These companies are making the most of the global AI rollout, and importantly, they are trading at attractive multiples right now.

Let's look at the reasons why buying these two AI stocks right now could turn out to be a smart long-term move.

1. Meta Platforms

AI is turning out to be a nice catalyst for digital advertising giant Meta Platforms, which has been offering its AI-powered advertising tools to advertisers and brands to improve audience targeting and reduce costs simultaneously. On the company's latest earnings conference call, management pointed out that AI tools have led to a 5% jump in ad conversions on Instagram, along with a 3% improvement on Facebook.

Moreover, Meta's users are now spending more time on its apps thanks to AI-powered content recommendations. The time users spent on Facebook and Instagram increased by 5% and 6%, respectively, in the previous quarter. These factors explain why Meta reported a solid increase of 22%, to $47.5 billion, in its Q2 revenue. Its bottom-line growth was even better, with adjusted earnings per share jumping by 38% year over year to $7.14 per share.

The numbers crushed Wall Street's expectations, fueling a big jump in Meta's stock price following the release of its results on July 30. Meta benefited from a 9% year-over-year jump in the average price per ad served during the quarter. Also, the AI-driven improvement in user engagement led to an 11% increase in ad impressions delivered by the company in the previous quarter.

Additionally, more advertisers on Meta's platform are now using its generative AI ad tools to create and optimize the performance of their campaigns. Meta says that almost 2 million advertisers are now using its AI video generation tools, while the adoption of its text generation tools is also improving. Looking forward, Meta's AI ad tools are likely to be adopted by more advertisers, as the company reports they significantly boost advertising returns.

A study conducted by the company earlier this year revealed that its AI advertising tools are delivering a "22% improvement in return on ad spend for advertisers." It won't be surprising to see advertisers funneling those savings back into Meta's advertising solutions to reach a bigger audience, thereby leading to further growth in the social media giant's revenue and earnings.

As such, it is easy to see why analysts have increased their earnings growth expectations for Meta.

META EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share.

The best part is that investors can buy this tech stock at an extremely attractive 27 times earnings, which is lower than the tech-laden Nasdaq-100 index's earnings multiple of almost 33. Buying Meta at this valuation looks like a no-brainer, as the company can gain a bigger share of the digital ad market thanks to the AI-powered gains it is delivering to advertisers.

2. Lam Research

Semiconductors are powering the AI revolution. Complex chip systems capable of tackling huge workloads are necessary to train and deploy AI models in data centers. This is why companies such as Nvidia, Broadcom, AMD, and Taiwan Semiconductor Manufacturing Company (TSMC) have seen healthy growth in their revenue and earnings in the past couple of years.

However, the chips that the companies mentioned above design and fabricate wouldn't have been possible without the semiconductor manufacturing equipment sold by the likes of Lam Research. The company sells wafer and fabrication equipment (WFE) to foundries such as TSMC and Intel and to memory manufacturers like Samsung, Micron, and SK Hynix.

These companies have been increasing their capital expenditure budgets to make more AI-focused chips. Unsurprisingly, industry association SEMI is projecting a 6.2% increase in WFE spending in 2025, followed by a bigger jump of 10.2% in 2026. It is worth noting that SEMI increased its WFE spending guidance last month.

The good part is that Lam is already benefiting from the improved spending on semiconductor equipment. The company released its fiscal 2025 results on July 30. It reported a 23% year-over-year increase in annual revenue to $18.4 billion. Its diluted earnings per share increased at a faster pace of 43% to $4.15 per share last fiscal year.

The stronger WFE spending forecast going forward explains why Lam's outlook was a solid one. It is expecting $5.2 billion in revenue in the current quarter, which is well ahead of the $4.63 billion consensus estimate. That would translate into a year-over-year increase of 25% in its top line. Lam seems capable of sustaining this healthy momentum throughout the year on the back of an increase in AI-focused semiconductor capacity.

As such, don't be surprised to see Lam's revenue growth in the current fiscal year exceeding the 8% increase that analysts are projecting. The following chart tells us that Wall Street analysts expect Lam to clock healthy double-digit earnings growth rates. That looks reasonable, considering the 24% annual growth that the AI chip market is expected to clock over the next five years, which should ideally lead to more investments in semiconductor manufacturing capacity.

LRCX EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share.

In the end, there is a possibility that Lam will grow at a stronger pace than Wall Street's expectations in the long run, and this should pave the way for more upside in this AI stock. With Lam trading at just 23 times trailing earnings, investors are getting a great deal on this stock right now, and they may not want to miss it, considering the AI-fueled gains it could deliver.

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

Before you buy stock in Meta Platforms, consider this:

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

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

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Lam Research, Meta Platforms, Nvidia, Palantir Technologies, Snowflake, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

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

• V2X was formed from the merger of Vectrus and Vertex Aerospace in 2022.

• The defense stock has racked up some impressive multibillion-dollar contract wins over the last couple of years -- including one just last week.

• Analysts forecast surprisingly strong earnings growth from V2X, although it hasn't happened just yet.

• 10 stocks we like better than V2X ›

Raise your hand if you've ever heard of V2X (NYSE: VVX), the small-cap defense company formed from the merger of defense contractors Vectrus and Vertex Aerospace in 2022?

Yep. That's about what I expected. Even among investors, V2X is the farthest thing from a household name. But it's a name defense investors in particular might want to start paying attention to. Because on July 31, V2X scored a new Pentagon defense contract worth $4.3 billion -- and V2X itself costs only $1.8 billion.

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 »

Introducing V2X

I admit, the first time this company caught my eye was on July 31, when the company's name (or rather, one of its component companies, Vertex) appeared at the very top of the list of the most valuable contracts awarded by the U.S. Department of Defense that day.

"Vertex Aerospace LLC, Madison, Mississippi, was awarded a maximum $4,322,844,989 value, indefinite-delivery/indefinite-quantity contract for the contractor operated and maintained supply service contract for the T-6 [training jet] aircraft," read the announcement, before going on to explain that V2X beat out two other bidders to win the contract, and that the $4.3 billion will be doled out over the course of the next 10 years (ending on July 31, 2034).

Further digging revealed that this isn't the only gigantic contract on V2X's plate, however. In fact, just last year, my fellow Fool Eric Volkman spotlighted a similarly significant win by V2X, when the company landed a $3.7 billion, five-year contract to provide "readiness capabilities" to the U.S. Army, by supporting the operation of training devices, simulators, and simulations.

In fact, averaging out to $740 million per year, that contract is arguably even more significant than last week's $4.3 billion win, which will be worth "only" $430 million per year over its decade duration.

"A billion here, a billion there -- pretty soon you're talking real money"

So... $4.3 billion here, and $3.7 billion there. It seems to me we're already talking about "real money" that V2X is earning off the Pentagon -- $8 billion total, won via just two contracts, over the course of just two years.

But if V2X is rolling in so much Defense Department dough, one wonders, why is it that the stock looks so seemingly cheap at a market capitalization of just $1.8 billion?

Is V2X stock cheap?

Well, let's start with sales. V2X took in $4.3 billion in revenue last year, up 9% from 2023 -- a respectable growth rate for a defense contractor, if perhaps a bit on the slow side for a small-cap defense contractor. What's more, V2X earned less than $35 million in profit on those sales.

That's a net profit margin of less than 1%. Which is to say, pretty slim.

If we apply this margin, then, to the extra $430 million a year V2X will be bringing in from its latest multibillion-dollar contract win, therefore, it's likely to boost V2X's annual earnings by less than $10 million. That's not a lot of money with which to move the needle on a $1.8 billion market capitalization.

Is V2X stock a buy?

Now, the good news is that V2X seems to be getting more profitable as its merger matures, and cost synergies between the two merged businesses, Vectrus and Vertex, work their way through the company. Over the last six months, for example, V2X earned $30.5 million, which is to say nearly as much as it earned in all of 2024. As profitability improves, analysts polled by S&P Global Market Intelligence estimate V2X might earn as much as $73 million this year, and generate $135 million in positive free cash flow.

Assuming the analysts are right, this would value V2X stock at 24 times current-year earnings, but only about 13 times current year free cash flow. That doesn't sound like a lot, but with profits only growing 9% a year, and V2X paying no dividend, it's not necessarily cheap enough to tempt me to buy the stock right now.

The big question for investors is whether V2X can continue improving its profit margin, and perhaps accelerate its earnings growth into the double digits. Many analysts believe the company can accomplish this, forecasting that per-share profits, for example, might double over the next three years -- and that free cash flow might nearly double in two.

I don't know enough about the company right now to say how likely this is, but now that I'm alerted to V2X's existence -- and impressed by its last two massive contract wins -- I'm certainly interested enough to keep following the story, and learning if V2X can deliver on these lofty predictions.

And as soon as I know the answer to that... I'll let you know, too.

Should you invest $1,000 in V2X right now?

Before you buy stock in V2X, 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 V2X 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

Rich Smith 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

• Vertex Pharmaceuticals' recent sell-off was overdone.

• Nvidia's growth story and dominance in the AI chip market are simply too good to ignore.

• Alibaba provides a great way to invest in AI on the cheap.

• 10 stocks we like better than Alibaba Group ›

What does it take to qualify as a growth stock? Probably the most important criterion is that the stock must be expected to grow significantly faster than the overall market. That definition weeds out a lot of stocks.

However, there's a problem. It's not always easy to determine which stocks are most likely to beat the market. I think, though, that several stocks have what it takes. Here are my picks for three of the smartest growth stocks to buy right now with $1,000 (listed by share price in descending order).

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

1. Vertex Pharmaceuticals

You might think Vertex Pharmaceuticals (NASDAQ: VRTX) is an unlikely candidate for this list after the biotech stock plunged following its second-quarter update. I have a contrarian view, though: The sell-off makes Vertex even more attractive with its share price below $400.

Vertex didn't report dismal Q2 results, by the way. Instead, the company announced two pipeline updates that disappointed investors. Experimental pain drug VX-993 failed to meet the primary endpoint of a phase 2 study, resulting in Vertex deciding against advancing it into pivotal testing. Also, the U.S. Food and Drug Administration (FDA) told the company that there isn't a path forward for a broad label in peripheral neuropathic pain (PNP) for suzetrigine.

I think the sell-off was overdone considering how much Vertex has going for it. The company's cystic fibrosis (CF) franchise remains strong. The commercial launch of non-opioid pain drug Journavx is going so well that Vertex is expanding its marketing efforts. Meanwhile, the biotech company is prioritizing diabetic peripheral neuropathy as the next indication for the drug and is initiating a second phase 3 study.

There's more. Vertex is on track to file for regulatory approvals of zimislecel in treating severe type 1 diabetes next year, pending positive phase 3 results. It also hopes to file for accelerated approval in the U.S. for povetacicept in treating IgA nephropathy, a kidney disease, assuming all goes well with an interim analysis of a phase 3 study. The company's chances for both programs succeeding in late-stage trials appear to be pretty good.

2. Nvidia

You could argue that Nvidia (NASDAQ: NVDA) is priced at a premium and faces increasing competition, including from some of its top customers. However, the fact remains that the company's growth story and dominance in the AI chip market are simply too good to ignore.

There was a common theme in the recent quarterly updates of several of the biggest tech giants. They're all continuing to invest heavily in data centers to support AI demand. It doesn't take an investing genius to realize this is great news for Nvidia, because its GPUs are still the gold standard in training and deploying AI models.

The company's Blackwell GPU architecture has extended its market lead. Even more powerful chips are on the way, with Nvidia now on an annual cadence of rolling out new products.

Nvidia's AI opportunities aren't limited to data centers, though. The company has massive opportunities in robotics and self-driving cars over the next several years. Another significant pullback in the stock would present a fantastic buying opportunity, but I'm not sure if we'll see one anytime soon. The stock is trading under $200 at the moment.

3. Alibaba Group Holding

If you want to invest in AI on the cheap, Alibaba Group Holding (NYSE: BABA) just might be the best game in town. Its shares trade at roughly 14 times forward earnings. That's only a fraction of the forward earnings multiples for the company's U.S. counterparts.

Of course, Alibaba isn't in town or even in the U.S.; it's headquartered in China. The company's China connection is a big reason behind its attractive valuation. Some investors fret that the Chinese government could interfere with Alibaba's business. They're also worried about export restrictions on U.S. AI chips (especially Nvidia's).

Those are valid concerns. However, the Chinese government wants to succeed in AI -- and it needs Alibaba's cloud unit to succeed to make that happen. Meanwhile, innovative Chinese companies such as DeepSeek could make it easier for Alibaba to host powerful AI apps even if it can't buy the more powerful U.S. chips. Alibaba is currently trading under $150 per share.

Could high U.S. tariffs on Chinese imports hurt Alibaba? Indirectly, yes. However, I think this stock has plenty of room to run regardless of trade challenges.

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 $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

Keith Speights has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Nvidia and Vertex Pharmaceuticals. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

I unequivocally loved the first season of The Sandman, the Netflix adaptation of Neil Gaiman's influential graphic novel series (of which I am longtime fan). I thought it captured the surreal, dream-like feel and tone of its source material, striking a perfect balance between the anthology approach of the graphic novels and grounding the narrative by focusing on the arc of its central figure: Morpheus, lord of the Dreaming.  It's been a long wait for the second and final season, but S2 retains all those elements to bring Dream's story to its inevitably tragic, yet satisfying, end.

(Spoilers below; some major S2 reveals after the second gallery. We'll give you a heads-up when we get there.)

When Netflix announced in January that The Sandman would end with S2, speculation abounded that this was due to sexual misconduct allegations against Gaiman (who has denied them). However, showrunner Allan Heinberg wrote on X that the plan had long been for there to be only two seasons because the show's creators felt they had only enough material to fill two seasons, and frankly, they were right. The first season covered the storylines of Preludes and Nocturnes and A Doll's House, with bonus episodes adapting "Dream of a Thousand Cats" and "Calliope" from Dream Country.

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© Netflix

This was the first time Peacock had ever occupied the No. 1 position in the chart.

Wednesday season 2 is off to a great start and I'm already counting down the days to part 2.

Blink and you’d miss him, but Chad Michael Murray was indeed in Freakier Friday. He doesn’t end up with Lindsay Lohan, but he’s the ideal romantic lead in one hit Netflix show.

A new leak has given a better insight into the ROG Xbox Ally's launch date, after a previous report revealed an August 20 pre-order date.

• The Trade Desk's shares plummeted nearly 40% and analysts blamed a growing rivalry with Amazon.
• Amazon has expanded its ad business with a Roku deal and live sports on Prime Video.
• Analysts expressed concern over The Trade Desk's prospects amid a competitive TV ad landscape.

The Trade Desk's shares cratered nearly 40% on Friday, its worst decline on record, and analysts say competition from Amazon may be to blame.

The Trade Desk, which helps companies target people across the web with ads, beat expectations in its earnings — but that wasn't enough to quell Wall Street's concerns. In commentary, analysts also cited the departure of the adtech company's CFO, but largely focused on the Amazon factor in explaining the stock drop.

The Trade Desk CEO Jeff Green responded to analysts' questions, saying his company would continue to serve an important role because it's a neutral seller of advertising, unlike Amazon, which also sells its own ads on Prime Video. He also argued The Trade Desk only competes with a small part of Amazon and suggested Amazon might one day allow companies like his own to sell ads on Prime Video.

"Amazon is not a competitor, and Google really isn't much of a competitor anymore either," Green said on the company's earnings call. "We're trying to buy the open internet, leveraging technology that values media objectively. We don't have any media. And we don't grade our own homework."

Analysts were skeptical of Green's optimistic stance, pointing to an increasingly competitive connected TV ad landscape. Amazon, Netflix, and Disney+ have all entered the market in recent years. Amazon's ad business, in particular, is on pace to grow fast with an upcoming deal to let advertisers buy ads on Roku devices through Amazon, and the NBA adding to Amazon's live sports programming on Prime Video.

Meanwhile, The Trade Desk is limited in its growth potential because it depends on its ability to access the ad inventory of other players like Netflix.

LightShed analysts had the harshest words, writing that "Green is either in a serious state of denial, or he is living in an alternate reality."

"The Amazon shadow over this stock is now front and center ... and harder to deny," MoffettNathanson's Michael Nathanson said, cutting his rating to sell from neutral.

Others were more sanguine. Evercore maintained an outperform rating, citing The Trade Desk's growing partnerships to sell Netflix, Roku, and Spotify advertising, and its expansion in retail media and international markets.

Amazon has become an ad titan

The bull case for Amazon's ad business has been gaining steam since the company barrelled into the TV ad market a year ago by making ads the default on Prime Video.

Gripes about the ad rates notwithstanding, advertisers like Amazon's massive scale, ability to target people based on their shopping preferences, and growing live sports offering on Prime Video.

Ad industry insiders recently told Business Insider that Amazon's entrance into TV advertising had made it harder for all but the top TV players, like Disney and Comcast's NBCUniversal, to compete.

A Morgan Stanley report in July said Amazon's Prime Video was on pace to dominate the advertising market on US-based smart TVs, knocking YouTube off its perch as the market leader in 2027. Later that month, Amazon reported its second-quarter earnings, showing its overall ads business growing 22% to $15.7 billion. That beat analyst expectations.

Amazon has also been striking deals with rival streamers like HBO Max and Apple TV+ to make itself the default destination for TV watching.

All this could be OK for rivals if the pie were ever-increasing. But the bigger worry is that CTV advertising won't be the growth engine it once was — leading media companies to fight for pieces of a smaller pie.

Nathanson pointed to slowing growth in recent quarters and intensifying competition from Amazon and Google.

He said he saw "a broader deceleration" in the US CTV ad market that should concern Trade Desk bulls.

The EU has authorized Brex to sell its spend management products directly in all 30 countries, "no workarounds required," CEO Pedro Franceschi said.

Key Points

• GAAP revenue of $37.2 million missed expectations by 2.3% in Q2 2025.

• Acute Care segment revenue surged 55.5%, while Oncology segment revenue declined 9.0%.

• Full-year 2025 adjusted EBITDA (non-GAAP) guidance was raised, reflecting operational progress and improved cost control.

• These 10 stocks could mint the next wave of millionaires ›

Heron Therapeutics (NASDAQ:HRTX), a biopharmaceutical company focused on acute care and oncology drugs, released its second quarter 2025 results on August 8, 2025. The standout news was a 55.5% jump in Acute Care segment revenue, offset by another GAAP revenue shortfall versus analyst expectations and continued weakness in the Oncology segment. Net revenue (GAAP) was $37.2 million, trailing the $38.075 million consensus and showing year-over-year growth of 3.3%. GAAP loss per share was $(0.02) versus an expectation of $(0.01), while operating losses narrowed and adjusted EBITDA (non-GAAP) turned positive year-over-year. The quarter showed progress, particularly in acute care, but ongoing Oncology declines and the GAAP revenue miss left a mixed overall impression.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS (GAAP)	$(0.02)	$(0.01)	$(0.06)	66 %
Revenue (GAAP)	$37.2 million	N/A	$36.0 million	3.3 %
Adjusted EBITDA	$1.8 million		$(1.2) million	N/A
Revenue – Acute Care	$10.7 million		$6.9 million	55.5 %
Revenue – Oncology	$26.5 million		N/A	N/A

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Success Factors

Heron Therapeutics specializes in the development and commercialization of therapeutics for patients in acute care and oncology settings. Its portfolio includes pain management and anti-nausea drugs aimed at the hospital and outpatient care markets.

Recent attention has focused on building the Acute Care business, driven by ZYNRELEF, an extended-release local anesthetic, and APONVIE, an intravenous anti-nausea drug for postoperative care. Key factors for future growth are innovation, regulatory approvals, intellectual property protection, commercial execution, and effective management of manufacturing and supply chain relationships.

Quarterly Developments: Segment Review and Key Actions

The Acute Care segment was a bright spot, driven by notable GAAP net revenue growth in both ZYNRELEF and APONVIE. Acute Care revenue jumped 55.5% year-over-year, supported by strategic investments in commercial teams and new sales initiatives. ZYNRELEF, a long-acting anesthetic product, produced 40.4% year-over-year growth in GAAP net revenue, with unit demand up 6.3% compared to Q1 2025. Management attributed some softness in revenue to a temporary wholesaler adjustment related to the 400mg VAN (Vial Access Needle) transition, a recent packaging and workflow optimization. Commercial momentum for ZYNRELEF is expected to accelerate with a new sales team dedicated to the brand beginning in Q3 2025, along with a permanent Centers for Medicare & Medicaid Services (CMS) J-code that will ease hospital reimbursement from October 2025 onward.

APONVIE, targeted for prevention of postoperative nausea and vomiting, saw revenue grow 141.6% year-over-year, and unit demand rose 19% sequentially. This reflects expanding hospital system adoption. APONVIE also will benefit from a dedicated field sales force in the next quarter, prioritizing deeper account access and broader utilization across moderate and high-risk surgery patients.

The Oncology segment declined 9.0% (GAAP) due to ongoing weakness in SUSTOL, another anti-nausea/anti-vomiting product. CINVANTI, an intravenous version in the same category, fell 3.1%, while SUSTOL decreased by 43.4% (GAAP). No significant new product drivers or catalysts were announced for the segment this quarter.

Beyond sales, Heron reported a gross margin of 73.5% of revenue. Operating expenses (GAAP) fell by $3.0 million year-over-year, reaching $29.0 million compared to Q2 2024. Adjusted EBITDA (non-GAAP) was positive at $1.8 million, compared to a negative result last year, indicating better operational leverage. The company also reduced total debt to $145 million (from $175 million), extending maturities to at least 2030. This restructuring was aimed at providing greater flexibility for growth. Cash and short-term investments stood at $40.6 million, down nearly $10 million from the prior quarter. Inventory build is notable, with stocks rising by almost $20 million in six months (GAAP, from $53.2 million at December 31, 2024, to $73.0 million at June 30, 2025).

Product Portfolio

ZYNRELEF leads the Acute Care segment as an extended-release anesthetic, recently enhanced with the VAN kit for easier hospital use. APONVIE is an intravenous anti-nausea product targeting postoperative care. CINVANTI and SUSTOL are anti-nausea therapies used mainly for patients undergoing chemotherapy in Oncology, with CINVANTI administered intravenously and SUSTOL administered via injection. Growth in Acute Care products helped offset declines in Oncology, though Heron’s future depends on translating current sales momentum into sustained, profitable adoption across hospital channels.

Looking Ahead: Guidance and Investor Considerations

Heron reaffirmed its full-year 2025 net revenue (GAAP) target of $153.0 million to $163.0 million, implying that revenue must reach at least $77 million in the second half of 2025 to hit the low end. The outlook for adjusted EBITDA (non-GAAP) was raised to $9.0 million to $13.0 million for full-year 2025, up from the prior range of $4.0 million to $12.0 million, reflecting year-to-date operating performance and tighter cost management. Management’s expectations for a step-change in Acute Care revenue in the second half of 2025 are closely tied to commercial team expansion and the rollout of permanent reimbursement codes for ZYNRELEF.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Revenue for the period was $0, missing the analyst estimate of $0.75 million and down from $0.02 million in Q2 2024.

• Clinical pipeline progress continued, with new Phase 2 trial initiations and the announcement of a significant partnership option deal.

• These 10 stocks could mint the next wave of millionaires ›

Kiora Pharmaceuticals (NASDAQ:KPRX), a clinical-stage biotech focused on therapies for vision loss and retinal diseases, released its second-quarter results on August 8, 2025. The most notable news was the absence of recognized revenue (GAAP), which came in below the $0.75 million analyst estimate and matched the previous year's $0 result. Net loss was $2.2 million, This was consistent with the prior-year period, with loss per share (GAAP) at ($0.54). Meanwhile, the company made key progress in advancing its two lead clinical programs and secured an option agreement with a major Asian pharmaceutical partner. The quarter highlighted solid operational execution in research and development, with support from non-dilutive partner funding, but cash burn and a reliance on future milestone payments remain noteworthy risks for the business in its current pre-commercial stage.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS (GAAP)	($0.54)	($0.60)	($0.53)	N/A
Revenue (GAAP)	$0	$0.75 million	$0.02 million	(100.0%)
Net Loss	N/A		$2.22 million	N/A

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Key Success Factors

Kiora Pharmaceuticals develops medicines for eye diseases that can cause blindness, particularly retinal degenerative diseases where few treatment options exist. Its lead product candidate, KIO-301, is a small molecule “photoswitch” intended to restore light sensitivity in eyes where the photoreceptors have degenerated, such as in retinitis pigmentosa. The company is also advancing KIO-104, an anti-inflammatory small molecule for retinal diseases where inflammation leads to vision loss.

Recent business focus has centered on advancing these products through clinical trials, seeking strong intellectual property protection, and securing partnerships to fund research and extend the company’s cash runway. Key factors for success now include timely achievement of clinical milestones, attracting further non-dilutive partner capital, and maintaining regulatory exclusivity for its intellectual property. The company does not yet generate commercial product sales, so progress toward these goals is essential for future sustainability.

Quarterly Highlights: Financial and Clinical Update

During the quarter, Kiora Pharmaceuticals reported no recognized revenue, missing the $0.75 million consensus revenue estimate and falling from $0.02 million in the previous year’s period. Management cited the absence of collaboration and grant revenue in the period, which differs from the prior six months, when one-time collaboration payments in Q4 2024 and Q1 2025 contributed significant but non-recurring revenue.

The net loss (GAAP) was $2.15 million, nearly flat from the GAAP net loss of $2.22 million recorded in the prior year. Loss per share (GAAP) was ($0.54), slightly ahead of the analyst forecast of ($0.60). Research and development expenses increased from $2,048,665 in Q2 2024 to $2,590,489 in Q2 2025, reflected the increased cost of progressing multiple Phase 2 trials. General and administrative expenses declined from $1,537,973 in Q2 2024 to $1,353,850 in Q2 2025.

For its lead product KIO-301—a photoswitch small molecule designed for vision restoration in patients with retinal degenerative diseases—the company initiated the ABACUS-2 Phase 2 clinical trial. The study uses a validated efficacy endpoint to assess functional vision outcomes in patients with advanced sight loss. The company also announced an option agreement with Senju Pharmaceutical of Japan, which could be worth up to $110 million plus royalties should the option be exercised. Kiora recognized $1.25 million in deferred revenue for the upfront option fee from this agreement. Additionally, external partner Théa Open Innovation reimbursed $1.3 million in research and development expenses related to KIO-301 for Q1 2025, further supporting development with non-dilutive capital.

KIO-104, Kiora’s anti-inflammatory small molecule for conditions like uveitis and diabetic macular edema, launched into the KLARITY Phase 2 clinical trial. The company secured new patent protection for KIO-104, extending potential market exclusivity until at least 2043—a move aimed at limiting future competition. Intellectual property remains a key factor for the company, as its business model currently relies on developing drugs for orphan indications, which benefit from regulatory exclusivity including extended patent life and special status in the U.S. and Europe.

Outlook and Investor Watchpoints

Management reiterated that its cash, cash equivalents, and short-term investments—totaling $20.7 million at June 30, 2025—are expected to support operations through late 2027. This projected runway covers anticipated data readouts for both ABACUS-2 and KLARITY, the company’s main Phase 2 clinical trials. Leadership also indicated that future partnership milestones, if achieved, could further extend this period. There was no additional financial guidance or specifics on projected future earnings or spending, beyond these cash runway remarks.

For investors following Kiora Pharmaceuticals, near-term milestones include data from the ongoing Phase 2 clinical trials for KIO-301 and KIO-104. The results of these studies and the possible conversion of existing partner option agreements into future milestone payments will likely dictate funding needs in 2027 and beyond. KPRX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Non-GAAP earnings per share of $2.24 and GAAP revenue of $191.9 million, both far exceeding analyst expectations, with non-GAAP EPS of $2.24 versus the analyst estimate of $0.87.

• GAAP sales rose 74%, driven by exceptional demand in power systems, with particularly high data center market contributions.

• GAAP gross margin fell to 28.2%, and inventory grew sharply, highlighting key risks related to product mix, scaling, and cost structure.

• These 10 stocks could mint the next wave of millionaires ›

Power Solutions International (NASDAQ:PSIX), a manufacturer specializing in engines and power systems for commercial and industrial applications, released its results for Q2 2025 on August 7, 2025. The company reported record performance, with non-GAAP diluted earnings per share of $2.24 and GAAP revenue of $191.9 million for Q2 2025, both well above analyst forecasts of $0.87 (non-GAAP EPS) and $136.5 million (GAAP revenue), respectively. These results highlight how soaring demand in the power systems segment, especially from data center projects, fueled outstanding results. Despite the rapid rise in revenue and profits, the company’s GAAP gross margin declined and operating expenses rose. Overall, this quarter’s results mark a step-change in scale and a resolution to prior financial uncertainties, but they also bring attention to the challenges presented by rapid growth and concentration in a single end market.

Metric	Q2 2025	Q2 2025 Estimate	Q2 2024	Y/Y Change
EPS – Diluted (Non-GAAP)	$2.24	$0.87	$0.72	211.1%
Revenue	$191.9 million	$136.5 million	$110.6 million	74%
Gross Profit	$54.1 million		$35.2 million	54%
Net Income	$51.2 million		$21.5 million	138.1%
Adjusted EBITDA	$34.7 million		$21.7 million	60.0%

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Recent Focus

Power Solutions International builds and markets power systems and engines designed for commercial, industrial, and transportation use. Its product range includes traditional engines, clean fuel power solutions, and battery systems used in a variety of applications. The company serves end markets like data centers, distributed power, material handling, and specialized transportation.

In recent years, the company has concentrated on five priorities: meeting strict emission standards, pursuing product innovation especially in alternative fuels, driving operational efficiency, deepening ties with strategic investors like Weichai, and closely tracking market trends such as demand for data center and backup power. Regulating compliance, improving cost management, and evolving its technology for new use cases have been central to its strategy.

Quarter Highlights: Financial and Operational Performance

The quarter featured substantial revenue growth exclusively in the power systems segment, which added $83.8 million over the prior-year period. This was linked to the company’s strategic focus on data centers, as it prioritized expanding capacity to meet evolving customer demand. Both the Industrial and transportation segments saw revenue drop by $1.6 million and $0.9 million, respectively, due to slower demand for material handling equipment. The sharp concentration in one growth engine highlights the company’s current opportunity and its risk profile if conditions shift in data centers or backup power markets.

Profitability saw several notable swings. GAAP net income more than doubled year over year, and adjusted net income followed a similar trajectory. However, GAAP gross margin fell from 31.8% in Q2 2024 to 28.2%, a decline of 3.6 percentage points. The company attributed this margin drop to two main factors: a larger share of sales coming from lower-margin products, and temporary inefficiencies caused by rapidly scaling up production to meet new demand, but did not commit to a timeline for improvement.

Operating expenses saw significant increases, particularly in selling, general and administrative costs, which rose by 269% compared to the same period a year ago (GAAP). Some of this is a one-time effect—in Q2 2024, expenses were reduced by a $5.0 million legal reserve release that did not recur. The rest of the cost growth came from incentive compensation and new spending to support additional business volume. Research and development expenses declined to 2.4% of sales, reflecting ongoing support for new product engineering.

A material one-time item was a $29.2 million GAAP benefit from releasing a deferred tax asset valuation allowance, substantially increasing net income and stockholders’ equity. While this improved headline results, it is a one-off development and not part of the recurring business. The company also reduced its total debt from $120.2 million at December 31, 2024, to $96.8 million at June 30, 2025, showing progress in deleveraging. Inventory rose sharply to $149.0 million as of June 30, 2025, suggesting either a deliberate build for expected demand or the need for close monitoring if anticipated sales do not materialize.

Financial Outlook and What to Watch

The company’s management expects full-year 2025 sales to outpace 2024, led by continued expansion in power systems and especially data center applications. It does not expect industrial and transportation sales to improve. Management did not provide explicit sales, profit, or margin forecasts for upcoming quarters.

Looking ahead, key areas to watch will be the evolution of the gross margin, cost controls in operational areas, and how inventory trends as the market for data center power solutions evolves. Sales concentration in the power systems segment is likely to remain significant, so any changes in data center demand could have a large effect. Investors may also focus on the sustainability of new cost levels and recurring profitability, exclusive of the recent one-time tax benefit. PSIX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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The Subaru WRX has always been the equivalent of an automotive shrug. Not because it lacks character but because it simply doesn't care what others think. It's a punk rock band with enough talent to fill stadiums but band members who don't seem to care about chasing fame. And the STI versions of yesteryear proved so talented that fame chased them.

For 2025, Subaru updated the WRX to now include the tS, which at first glance appears to be the same flannel-wearing street fighter. But looks can be deceiving. The tS hides sharpened tools underneath, translating to better handling and responsiveness.

What does “tS” really mean?

Subaru positions the tS as being tuned by STI, but it's not an STI return. Sure, that's technically true; only Subaru can name something STI. And to be clear, there's no extra power here, no gigantic wing that takes out flocks of birds, and no pink STI badge on the trunk. But the tS is imbued with enough STI-ness to make a case.

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© Jim Resnick

One of the biggest messages to come from HBO Max’s second quarter earnings call is that its password crackdown that’s about to hit subscribers in a few weeks time is about to get “aggressive”.

Percy Hynes White left the show after the release of season one, in the wake of accusations of sexual assault.

SpaceX has reportedly distributed an “unconditional and perpetual agreement” to non-SpaceX affiliated homes that would exchange access to Starbase’s water and sewer system for residents’ agreement to leave the area for “any and all launch, testing and other operational activities.”

The move would help power X's struggling ads business following the departure of former CEO Linda Yaccarino.

Key Points

• Vertex Pharmaceuticals should deliver exceptional returns, regardless of what the stock market does.

• Dominion Energy is not your father's utility stock.

• UnitedHealth Group looks like a great bad-news buy.

• These 10 stocks could mint the next wave of millionaires ›

When dark clouds appear on the horizon, it's wise to grab an umbrella, even if the sun is still shining overhead. You'll want to be prepared in case a heavy rain is on the way. I think this is a good metaphor for investors to heed.

The stock market is performing well, with the S&P 500 (SNPINDEX: ^GSPC) near its all-time high. However, some warning signs are readily apparent. The ratio of total stock market capitalization to GDP (commonly referred to as the Buffett Indicator) is also at a record high -- and above a level that Warren Buffett referred to as "playing with fire." The latest employment numbers are worrisome. Inflation is creeping upward. And the full brunt of the Trump administration's tariffs has yet to be felt.

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 »

If putting money in the stock market right is the equivalent of going outside with dark clouds on the horizon, what's the "umbrella" for investors? Buying stocks that are poised to perform well even if the overall market sinks. With that in mind, here are my picks for the best stocks to invest $1,000 in right now.

1. Vertex Pharmaceuticals

I think taking nearly half of an initial $1,000 and buying one share of Vertex Pharmaceuticals (NASDAQ: VRTX) is a smart move. This biotech stock should deliver exceptional returns, regardless of what the stock market does.

Vertex doesn't have to worry about economic turbulence affecting its revenue and profits. Doctors will prescribe its cystic fibrosis (CF) therapies without missing a beat for a simple reason: There aren't any other approved drugs that treat the underlying cause of the rare genetic disease.

Likewise, the commercial launch of Vertex's newest drug, Journavx, should gain momentum come rain or shine. Journavx fills a key void in treating acute pain. It's highly effective, but isn't addictive like opioids.

Vertex's late-stage pipeline also gives investors several lottery tickets with great odds. The drugmaker is evaluating inaxaplin as a treatment for APOL1-mediated kidney disease. Povetacicept's first targeted indication is another kidney disease, IgA nephropathy. Zimislecel holds the potential to cure severe type 1 diabetes.

I think all of these drugs could be huge winners for Vertex if phase 3 testing goes well.

2. Dominion Energy

To paraphrase an old car commercial, Dominion Energy (NYSE: D) is not your father's utility stock. Its share price is low enough that you can scoop up three or four shares and still have enough left to buy the last stock on our list.

Don't get me wrong, though: Dominion has all the advantages your parents or grandparents would expect from a utility stock. And like most utility stocks, Dominion also pays an attractive dividend. Its forward dividend yield currently stands at 4.37%.

Dominion's business is also rock-solid and protected from competition. The company provides regulated electricity service to around 3.6 million homes and businesses in three Southern states -- Virginia, North Carolina, and South Carolina. It also provides regulated natural gas service to roughly 500,000 customers in South Carolina.

One intriguing thing about Dominion is that it's outperforming the S&P 500 in what has become a pretty good year so far for stocks. Another is the company's solid growth prospects, driven partly by the demand for artificial intelligence (AI). Dominion's home state of Virginia hosts the world's largest data center market.

3. UnitedHealth Group

You might be surprised to see UnitedHealth Group (NYSE: UNH) on the list. But I view this stock as a great bad-news buy, with its share price below $250.

I won't try to sweep UnitedHealth Group's challenges under the rug. The company continues to experience higher-than-anticipated medical costs, especially with its Medicare Advantage plans. It's being investigated by the U.S. Department of Justice for its Medicare billing practices. And UnitedHealth's Optum Rx unit, like other pharmacy benefits managers (PBMs), is under intense political scrutiny.

However, I believe that all these negatives are more than baked into UnitedHealth Group's share price. The stock trades at 10.3 times trailing-12-month earnings, its lowest valuation since the aftermath of the Great Recession.

More importantly, I view the company's issues as temporary. I fully expect premium increases will enable the company to restore earnings growth next year. UnitedHealth Group has survived DOJ investigations in the past and come out on top. I don't think PBMs are going away, either.

If the stock market tanks, my hunch is that UnitedHealth Group will hold up better than most stocks because it's already oversold. And I predict the stock will rebound as it emerges from the shadows cast by its numerous challenges.

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Keith Speights has positions in Dominion Energy and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Vertex Pharmaceuticals. The Motley Fool recommends Dominion Energy and UnitedHealth Group. The Motley Fool has a disclosure policy.