Key Points

• Quantum computing stocks have been on a tear this year, despite the technology's nascent scale and still speculative nature.

• Unlike the broader artificial intelligence (AI) theme, many popular quantum computing stocks are small companies with limited traction.

• While it can be tempting to follow the momentum, several quantum computing stocks boast valuation multiples that echo those seen during prior stock market bubbles.

• 10 stocks we like better than IonQ ›

This year has been tough for investors, particularly those who flock toward growth stocks. Just about every major industry has been impacted in some form or fashion by President Donald Trump's new tariff policies.

While the broader implications of these import taxes are still unfolding, one sector that has faced abnormally large headwinds is technology. For the first time in nearly three years, investing in the artificial intelligence (AI) market hasn't necessarily resulted in outsized gains.

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Nevertheless, one pocket of the AI realm that has managed to circumvent the panic-selling this year is quantum computing. As of this writing (July 17), the Defiance Quantum ETF has gained 17% so far this year -- roughly double the returns seen in the S&P 500 and Nasdaq Composite.

With quantum computing stocks trouncing the broader market, now may be an appropriate time to assess valuations in the sector and compare them to prior periods of heightened enthusiasm.

What is a stock market bubble, and what are some examples?

One of the most basic mistakes investors make is assessing a company's valuation based on its stock price. In other words, if the stock price is low, an investor might mistakenly view the company as "cheap" (and vice versa).

Smart investors understand that there are far more parameters than the share price that help determine a company's valuation. Underlying financial metrics, such as revenue, gross margins, profitability, free cash flow, cash, and debt, should all play a factor in assessing the health of a business.

From there, more sophisticated analysis requires investors to benchmark these figures and their growth rates against a set of peers to get a better sense of how the business in question compares to the broader competitive landscape.

Many investors do not take the time to perform the due diligence exercise above and instead choose to follow broader momentum. Unfortunately, this can lead to abnormally inflated stock prices -- those that are incongruent with the underlying fundamentals of the business.

Generally speaking, reality begins to set in and these companies are unable to sustain their overstretched valuations, eventually leading to harsh, dramatic sell-offs. This phenomenon is known as a stock market bubble.

In the charts below, I've illustrated some valuation trends across two notable stock market bubbles.

AMZN PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

The chart above illustrates the price-to-sales (P/S) ratios for a number of high-flying internet stocks during the dot-com bubble of the late 1990s. As the trends above make clear, each of the companies in the peer set above trades at much more normalized valuation multiples today when compared to their peaks during the internet boom.

ZM PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

Investors witnessed a similar theme in overstretched valuations during the peak days of the COVID-19 pandemic. Companies such as Zoom Communications, Wayfair, and Peloton witnessed abnormal demand for their respective product offerings as remote work became the norm.

As the trends seen above demonstrate, however, these growth tailwinds were not permanent. Today, none of these COVID stocks are seen as compelling growth opportunities, and their cratering valuations are a sobering reminder of the aftermath of bubbles bursting.

How do quantum computing stocks compare to the valuations above?

Over the last year, IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) have emerged as popular names fueling the quantum computing movement.

IONQ PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

With a P/S multiple of over 5,700, the tiny Quantum Computing business is the clear outlier in the quantum computing cohort illustrated above. Even so, Rigetti, IonQ, and D-Wave each boast P/S ratios that are either considerably higher or in line with the darlings of the dot-com and COVID bubbles.

Are we in a quantum computing stock bubble?

The quantum computing stocks referenced above are highly speculative -- arguably even more so than the highfliers during the internet era. Unlike then, today's technology behemoths, such as Amazon, Microsoft, eBay, and Cisco, have evolved into sophisticated platform businesses with diversified ecosystems.

This provides them with the scale and financial flexibility to explore emerging fields such as quantum computing. Smaller players, such as IonQ, Rigetti, D-Wave, and Quantum Computing, currently face intense competition from big tech -- something the dot-com businesses did not.

Given the valuation analyses explored above, many popular quantum computing stocks are clearly trading at abnormally high and historically unsustainable valuation levels. For these reasons, I think companies such as IonQ, Rigetti, D-Wave, and Quantum Computing have entered bubble territory.

With that said, many big tech companies in the "Magnificent Seven" are exploring quantum applications as well. Many of these companies trade for much more reasonable valuations. While I am not convinced the broader quantum computing opportunity is necessarily in a bubble, I believe investors need to be cautious and thoughtful when selecting which quantum computing stocks to invest in.

And the best choices will rarely be high-flying specialists with big dreams and small revenue streams.

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

Before you buy stock in IonQ, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $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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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Microsoft, Peloton Interactive, VeriSign, Zoom Communications, and eBay. The Motley Fool recommends Wayfair 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

• BigBear.ai stock is surging Thursday amid a day of bullish momentum for the broader market.

• While there haven't been any major new developments for the company, investors are continuing to bet on defense artificial intelligence (AI) stocks.

• BigBear.ai's share price has now risen more than 220% over the last three months,

• 10 stocks we like better than BigBear.ai ›

BigBear.ai (NYSE: BBAI) stock is roaring higher again in Thursday's trading. The company's share price was up 13.6% as of 2 p.m. ET amid a 0.5% jump for the S&P 500 (SNPINDEX: ^GSPC) and a 0.7% jump for the Nasdaq Composite (NASDAQINDEX: ^IXIC). The stock had been up as much as 17.4% earlier in the session.

While there doesn't appear to be any fresh business-specific news for BigBear.ai today, its valuation is getting a big boost in conjunction with bullish momentum for the broader market. Palantir stock hitting a new record high today may also be giving the smaller defense tech player's share price a lift as well.

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BigBear.ai stock is now up 224.5% over the last three months.

BigBear.ai stock sees another day of big gains despite no major news

The stock market is rising today as investors digest the latest rounds of economic data and react to recent corporate earnings reports. There's no major news for BigBear.ai today, but that isn't stopping its stock from posting double-digit gains.

Investors are looking to artificial intelligence (AI) and software companies with exposure to the defense industry as growth stocks that can continue to thrive in the face of geopolitical volatility. Palantir has been the poster child for the defense AI trade, and BigBear.ai has sometimes seen significant valuation moves in conjunction with news for Palantir or pricing shifts for its stock.

What's next for BigBear.ai?

BigBear.ai stock has seen a massive valuation run-up over the last couple of months on relatively little news. On the heels of its latest rally, BigBear.ai now has a market capitalization of roughly $2.4 billion and is valued at approximately 14 times this year's expected sales. While it's possible that the stock will continue to soar if the company announces major new contract wins, there's a risk that the company's recent gains are out of sync with the business's fundamentals and outlook.

Should you invest $1,000 in BigBear.ai right now?

Before you buy stock in BigBear.ai, consider this:

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Key Points

• AMD stock is soaring following news that Nvidia will receive licensing approval to sell its H20 processors in China.

• Export approvals for Nvidia's H20 suggest that AMD's own AI processors for the Chinese market could receive the necessary licenses.

• AMD's being able to sell advanced AI processors to China could create multiple wins for investors.

• 10 stocks we like better than Advanced Micro Devices ›

Advanced Micro Devices (NASDAQ: AMD) stock is getting a big boost today thanks to major news for its most important competitor. The semiconductor specialist's share price was up 7.2% as of 11 a.m. ET. Meanwhile, the S&P 500 index was flat on the day, and the Nasdaq Composite index was up 0.6%. The stock had been up as much as 8.5% earlier in trading.

Semiconductor investors are shrugging off news that inflation actually came in higher than expected in June and focusing on a big win for Nvidia. The artificial intelligence (AI) leader has secured permission to sell its H20 processor and other hardware in China, and the development could also be good news for AMD.

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AMD stock rises as Nvidia scores big win

Nvidia said today that it has received assurances from the U.S. government that it will be granted export licenses to sell its H20 processors and other AI-related hardware to China. The news comes after new restrictions were implemented in April that prevented the company's H20 hardware from being sold into the Chinese market without a license.

At the time it seemed very unlikely that the export licenses would be granted, but the Trump administration appears to be making a significant reversal on the issue. The decision to allow Nvidia's H20 processor to be sold to Chinese customers comes after a recent meeting between President Trump and Nvidia CEO Jensen Huang, and it looks to be a major development in wider trade negotiations between the U.S. and China. With Nvidia's H20 processor seemingly on track to receive the necessary export licensing, there's a good chance that AMD's specialized AI processors for the Chinese market will also be given export approval.

What's next for AMD?

Approval to sell its specialized processors in China would be a major positive development for AMD stock. In addition to opening up substantial revenue streams for the company for the batch of AI processors it has already designed to meet specific requirements for export to the Chinese market, easing export restrictions would also seemingly reduce the risk that the sale of lower-end hardware could also be restricted.

While there's still significant risk on the geopolitical front, allowing the sale of capable AI processors to China suggests the potential for a significant improvement in U.S. trade relations. If so, AMD stock could continue to see bullish business-specific catalysts in addition to valuation tailwinds for the broader market.

Should you invest $1,000 in Advanced Micro Devices 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 $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

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Key Points

• Planet Labs shares rose after announcing a major multiyear satellite imaging deal with the German government.

• The 240 million euro agreement expands Planet Labs’ role in European defense and security, building on recent contracts with U.S. agencies.

• The company occupies a unique niche with high growth potential, but investors should be aware of risks such as possible share dilution.

Shares of Planet Labs (NYSE: PL) climbed on Thursday, closing up 11.2% as of the 1 p.m. ET early market close for the Fourth of July holiday. The rise comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.8% and 1%, respectively.

Planet Labs, a satellite imaging company, signed a major deal earlier this week that is continuing to boost shares.

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Planet Labs inks major deal

The company announced on Tuesday that it has signed a deal with the German government to provide satellite imagery and geospatial data "in support of European peace and security." The multiyear, 240 million euro agreement also includes artificial intelligence (AI)-powered intelligence from the imagery and data Planet Labs provides.

The deal marks a major step in the company's push into Europe and defense and security-related applications. In a statement, Will Marshall, CEO and co-founder of Planet Labs, said of the deal, "With the changing geopolitical landscape, the demand for sovereign access to geospatial intelligence is more urgent than ever before, and Planet's satellite services model is uniquely designed to enable large area security monitoring."

This could be the first of many such deals, as countries across Europe commit to increasing defense spending after last month's NATO summit.

Although the contracts are smaller in scope, this month saw the company announce several other significant contracts with the U.S. Department of Defense and the U.S. Navy.

Planet Labs is growing

Although the stock is not cheap and investors should be aware of possible dilution as the company raises money to fund growth, I think Planet Labs is a good pick for those with a high risk tolerance. The company operates in a unique niche that has a lot of potential.

Should you invest $1,000 in Planet Labs Pbc right now?

Before you buy stock in Planet Labs Pbc, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

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Johnny Rice 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

• Lucid reported record vehicle deliveries in Q2, growing 38% year over year on the back of new Gravity SUV sales.

• Despite setting new milestones, Lucid’s production still outpaced demand.

• The EV maker faces significant challenges as the broader EV market softens.

Shares of Lucid Group (NASDAQ: LCID) are climbing on Thursday. The luxury electric vehicle maker's stock gained 5.4% as of 11:30 a.m. ET. The rise comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.8% and 1%, respectively.

Lucid reported its Q2 2025 production and delivery numbers yesterday, revealing somewhat mixed results.

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Lucid ramps up Gravity sales

In the second quarter ending June 30, Lucid produced 3,863 vehicles and delivered 3,309. These numbers alone are somewhat disappointing; overproducing 554 vehicles could indicate demand is lagging behind management's expectations. The numbers also mean that Lucid needs to more than double its production in the second half of the year to meet its goal of 20,000 vehicles produced in 2025.

Still, the quarter was a record for Lucid, with deliveries up 38% year over year (YOY). Its deliveries for the first six months of the year are up 50% YOY. Those numbers look especially impressive when you consider Tesla and Rivian are both reporting shrinking numbers. The growth is primarily driven by the company's new Gravity SUV.

Challenges remain

Lucid is still priced at the top end of the market and will struggle to reach the mass-market scale of Tesla without introducing a more affordable option. Gravity sales have been encouraging, but are still lagging behind targets set by the company.

Despite the growth, I have serious doubts Lucid can execute a turnaround, especially as the broader EV market softens. The rollout of its Gravity SUVs is a make-or-break moment for the struggling company.

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

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

Micron (NASDAQ: MU) stock rose in Tuesday's trading. The memory technologies company's share price climbed 4.7% in the daily session. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) gained 1.1%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) climbed 1.4%.

Micron's valuation got a boost today as macroeconomic and geopolitical developments pointed to a more favorable backdrop for investors. Excitement surrounding the company's quarterly report tomorrow may have also factored into the valuation move.

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Micron stock rises on more favorable macroeconomic and geopolitical outlook

Federal Reserve Chair Jerome Powell said today that the central bank would continue to monitor tariff and inflation dynamics before committing to cutting interest rates, but he also left the door open for a rate reduction next month. Along with other recent comment from Fed officials, Powell's statements today bolstered investor hopes for a rate cut next month and helped send the broader market higher.

Investors were also relieved to see the announcement of a ceasefire in the war between Israel and Iran. In addition to being a potential source of outcomes that could drive inflation higher, investors have shown signs of concern that military actions between the two countries could spiral into a much wider conflict that would destabilize markets. With a ceasefire now in place, Micron and other stock stocks received valuation boosts as buyers became less risk-averse.

What's next for Micron?

After market close tomorrow, Micron will publish results for the third quarter of its current fiscal year, which concluded May 30. The average Wall Street analyst estimate calls for the business to report non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.61 on sales of $8.85 billion. With the last update from Micron, the company guided for adjusted earnings per share to be between $1.47 and $1.67, and for sales to be between $8.6 billion and $9 billion.

While the company is expected to see relatively soft sales for its NAND memory chips, analysts are expecting strong performance for high-bandwidth-memory (HBM) and other DRAM solutions. With AI-focused HBM products potentially making up a bigger portion of Micron's sales mix, sales for these higher-margin products could push Micron to a stronger-than-expected earnings performance in the period.

Should you invest $1,000 in Micron Technology right now?

Before you buy stock in Micron Technology, consider this:

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

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Keith Noonan has positions in Micron Technology. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Dogecoin (CRYPTO: DOGE) is up on Tuesday. Over the last 24 hours, the cryptocurrency was trading up 4.4% at its highest. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) closed up 1.1% and 1.4%, respectively.

Dogecoin and most of the crypto market were up today after Jerome Powell spoke to Congress, revealing the Fed is adopting a more crypto-friendly approach. Developments in the Iran-Israel conflict also boosted markets.

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The Fed takes a friendly tone toward crypto

Federal Reserve Chair Jerome Powell confirmed on Tuesday that U.S. banks can serve cryptocurrency firms, so long as they follow specific risk management and consumer protection rules. Powell emphasized that the Fed won't block lawful bank-crypto relationships and has eliminated "reputational risk" from its bank supervision framework, aligning with recent changes by the FDIC and OCC.

These comments signal policy shifts that remove key barriers that had hindered crypto access to traditional banking. Investors across the crypto market were enthusiastic about what this means for the future of digital currencies, including Dogecoin.

Investors bet global conflict will ease

Tensions were high today after a ceasefire in the Israel-Iran war broke down. Still, investors appeared encouraged by Iran's somewhat limited response to U.S. strikes on its nuclear facilities, and markets, including crypto, were up.

Dogecoin is still a meme coin

Despite today's jump, I do not recommend investing in Dogecoin. The fact is that it is a meme coin; its value is derived not from utility, but from "vibes." That makes it incredibly volatile and subject to wild swings in price, and long-term value can be wiped out on a whim.

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

Before you buy stock in Dogecoin, consider this:

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

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Taiwan Semiconductor Manufacturing (NYSE: TSM) stock is moving higher Tuesday. The semiconductor fabrication leader's share price was up 4.7% as of 3:15 p.m. ET. At the same point in the day, the S&P 500 (SNPINDEX: ^GSPC) was up 1.2%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was up 1.5%.

TSMC is gaining ground today following macroeconomic and geopolitical developments that are helping to push valuations for tech stocks higher. The company's valuation is also getting a boost from a new market-share report.

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TSMC stock rises as investors seen macroeconomic and geopolitical green flags

Following gains yesterday, tech stocks are continuing to rally today on indications that the Federal Reserve serving up an interest rate cut at its meeting next month is now a realistic possibility. Fed Chair Jerome Powell said this morning that the central banking authority would continue to monitor inflation trends and the impact of tariffs, but he seemingly left the door open for a July rate cut. Meanwhile, recent comments from other Fed officials have directly advocated for the move.

TSMC stock is also rising thanks to news that Israel and Iran have agreed to a ceasefire. The market has been weighing geopolitical risk factors lately, and the possibility that the war between Israel and Iran could spiral into a wider conflict involving the U.S., Russia, and China has been a concern that's tamped down on buying action despite some other bullish market indicators. With signs that near-term risk on that front may be moderating, investors are buying TSMC shares today.

TSMC retains its leadership in the foundry industry

Earlier today, Counterpoint Research published a new market-share report on the semiconductor industry. In the Foundry 2.0 category, which includes both fabrication and nonfabrication products and services, TSMC continues to enjoy a strong leadership position.

According to Counterpoint, TSMC claimed a 35% market share in the Foundry 2.0 category in this year's first quarter. The performance was in line with the company's market share in the previous quarter and represented a 0.9% increase compared to Q1 2024. The report bodes well for TSMC continuing to maintain a decisive lead over its competitors in the contract chip manufacturing space.

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

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

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

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

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Navitas Semiconductor (NASDAQ: NVTS) stock is seeing big gains in Tuesday's trading. The company's share price was up 8.4% as of 1:30 p.m. ET amid a 1% gain for the S&P 500 index (SNPINDEX: ^GSPC) and a 1.4% jump for the Nasdaq Composite (NASDAQINDEX: ^IXIC).

The company's valuation is surging today thanks to positive developments on geopolitical and macroeconomic fronts. The stock is also rising in conjunction with an announcement that the company has received an award from one of its partners.

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A Navitas collaborator is singing the company's praises

Before the market opened today, Navitas published a press release announcing that VREMT Energy had named the company as the recipient of its Outstanding Technical Collaboration Award. The two tech specialists have collaborated on a research and development laboratory using Navitas' GaNFast gallium nitride (GaN) and GeneSiC silicon carbide (SiC) semiconductors to improve power systems for electric vehicles.

News of the award may be increasing investor hopes that a significant product breakthrough will emerge through the partnership.

Navitas stock soars on improving macroeconomic and geopolitical outlook

While Federal Reserve Chairman Jerome Powell indicated that the central banking authority will continue to take a wait-and-see approach on interest-rate cuts, the probability of a rate cut happening at next month's meeting seems to have increased significantly. At the very least, it now seems much more likely that the Fed will serve up one or more rate cuts this year. The change in the rate outlook has investors bidding up growth stocks in the tech sector, and Navitas is benefiting from the trend.

In addition to the possibility that Navitas stock will be a enjoying a better-than-expected macroeconomic backdrop, investors have received some reassuring news on the geopolitical front. A ceasefire between Israel and Iran was announced today, and the market is rising as a major source of potential volatility appears to be de-escalating. Geopolitical turmoil poses a key risk factor to semiconductor companies and global supply chains at large, and indications of global stability are likely to be bullish catalysts for Navitas.

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Keith Noonan 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 Quantum Computing (NASDAQ: QUBT) are surging this week, up 24.2% as of 1:22 p.m. ET. The jump comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) both had modest gains.

At his company's GTC Paris developer conference on Wednesday, Nvidia CEO Jensen Huang indicated that he thinks quantum computing is reaching an "inflection point," boosting stocks across the industry.

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Jensen changes his tune

Earlier this year, Huang sent quantum stocks sliding after he said he believes useful quantum computers were 15 years or more away. He later qualified his remarks and walked them back somewhat, even hosting executives from around the industry to "tell him why he was wrong."

On Wednesday, however, he went much further, making the most directly bullish comments thus far. Huang said that he believes the industry is nearing an "inflection point" and that "we are within reach" of being able to apply the technology "in areas that can solve some interesting problems in the coming years."

A long road ahead

As much as this seems a significant departure from his original stance, it seems to me that investors may be reading past what Huang actually said. There's a difference between solving "some interesting problems" and the full maturation of quantum technology that delivers on its transformative promise. There is plenty of reason to believe Huang's original timeline for the latter.

And given the enormous market capitalizations of these quantum stocks, including Quantum Computing, the technology must be transformative. I think we are still a very long way from a quantum computer that is robust, powerful, and stable enough to generate a return on the current level of investment. I would stay away from Quantum Computing stock for the time being.

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Before you buy stock in Quantum Computing, consider this:

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Newsmax (NYSE: NMAX) stock got hit with another round of big sell-offs in Thursday's trading. The company's share price closed out the day's trading down 10.5% amid the backdrop of a 0.6% decline for the S&P 500 and a 0.9% decline for the Nasdaq Composite.

Sell-offs picked up as the day progressed as investors reacted to tariff and trade issues and other potential macroeconomic risk factors. While there weren't any immediate business factors pushing Newsmax stock lower, the stock may have faced some significant pressure due to news surrounding Tesla and CEO Elon Musk.

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As a network that primarily features right-leaning political content, Newsmax has sometimes been included in the basket of "Trump trade" stocks -- a group of stocks that some investors are betting will see positive catalysts in conjunction with the President's second term. After previously being a high-profile supporter of President Trump, Musk has recently ramped up criticism of Trump and the budget bill he supports. The Trump-Musk schism helped spur a 14.3% sell-off for Tesla stock today, and the pullback effect extended to other "Trump trade" stocks.

Is the latest pullback an opportunity to buy Newsmax stock?

In the absence of actual business-specific news pushing Newsmax's share price lower, today's big sell-off could look like an overreaction. The stock is now down roughly 81% from market close on the day of its initial public offering (IPO).

Sell-offs have now pushed the company's market capitalization down to roughly $2.1 billion -- or roughly 12.3 times the $171 million in revenue it reported last year. The company is still growing revenue at a solid clip, with sales rising 12% year over year in the first quarter, but its current valuation still looks somewhat lofty given its rate of sales expansion. Factoring in the potential for the business to face significant negative judgments in outstanding civil suits, I think Newsmax stock still looks too risky right now.

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

Before you buy stock in Newsmax, 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 Newsmax 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 $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

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*Stock Advisor returns as of June 2, 2025

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

Shares of Newsmax (NYSE: NMAX) are plunging on Thursday. The media company's stock lost 9% as of 3:50 p.m. ET. The steep decline comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 0.3% and 0.8%, respectively.

There isn't a direct catalyst today, so here's a quick analysis of the company's stock.

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Newsmax saw its stock skyrocket nearly 1,800% in the first two days following its recent initial public offering (IPO), before falling roughly 90% over the next week. The conservative media company's viewership has been spiking, leading to the intense excitement around its stock. Newsmax's Q1 viewership jumped 50% year over year, and it is now one of the five most-watched channels in all of cable and the fourth-most-watched cable news channel. Along with its viewership, its revenue has grown considerably as well. The company's revenue jumped 26.4% from 2023 to 2024.

There are plenty of reasons to be wary

That's about where the good news ends. The company is operating deep in the red, losing more than $17 million in the first quarter of 2025. Its viewership numbers are also less impressive when you consider that most cable news channels saw comparable major growth over the same period and that its biggest competitor, Fox News, is still miles ahead. All 15 of the most-watched shows on cable appear on Fox. And that 15th-ranked show has 3 times as many viewers as Newsmax's top-ranked program.

Despite this disparity, Newsmax stock carries a price-to-sales ratio more than 8 times that of Fox News' parent company. This seems divorced from reality to me. And if that weren't reason enough to stay away from this stock, Newsmax is facing massive litigation over its false statements regarding the 2020 election. The penalty it could face would potentially bankrupt the company.

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

Before you buy stock in Newsmax, 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 Newsmax 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 $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

Johnny Rice 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 CoreWeave (NASDAQ: CRWV) are falling on Thursday, down 16.2% as of 2:13 p.m. ET. The large drop comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell by 0.3% and 0.1%, respectively.

CoreWeave stock's sharp drop isn't really being driven by specific news from today; rather, it's a retreat from the stock's recent massive run-up. The stock was up nearly 50% this week before today's fall after the company announced several catalysts.

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CoreWeave inks a key deal

CoreWeave, which provides cloud computing services to artificial intelligence (AI) companies like Nvidia and Microsoft, announced earlier this week that it has entered into a deal with Applied Digital to lease 250 megawatts of computing power for the next 15 years. The deal greatly expands CoreWeave's total capacity and ability to serve its customers.

CoreWeave appoints a new executive

On Wednesday, the company announced it has appointed Ernie Rogers as chief architect of strategic financing. Rogers will help CoreWeave continue to finance its rapid expansion. Michael Intrator, co-founder and CEO, explained in a statement that his "deep understanding of our business makes him uniquely qualified to help drive our next phase of growth."

There are reasons to be cautious

CoreWeave's growth has been impressive, but I'm not sold on the stock. The company is highly leveraged and, with the recent appointment of Rogers, appears to be looking to add to this debt. This makes the company highly vulnerable to any disruptions in its growth.

This would already be cause for concern, but considering that CoreWeave's revenue is entirely dependent on just a handful of companies, the risk is greater. After all, its largest client, Microsoft, is a cloud provider itself. It's more than possible that CoreWeave sees a major disruption in sales that could handicap the company as it grows. Therefore, I would avoid CoreWeave stock.

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

Before you buy stock in CoreWeave, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Five Below (NASDAQ: FIVE) stock is gaining ground in Thursday's trading. The company's share price was up 6.5% as of 12:45 p.m. ET. Meanwhile, the S&P 500 (SNPINDEX: ^GSPC) was up 0.1%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was up 0.4%.

After the market closed yesterday, Five Below published results for the first quarter of its current fiscal year. It delivered sales and earnings that beat Wall Street's expectations for the quarterly period, which ended May 3.

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Five Below stock jumps on Q1 sales and earnings beats

For fiscal Q1, Five Below posted non-GAAP (generally accepted accounting principles) adjusted earnings per share of $0.86 on revenue of $970.53 million. Meanwhile, the average analyst estimate had called for the business to record adjusted earnings per share of $0.83 on sales of $966.49 million. Overall revenue was up 19.5% year over year in the period, with a 7.1% increase for same-store sales and new location openings helping to power strong revenue expansion in the period. Adjusted earnings per share were roughly 43% compared to last year's quarter.

What's next for Five Below?

For the current quarter, Five Below is guiding for sales to come in between $975 million and $995 million. The guidance range came in significantly better than the average Wall Street forecast, which had called for sales of $958.33 million. Five Below management expects same-store sales growth between 7% and 9% this quarter.

Meanwhile, adjusted earnings per share in fiscal Q2 are projected to be between $0.50 and $0.62. For comparison, the average Wall Street analyst estimate had called for adjusted earnings per share of $0.58 prior to Five Below's recent quarterly report. While the midpoint of management's earnings guidance came in below the average analyst estimate, guidance for strong same-store sales growth appears to have offset concerns related to the shortfall on the profit target.

Should you invest $1,000 in Five Below right now?

Before you buy stock in Five Below, 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 Five Below 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 $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy.

The three major benchmarks struggled in the first months of the year as investors worried about the economic situation ahead. President Donald Trump set out a plan to impose tariffs on imports, a move analysts and economists said could weigh on growth. The concern is both businesses and consumers would face higher costs -- a scenario that might hurt corporate earnings.

Over the past few weeks, though, certain positive elements have helped the S&P 500 (SNPINDEX: ^GSPC), the Dow Jones Industrial Average (DJINDICES: ^DJI), and the Nasdaq Composite (NASDAQINDEX: ^IXIC) to rebound. The U.S. reached initial trade deals with the U.K. and China, and the U.S. temporarily exempted the high-growth area of electronics from import tariffs.

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Of course, uncertainty still remains. A federal court ruling recently halted Trump's tariffs, but an appeals court then ruled the U.S. could continue collecting duties. And this legal battle may continue. Meanwhile, tensions between the U.S. and China just intensified again as the U.S. said China breached their trade agreement.

But these latest events could be temporary disturbances and might not hold indexes back for very long. And artificial intelligence (AI) stocks could be the first to benefit, considering the growth potential of that market -- analysts expect it to surpass $2 trillion by the early 2030s. So, if you're bullish on a 2025 rebound, consider these three AI stocks to buy.

1. Advanced Micro Devices

Nvidia dominates the AI chip market, but that doesn't mean there isn't room for other winners. And one that's showing potential is Advanced Micro Devices (NASDAQ: AMD). This chip designer is on the way up, offering an AI chip -- MI300X -- that may not beat Nvidia's top chip, but still offers customers quality performance.

Customers are realizing this, helping AMD's data center revenue to soar 57% in the recent quarter. Year-over-year growth accelerated for the fourth straight quarter, even against the backdrop of a complex economic environment, CEO Lisa Su said. This was done at increasing profitability on sales, with non-GAAP (generally accepted accounting principles) gross margin expanding to 54% from 52% in the year-earlier period.

AMD also is a leader in the central processing unit (CPU) market -- these are the main processors found in standard computers -- and recently gained more than 16% in CPU market share, bringing it close to beating Intel in that market, according to Wccftech.

AMD trades for 27x forward earnings estimates, down from 54x less than a year ago, yet revenue has climbed significantly -- so now looks like a great time to buy.

AMD PE Ratio (Forward) data by YCharts

2. Broadcom

Broadcom (NASDAQ: AVGO) is a networking expert, selling a wide range of products used anywhere from your smartphone to data centers. And speaking of data centers, they're driving growth for the company now as demand from AI customers soars.

In the most recent quarter, the company's AI revenue surged 77% to $4.1 billion, and consolidated revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached record levels. Importantly, the momentum looks set to continue. Broadcom forecast $4.4 billion in AI semiconductor revenue for the second quarter, saying this will be driven by big cloud service providers as they pile into connectivity solutions.

Broadcom also predicted its three major cloud customers will result in a serviceable addressable market of $60 billion to $90 billion in fiscal 2027. And this doesn't even include four other big customers working with Broadcom to develop AI accelerators.

Broadcom stock is trading close to its all-time high, but considering the AI growth ahead and its valuation of 36x forward earnings estimates, there still is room for the stock to run -- and it may gather momentum as the indexes rebound.

3. Oracle

Oracle (NYSE: ORCL) once was mainly known for its database management platform, but in recent times, it's become a significant player in the AI story. This tech giant offers a broad and flexible range of cloud solutions and has seen AI cloud infrastructure revenue take off in recent quarters -- in the most recent period, it soared nearly 50%.

The company's record level of sales contracts in the quarter offer us visibility on what's ahead, and there's reason to be optimistic: This $48 billion in contracts helped remaining performance obligations, or revenue to expect from these deals, to climb 63% to $130 billion.

On top of this, Oracle is involved in the Stargate project to build out AI infrastructure in the U.S., and the company also is playing a key role in an international Stargate effort. Along with partners including AI chip giant Nvidia, Oracle will help build a Stargate campus in the United Arab Emirates.

As for valuation, Oracle looks reasonably priced, trading at 27x forward earnings estimates, considering these catalysts for growth that could push the stock higher in the months and quarters to come. So, if indexes rebound in 2025, Oracle may be one of the big winners.

Should you invest $1,000 in Advanced Micro Devices right now?

Before you buy stock in Advanced Micro Devices, 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 Advanced Micro Devices 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!*

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Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Oracle. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Shares of Tempus AI (NASDAQ: TEM) are falling on Wednesday. One of Cathie Wood's largest holdings, the company's stock plummeted 18.7% as of 2:15 p.m. ET. The collapse comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) were mostly flat.

Tempus, a "precision medicine" company that leverages artificial intelligence (AI) to better treat patients, was the target of a short report from short-seller Spruce Point Capital Management that alleges the stock has as much as a 60% downside.

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Tempus faces significant allegations

The report, released as the market opened today, outlines Spruce's allegations. The most damning of these include a history of company leadership, especially founder Eric Lefkofsky, creating advanced technology companies that make bold claims they often fail to back up. The report says that the leadership exits the companies, having made millions, early, leaving shareholders with losses or "lackluster" returns.

The report also alleges that Lefkofsky and Tempus leadership are misleading the public as to their use of AI. The report states that just before the company IPO'd, as AI hype was peaking, the company rebranded from Tempus Labs to Tempus AI. Despite its centrality in the company's new name, branding, and public statements, only 2% of its 2024 revenue came from AI applications. The report alleges that Tempus' actual ability to utilize AI is vastly overstated.

There is reason to be skeptical

While there are many more allegations -- like accounting irregularities and weakening relationships with core customers like AstraZeneca -- it's important to take it with a grain of salt. The short-seller has a financial stake in seeing Tempus' stock price decline. Still, the report is convincing, and even if most of the allegations prove untrue, I agree with its final assessment that the stock is already overpriced. I would stay away from Tempus, even if it is one of Cathie Wood's favorites.

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

Before you buy stock in Tempus Ai, 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 Tempus Ai 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

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

Shares of Navitas Semiconductor (NASDAQ: NVTS) are skyrocketing on Thursday. The company's stock soared an incredible 156% as of 1:57 p.m. ET, and as much as 161.8% earlier in the day's trading. The remarkable gain comes as the S&P 500 (SNPINDEX: ^GSPC) gained 0.2% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jumped 0.6%.

The semiconductor company announced a new partnership with artificial intelligence (AI) chip giant Nvidia after the market closed yesterday.

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A massive partnership

Navitas announced Wednesday that Nvidia has selected the company to help power its next-generation AI data center systems that will include the much anticipated Rubin chips, the upcoming successor to its current, industry-leading Blackwell chips.

Navitas says its gallium nitride (GaN) and silicon carbide (SiC) technologies will help Nvidia solve key scaling issues with its power supply for the incredibly powerful AI-enabling chips. The technologies create "high-efficiency, scalable power delivery for next-generation AI workloads, ensuring greater reliability, efficiency, and reduced infrastructure complexity."

A major validation

The deal is important not just because it will bring in significant revenue, but because in partnering with the world's leading AI chipmaker, Navitas' technology is validated to the entire industry.

Gene Sheridan, CEO of Navitas, said, "We are proud to be selected by Nvidia to collaborate on their 800 HVDC architecture initiative," adding, "Our latest innovations... have created new inflections into markets such as AI data centers and electric vehicles."

I think Navitas stock is worth owning; this seal of approval from Nvidia is a game changer, and the company's balance sheet is solid, with minimal debt.

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

Before you buy stock in Navitas Semiconductor, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

In recent days, investors have breathed a sigh of relief. After weeks of concerns about the impact of President Donald Trump's import tariffs, a reason for optimism emerged. The U.S. and China -- the country subject to the highest tariffs -- reached an initial agreement, and one that was better than expected. As a result, the three major benchmarks climbed, with the S&P 500 (SNPINDEX: ^GSPC) even returning to positive territory for the year.

However, amid this excitement about a better situation ahead, billionaire Jamie Dimon remains somewhat cautious. The chief executive officer of JPMorgan Chase in a Bloomberg interview said despite the tariff deal, a recession isn't "off the table at this point." Though the bank's economists lowered their U.S. recession risk forecast to below 50% from 60%, Dimon said current uncertainties such as large deficits and high interest rates could weigh on the economy -- and that market volatility probably isn't over.

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"I think it's a mistake to think we can go through all the things we're going through, and the volatility itself will come down," Dimon told Bloomberg during the bank's conference in Paris.

As CEO since 2005, Dimon has accompanied JPMorgan as its market value soared more than 400% to $743 billion, and he's often looked to for his comments on the general stock market environment to come.

Moving forward, if Dimon is right, the market still may face some challenges even after this week's landmark agreement between the U.S. and China. And that's why it's important to prepare your portfolio to handle any environment. Here are five ways to do just that.

1. Favor diversification

If your portfolio is heavily exposed to just one company or industry -- even if it's a winning one today -- now is a great time to adjust your strategy. We've seen in recent weeks that even the strongest companies -- such as artificial intelligence (AI) chip giant Nvidia -- saw their shares drop amid general tariff and economic concerns. So it's never a good idea to place narrow bets when investing in stocks.

Instead, include at least a few industries and eventually several stocks in your portfolio, so if one faces troubled times, the others may compensate. And if you're not as knowledgeable as you'd like to be about a certain industry that you'd like to invest in, don't worry: There's a simple solution. Try an exchange-traded fund (ETF) revolving around that particular industry. It will offer you immediate diversification and exposure to top companies in the field.

2. Invest in companies that have proven themselves

Well-established companies with a long track record of earnings growth over the years are your best friends during uncertain times. They've proven their ability to handle challenges -- so if their financial situations and strategies haven't significantly changed, there's reason to be confident they can do it again.

An example is Amazon (NASDAQ: AMZN). The e-commerce and cloud computing giant struggled with higher inflation a few years ago and even shifted to an annual loss. But the company didn't sit still, and instead used this as an opportunity to revamp its cost structure -- a move that led it back to profitability a year later and continues to make this market giant more efficient.

So, it's worth looking at how a company has managed past difficulties, and those that have excelled may be great candidates for your buy list.

AMZN Net Income (Annual) data by YCharts

3. Buy dividend stocks

No matter what the market is doing in a given year, your portfolio still could deliver some gains if you invest in dividend stocks. These players offer you passive income just for owning the shares. This is something you'll particularly appreciate when the market is down.

How to choose a top dividend company? Look to the list of Dividend Kings, which includes companies such as Coca-Cola, Johnson & Johnson, and many others across sectors. These companies have boosted their dividend payments for at least the past 50 years, a sign that rewarding shareholders is important to them. So you can buy with confidence that these payments likely will continue well into the future.

4. Commit to an asset that's always won over time

It's impossible to predict the future with 100% accuracy. But one particular asset always has won over time, suggesting it could continue along this path. And this is the stock market as a whole -- from the S&P 500 to the Dow Jones Industrial Average (DJINDICES: ^DJI) and the Nasdaq Composite (NASDAQINDEX: ^IXIC). After each past decline, the indexes have gone on to advance over time.

^SPX data by YCharts

To benefit from this, commit to an asset that tracks one of the three major benchmarks. An example is the Vanguard S&P 500 ETF (NYSEMKT: VOO). The purchase will offer you instant diversification as well as a great chance of scoring a win -- as long as you hold on for the long term.

5. Focus on the long term

It may be very tempting to get in on the trendy stock of the moment and sell it a few weeks later for a profit. But it doesn't always work out that way. In many cases, a few weeks after your purchase, instead of gains, you may see losses -- at least on paper. That's all part of the short-term investing routine, and that puts the pressure on you to "time the market."

But I've got good news for you: You don't have to worry about all of that when you invest for the long term -- and through long-term investing, you may set yourself up for an even bigger win. How to do it? Buy quality stocks with bright future stories when they're trading for reasonable prices -- and hold on for at least five years.

You may experience ups and downs, but you won't have to worry about an economic downturn or recession wiping out your gains. By sticking with solid players throughout business and market cycles, you're likely to position yourself for a win over the long run.

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 $349,648!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,142!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $635,275!*

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.

See the 3 stocks »

*Stock Advisor returns as of May 12, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Wall Street hasn't been hurting for catalysts of late. Following a nearly two-and-a-half-year climb in the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC), which was spurred by the rise of artificial intelligence (AI), investors have been hypnotized in 2025 by President Donald Trump's ever-changing tariff policies, wild swings in Treasury bond yields, and the return of stock-split euphoria.

But it's fair to question whether Wall Street and the investing community are missing the bigger picture: The U.S. economy.

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 »

Although the economy and stock market aren't tied at the hip, corporate earnings often ebb and flow with the domestic economy. According to one recession forecasting tool, which hasn't been wrong in 59 years -- and has only been incorrect once when back-tested to 1959 -- things may not be as rosy for the U.S. economy and stock market as they appear on the surface.

It's been 59 years since this recession indicator wasn't accurate

There isn't any data point or forecasting tool on the planet that can guarantee what's going to happen next with the U.S. economy and/or Wall Street. But there are select metrics, forecasting tools, and events that have strongly correlated with directional moves in the Dow, S&P 500, and Nasdaq Composite throughout history. For instance, notable declines in M2 money supply have historically led to economic downturns and tough times for Wall Street.

Perhaps Wall Street's biggest concern at the moment has less to do with Trump's tariff policies, and everything to do with what the Federal Reserve Bank of New York's recession probability tool says comes next.

The New York Fed's recession predicting tool analyzes the spread (difference in yield) between the 10-year Treasury bond and three-month Treasury bill to calculate how likely it is that a recession will take shape over the next 12 months.

In a healthy economy, the Treasury yield curve slopes up and to the right. This is to say that longer-dated bonds maturing in 10 to 30 years sport higher yields than Treasury bills maturing in a year or less. The longer your money is tied up in an interest-bearing asset, the higher the yield should be.

When the yield curve inverts is where trouble starts brewing. This is where short-term Treasury bills have higher yields than long-term Treasury bonds. It's typically an indication that investors are worried about the outlook for the U.S. economy.

The only false positive for the New York Fed's recession probability tool occurred in 1966. U.S. Recession Probability data by YCharts. Gray areas denote U.S. recessions.

The New York Fed's recession probability forecast is updated on a monthly basis, with the May 2025 update pointing to a 30.45% chance of a U.S. recession taking shape by April 2026. While this is well off the 2023 high of a greater than 70% chance of a recession occurring -- this was the highest reading in four decades -- every probability reading above 32% since 1966 has eventually been followed by a U.S. recession.

But there's more to this correlation than simply looking at recession probability percentages. More often than not, previous recessions didn't materialize until the yield curve un-inverted and began moving sharply higher. You can see this dynamic in the 10-year and three-month Treasury spread comparison below.

10 Year-3 Month Treasury Yield Spread data by YCharts. Gray areas denote U.S. recessions.

Since we're coming off the steepest inversion of the 10-year/three-month yield curve in four decades, it's only natural that it's taken a bit longer for the yield curve to attempt to right itself. This un-inversion of the yield curve, coupled with the history behind the New York Fed's recession probability tool, strongly points to a U.S. recession taking shape.

It's worth noting that the initial read of U.S. first-quarter gross domestic product (GDP) showed a 0.3% contraction in the economy. While this is notably better than what the Federal Reserve Bank of Atlanta's GDPNow model had been forecasting, in terms of the U.S. economy shrinking, it still aligns with the New York Fed's recession indicator potentially being right.

Based on an analysis from Bank of America Global Research, around two-thirds of the S&P 500's peak-to-trough drawdowns between 1927 and March 2023 occurred during, not before, U.S. recessions.

Economic and stock market cycles aren't linear, which is actually fantastic news

Seeing a highly successful predictive indicator forecast a recession may not be what you, as an investor and/or working American, want to hear. But the pendulum for economic and stock market cycles swings in both directions -- and quite disproportionately.

Regardless of fiscal and monetary policy, recessions are normal, healthy, and inevitable aspects of the economic cycle. While higher unemployment and weaker wage growth often accompany recessions, economic downturns are perhaps best known for being short-lived.

In the nearly 80 years since World War II ended, the U.S. economy has navigated its way through a dozen official recessions. The average length of these 12 economic downturns is just 10 months, with none surpassing 18 months in length.

On the other hand, the typical period of growth for the U.S. economy is roughly five years over the same timeline. The economic boom-and-bust cycle is anything but a mirror image, and it explains why the U.S. economy has grown noticeably over the long run.

This wide disparity between optimism and pessimism can also be observed on Wall Street.

It's official. A new bull market is confirmed.

The S&P 500 is now up 20% from its 10/12/22 closing low. The prior bear market saw the index fall 25.4% over 282 days.

Read more at https://t.co/H4p1RcpfIn. pic.twitter.com/tnRz1wdonp

-- Bespoke (@bespokeinvest) June 8, 2023

In 2023, the analysts at Bespoke Investment Group published a data set to social media platform X that compared the length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929.

Bespoke found that the average bear market downturn in the benchmark S&P 500 lasted 286 calendar days, or approximately 9.5 months. The data set also shows that the lengthiest bear market on record was 630 calendar days during the oil embargo of the mid-1970s.

On the other hand, the average bull market has stuck around for 1,011 calendar days spanning nearly 94 years. What's more, if the current bull market for the S&P 500 were extrapolated to the present day, more than half of all bull markets since September 1929 (14 out of 27) would have lasted longer than the lengthiest bear market.

It simply doesn't make much sense for investors to become too preoccupied with short-lived downturns when historical data conclusively shows that the U.S. economy and stock market spend a disproportionate amount of their time in the proverbial sun.

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

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

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.

XRP (CRYPTO: XRP) is surging on Thursday. The price has risen 6% in the last 24 hours as of 2:17 p.m. ET. The move comes as the S&P 500 (SNPINDEX: ^GSPC) gained 1.1% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 1.7%.

Multiple positive developments are driving Ripple's token higher.

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 »

Trump trade deal boosts market sentiment

President Trump announced today that a trade deal has been reached with the U.K., the first since Trump's sweeping tariffs were announced in April. Investors across the market reacted positively. The details are light, and the deal has yet to be finalized, but the move indicates a resolution to the trade war could be coming. The uncertainty sparked by Trump's tariffs has hit speculative assets like XRP especially hard, so investors were pleased to see positive movement.

Bitcoin milestone fuels market-wide euphoria

Likely as part of the renewed optimism following the trade deal news, Bitcoin crossed the $100,000 threshold once again. The six-figure mark is a psychological barrier, and its crossing sparked a rally across crypto. As it often does, XRP followed closely behind Bitcoin's movements.

Coinbase makes a huge purchase

In the meantime, Coinbase announced today it will acquire Deribit, the world's largest cryptocurrency derivatives platform. The approximately $2.9 billion deal was viewed across the market as positive for crypto at large and a sign of the growing maturation of the industry, sending XRP and other cryptos higher.

XRP is overvalued

While the positive news across the market helped boost XRP, I have my doubts. To be sure, it is a crypto with real-world utility already in widespread use, and in a world of meme coins, that is worth something. The SEC could also soon grant issuers the green light to begin offering a spot XRP ETF, no doubt a positive catalyst.

Regardless, with a market capitalization of over $130 billion, I believe it is overvalued.

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

Before you buy stock in XRP, 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 XRP 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 $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and XRP. The Motley Fool has a disclosure policy.