Key Points

• Sluggish electric vehicle sales threaten the trillion-dollar valuation Tesla generated on enthusiasm for its Robotaxi and Robotics potential.

• Toyota could overtake Tesla if the market starts to value Tesla more like an automotive manufacturer than a technology company.

• Meanwhile, Alphabet is arguably the autonomous driving leader at this point, and may outperform Tesla stock moving forward.

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

Tesla (NASDAQ: TSLA) is one of the world's largest companies by market value, worth a little over $1 trillion today. The company is a pioneer in electric vehicles, autonomous driving software, and renewable energy, and is charging full steam into Robotaxis and humanoid robotics.

At face value, there is a lot to like about this technology company. But when you dig deeper, Tesla is far riskier as an investment, given its past success and massive valuation.

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Sure, Tesla has a high ceiling, but it also has a very low floor. That's why I predict that Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Toyota Motor (NYSE: TM) will both be worth more than Tesla three years from now.

It's not as far-fetched as it sounds. Here is what you need to know.

Tesla's ambitious plans will likely take time, and that could spell near-term trouble

The narrative around Tesla is shifting from its legacy electric vehicle business to Robotaxi and humanoid robotics, which CEO Elon Musk and an increasing number of investors expect to carry the company's value moving forward.

Tesla's electric vehicle sales have started to decline, which could be at least partially due to Elon Musk's sometimes controversial, politicized persona. The issue here is that Tesla has only just begun launching its Robotaxi business, which is limited to a small number of vehicles with multiple safety measures in place. Tesla wants to expand its fleet rapidly, but that may take longer than most want to believe due to local and state-level regulations. Remember, Tesla's self-driving technology has still only obtained Level 2 capability, which mandates a human driver be present in the vehicle while it is autonomously operating.

Optimus, Tesla's humanoid robot, is also still in early stages. While the company aims to build 5,000 Optimus units this year, reports indicate that Tesla is behind on that. Perhaps Optimus will someday generate the trillions of dollars in revenue Elon Musk believes it can, but Tesla has infamously established numerous timetables before that have failed to execute as promised.

Unless Tesla can ramp Robotaxi and Optimus very quickly over the next year or so, the company's recent sales struggles could weigh significantly on the stock:

Data by YCharts.

Over the past few years, revenue growth ceased and then turned negative. Profit margins have cratered. If investors make Tesla a "prove it" story, the stock, trading at over 12 times revenue, could reasonably see at least 50% downside as its valuation shifts to more closely resemble that of an automotive manufacturer than a technology company.

Investors may not appreciate Toyota enough

Take Toyota, for example, which is the world's most valuable legacy automotive company. Its revenue continues to grow to new highs, and its profit margin is far higher, clearing Tesla by over 3 percentage points. Ironically, Toyota has a market cap of just $246 billion, valuing the stock at a price-to-sales (P/S) ratio of less than 1.0, and a fraction of Tesla's.

Data by YCharts.

To be fair to Tesla, I don't think it's likely that the stock's valuation drops all the way down to Toyota's level. The upside is too high if it delivers on Robotaxi and Optimus as investors hope -- even if it takes longer than expected.

But Toyota could surpass Tesla's value if the two meet somewhere in the middle. Using each's trailing-12-month revenue, Toyota's valuation would overtake Tesla's at a P/S ratio of 1, if Tesla's fell to about 3. This comparison is more about Tesla's downside than Toyota's upside, but it highlights Tesla's potential risks if the company doesn't follow through on some very ambitious goals.

Alphabet is the true market leader in self-driving vehicles

It seems safe to say that Waymo is currently the leading autonomous ride-hailing company. That puts parent company Alphabet in the driver's seat.

Alphabet, valued at over $2.3 trillion, is already worth more than Tesla, but some may not feel it will remain that way. Ark Invest's Cathie Wood believes that Tesla's value will skyrocket on Robotaxi growth. But I'm skeptical, at least of such a short time frame, for the reasons I walked through above. Additionally, Alphabet is a central player in artificial intelligence, with a blossoming cloud-computing business and digital advertising business that generates cash flow.

Some might not associate Alphabet with self-driving vehicles. Yet Alphabet is arguably the perfect company to go after that market because it has such strong existing businesses that can fund the investments to develop a self-driving fleet and expand it across the United States. Waymo continues to announce new markets, and until Tesla and Robotaxi close the gap, it's hard not to like Alphabet's prospects better than Tesla's moving forward.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $473,820!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,540!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $653,427!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of August 11, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.

Key Points

• Fair Isaac's FICO score could face new competition in mortgages originated through Fannie Mae and Freddie Mac.

• The stock's tumble could be due to a previously excessive valuation instead.

• Strong pricing power and aggressive share repurchases make Fair Isaac a stock to buy on the dip.

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

When someone wants to take out a loan, open a credit card, or apply for a mortgage, lenders will look at that person's credit score. It's been a lucrative business model for decades for Fair Isaac (NYSE: FICO), the company whose FICO credit scoring system has become a global leader, used in making more than 10 billion credit decisions annually.

Shares of Fair Isaac have returned more than 43,000% since 1994!

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The stock, however, has tumbled for months. The downtrend continued after the U.S. government announced it would let U.S. mortgage giants Fannie Mae and Freddie Mac use VantageScore, an alternative credit scoring model created by the U.S.'s top three credit bureaus. That decision breaks the decades-long monopoly Fair Isaac has enjoyed in that market, helping generate those staggering investment returns.

But despite the troubling news, the stock's steep 43% decline from its 52-week high could instead be an opportunity to buy the dip and hold for the long haul.

FICO's network effects will be hard to undo

The most important part of lending money is getting paid back. Fair Isaac's FICO score dominates this aspect of the lending industry. About 90% of the top U.S. lenders and credit unions use the FICO score, and 95% of the total dollars of U.S. securitizations -- loans pooled together and sold as investments -- solely cite the FICO score to measure their risk.

The more lenders depend on the FICO score, the more data it has to hone its algorithm, and the more people trust its reputation. It's a self-fulfilling loop, often called the network effect. It's a powerful advantage that doesn't typically erode overnight.

The industry criticized Fair Isaac for raising its wholesale royalty price from $3.50 to $4.95 per score on mortgage originations last year, an increase of more than 40%. It probably influenced the government's decision to open up Fannie Mae and Freddie Mac mortgages to a competitor. But how likely is this to hurt Fair Isaac's business? I'm skeptical that it will, at least for now.

With a mortgage averaging roughly $6,000 in total closing costs, the $4.95 Fair Isaac charges for a FICO score is a minuscule component of the total costs of originating a mortgage loan. Is a lender going to opt for a less-proven credit scoring system to save a couple of dollars per loan? Even if the VantageScore system performs well, a loan default could wipe out a lender's cumulative savings on thousands of originations.

On the securitization side of things, institutions and other investors who buy securitized mortgage products would need to feel comfortable with an alternative tool gauging the risk of such products. Once again, it's not that it can't happen, but assuming it will could be getting too far ahead of things.

This could explain the stock's sharp decline

Instead, Fair Isaac's recent tumble could boil down to the stock's valuation coming back to earth.

After all, the stock's price-to-earnings (P/E) ratio topped out at nearly 120 at its peak, an excessive valuation that made an eventual reversion a matter of when, more so than if.

FICO PE Ratio data by YCharts.

You can see the stock's P/E was less than 30 not very long ago. Stock prices can act like pendulums, swinging hard in either direction. The overextended valuation had already begun to unwind and the VantageScore announcement simply added to the selling pressure.

A fantastic company at a reasonable price

The decline has dropped Fair Isaac to a reasonable price for long-term buyers. Wall Street is quite optimistic about the company's future; long-term estimates call for 27% annualized earnings growth. That's a price/earnings-to-growth (PEG) ratio of about 2, a solid valuation for a top-notch company.

Fair Isaac will have opportunities to live up to expectations as consumers in America and abroad continue to borrow. Much of that growth could depend on its ability to raise prices on its FICO credit scores. Investors probably shouldn't anticipate more 40% price increases, but Fair Isaac's market leadership with FICO should give it solid pricing power across various types of credit.

Additionally, Fair Isaac aggressively buys back stock to boost its earnings per share. Management has retired nearly a quarter of the diluted share count during the past decade.

Fair Isaac's valuation isn't a bargain yet. If the shares decline more, pushing the stock to valuations reminiscent of 2022 and 2023, investors may want to buy slowly and steadily to ensure they leave some cash handy for lower prices should they present themselves.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,026%* — a market-crushing outperformance compared to 180% for the S&P 500.

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*Stock Advisor returns as of August 4, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.

Key Points

• Nvidia's AI data center chips remain the gold standard.

• Amazon and Microsoft have been significant winners in AI due to their massive cloud infrastructure operations.

• Arista Networks and Broadcom have tremendous growth ahead in AI networking.

• 10 stocks we like better than Nvidia ›

It will be a massive undertaking to build out the hardware and support necessary to power increasingly advanced artificial intelligence and provide it at a global level where billions of people can access it.

According to research by McKinsey & Company, the world's technology needs will require $6.7 trillion in data center spending by 2030. Of that, $5 trillion will be due to the rising processing power demands of artificial intelligence (AI). These investments, though, will lay the groundwork for the next era of global innovation, which will revolutionize existing industries and create new ones.

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Some key companies have already been experiencing significant growth due to the AI trend, and there is still likely a long runway ahead for players in key AI infrastructure spaces, including semiconductors, cloud computing, and networking.

Here are five top stocks to buy and hold for the next wave of AI innovation.

Nvidia: The data center AI chip leader

Inside these colossal AI data centers are many thousands of AI accelerator chips, usually from Nvidia (NASDAQ: NVDA). The company's graphics processing units (GPUs) are the only ones that can make use of its proprietary CUDA platform, which contains an array of tools and libraries to help developers build and deploy applications that use the hardware efficiently. CUDA's effectiveness -- and its popularity with developers -- has helped Nvidia win an estimated 92% share of the data center GPU market.

The company has maintained its winning position as it progressed from its previous Hopper architecture to its current Blackwell chips, and it expects to launch its next-generation architecture, with a CPU called Vera and a GPU called Rubin, next year. Analysts expect Nvidia's revenue to grow to $200 billion this year and $251 billion in 2026.

Amazon and Microsoft: Winning in AI through the cloud

AI software is primarily trained and powered through large cloud data centers, making the leading cloud infrastructure companies vital pieces of the equation. They're also Nvidia's largest customers. Amazon (NASDAQ: AMZN) Web Services (AWS) has long been the world's leading cloud platform, with about 30% of the cloud infrastructure market today.Through the cloud, companies can access and deploy AI agents, models, and other software throughout their businesses.

AWS's sales grew by 17% year over year in Q1, and it should maintain a similar pace. Goldman Sachs estimates that AI demand will drive cloud computing sales industrywide to $2 trillion by 2030. Amazon will capture a significant portion of that, and since AWS is Amazon's primary profit center, the company's bottom line should also thrive.

It's a similar theme for Microsoft (NASDAQ: MSFT). Its Azure is the world's second-largest cloud platform, with a market share of approximately 21%. Microsoft stands out from the pack for its deep ties with millions of corporate clients. Businesses rely on Microsoft's range of hardware and software products, including its enterprise software, the Windows operating system, and productivity applications such as Outlook and Excel.

Microsoft's vast ecosystem creates sticky revenue streams and provides it with an enormous customer base to cross-sell its AI products and services to. Microsoft has also invested in OpenAI, the developer behind ChatGPT, and works with it extensively, although that relationship has become somewhat strained as OpenAI has grown increasingly successful.

Regardless, Microsoft's massive footprint across the AI and broader tech space makes it a no-brainer.

Arista Networks and Broadcom: The networking tech that underpins AI

Within data centers, huge clusters of AI chips must communicate and work together, which requires them to transfer massive amounts of data at extremely high speeds. Arista Networks (NYSE: ANET) sells high-end networking switches and software that help accomplish this. The company has already thrived in this golden age of data centers, with top clients including Microsoft and Meta Platforms, which happen to also be among the highest spenders on AI infrastructure.

Arista Networks will likely continue benefiting from growth in AI investments, as these increasingly powerful AI models consume ever-increasing amounts of data. Analysts expect Arista Networks to generate $8.4 billion in sales this year (versus $7 billion last year), then $9.9 billion next year, with nearly 19% annualized long-term earnings growth.

Tightly woven into this same theme is Broadcom (NASDAQ: AVGO), which specializes in designing semiconductors used for networking applications.

For example, Arista Networks utilizes Broadcom's Tomahawk and Jericho silicon in the networking switches it builds for data centers. Broadcom's AI-related semiconductor sales increased by 46% year-over-year in the second quarter.

Looking further out, Broadcom is becoming a more prominent role player in AI infrastructure. It has designed custom accelerator chips (XPUs) for AI model training and inference. It has struck partnerships with at least three AI customers that management believes will each deploy clusters of 1 million accelerator chips by 2027. Broadcom's red-hot AI momentum has analysts estimating the company will grow earnings by an average of 23% annually over the next three to five years.

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

Before you buy stock in Nvidia, consider this:

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

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

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*Stock Advisor returns as of July 15, 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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Arista Networks, Goldman Sachs Group, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Cryptocurrency prices boil down to the basics: supply and demand.

• Bitcoin continues to hold advantages in adoption and tokenomics over other cryptocurrencies, also known as altcoins.

• The government's spending habits bode well for Bitcoin's long-term price action.

• 10 stocks we like better than Bitcoin ›

The cryptocurrency market has been heating up since the Trump administration assumed office in January.

President Donald Trump campaigned on supporting cryptocurrencies, and his actions have followed through on this promise. He signed an executive order to establish a strategic federal reserve for digital assets and has broadly loosened the regulatory grip on the industry.

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 »

But when it comes to deciding the smartest cryptocurrency to buy right now, it may still pay to stick with the basics. Most cryptocurrencies are highly speculative investments. That said, Bitcoin (CRYPTO: BTC) appears poised to build on its years of impressive returns.

I'll explain below why Bitcoin remains the smartest cryptocurrency to invest $1,000 into today.

Understanding how market forces affect Bitcoin and other cryptocurrency prices

The price of any traded asset at any given moment boils down to market forces -- what someone is willing to sell something for, versus what someone is willing to pay for it. It's the fundamental basics of supply and demand.

Some assets represent tangible things. For instance, real estate is physical property that you can appraise. Stocks represent ownership in companies, with revenue and profits. Having something tangible helps someone determine how much to pay for it.

However, cryptocurrencies are digital assets, often with little or no tangible value to support their market prices. As a result, cryptocurrencies can be highly volatile. Their long-term price direction depends on factors that ultimately influence that delicate balance between supply and demand.

It's that simple. Bitcoin, the original cryptocurrency, has been such a lucrative investment over the years because it continues to get this right.

Bitcoin's advantages over most altcoins

For starters, Bitcoin has a capped maximum supply, and new coins enter circulation at a slower rate following each halving, when mining rewards decline. Meanwhile, interest (demand) in Bitcoin has risen over time as it gains support from individuals, institutional investors, and even corporations and governments. For example, some companies have begun carrying Bitcoin on their balance sheets instead of cash and equivalents, and the U.S. government will start stockpiling Bitcoin thanks to Trump's executive order earlier this year.

Investors looking to invest in altcoins, or any cryptocurrency aside from Bitcoin, must consider their purpose and tokenomics. Many altcoins are meme coins, designed with little intention of real-world utility. Their market prices depend on sustained popularity.

Ethereum and XRP are popular altcoins, but both come with some issues. The Ethereum network's token, Ether, has an unlimited supply, which applies downward pressure on the token's market price. Meanwhile, XRP's creator, Ripple Labs, remains entangled in a civil lawsuit with U.S. regulators after a judge recently rejected their efforts to settle the case. It could weigh on XRP's real-world adoption and its market price until the litigation is resolved.

Cryptocurrencies as a whole have become increasingly popular across the investing community, but Bitcoin remains, at least for now, the most widely adopted and valued cryptocurrency by a wide margin.

Why Bitcoin's price can continue to rise

Bitcoin may not represent property or a business, but society has given it value as an anti-inflationary asset. This purpose drives higher interest in Bitcoin, and it's an important distinction that separates it from other cryptocurrencies at the moment.

One might think of Bitcoin as a digital version of gold. It doesn't have as much practical use as fiat currency, but it is valued, and there is only a limited amount of it. Just like gold, Bitcoin's price, denominated in U.S. dollars, continues to increase as more dollars flood the economy.

US M2 Money Supply data by YCharts

Bitcoin has risen much faster than gold, but it also started at a much smaller value. Even today, Bitcoin's fully diluted market value of $2.3 trillion is a fraction of the world's gold supply, which is about $22.3 trillion. I'm not sure that Bitcoin will ultimately match gold's value, but it's reasonable to think that there's more upside ahead, given the huge disparity.

The U.S. government's consistent fiscal deficit helps contribute to an expanding money supply. According to the Congressional Budget Office, the newly passed "big, beautiful bill" will likely increase the U.S.'s national debt during the next decade, which bodes well for Bitcoin and other assets priced in U.S. dollars.

These tailwinds, combined with a growing interest in Bitcoin from various parties worldwide, make it the clear choice for investors looking to invest $1,000 in cryptocurrencies today.

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

Before you buy stock in Bitcoin, 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 Bitcoin 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

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.

Key Points

• Southern Company is a sprawling utility business with strong positioning for a nuclear energy resurgence.

• The dividend offers a solid starting yield and comes with growth potential.

• However, the stock may not be as attractive following its recent rally.

• 10 stocks we like better than Southern Company ›

Providing key energy resources, such as electricity and natural gas, to consumers and businesses isn't easy. However, it's a big industry, and that's where utility companies shine.

The Motley Fool recently researched the largest utility companies, and Southern Company (NYSE: SO) ranked third, with a market capitalization of just over $100 billion. The utility giant seemingly does it all; it operates electric and gas utilities, provides fiber optic and wireless communications services, and sells wholesale energy. The company has over 9 million customers across the southeastern United States.

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But is Southern Company worth your hard-earned cash today?

Here's how the stock might appeal to investors and whether it's a buy currently.

Positioned for a resurgence in nuclear

The surge in data center construction for artificial intelligence and cloud computing could strain the U.S. electric grid. Goldman Sachs estimates that data center power consumption will rise by 165% from 2023 levels by the end of this decade.

That has revived interest in nuclear power. Some of the leading technology companies have already begun inking deals with nuclear companies to supply power, and the Trump administration is calling for increased investment in nuclear to quadruple the country's capacity by 2050.

Southern Company is positioned well as an incumbent leader in nuclear power. Its subsidiary, Southern Nuclear, operates eight nuclear units across three power plants, including its recently completed Vogtle Units 3 (2023) and 4 (2024), the first newly built commercial units in the United States in approximately three decades.

Vogtle Units 3 and 4 took approximately 15 years to build and cost over $36 billion, so having this done ahead of what could be a golden age for nuclear power demand is a key advantage. It also frees up Southern Company from what has been a costly endeavor, to say the least.

A steady and growing dividend

Utility companies are typically stable investments and fantastic dividend stocks. People almost always need energy, and the regulated nature of the industry limits competition in exchange for continued investment and price stability from the utilities.

Southern Company operates multiple subsidiaries, spanning power generation, transmission, electric and gas utilities, nuclear, and telecommunications. Cumulatively, Southern Company anticipates 8% annualized load growth (power demand) through 2029, translating to 5% to 7% annualized long-term earnings-per-share growth.

That is more than enough to fund continued dividend increases. Southern Company already has an established dividend track record of 24 consecutive annual increases and hasn't cut its dividend in 78 years. The stock's dividend yield is 3.2% at its current share price.

Is Southern Company a buy?

That growth and dividend could push the stock's annualized investment returns to 8% to 10%. That won't excite everyone, but utility stocks are famously resilient, and Southern Company's beta of just 0.38 should allow shareholders to sleep well at night when the broader market tumbles.

Southern Company's stock has risen about 16% over the past year, likely due, at least in part, to the increased excitement surrounding nuclear energy producers.

I probably wouldn't call Southern Company stock a bargain. Not at a price-to-earnings ratio of 21, using 2025 estimated earnings, when the business is expecting 5% to 7% annualized earnings growth. Management indicated there could be some upside to its growth forecast, so perhaps Southern Company comes in at the high end or even exceeds that. However, that's speculation at this point.

It's probably fine to nibble on Southern Company at its current price. But, ideally, the stock would pull back to around 17 to 18 times earnings, a more attractive valuation for a slow-and-steady stalwart like Southern Company.

Should you invest $1,000 in Southern Company right now?

Before you buy stock in Southern Company, 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 Southern Company 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

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.

Key Points

• Americans aren't saving enough for retirement.

• Here are three exchange-traded funds to build your nest egg around.

• Complement them with top-notch individual stocks, such as this AI leader, plus a cryptocurrency to protect against inflation.

• 10 stocks we like better than Vanguard S&P 500 ETF ›

Despite the remarkable U.S. economy, Americans are falling dramatically short of their retirement goals. According to research by The Motley Fool, most Americans are saving and investing in a retirement account, but just 34% believe that they're on track to hit their goals.

The study found that the median U.S. household has just $87,000 saved, with the typical household reaching a peak of around $200,000 between the ages of 65 and 74.

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If you're still working, a diversified investment portfolio can help you change your financial trajectory, even if you're starting later than you had hoped to.

Here are five incredible investments to consider for your long-term portfolio that could help move the needle for your retirement over the coming decades. Consider buying and holding them today.

1. An ETF you can build your retirement around

For quick and straightforward portfolio diversification, consider exchange-traded funds (ETFs). These are collections of individual stocks that trade under a single ticker symbol. Among them, it's hard to beat the Vanguard S&P 500 ETF (NYSEMKT: VOO). This ETF tracks the S&P 500, an index of 500 prominent U.S. companies.

Investing in this ETF provides exposure to various market sectors and industries. The S&P 500 adheres to strict selection criteria that help maintain its quality. Its system works. The S&P 500 is arguably the most proven wealth-building machine of all time, making it a no-brainer to include in your retirement portfolio.

2. Casting a wider net, this ETF offers instant diversification

Diversifying your portfolio goes beyond the companies and industries you invest in. It also includes geographic markets. Therefore, you should consider an ETF such as the Vanguard Total World Stock ETF (NYSEMKT: VT), a global stock market ETF with over 9,700 individual stocks from almost every industry across various countries.

It represents an investment in the broader global economy, which is crucial because there may be times when the U.S. stock market stumbles or lags behind other countries. This ETF pairs nicely with the Vanguard S&P 500 ETF as a foundation for your nest egg that should last as long as you need it to.

3. This innovation ETF should also help grow your nest egg

Now, it's time to look to growth to help your money compound over the coming decades. Consider the Invesco QQQ Trust (NASDAQ: QQQ) a fantastic starting point.

This ETF tracks the Nasdaq-100, an index with a heavy focus on technology stocks. It provides abundant exposure to the "Magnificent Seven" stocks, which lead the way in artificial intelligence (AI), cloud computing, e-commerce, digital advertising, and other high-growth industries.

This fund can be more volatile, but it has outperformed the S&P 500 over its lifetime. That may not always be the case, but the world is becoming increasingly tech driven, making the Invesco QQQ an excellent way to bet on innovation as a whole.

4. A leading AI stock that could boost your portfolio's results

It's fine to sprinkle in some individual stocks after you have built a foundation for your portfolio. AI could create trillions of dollars in economic value down the road, making it perhaps the most important growth story you can invest in right now.

Nvidia (NASDAQ: NVDA) has already established itself as an AI powerhouse. It's the dominant leader in supplying chips used to train and run AI models in data centers.

Nvidia continues to grow as companies invest billions to build data centers, and experts predict that these expenditures could amount to trillions of dollars over the coming years. Beyond that, Nvidia could also play a part in emerging AI-driven technologies, such as autonomous vehicles and humanoid robotics. Nvidia is a total package that should continue to thrive, considering the AI era is only just beginning.

5. Hedge for inflation with the flagship cryptocurrency

President Donald Trump recently signed his "One Big Beautiful Bill" into law, officially raising America's debt ceiling. It's another sign that the U.S. government figures to continue spending to support its interests, a long-standing pattern that has steadily increased the country's debt. As a result, it may be worthwhile to include some anti-inflationary investments in your portfolio.

Bitcoin (CRYPTO: BTC) is the largest and most prominent cryptocurrency. Its status and capped maximum supply have resulted in staggering price appreciation that has easily outpaced the stock market for years.

Alternatively, if you're skeptical of cryptocurrencies, consider investing in gold, which remains a popular hedge against inflation to this day. Either way, having some anti-inflationary investments is yet another way to cover all your bases and mitigate risk.

Should you invest $1,000 in Vanguard S&P 500 ETF right now?

Before you buy stock in Vanguard S&P 500 ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 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 $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

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

As always, The Motley Fool cannot and does not provide personalized investing or financial advice. This information is for informational and educational purposes only and is not a substitute for professional financial advice. Always seek the guidance of a qualified financial advisor for any questions regarding your personal financial situation. If you'd like to submit your question for feedback, you can do so here.

Dividend investors will tell you that it feels incredible to wake up, check your portfolio, and see that a company you own shares of has deposited a dividend check into your account.

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That's what one Reddit poster recently exclaimed in a recent post. The positive reinforcement of dividend payments has motivated them to set a goal of generating a dollar each business day for a year. Add it up, and that's approximately $260 in annual dividend income they're aiming for.

I'm addicted to dividends!
byu/IPayTaxesWink individends

It's a fantastic goal for beginners, who can set new, higher goals once they hit this milestone. Eventually, an investor could retire on the dividends they earn, all without selling their stocks.

Here is an excellent blueprint for this Reddit user, or anyone looking to dive headfirst into the world of dividend investing.

1. Identify dividend stocks with these crucial traits

Not all companies pay dividends, so it's essential to know why some do which stock could be a good fit for your dividend portfolio.

Dividends are a way for companies to return cash directly to their shareholders. Typically, companies pay dividends when they generate excess profits beyond what's required for sustaining and growing the business. You can find dividend stocks in every industry, but some are better than others.

What does an outstanding dividend stock look like?

You want to find companies that have profitable and growing businesses, healthy financials, and are committed to paying out a sustainable dividend.

Here is a quick list of boxes I like to check when evaluating dividend stocks:

1. The company has increased its dividend for at least 10 consecutive years.
2. A dividend payout ratio below 80% of earnings or cash flow.
3. An investment-grade credit rating, indicating a strong balance sheet.

High dividend yields can tempt investors, but they can also be a warning sign that the company is struggling. Investors should probably expect most trustworthy dividend stocks to yield no more than 5% or 6%. To check if the dividend is sustainable, investors should scrutinize businesses with yields higher than that, or if a stock's yield is abnormally high compared to its historical average.

2. Construct a diversified portfolio

You're not always going to be right. Occasionally, you'll invest in a company that winds up being a dud.

That's why it's essential to diversify your portfolio. The Motley Fool recommends having 25 to 30 stocks. Additionally, investors who aren't comfortable or willing to research individual companies can easily diversify by investing in dividend-paying exchange-traded funds (ETFs).

A few ETFs can give investors exposure to hundreds of individual companies, so it's a great way to go if you want to keep things as simple as possible.

3. Set up dividend reinvestment

If you want your dividend income to pile up as quickly as possible, you'll want to reinvest your dividends. That means your dividends will automatically buy additional shares of the company paying them. Those shares, even if they are only little fractions of shares at first, will pay dividends, too.

It's a personal decision whether to reinvest dividends into the paying companies automatically, or to pool them together to buy shares yourself. Many leading online brokerages enable investors to set up a dividend reinvestment plan within their account settings.

Lastly, enjoy the journey

Dividends bring a unique sense of joy and achievement to many investors. As the Reddit poster said, it can even become an addiction! The most important thing is to set up a sustainable investment plan that you can follow while still enjoying life and savoring the journey. After all, your portfolio should work for you, not the other way around.

With time and continuous contributions, the Reddit poster, or anyone for that matter, can generate a dollar in dividends every day. If you stick with it long enough, dividends could eventually pay all your living expenses.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 994%* — a market-crushing outperformance compared to 172% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

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*Stock Advisor returns as of June 23, 2025

Justin Pope 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.

Shares of Deckers Outdoor (NYSE: DECK) continue to tumble. The parent company of footwear brands including UGG, HOKA, Teva, and Ahnu has fallen roughly 50% since peaking early this year at over $200 per share.

It never feels good to buy a stock that continues to go down. It's only human to want to buy winners. The reality is that all companies face adversity at times; the trick is knowing when the company is working through minor bumps or if there are serious problems underneath the surface.

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So, I took a peek into the business to see which side of the coin Deckers Outdoor lands on. Here is whether you should invest $1,000 into Deckers stock today.

Core brands continue to lead the way despite some industry headwinds

Deckers Outdoor's two primary brands are UGG, a California lifestyle brand most known for its boots, and HOKA, a premium running shoe brand. Together, UGG and HOKA combined for $4.76 billion of the company's $4.99 billion total sales in fiscal 2025.

The good news is that both brands continue to perform well. Sales of UGG and HOKA increased 13.1% and 23.6%, respectively, in fiscal 2025. But Q4 sales growth was much lower, just 3.6% for UGG and 10% for HOKA in Q4. In other words, sales momentum has dramatically slowed.

Slowing growth isn't ideal, but there is a fair amount of evidence that Deckers is dealing with industrywide headwinds rather than internal issues. Uncertainty regarding tariffs has complicated the supply chain for footwear companies, which primarily manufacture outside of the United States. Deckers manufactures most of its products in Vietnam.

Management estimated that the company's cost of goods sold may increase by $150 million in fiscal 2026 due to tariffs, and is unsure how that may impact consumer demand. The company declined to offer financial guidance for the upcoming year.

The stock's decline may have created a buying opportunity -- though risks exist

Shoes are a discretionary spend for most consumers, so economic uncertainty can easily disrupt business. However, it could be a buying opportunity for the stock if these challenges are temporary and the brands themselves remain strong with buyers.

Deckers is holding up far better in this operating environment than Nike, which reported a 9% year-over-year sales decline in its most recent quarter. I think it's a positive sign that HOKA is Deckers Outdoor's fastest-growing brand, while Nike, the industry leader, is struggling.

If you zoom out, the HOKA brand's recent growth is no fluke. The brand's sales have skyrocketed from just $352 million in fiscal 2020.

Deckers is also well-equipped to navigate a challenging business climate, with a debt-free balance sheet and nearly $1.9 billion in cash on hand. Management re-upped the company's share repurchase program in Q4 as well, bringing its authorized buybacks to $2.5 billion, or 15% of its current market capitalization. That's going to do wonders in establishing a solid floor for earnings-per-share growth.

Whether it's sneakers or apparel, fashion brands are a popularity contest. The risk in these stocks is that the brands lose their appeal. Fortunately, that doesn't seem to be the case here.

Should you invest $1,000 in Deckers Outdoor stock today?

Things could always change in the future, but Deckers Outdoor seems poised for a bounce-back once the economic landscape improves. Consumer sentiment has taken a clear hit amid the uncertainty in recent months.

The negativity is weighing on shoppers, and the stock's steep decline could be as simple as the market lowering growth expectations. Earlier this year, analysts were anticipating approximately 15% annualized long-term earnings growth from Deckers. Those estimates have dropped to just 6.4% today.

Deckers traded at a price-to-earnings ratio of 37 in January, but that has plunged to just 17. Even modest sales growth coupled with those massive buybacks should generate the mid-single-digit earnings growth analysts now expect, and there could be significant upside potential if growth eventually reaccelerates and drives that valuation higher again.

The stock can always go lower, but the long-term risk-to-reward dynamic looks attractive here, making Deckers Outdoor a fine buy-and-hold candidate to park $1,000 in.

Should you invest $1,000 in Deckers Outdoor right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor and Nike. The Motley Fool has a disclosure policy.

Manufacturing is the basis of the global economy. Almost everything, from footwear to automobiles, is produced in factories. Within that landscape, Fastenal (NASDAQ: FAST) has built a tremendous business.

The company distributes fasteners, supplies, safety gear, and other products that almost every manufacturer needs but often overlooks.

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Decades of steady growth have made Fastenal a giant in the industry, and its shareholders quite wealthy. The company has paid and raised its dividend for 25 consecutive years, and returned over 13,000% since the mid-1990s.

Shares are up 67% over the past three years alone. Can the stock continue to deliver, or is Fastenal approaching the end of its runway? Here is what you need to know.

Innovation and a convenience-focused value proposition have fueled Fastenal's success

Supply chains are crucial to all manufacturers. But while most companies focus on the core materials they need to build their products, they often overlook the simple items that workers frequently need. Think nuts and bolts, safety goggles, and batteries. Fastenal has found immense success catering to this need.

Fastenal is a leading distributor of industrial supplies, selling essential yet under-the-radar products to its customers. It focuses on technology to provide excellent service and nearly unbeatable convenience.

For example, Fastenal installs vending machines at customer facilities, allowing workers to easily access what they need without interrupting their work. Fastenal will also open on-site stores at larger facilities and has a full-fledged e-commerce storefront.

Continuous expansion has helped Fastenal continue to grow its top and bottom lines:

FAST Revenue (TTM) data by YCharts

A diversified, growing revenue base funds a rising dividend

Today, Fastenal has approximately 130,000 vending machines installed, up from 55,000 in 2015. It seems clear that Fastenal's business model is effective, so it's more a matter of how long the company can sustain its expansion.

Most manufacturing sites are small, making vending machines a great solution. Fastenal's installed vending base grew by 12.2% from 2023 to 2024 and by 12.4% year over year in Q1 2025, so its growth momentum remains strong. Management estimates that its addressable market could support upward of 1.7 million units.

Fastenal also works with national accounts, which often buy more but have more complex needs. The company signs contracts with these customers. In 2024, national accounts represented 63% of total sales. However, no single customer contributed more than 5% of Fastenal's sales last year, so there is little risk of painful fallout if any given customer were to leave.

Such a diverse business enables Fastenal to continue paying and increasing its dividend. The company has raised its payout through both the 2007-2009 financial crisis and the COVID-19 pandemic, two of the worst scenarios for its industrial-focused customer base in decades.

The dividend payout ratio is higher than you'd like to see in most industrial stocks, at 80% of earnings. However, Fastenal doesn't spend much on capital expenditures, and the business has zero net debt. Management has raised the dividend at an annualized rate of 12% over the past decade, and occasionally pays a special dividend.

Fastenal's willingness to return cash to shareholders is a significant contributor to the stock's long-term results.

Is it too late to buy Fastenal stock?

Wall Street also seems to think that Fastenal will continue to sustain solid growth. Analysts estimate the company will grow earnings by an average of just over 10% annually over the long term.

That doesn't mean the stock is without risks. Much of what Fastenal sells comes from non-U.S. sources, which means tariffs could weigh on the business if they persist. Additionally, Fastenal's business would be affected during a recession, as the company's manufacturing-driven customer base would likely slow.

But while Fastenal's future appears bright, the stock's valuation already reflects that. The stock's success has pushed its price-to-earnings (P/E) ratio to 42, which is a bit high for a business with an expected 10% earnings growth rate.

That values the stock at a PEG ratio of about 4.0, and I generally shy away from buying high-quality stocks above PEG ratios of 2.0 to 2.5. The risk of downside if something goes wrong becomes uncomfortably high as you start going beyond that.

So it's not too late to be bullish on Fastenal, but investors would be wise to wait for a lower price before scooping up shares.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Justin Pope 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.

Stock prices can do irrational things from day to day, or even for a few years. But if you look at more extended periods, you'll see that the market is pretty good at sniffing out winning and losing companies. That's why The Motley Fool recommends long-term investing.

So, when a stock, say, The Trade Desk (NASDAQ: TTD), returns over 2,300% since its initial public offering in 2016, investors can feel like that company is genuinely worth looking at more closely.

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The technology company has continued to grow in a lucrative but highly competitive advertising space. Despite its long-term performance, The Trade Desk is down over 40% from its high. Is the stock still a long-term winner?

Here is whether investors should consider adding the stock to their portfolios today.

An alternative to the "walled garden" dominance of big tech companies

Advertising has been around forever, and for a good reason: It works. But an age-old industry is evolving. Advertising dollars are steadily shifting from newspapers, magazines, and broadcast television to the internet, where your online footprint generates data that companies can use to target you with ads they think you'll respond to.

Google (Alphabet) and Facebook (Meta Platforms) built trillion-dollar businesses on this trend. They act as gatekeepers in internet search and social media, a $500 billion market between both segments. These companies operate walled garden ecosystems, meaning they make the rules, keep the data, and give little control to advertisers.

As big and powerful as these walled gardens are, there are other opportunities in the digital advertising market -- in connected TV, online video, websites, smartphone apps, mobile web browsers, and internet audio. That's where The Trade Desk has thrived.

Its technology platform enables companies to purchase ad space, target their ads to their ideal audience, and track the results of their ad campaigns. It also offers more transparency and control than these walled gardens, a big deal to advertisers, as evidenced by The Trade Desk's success over the years.

Why The Trade Desk could continue to grow profitably

Sustained, profitable business growth is the key ingredient for a winning long-term investment.

The Trade Desk has generated $2.57 billion in revenue over the past four quarters, converting $0.26 of every dollar into free cash flow. The company can continue to build on that. Gross ad spending on the platform was approximately $12 billion in 2024, just a fraction of an estimated $135 billion opportunity in digital media (excluding search and social apps).

Additionally, an estimated $300 billion is still spent on traditional media, which will continue to shift to digital over time. The Trade Desk's gross ad spending has grown by 24% to 25% annually from 2022 to 2024, so there aren't any signs of growth slowing down meaningfully.

TTD Revenue (TTM) data by YCharts.

The Trade Desk is currently transitioning customers to its new Kokai platform, which utilizes artificial intelligence to optimize ad spending, thereby helping drive better campaign results for customers and ultimately leading to improved monetization for The Trade Desk. That could mean higher profit margins over time.

Lastly, I don't think The Trade Desk gets enough credit for taking care of its shareholders. The company's discipline in managing stock-based compensation has limited share dilution to just 3.4% over the past five years. That's a big deal because a higher share count diminishes a stock's potential returns by spreading the company's profits across a broader shareholder base.

The recent sell-off offers investors an opportunity

Stocks with stellar long-term track records, like The Trade Desk, don't go on sale often. But that is precisely what's happened. A rare, disappointing quarter in fourth-quarter 2024 sent the stock tumbling from a valuation, as measured by enterprise value-to-revenue, that had grown increasingly hot over the past few years.

When you buy and hold a stock, you are, in a way, partnering with that company. You want to feel good about who is steering the ship. On the Q4 2024 earnings call, The Trade Desk's founder and CEO, Jeff Green, discussed 15 ways the company is capitalizing on industry growth trends. It's an encouraging glimpse into The Trade Desk's leadership.

Now, the stock is valued at a level rarely seen over the past six years.

TTD EV to Revenues data by YCharts. EV = enterprise value.

The Trade Desk seems poised to continue its ongoing trajectory of profitable growth moving forward. Its current price looks like a fantastic starting point for a fresh investment, as a lower valuation means that revenue and earnings growth will more likely reflect in the stock's returns.

Overall, it seems likely that The Trade Desk will continue to be a winning stock over the long term.

Should you invest $1,000 in The Trade Desk right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

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. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.

The loose regulatory nature of the cryptocurrency market has led to an influx of meme coins, cryptocurrencies that lack meaningful real-world utility but can attract investors due to their appeal as a joke, because they are affiliated with someone or something popular, or for some other superficial reason.

Dogecoin (CRYPTO: DOGE) is the original meme coin. It was created as a joke, but Dogecoin's price has risen by more than 50,000% since 2014. Those returns are no joke.

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It's been a volatile journey, though. Dogecoin is currently on a slide, having dropped to less than $0.20 after soaring to more than $0.46 in late 2024. With Bitcoin setting new highs recently, should investors buy Dogecoin at less than $0.25 and ride the train?

Here is what you need to know.

Dogecoin has surpassed $0.25 several times before

Dogecoin was around for a while before its popularity exploded in 2021. The meme coin has a large and supportive community and is a fully functioning cryptocurrency -- meaning people can use it as a digital currency at the few places where it's accepted.

During the past five years, Dogecoin's price has surged to $0.25 or higher a number of times. However, it has struggled to stay there. Previous rallies have occurred during periods of high cryptocurrency optimism, such as 2020-2021, and immediately after the 2024 election, when investors cheered an incoming president who had campaigned on a pro-cryptocurrency message.

Remember, investor sentiment is crucial to Dogecoin's price because cryptocurrencies lack underlying earnings or tangible assets to support their value. Their prices depend on the market's willingness to pay more for tokens.

Three factors working against Dogecoin's long-term price potential

That willingness, or the demand for the cryptocurrency, stems from three key factors: utility, tokenomics, and competition.

Dogecoin has problems in all three areas, which could continue to work against it over time.

First, Dogecoin lacks significant utility. Its popularity has resulted in some adoption: For example, some investment firms hope to launch Dogecoin exchange-traded funds (ETFs), which is a step in the right direction, and some merchants will accept it as payment. Still, Dogecoin is used for trades, tips, and donations primarily within its community. Meme coins generally aren't intended for much else.

Second is Dogecoin's tokenomics. Many view Bitcoin as an anti-inflationary digital asset due to its increasing adoption and capped supply. But Dogecoin has an unlimited maximum supply, and miners earn about 10,000 tokens per minute. This ever-increasing supply has much the same effect on Dogecoin's price that share dilution has on a company's stock.

Third, there is competition from newer meme coins. Many investors invest small sums in meme coins for fun. They typically aren't a serious component of a portfolio. Dogecoin's name recognition helps it, but investors may opt for different meme coins when newer, hotter tokens go viral. Less investor interest means lower prices.

Should you buy Dogecoin at less than $0.25?

The main points of Dogecoin and other meme coins are to have fun and build community around your favorite tokens. So it's perfectly fine to buy Dogecoin today, as long you're not spending a meaningful amount of money or seriously expecting a profit.

Of course, Dogecoin could spike and go to $0.25 and beyond, just as it has before. And if you buy Dogecoin and it happens to make you money, then that's great! Just don't count on it.

Dogecoin, like other meme coins, should not be considered a bigger deal than it is. It's all about going in with the proper expectations.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Sometimes, it feels like bank stocks carry a stigma.

Perhaps it's the persona of the extremely wealthy, the "suits" as some on social media might call them, that some associate with big banks. Maybe it's a result of the political backlash from the financial aid some banks received during the 2007-2009 financial crisis. Or, it could be that banks are complicated businesses that even professional analysts can struggle to sift through.

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The Motley Fool dove into the financial sector and reported on the world's largest financial companies by market cap. JPMorgan Chase (NYSE: JPM) checked in at No. 2, after Berkshire Hathaway. America's largest bank has delivered strong returns for shareholders, with annualized investment returns exceeding 25% during the past five years.

Is the stock still a buy, or has this big bank stock peaked? Here is what you need to know.

A lucrative business with a virtually impenetrable moat

Big banks like JPMorgan Chase touch almost every aspect of the economy. They are involved in a wide range of financial products and services, including (but not limited to) consumer and business banking, mortgages, investment management, and student lending. A bank's finances are a complicated web, but a bank's primary function is lending money at higher rates than it pays to depositors.

There are two competitive advantages in that game: size and stickiness. Let me explain.

Larger banks have more resources to invest in areas such as technology to analyze and act on data, marketing to attract customers, and cheaper access to capital that they can use to undercut smaller competitors. It's a significant reason big banks continue to grow larger, while the total number of banks and credit unions in the U.S. has steadily declined.

JPMorgan Chase is America's largest bank with more than $4.3 trillion in assets. It offers practically every financial product or service you could imagine. A customer is more likely to stick with JPMorgan Chase as they use them for more of their financial needs.

It's hard to see anything other than government regulation threatening the wide moat JPMorgan and other large U.S. banks enjoy.

Why JPMorgan Chase will likely continue to grow

Since JPMorgan Chase is essentially everywhere in the economy, it is likely to grow in tandem with it. That trend has played out for years:

JPM Total Assets (Quarterly) data by YCharts

A bank also benefits from inflation, where asset prices, home values, and loan sizes all grow over time. The catch is that recessions can hurt banks when people and businesses spend and borrow less, and loan defaults rise.

It's a part of investing in bank stocks, though it's worth noting that the 2007-2009 financial crisis was one of the worst events in the financial sector since the Great Depression. Some banks didn't survive, but JPMorgan Chase did, and has thrived in recent years. The stock has outperformed the S&P 500 index by a wide margin during the past decade.

Is the stock a buy?

Here's the problem for investors now. JPMorgan Chase stock currently trades at about 2.2 times its book value, near its highest valuation during the past decade. That's not ideal when the economy is showing multiple signs of potential weakness including:

• U.S. household credit card debt is at an all-time high.
• Auto loan delinquencies are at decade-highs, excluding a spike during the pandemic.
• Student loan repayments are fully resuming after a multiyear pandemic freeze.
• Interest rates are rising, squeezing demand for mortgages and other loans.

Even JPMorgan Chase's chief executive officer, Jamie Dimon, has publicly expressed concern for the economy's direction. Although JPMorgan is a world-class business and bank, it's tough to justify paying such a high valuation for a company that could soon be subjected to a weaker economy than it has enjoyed for most of the past five years.

Nobody can predict these things with certainty, but investors may be wise to tread lightly here.

Should you invest $1,000 in JPMorgan Chase right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

People love round numbers, and Bitcoin (CRYPTO: BTC) is a notable one, having reached $100,000 late in 2024. After some volatility, something you'll see occasionally when you invest in cryptocurrencies, Bitcoin has recrossed the $100,000 mark and is up 8% during the past month alone.

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Where Bitcoin's price goes tomorrow, or next week, is anyone's guess. However, some exciting catalysts are lining up at the right time that could send Bitcoin's price higher.

Here are four reasons Bitcoin could soar in June.

1. Investor enthusiasm has risen since Bitcoin's price hit $100,000

It's remarkable to think about how far Bitcoin has come. Bitcoin's price crossed the $100,000 marker roughly 15 years after an early Bitcoin investor famously traded 10,000 bitcoins for a couple of pizzas. The Motley Fool conducted research that found that 30% of respondents who had never owned cryptocurrencies were more likely to invest for the first time due to Bitcoin hitting $100,000.

The Motley Fool's research also found that 68% of cryptocurrency investors surveyed believe that Bitcoin's price will reach $200,000 in 2025. Market sentiment has a direct impact on Bitcoin's price movement, so such high enthusiasm bodes well for Bitcoin's current momentum.

2. Government spending takes a turn in Bitcoin's favor

The Trump administration and Elon Musk created the Department of Government Efficiency (DOGE) to help reduce federal spending. However, pushback from politicians and the courts has effectively thwarted DOGE's efforts, which also turned out not to do much to reduce spending. Musk has stepped back from his government role, and the looming One Big Beautiful Bill, the Trump administration's budget bill, will likely continue the U.S. government's pattern of running a fiscal deficit.

Bitcoin is a popular anti-inflationary investment. After months of headlines about DOGE's efforts, the pivot back to the government's overspending ways is likely to continue fanning the flames of inflation, which is a tailwind for Bitcoin's price.

3. Trump's latest sign of Bitcoin support

President Donald Trump campaigned on cryptocurrency support, and followed through with an early executive order to establish a strategic Bitcoin reserve. In late May, Trump Media & Technology Group, the parent company of Trump's Truth Social media app, announced a deal to raise $2.5 billion that will help the company begin accumulating Bitcoin.

The Motley Fool's 2025 Cryptocurrency Investor Trends Survey found that Trump's public support for Bitcoin and cryptocurrencies moves the needle, and this announcement is a fresh instance of him putting his weight behind it.

4. Tariff shock is subsiding

Bitcoin rallied in late 2024 on the transition to a more pro-cryptocurrency Trump administration. However, Trump dumped cold water on Bitcoin's price action in early April by announcing aggressive tariffs that shocked and spooked the market. The VIX Index, a commonly used indicator of market fear, spiked to its highest mark since the COVID-19 pandemic.

VIX data by YCharts

Many investors see Bitcoin as a riskier asset than many others, so a fearful market generally works against Bitcoin's price. The market has since calmed down, despite Trump extending and retreating on tariffs on multiple occasions, and different courts issuing conflicting rulings.

Bitcoin has rallied on the perception that such high tariffs seem increasingly unlikely. Things could take a turn for the worse, but assuming that doesn't happen, a calmer market can help Bitcoin continue its rally.

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

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

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Tobacco stocks aren't for everyone. The fact that they deal in vices and sell addictive products is off-putting to some, while others skip over them in favor of faster-growing businesses. British American Tobacco (NYSE: BTI) is one of the industry's most prominent players, boasting a global presence and a diverse portfolio of cigarette brands and smoke-free nicotine products.

The stock's nearly 7% dividend yield offers firm short-term returns, which investors can appreciate when market volatility rises, as it has recently.

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But can you trust British American Tobacco as a long-term holding in your portfolio? There are some risks, but the upside could surprise you.

Emerging from a tumultuous decade

It has been a particularly rough decade for British American Tobacco, also known as BAT. The stock languished for years as the company worked through two primary challenges:

1. The early stages of an industrywide shift away from cigarettes to smoke-free nicotine products.
2. The consequences of overpaying to merge with Reynolds American in 2017, including a $31.5 billion non-cash write-down on its U.S. cigarette brands in late 2023.

Now the dust is settling.

Tobacco companies are transitioning to electronic cigarettes (vapes), heated tobacco, and oral nicotine pouches, and British American Tobacco is competing. Organic, currency-neutral sales for new category products grew by 8.9% in 2024, rising to 17.5% of total revenue. British American Tobacco is trailing Philip Morris International in its smoke-free efforts, but is ahead of Altria Group, which still depends overwhelmingly on Marlboro cigarettes in the U.S.

Combustible cigarette volumes are declining, but BAT is increasing prices to offset the losses -- a classic tactic for tobacco companies.

Continued growth in new category products and stable cigarette revenues could drive modest but steady long-term growth. Management anticipates 3% to 5% annualized currency-neutral revenue growth starting in 2026. That won't light the world on fire, but it's a path forward from a brutal stretch.

Dividend reinvestment is the path to maximizing returns

The beauty of British American Tobacco is that you don't need blazing growth to produce excellent investment returns.

British American Tobacco's dividend yields 7%. If it hits its growth goals and maintains profit margins, the company could generate total annual returns of 10% to 12% over the long term, and that's without factoring in dividend reinvestment. Pump those dividends right back into the stock, and you're going to see some serious compounding over time.

Some investors question the sustainability of the dividend, but I don't see an issue.

British American Tobacco generated 7.9 billion pounds in free cash flow in 2024 and paid out 5.2 billion pounds in dividends. That's a payout ratio of 66%, leaving a substantial amount left over. Additionally, the company owns approximately a quarter of ITC, an Indian conglomerate with a market value of 5.38 trillion rupees, or roughly $63 billion. That's a valuable asset for BAT, and gives the dividend -- a top financial priority for tobacco companies to begin with -- an extra safety net.

Why the stock should perform better over the next decade

Right or wrong, share prices can influence how investors might view a stock. British American Tobacco is up 43% over the past year, but down 25% from a decade ago.

Fortunately, it appears that the stock's recent momentum is the start of a new era. British American Tobacco's price-to-earnings ratio peaked at about 24 at the end of 2017. It slowly unwound for years, a major contributor to the stock's lousy performance.

British American Tobacco hit bottom at under 8 times earnings early last year, following its massive write-off. Now, with a brighter future ahead, the market is buying. The stock's valuation has risen, but it's still under 10 times 2025 earnings estimates. Investors probably shouldn't expect shares to return to 24 times earnings anytime soon, but the current price is reasonable at the very least.

It should enable shareholders to enjoy returns in line with the company's growth and dividends moving forward. That should make long-term investors very happy.

Should you invest $1,000 in British American Tobacco right now?

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

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*Stock Advisor returns as of April 28, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends British American Tobacco P.l.c. and Philip Morris International and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy.

Investors have spent the past couple of years acquainting themselves with artificial intelligence (AI) and quantum computing. These emerging technologies could represent the most significant leaps forward for humankind since the internet decades ago.

Of course, such groundbreaking technologies can be lucrative investment opportunities. The Defiance Quantum ETF (NASDAQ: QTUM) could be a smart way to add exposure to artificial intelligence and quantum computing to your portfolio.

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The exchange-traded fund has plunged nearly 20% from its high amid the market's recent volatility, one of its steepest declines since it began trading in 2018.

Here are three reasons to buy this AI quantum computing stock on the dip.

1. Quantum computing and AI have significant growth potential

It's impossible to predict what AI and quantum computers could make possible over the coming decades. You might see things you only thought were possible in science fiction. Humanoid robotics is already on the way, which reminds me of a famous action movie from the 1980s featuring a particular cyborg sent from the future.

Plus, AI and quantum computing could eventually be worth trillions of dollars. Research from McKinsey estimates AI could generate $23 trillion in annual economic value by 2040. Meanwhile, quantum computing could start slowly. Technology experts have speculated that practical quantum computers could still be several years away.

However, they could be a game changer once they get here. Boston Consulting Group's report on quantum computing forecasts that quantum computers will create $5 billion to $10 billion in annual economic value by 2030, but projects this to increase to $450 billion to $850 billion by 2040. Time will tell how accurate such estimates and timelines are, but the financial and real-world potential is exciting, to put it mildly.

2. An ETF means you don't have to pick winners

AI and quantum computing present quite a challenge for investors. Most individuals, let alone professional investors, aren't experts in these complex fields.

Therefore, picking individual winners could prove extremely challenging. That's a great reason to invest in a diversified instrument such as the Defiance Quantum ETF. It represents a global basket of 70 companies involved with AI and quantum computing -- someone else did the hard work of picking high-quality stocks in these advanced technology industries.

The fund's top holdings include:

Company	ETF Weight
D-wave Quantum	3.31%
Orange	2.37%
NEC Corp	2.17%
Palantir Technologies	2.15%
Koninklijke Kpn	2.05%
Alibaba Group	2.03%
Nokia	1.93%
Northrop Grumman	1.89%
Rigetti Computing	1.87%
RTX Corp	1.83%

Data source: Defiance ETFs.

Since AI and quantum computing have immense potential but are still so unpredictable, casting a wide net is a wise strategy. It could be a case of the 80-20 rule, where a select few companies produce a majority of the value in AI and quantum computing.

The ETF's construction spans various companies, industries, and countries, reducing risk by limiting the top holding to just 3.31% of the fund's total assets. Additionally, the expense ratio (0.4%) appears reasonable, considering the simplicity and diversification you gain in return.

3. The Defiance Quantum ETF has outperformed the market

Many quantum computing stocks have been highly volatile, and investors who bought at the wrong time have endured steep losses.

The Defiance Quantum ETF has been around since 2018, and has outperformed the Nasdaq Composite, a prominent technology-leaning U.S. stock market index, since about 2021:

QTUM Total Return Level data by YCharts

Past performance does not guarantee future results, but it demonstrates the effectiveness of a diverse approach to speculative industries like AI and quantum computing. I don't see why the Defiance Quantum ETF can't continue to perform well as these technologies mature.

Should you invest $1,000 in ETF Series Solutions - Defiance Quantum ETF right now?

Before you buy stock in ETF Series Solutions - Defiance Quantum 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 ETF Series Solutions - Defiance Quantum 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 $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

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*Stock Advisor returns as of April 21, 2025

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends Alibaba Group and RTX. The Motley Fool has a disclosure policy.