Just when some were thinking the artificial intelligence (AI) trade was dead, Nvidia (NASDAQ: NVDA) and other big tech stocks knocked their earnings reports out of the park. The fact is that investment in AI technology, data centers, and other infrastructure is booming with no end in sight.

Just last week, Amazon (NASDAQ: AMZN) announced plans to invest another $10 billion in new data centers in North Carolina. Big Tech companies are expected to spend $325 billion this year, a significant increase over the $223 billion invested in 2024. Far from being over, investment in AI is just getting started.

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As you can see below, the AI market is poised to experience significant growth through the end of the decade, and likely well beyond.

Here are two companies every tech investor should have on their radar.

Nvidia is still king

Nvidia's graphics processing units (GPUs) are critical infrastructure for data centers, and the big tech companies are battling to acquire as many as possible. For example, Elon Musk's xAI supercomputer initially started with 100,000 units, doubled this number to 200,000, and rumors suggest it plans to grow to 1,000,000 units in the future.

Projects like the one mentioned above for Amazon also require untold thousands of GPUs, and there are many of these projects in progress across the U.S. and the world. The incredible demand is not slacking and is the reason that Nvidia's results continue to dazzle.

Nvidia's data center revenue grew 73% year over year in the recently announced fiscal first quarter of 2026, reaching $39 billion, while total sales increased to $44 billion, representing 69% growth. As shown below, Nvidia's revenue and cash flow growth over the last few years is nothing short of incredible.

NVDA Revenue (TTM) data by YCharts

There is no indication that the growth won't continue in earnest. Nvidia expects $45 billion in sales for Q2 of fiscal 2026, representing a 50% year-over-year increase. The percentages decrease due to the laws of larger numbers; however, Nvidia will add $15 billion in total sales from Q2 of fiscal 2025 to Q2 of fiscal 2026 by achieving its target.

Nvidia stock currently trades with a price-to-earnings ratio of 46, well below its three-year average of 80. This drops to just 34 on a forward basis. While the exponential gains of the last few years may be over, Nvidia stock will still likely outpace the market, given the high demand for its products and its superior growth rate.

Don't sleep on Amazon's prospects

Pop quiz, investors. What is the biggest challenge that AI faces? If you said managing, processing, and securing data, you are correct! In fact, as shown below, all of the largest challenges center around data in one form or another.

This means that cloud providers, like Amazon Web Services (AWS), the largest cloud services provider on Earth, have massive growth runways as AI adopters seek data services. AWS is the straw that stirs Amazon's drink, as it accounts for the majority of its profits. In Q1, AWS provided 63% of Amazon's $18.4 billion in operating profits. Sales reached $29 billion, driven by robust 17% year-over-year growth, and the operating margin was impressive at 39%, demonstrating that AWS has excellent pricing power.

Amazon's other revenue streams also posted strong results. Digital advertising stood out with 19% year-over-year growth to $14 billion in Q1 sales. Overall, Amazon achieved 9% total sales growth, with total revenue reaching $156 billion. Net income increased to $17 billion from $10 billion in the same period last year.

The results are simply too good to be ignored. Amazon stock is historically undervalued, despite its stock price being on a general upward trajectory, as shown below.

AMZN data by YCharts

AWS will thrive in the age of artificial intelligence, and so will Amazon. This appears to be an excellent opportunity for investors to purchase shares that are at least fairly valued, and possibly undervalued.

The AI industry is growing rapidly, and these industry titans will continue to benefit tremendously. Economic policy, such as tariffs, remains a wild card that investors should keep an eye on; however, the economy is proving quite resilient, and companies like Nvidia and Amazon are excellent long-term investments that will appreciate long after the tariff drama has run its course.

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 $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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bradley Guichard has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.

Amazon (NASDAQ: AMZN) has been one of the best investments anyone could've made. In the past 20 years, shares have catapulted 11,270% higher (as of June 3). A $10,000 investment would've turned into more than $1.1 million today. That's life-changing wealth.

As of this writing, this "Magnificent Seven" stock trades 15% off its peak from early February. Now might be a great time to add this dominant enterprise to your portfolio. Here's why Amazon shares still look like a long-term winner.

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Amazon has numerous avenues for growth

Investors prefer to own companies that exhibit solid growth, thanks to the presence of a powerful secular trend. Amazon stands out above the crowd because it has multiple tailwinds working to its benefit.

We all know about the massive online marketplace, which makes Amazon a leader in the e-commerce niche of the broader retail sector. According to data from the Federal Reserve Bank of St. Louis, physical shopping in the U.S. still represents 84% of the industry, providing Amazon with a durable opportunity to capture in the decades ahead.

Amazon Prime membership is estimated to have 220 million subscribers worldwide, providing recurring and predictable revenue for the business. People can buy items with fast and free delivery, get savings on gas, and watch shows and movies. Consequently, the rising popularity of streaming entertainment should make Prime a compelling service for more people.

Advertising might fly under the radar, but that should change. In the first quarter, digital advertising contributed $13.9 billion to Amazon's revenue. That sales figure increased 19% year over year. Amazon.com counted 2.6 billion visitors in April, so there's plenty of attention that can be monetized.

Amazon also has a budding presence within healthcare. Amazon One Medical is a primary care service offering in-person and telehealth appointments to patients. There's also Amazon Pharmacy, which can deliver medications at discounted prices.

AWS has become a high-powered business

One important secular trend that hasn't been mentioned here yet is cloud computing, a market poised to register fantastic growth going forward. CEO Andy Jassy says that 85% of IT spending is still on-site, which introduces a truly massive opportunity as these companies shift to off-premises and take advantage of the cloud.

Enter Amazon Web Services (AWS), which continues to be a significant growth engine, reporting a 17% revenue gain in Q1. In the past 12 months, AWS raked in a whopping $112 billion in sales, making it the leader in the global cloud market.

It's also bolstering the bottom line. Operating income came in at $11.5 billion for AWS during Q1, translating to a remarkable operating margin of 39.5%. It has required substantial investments to get to this point, but now AWS can leverage its expense structure to generate sizable profits.

With AWS, Amazon also has a critical platform to launch various artificial intelligence (AI) tools for its customers. "Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we've only fantasized," Jassy said.

Valuation and earnings create upside

While Amazon certainly proves that it's a wonderful company, it's important for investors to look at the stock's valuation as well. If you pay too much, no matter how great a business it is, returns going forward can disappoint.

Amazon shares trade at a forward price-to-earnings (P/E) ratio of 33.3. On the surface, this doesn't exactly look like a bargain. However, when you realize that net income soared 77% between 2021 and 2024, and that the analyst community sees earnings per share rising 62% from 2024 to 2027, it's easy to be bullish.

Amazon has been a fantastic stock to own in the past, and it can still be a long-term winner in the future.

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

Before you buy stock in Amazon, consider this:

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

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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Any negative Nellie can find things to dislike about Amazon (NASDAQ: AMZN). The stock remains down by a double-digit percentage below its previous high. The company could face a bumpy road if the Trump administration's steep tariffs remain in place. The Federal Trade Commission and 17 state attorneys general are going after Amazon in court for alleged monopolistic practices.

However, I think Amazon's positive Pollys have a stronger case than the negative Nellies. The e-commerce and cloud services giant's overall future remains bright, in my view. Here are seven reasons to buy Amazon stock like there's no tomorrow.

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1. AI is only in its early innings

While artificial intelligence (AI) has impacted the world tremendously already, the technology is still only in its early innings. This bodes well for Amazon. Why? It's the world's largest cloud services provider, and AI will run primarily in the cloud.

I think Amazon is well-positioned to be a big winner as agentic AI hits its stride. The company should also profit hugely if and when artificial general intelligence (AGI) is ready, especially if Anthropic (an AI pioneer in which Amazon has invested heavily) emerges as an AGI leader.

2. E-commerce still has massive growth potential

Amazon generates most of its revenue from e-commerce. Although e-commerce isn't as big a growth driver for the company as its cloud business, it still has massive growth potential.

How much could Amazon's e-commerce business grow? CEO Andy Jassy noted in the company's October 2024 quarterly update that Amazon's share of the global retail market is only around 1%. Between 80% and 85% of that retail market is still in brick-and-mortar stores, with e-commerce making up the rest. Jassy predicted that this "equation is going to flip in the next 10 to 20 years." If he's right, Amazon should be one of the biggest beneficiaries.

3. Multiple other growth opportunities

AI and e-commerce aren't Amazon's only growth opportunities. The company has multiple "other bets" (to borrow a phrase from another giant AI leader) that could drive long-term growth.

Healthcare ranks as one of Amazon's most important areas for growth, thanks to its expansion into the online pharmacy and healthcare provider markets. The company's Project Kuiper satellite network could begin providing internet service later this year. I think Zoox, Amazon's autonomous ride-hailing business, could also move the needle over the long term.

4. An impressive financial pedigree

It takes money to make money. And Amazon has a lot of money. The company's cash stockpile tops $94 billion. Amazon's revenue continues to grow. Its profits are growing even more quickly, soaring 64% year over year in the latest quarter. Amazon is well-positioned to invest in future growth.

5. A culture of innovation

Amazon founder Jeff Bezos instilled a start-up mindset among employees that remains in place today, even though the company is now valued at around $2.2 trillion. He referred to this as a "Day One" culture. Amazon continues to look for new ways to innovate and new opportunities to grow.

Jassy expanded on this "Day One" perspective in his latest letter to shareholders. He wrote that Amazon also has a "why culture." Jassy explained that the company's employees "have to constantly question everything around us." He said that asking "why" has led to the major innovations that have led to Amazon's growth, from shifting from selling only books to selling all types of products to launching Amazon Web Services.

I think Amazon's culture of innovation, based upon thinking like a start-up and continually asking why, will lead to more game-changing products and services in the future.

6. A historically attractive valuation

At least at first glance, Amazon stock doesn't look like much of a bargain. The company's shares trade at nearly 34 times trailing 12-month earnings and more than 32 times forward earnings.

However, Amazon's valuation looks attractive compared to its historical levels. The stock is cheaper now than it's been since early 2009, when the U.S. economy began recovering from the Great Recession.

AMZN PE Ratio data by YCharts

7. There is a tomorrow

Probably the best reason to buy Amazon stock like there's no tomorrow is that there is a tomorrow. Any challenges that the company faces from tariffs and macroeconomic uncertainty will be only temporary. Amazon has proven to be remarkably resilient in the past. It will almost certainly continue to be resilient in the future. If you're a positive Polly about Amazon, I suspect you'll make plenty of money over the long term.

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

Before you buy stock in Amazon, consider this:

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

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

Shopify (NASDAQ: SHOP) has been a massive winner over the last decade, delivering a mind-blowing 3,664% return (as of writing) since going public in 2015.

While long-term investors have benefited enormously from this rise, potential investors wonder if Shopify is a worthy stock to add to their portfolio today.

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This article aims to explore the opportunities and risks associated with owning the stock over the next few years, helping investors make an informed decision.

Bull case:

Shopify has been an unusual company, as it competes against Amazon in the competitive e-commerce industry, yet has remained hugely successful over the last decade -- the secret lies in Shopify's unique business model.

As a start, Shopify is a software-as-a-service company focusing on enabling merchants to sell their products anywhere and everywhere. So the idea is that with the tools that Shopify offers, any seller can quickly set up an online store to sell their products globally, or employ the company's hardware-software solution (such as POS system) to sell in a brick-and-mortar store, or do both concurrently (omnichannel). In other words, Shopify aims to be the preferred partner for merchants, benefiting only when they are successful.

Shopify's fee structure further amplifies its focus on merchant success. With a monthly subscription fee of $29 for its basic plan, a new merchant can open an online store with plenty of softer tools at their disposal to make their first sale. Beyond that, Shopify takes a transaction fee ranging from 0.2% to 2% for each successful sale, aligning its interest with the seller's success.

This win-win arrangement helps explain Shopify's sustainable growth over the years. When merchants become successful using Shopify, new sellers get motivated to start their entrepreneurial journey using Shopify's platform. Besides, successful merchants contribute more revenue to Shopify and are also likely to become loyal customers.

And that brings up another key point to highlight about Shopify, namely its recurring revenue nature. For the year ending Dec. 31, 2024, the tech company had $178 million in monthly recurring revenue, or $2.1 billion annually, from its monthly subscription fees.

This revenue is extremely sticky and likely to continue growing over time. The rest of Shopify's revenue is correlated with its gross merchandise value (GMV), which is also recurring, provided that it continues to help merchants sell more products over time. For perspective, GMV grew by 26% in 2024, demonstrating the company's continued growth momentum.

Shopify's solid business model makes the company extremely attractive to investors, especially considering the vast growth opportunities ahead, both locally (in online and offline retail) and internationally. If the company can remain focused on delighting its users, it is likely to attract and retain more successful sellers over time.

Bear case:

While there is plenty to like about Shopify, investors must also consider the downside risk of owning the stock.

One thing to note is that as Shopify continues to grow in size, it may struggle to sustain its historically high growth rates, even though it is likely to continue growing at respectable rates.

For instance, Shopify experienced explosive growth during the pandemic as online sales penetration skyrocketed. However, that tailwind has faded, creating some challenges for the company during the later-pandemic period. The silver lining is that Shopify has expanded beyond its online roots to offer omnichannel solutions for merchants, allowing it to continue growing its total retail market share through its brick-and-mortar solutions.

Besides, as Shopify scales, it will inevitably gain more attention from giants like Amazon, which will try to fend off the younger player from taking market share. With enormous resources (financial, human talent, and technology), Amazon could pose a threat to Shopify's ongoing expansion.

For example, Amazon could offer a more comprehensive set of tools (including logistics, cloud computing, and AI solutions, as well as advertising) to attract key Shopify merchants to its marketplace.

Beyond competition risk, Shopify is increasingly facing macro risks, especially now that it has sellers globally. The recent tariff war has become increasingly burdensome for small and medium-sized sellers to conduct business, which could lead to either lower sales volumes or even the outright closure of their businesses.

If merchants suffer, Shopify will feel the pain since its revenue is closely tied to merchants' success.

It doesn't help that Shopify's stock trades at a significant premium, posing substantial rerating risks if the company fails to meet investors' expectations. As of the time of writing, Shopify's stock trades at a price-to-earnings (P/E) ratio of 110, a high figure by any standard.

What it means for investors

Shopify has a solid track record of execution and growth, leveraging its business model and customer-obsessed culture. These advantages strategically position it to sustain its growth momentum.

Still, investors should not expect a smooth ride, as the tech company must fend off competitors while navigating turbulent macroeconomic situations, such as tariffs. And with the stock trading at premium levels, buying the stock today is not for the faint-hearted.

Only those with a long time horizon (more than five years) and a strong conviction should consider buying the stock.

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

Before you buy stock in Shopify, consider this:

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

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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.

Many hypergrowth tech stocks skyrocketed during the buying frenzy in meme stocks throughout 2020 and 2021. But in 2022 and 2023, many of those stocks stumbled as interest rates rose. Some bounced back in 2024 as interest rates declined, but cooled again this year as the Trump administration's tariffs, trade wars, and other unpredictable headwinds rattled the markets.

However, a lot of those hypergrowth plays are still built for long-term growth. So if you can stomach a bit of near-term volatility, these three stocks -- Pinterest (NYSE: PINS), AppLovin (NASDAQ: APPS), and CrowdStrike (NASDAQ: CRWD) -- might just be worth accumulating throughout the rest of the year.

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 »

1. Pinterest

Pinterest carved out its own niche in the crowded social media market with its virtual pinboards for sharing ideas, interests, and hobbies. That focus insulated it from the hate speech and misinformation that dogged other social media platforms, and its pinboards were a natural fit for digital ads and small digital storefronts.

Many retailers, like IKEA, have uploaded their entire catalogs to Pinterest's boards as "shoppable" pinboards.

From 2020 to 2024, Pinterest's year-end monthly active users (MAUs) increased from 459 million to 553 million, its annual revenue more than doubled from $1.69 billion to $3.65 billion, and the company finally turned profitable in 2024. Its MAUs grew 10% year over year to 570 million in the first quarter of 2025, which definitively deflated the bearish thesis that its popularity was just a pandemic-era fad.

Pinterest's recent growth was driven by its overseas expansion, new Gen Z users who curbed its dependence on older users, fresh video content, more e-commerce tools, and new artificial intelligence (AI)-driven recommendations, which crafted targeted ads based on its users' pinned interests. It should continue growing as it monetizes its overseas users more aggressively while deepening its lucrative advertising and e-commerce partnership with Amazon.

From 2024 to 2027, analysts expect Pinterest's revenue to grow at a compound annual growth rate (CAGR) of 14% and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to increase at a CAGR of 21%. It still looks cheap at 16 times this year's adjusted EBITDA -- and it could have plenty of room to grow as the social shopping market heats up.

2. AppLovin

AppLovin is a publisher of mobile games, but it also helps other developers monetize their apps with integrated ads. Most of its growth is now driven by the advertising business, which benefited from the growing popularity of its AI-powered AXON ad discovery services to help advertisers connect with potential customers.

To accelerate that expansion and evolution, the company acquired the mobile ad tech company MoPub in 2021 and the streaming media advertising company Wurl in 2022. It even placed a bid for TikTok's U.S. business, but that potentially transformative deal faces an uncertain future. AppLovin is also in the process of selling its slower-growth mobile gaming division to Tripledot Studios, and it could grow much faster and at higher margins once it closes that deal.

From 2020 to 2024, AppLovin's revenue more than tripled, from $1.45 billion to $4.71 billion. It slipped to a net loss in 2022, but turned profitable again in 2023. Its net profit more than quadrupled to $1.58 billion in 2024. Its robust profit growth and swelling market cap might even pave the way toward its eventual inclusion in the S&P 500.

From 2024 to 2027, analysts expect AppLovin's revenue and earnings per share to grow at a CAGR of 22% and 45%, respectively. The stock might seem a bit pricey at 51 times this year's earnings, but the rapid growth of its AI-driven advertising business should justify that higher valuation.

3. CrowdStrike

CrowdStrike is a cybersecurity company that eschews on-site appliances and offers its endpoint security tools only as cloud-native services on its Falcon platform. That approach is stickier and easier to scale, and it doesn't require any on-site maintenance or updates.

From fiscal 2021 to fiscal 2025 (which ended this January), CrowdStrike's annual revenue more than quadrupled from $874 million to $3.95 billion, while the percentage of customers using at least five of its modules (at the end of the year) rose from 47% to 67%. It's still not consistently profitable according to generally accepted accounting principles (GAAP), but its non-GAAP net income increased at an impressive CAGR of 99% during those four years.

From fiscal 2025 to fiscal 2028, analysts expect its revenue to grow at a CAGR of 22%. They also expect it to turn profitable on a GAAP basis in fiscal 2027 -- and more than triple its net income in fiscal 2028. That impressive growth trajectory should be driven by its continued disruption of on-site appliances, the expansion of its new AI-driven threat detection services, and a resolution of the legal and regulatory problems related to its widespread outage last July.

CrowdStrike's business is gradually maturing, and its stock might not seem like a bargain at 24 times this year's sales, but I think it remains one of the best cybersecurity plays for long-term investors.

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

Before you buy stock in Pinterest, 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 Pinterest 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, CrowdStrike, and Pinterest. The Motley Fool has a disclosure policy.

Walmart (NYSE: WMT) is the largest company in the world by sales, and it's held on to that status tightly, even as tech stocks have surged and the world has gone digital. Although Amazon, the second-largest company, keeps getting closer, Walmart's simple retail model beats out everyone else.

This kind of strength is something every investor should have in their portfolios, and Walmart is an excellent candidate. Here are three reasons to buy it today.

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1. It's safe

When the market is uncertain, it's the safe, established stocks that can tide your portfolio over. Investors have been pouring into Walmart stock, and it's crushed many growth stocks and the market itself over the past year as it's gained 47%.

Walmart's sheer size gives it an edge over its competitors. It has more than 10,500 global locations, including 4,600 in the U.S. alone. It's a discount retailer, so it appeals to customers at all times, but even more so when the economy is under pressure. It has tremendous leverage with suppliers, allowing it to play with price and change its supply chain when necessary.

Management said that with the new tariffs, it would have to raise some prices. But the company's exposure is limited, as most of its high-moving products are everyday essentials that it can easily keep flowing, with two-thirds of its product assortment already made in the U.S., and because it's a global company. In any case, Walmart has many levers to pull to offset the impact of new tariffs, such as shifting production to different regions and changing the materials it uses. Again, due to its scale and leverage, it can have suppliers make these changes.

It's also benefiting from some of its new businesses, such as a Prime-style membership program and advertising, which are high-margin and can make up some of the higher costs.

2. It's growing

Walmart has $685 billion in trailing-12-month sales, yet it still manages to report year-over-year growth consistently. Sales increased 4% (currency neutral) in the fiscal 2026 first quarter (ended April 30), and management expects sales to increase 3% to 4% for the full year as well.

The company constantly finds new ways to upgrade and boost sales. It recently launched a new line of premium products to attract a more upscale consumer, and it's still opening new stores. The advertising business, including the recently acquired Vizio ad-supported streaming, increased 50% year over year in the first quarter. This is an exciting new venture. Membership is also adding value, and membership fee income increased by 15% over this quarter last year.

One of its most compelling growth drivers lately has been e-commerce. Walmart was a bit behind the curve when e-commerce first exploded, losing significant ground to Amazon. But it's invested in its digital channels over the past few years and has a formidable program, including an edge over Amazon in using its thousands of stores for distribution and order fulfillment.

E-commerce sales increased 22% year over year in the first quarter, with a 21% increase in the U.S. and a 27% increase for the Sam's Club stores. Sam's Club represents its own opportunity as it continues to open stores across the globe.

3. It's reliable for passive income

Finally, Walmart is a Dividend King. That's an exclusive status given to stocks that have raised their dividends annually for at least 50 years, implying a rock-solid dividend and a growing check. Walmart has raised its dividend under all kinds of circumstances for the past 53 years, providing reliable passive income for retirees and other shareholders who count on it.

Walmart's 0.9% (at the current price) dividend isn't high-yielding. Its other qualities, though, are very attractive.

As the market continues to experience uncertainty, with no one knowing what lies ahead, Walmart stock can bolster your portfolio and create long-term shareholder value.

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

Before you buy stock in Walmart, 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 Walmart 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

When most investors are thinking about buying a particular stock, they'll start by looking at the underlying company's recent fiscal results. And to be fair, it's a sound approach. Although past performance is no guarantee of future results, that past gives us a reasonably good idea of what the future likely holds.

Still, sometimes we need to dig deeper and examine the qualitative things a company is doing that could alter its quantitative future.

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With that as the backdrop, although there's not much unpredictability with its business, Walmart (NYSE: WMT) and its stock are apt to be somewhere pleasantly surprising in the next three years. Here's why.

Meet the new-and-improving Walmart

Walmart is the world's biggest brick-and-mortar retailer, with 90% of U.S. residents living within 10 miles of one of its 4,600 domestic namesake stores, or one of its 600 Sam's Club warehouses. There are almost 5,600 other locations outside of the United States as well.

Last year this giant of a company did $681 billion worth of business, turning $19.4 billion of that into after-tax net income, and extending long-standing (even if occasionally bent and sometimes slow) growth trends. And yes, those numbers confirm the retailer continues to dominate at least North America's general merchandise and grocery retailing landscapes.

But the Walmart of yesteryear -- and even the Walmart of today -- isn't quite the Walmart you can expect come 2028. There are several initiatives underway right now that should be measurably more mature three years from now, each of which could make a positive impact on its top and bottom lines.

One of these initiatives is its nascent online advertising business.

If you ever shop at Walmart.com then you've seen advertisements, probably without even giving it a second thought. Every website runs ads these days, after all.

Except, Walmart isn't simply hoping to prompt you into making a purchase of something it's selling. Brands are paying Walmart to promote their particular goods online with these ads. The retailer did $4.4 billion worth of this high-margin advertising business, in fact, up 27% year over year, and bolstering the bottom line for an e-commerce platform Walmart was going to operate anyway. This still only scratches the surface of the opportunity, though. With an ever-growing amount of insight as to what works and what doesn't, this advertising revenue's growth accelerated to a pace of 31% year over year during the first quarter of this year.

While it's not clear exactly where the ceiling is for this business, eMarketer expects average annualized growth of 17.2% for the United States' entire retail media (digital advertising at retailers' e-commerce sites) business. That outlook bodes very well for Walmart.com's long-term ad business growth.

The mega-retailer isn't just looking to the U.S. as a growth engine, however. Indeed, Walmart seemingly understands that it's running out of places within the United States to establish profitable brick-and-mortar stores, having closed 11 of them last year. There's opportunity abroad, and the company is capitalizing on it more than you might realize. In 2023, management announced its goal to grow its international revenue from around $100 billion per year then to $200 billion annually by 2028. After last year's reported tally of $121.9 billion, that target doesn't seem so crazy after all.

Finally, while most investors can acknowledge Walmart has done the unthinkable by building a respectably sized e-commerce business in a market that's dominated by Amazon (NASDAQ: AMZN), they may be underestimating just how well it's doing online. Although the company itself doesn't disclose the specifics, consensus numbers provided by Statista suggest Walmart's worldwide annual online sales have soared from around $25 billion in 2019 to roughly $100 million last year.

That's still only a drop in the bucket, to be clear. Even within the all-important U.S, market, Walmart's 10.6% share of the e-commerce market is a distant second to Amazon's 39.7%, according to data compiled by industry research outfit Digital Commerce 360.

It's worth noting, however, that Walmart's share of the domestic online shopping market has more than doubled since 2017, while Amazon's share has barely budged. Clearly the company is doing something right.

And remember that each of these initiatives is still a work in progress. We're not yet seeing these efforts working at their eventual, refined best.

But tariffs? Arguably more bark than bite. The longer the standoff lingers, the clearer it becomes that President Donald Trump is posturing as a negotiation tactic. He wants trade to flow as freely as much as anyone.

What it means for revenue, earnings, and Walmart stock

So what does it mean for investors? It means don't be surprised if Walmart outperforms expectations over the course of the coming three years.

As of the latest look, the analyst community is calling for full-year revenue of $766 billion for the 12-month stretch ending in 2027. Extrapolating that annualized growth rate of 4% would put calendar 2028's top line in the ballpark of just under $800 billion. Using the same projection math, per-share earnings should swell from last year's $2.41 to roughly $3.60 for the same time frame. Not bad.

Just bear in mind that analysts could be underestimating Walmart's potential upside just as much as average individual investors are. Walmart's yearly sales growth rate has easily exceeded 6% in most years since 2021, and that's without all the growth weapons the company is successfully wielding now.

As for the stock, assuming its current earnings-based valuation of around 42 times its trailing per-share profits, Walmart stock could be priced around $144 three years from now. That's a 47% gain, or an average annualized improvement of roughly 15%.

Just don't get so enamored by the numbers that you look past the bigger and better reason to own a piece of this company (or any other). That is, Walmart is doing a lot of things right, leveraging its strengths while creating new ones. When an organization does that, everything else including progress from its stock tends to fall in line.

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

Before you buy stock in Walmart, 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 Walmart 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!*

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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. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

At the end of this year, Warren Buffett will be stepping down as Berkshire Hathaway's CEO. Buffett has built an incredible track record of success since taking over the business in 1965 and using it as the foundation for an investment conglomerate that would go on to become one of the world's largest and most successful companies.

Buffett mostly made his name and delivered fantastic returns for shareholders through the principles of value investing, but Berkshire has also come to have a larger exposure to technology trends and growth stocks in recent years. And in the tech space, no trend is bigger or more important than artificial intelligence (AI) right now. With that in mind, read on for a look at two stocks that account for roughly 22% of Berkshire Hathaway's $282 billion stock portfolio.

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1. Apple

Keith Noonan (Apple): With a market capitalization of $3 trillion, Apple (NASDAQ: AAPL) stands as the world's third-largest company, trailing only Microsoft and Nvidia. Coming in at 21.6% of Berkshire's total stock portfolio, it's also the investment conglomerate's single largest publicly traded company. It retains that distinction even though Buffett's company sold more than 600 million shares of Apple stock last year.

In general, Berkshire Hathaway has been reducing its stock holdings and building up its cash position recently. The move likely reflects concerns that the market at large has become expensive relative to the level of macroeconomic and geopolitical risks that Berkshire's analysts see on the horizon. On the other hand, the move to significantly reduce its Apple holdings likely reflects some specific concerns facing the business.

While Apple's leading position in mobile hardware gives it a strong foundation to build out its artificial intelligence (AI) business, the company also seems to be behind leading players including Microsoft, Alphabet, and Meta Platforms in some key respects. For example, Apple has reportedly had significant trouble getting its next-gen, AI-powered Siri platform up to the performance levels that developers were targeting.

Additionally, Apple is facing some significant challenges in the Chinese market. The rollout of the company's Apple Intelligence platform was delayed last year because Apple had not found a Chinese company to partner with to roll out the software locally. As a result, sales for the iPhone 16 were relatively soft in the market. The mobile hardware giant has now partnered with Alibaba Group Holding to make its AI software available, but Chinese customers are still showing increased preference for domestic technology brands -- and geopolitical dynamics could create continued headwinds.

Berkshire's move to reduce its position in Apple has meant that Buffett's company has also actually reduced its investment exposure to the overall AI trend. On the other hand, Apple has still retained its status as Berkshire's largest stock holding -- and it seems clear that Buffett remains a big fan of the business. Apple has yet to match the AI successes of some other top tech players, but the company's many strengths suggest it still has many opportunities to be a big winner in the space.

2. Amazon

Jennifer Saibil (Amazon): Amazon (NASDAQ: AMZN) makes up a small percentage of the Berkshire Hathaway portfolio, and Buffett didn't even buy it. He said that one of the portfolio's investing managers, Todd Combs or Ted Weschler, pushed the button on Amazon stock, because tech isn't really in his wheelhouse. However, he's also said that he made a mistake by not buying it earlier.

Amazon is so much more than AI, but generative AI is leading it forward today, representing its greatest growth opportunities. Amazon Web Services (AWS) is Amazon's cloud computing business, where much of the generative AI is taking place. It's the largest cloud services business in the world, with 30% of the market, according to Statista.

CEO Andy Jassy believes that very soon all apps will be built with a generative AI component, like databases and storage today. Most of that is going to be built on the cloud, and as the leader, Amazon will account for a vast amount of it. "Before this generation of AI, we thought AWS had the chance to ultimately be a multi-hundred-billion dollar revenue run rate business," Jassy said on a recent earnings call. "We now think it could be even larger."

To make that happen, Amazon offers the largest assortment of generative AI tools and services throughout the three layers of its program. The bottom layer is complete customization for its largest clients to build their own large language models (LLMs), the foundation of generative AI. The middle layer is semi-custom solutions through the Amazon Bedrock program, and Amazon offers several tools in the top layer for small businesses that need ready-made programs. These are tools like the ability to create full product descriptions based on prompts.

AWS already pulls more than its own weight for Amazon. Sales increased 17% year over year in the first quarter, making it the second-fastest-growing segment behind advertising, and it accounted for 63% of operating income.

Will Berkshire Hathaway buy more Amazon stock after Buffett steps down as CEO at the end of the year? It will be interesting to see whether or not the equity positions change without Buffett in the top spot.

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

Before you buy stock in Apple, 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 Apple 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 171% 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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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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in Apple. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Alibaba Group 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.

Shares of freight service veteran UPS (NYSE: UPS) are diving these days. The stock is down 24% in the last six months, building on a longer downturn that started in the inflation panic of 2022.

The steep price drop brought two investor-friendly qualities to UPS. First, this world-class company is hanging out in Wall Street's bargain bin at the moment. Second, the same stock price pressure drove UPS' dividend yield to record-breaking levels.

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 »

Read on to see why you should consider buying some UPS stock on the cheap in June 2025, locking in a great purchase price and a fantastic dividend payout.

UPS is stumbling in 2025 (but not falling flat)

It's fair to say that UPS has experienced some financial trouble recently. The pandemic e-commerce boom faded out. The inflation crisis accelerated the package-shipping slowdown. More recently, trade tensions between Washington and Beijing pose new threats to the shipping industry. UPS thrives on high consumer confidence and healthy global trade trends. The company suffers when those market qualities are headed in the wrong direction, as they are in 2025.

So yes, UPS is having some trouble. However, it is well equipped to handle these challenges.

Can UPS keep those juicy dividends coming?

Even in a painful downswing, UPS remains a very profitable business. The company generated $5.9 billion of net income over the last four quarters, converting 92% of the paper profits into free cash flows.

UPS spent all of the cash profits on dividend checks. That's hardly ideal, and the company doesn't have much room for dividend increases in this economy. At the same time, UPS has $5.1 billion in cash reserves and a rock-solid credit rating. The dividend looks safe from cash-preserving cuts in the foreseeable future.

Why UPS is shrinking its Amazon deliveries

And UPS isn't resting on its laurels. The company plans to boost its profitability over the next year by taking on a smaller number of low-margin shipments. The long-standing partnership with Amazon (NASDAQ: AMZN) is the main target for this cost-cutting effort, with shipments under the contract halving by the summer of 2026. The move will let UPS close 73 shipping centers and reduce its annual operating time by 25 million hours.

"Amazon is our largest customer but it's not our most profitable customer," CEO Carol Tom said in January's fourth-quarter earnings call. "Our contract with Amazon came up this year. And so we said it's time to step back for a moment and reassess our relationship. Because if we take no action, it will likely result in diminishing returns."

In other words, UPS is taking action to solidify its bottom-line profits. The helpful moves it makes in this challenging economy should translate into stronger earnings in the next macroeconomic upswing.

The long-term case for owning UPS

Investing is a marathon, not a sprint. UPS stock is cheap right now for short-sighted reasons. The company should thrive in the long run, equipped with a world-class shipment system and a proactive management team. By focusing on more profitable services, UPS could get back to generous dividend increases in 2026 and beyond.

And in the meantime, the dividend yield stands at an eye-popping 6.7%. It's nearly an all-time record for UPS, and one of the 10 most lucrative yields found in the S&P 500 (SNPINDEX: ^GSPC) index. Furthermore, UPS shares are valued at just 14.3 times trailing earnings and 0.9 times sales. These multiples are about half of their long-term averages and nearly equal to the all-time lows seen in the subprime mortgage meltdown of 2008.

Taken together, the rich dividend yield and affordable stock price add up to a great long-term investment. The UPS shares you buy in this temporary dip can help you build wealth in the long run.

Should you invest $1,000 in United Parcel Service right now?

Before you buy stock in United Parcel Service, 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 United Parcel Service 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 171% 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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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Amazon. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool has a disclosure policy.

In March 2020, I outlined where I thought tech giant Nvidia's business and stock would be in five years, or in March 2025. It's now a little past the five-year mark, so how did I do?

Overall, I'd give myself a B or a B+. I was mostly correct in my business predictions and accurate about what investors care about the most, the stock price: "I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade," I wrote.

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Indeed, from March 1, 2020 (when my five-year predictions article published) through March 1, 2025, Nvidia stock's total return was 1,760% -- nearly 15 times the S&P 500's return of 118%. In other words, Nvidia stock turned a $1,000 investment into a whopping $18,600 over this five-year period. (Nvidia stock's five-year return through the date of this writing, June 4, is a little lower, as the chart below shows. Shares are up since March 1; it's the change in the 2020 start date that slightly lowers their current five-year return.)

Nvidia stock's fantastic performance has largely been driven by the incredible demand for the company's graphics processing units (GPUs) and related technology that enable artificial intelligence (AI) capabilities.

Prediction 1: CEO Jensen Huang will still be leading the company

Status: Correct.

In March 2020, I wrote that "as long as [Huang] stays healthy, the odds seem in favor of his still being at Nvidia's helm in five years."

For context, Jensen Huang, who co-founded the company in 1993, turned 62 in February, according to public records.

Nvidia investors should certainly hope that Huang remains the company's leader for some time. As I wrote in June 2024:

Nvidia is many years ahead of the competition in AI-enabling technology thanks to Huang's foresight. Starting more than a decade ago, he began to steadily use profits from Nvidia's once-core computer gaming business to position the company to be in the catbird seat when the "AI Age" truly arrived.

Prediction 2: Nvidia will still be the leading supplier of graphics cards for computer gaming

Status: Correct.

Here's part of what I wrote in the March 2020 article:

Nvidia dominates the market for discrete graphics processing units (GPUs) -- the key component in graphics cards for desktop computer gaming. In the fourth quarter of 2019, the company controlled 68.9% of this market.

Nvidia has increased its leadership position over the last five years. In the fourth quarter of 2024, it had an 82% share of the desktop discrete GPU market, compared with longtime rival Advanced Micro Devices' 17% share, according to Jon Peddie Research. Intel, which entered this market in 2022, had a 1% share.

Growth in Nvidia's gaming market platform will be covered below.

Prediction 3: The global gaming market will continue its robust growth

Status: Correct.

In March 2020, I wrote: "In 2025, the gaming market should be much bigger [relative to 2020]."

By all counts -- the number of global gamers, total computer gaming market revenue, and computer gaming PC revenue -- the computer gaming market has grown solidly over the last five years.

And Nvidia has benefited nicely from this growth. In fiscal year 2020 (ended late January 2020), the company's gaming market platform generated revenue of $5.52 billion. In fiscal 2025 (ended in late January), this platform's revenue was $11.35 billion. This increase amounts to a compound annual growth rate (CAGR) of 15.5%.

This is strong growth for such a huge market. It might not seem so only because Nvidia's data center market platform's growth has been phenomenal over this same period.

In fiscal 2020, gaming was Nvidia's largest platform, accounting for 51% of its total revenue. In fiscal 2025, gaming was its second-largest platform behind data center, contributing about 9% of its total revenue.

Prediction 4: Nvidia's GPUs will still be the gold standard for AI training

Status: Correct.

In March 2020, I wrote:

The company's GPU-based approach to accelerating computing is considered the gold standard for DL [deep learning, the dominant type of AI] training, the first step in the two-step DL process. [The second step is inferencing.] This statement is extremely likely to hold true in 2025, in my opinion.

Since 2020, both AMD and Intel have launched GPUs for AI-powered data centers, but Nvidia's grip on this market -- which is growing like wildfire -- remains tight. IoT Analytics, a technology market research firm, estimates Nvidia had a 92% share of the data center GPU market in 2024.

As an added plus, since 2020, Nvidia's GPUs have gone from having very little share of the AI inferencing chip market to having the largest chunk of this market. Inferencing is the running of an AI application.

In fiscal 2020, Nvidia's data center platform's revenue was $2.98 billion. It skyrocketed to $115.2 billion in fiscal 2025, equating to about a 107% compound annual growth rate (CAGR). This amazing growth powered the data center to account for 88% of Nvidia's total revenue in fiscal 2025, up from 27% in fiscal 2020.

Prediction 5: The legalization of driverless vehicles will turbocharge its auto platform's growth

Status: My timeline was too optimistic.

In March 2020, I wrote: "In 2025, fully autonomous vehicles should be legal -- or very close to being so -- across the United States. Nvidia is well positioned to majorly profit from [this event]."

I wouldn't say that fully autonomous vehicles are "very close" to being legal across the U.S. This event seems at least a few years away. But I continue to believe this watershed event will "turbocharge" Nvidia's growth thanks to its widely adopted AI-powered DRIVE platform.

Prediction 6. The X factor

Status: Correct.

In March 2020, I wrote: "Nvidia is incredibly innovative, so there seems a great chance that the company will introduce at least one major new technology that takes nearly everyone by surprise."

Over the last five years, Nvidia has launched a good number of major new technologies that have likely taken most investors and Wall Street analysts by surprise.

One example is its Omniverse platform, which launched in 2021. This is a simulation platform that enables the creation of virtual worlds and digital twins. It's been widely adopted by a broad industry range of large enterprise companies -- including Amazon, PepsiCo, and BMW Group -- for uses such as designing products and optimizing facility workflow.

2020 article ending: And Nvidia's stock price in 2025?

Status: Correct.

Here's what I wrote in March 2020:

It's impossible to predict a company's stock price in five years because so many unknowns ... can have a huge influence on the market in general. That said, given the projections made in this article, I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade.

Stay tuned. I'm planning on a predictions article similar to my 2020 one. Hint: It's going to be optimistic, as Nvidia's highly profitable strong revenue growth is far from over, in my opinion.

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 $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.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Intel, and Nvidia. The Motley Fool recommends Bayerische Motoren Werke Aktiengesellschaft and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

For the last couple of years, it's been easy to group the "Magnificent Seven" together. These massive companies have become the dominant tech players and have taken advantage of artificial intelligence (AI) like no other group of companies in the market.

But once President Donald Trump took office and enacted sweeping tariffs, the group began to diverge based on how tariffs impacted their supply chains and the types of products and services they sold.

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 »

Microsoft (NASDAQ: MSFT) has been one of the strongest, most resilient performers in the group. Is it time to double down on Microsoft stock today?

Riding Azure's momentum

While all the companies in the Magnificent Seven operate in the tech sector, most of them have been able to develop diversified revenue streams. Microsoft has many unique tech businesses, including cloud services, Microsoft Office 365 products, gaming, LinkedIn, search and advertising, and more.

Luckily for Microsoft, many of these businesses are services the company provides and therefore are less impacted by tariffs, which likely explains its strong performance in 2025 (as of June 3).

MSFT data by YCharts.

But a big reason for the company's strong performance is Azure, which falls under the company's cloud services and products category. Azure and other cloud services revenue in the company's third fiscal quarter of 2025 (quarter ended March 31, 2025) grew 35% year over year.

Azure is the foundation of Microsoft's artificial intelligence offerings and business. Launched in 2010, Azure started as a cloud computing network of data centers that companies could run their business on instead of maintaining their own infrastructure.

Since then, Azure has branched out to offer numerous other products, including in artificial intelligence. Through a partnership with OpenAI, Azure provides AI models that developers and businesses can leverage to build their own AI applications. Microsoft has also integrated AI tools from Azure into its own applications, such as Microsoft 365 Copilot, to automate repetitive tasks and improve efficiency.

Many investors questioned Microsoft's significant capital expenditures (capex) on AI over the last two to three years, wondering when they would see a payoff, which has now started to play out. Interestingly, on the company's most recent earnings call, Microsoft CFO Amy Hood pointed out that it's getting harder to separate AI-related revenue from non-AI-related revenue, as the two are starting to feed off of one another.

Evercore analyst Kirk Materne raised his price target on Microsoft from $500 to $515 in late May and maintained a buy rating on the company. Materne said that not only is Microsoft all in on AI, but the more traditional cloud business also still has plenty of runway, considering only around 20% of information technology workloads run in the cloud today -- a number Materne thinks could eventually increase to 80%. And AI tools could be a way to bring more businesses onto the cloud. Materne estimates that Microsoft's AI revenue could reach upwards of $110 billion by fiscal year 2028.

Time to double down?

There are several reasons to double down on Microsoft. For one, it is arguably the company least impacted by tariffs in the Magnificent Seven. As Morningstar points out, the company "has minimal risk exposure to retail, advertising spending, cyclical hardware, or physical supply chains." This should make it more resilient as the trade war continues to play out.

Microsoft's cloud and AI business is also starting to thrive. The company is reaping benefits from all the capex spending and is well-positioned to further grow revenue as the digital transformation of the business world continues to progress. Finally, Microsoft is one of just a few companies in the world to hold the highest possible credit rating from both Moody's and S&P Global. This makes it a source of stability throughout the economic cycle.

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

Before you buy stock in Microsoft, 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 Microsoft 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.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Moody's, Nvidia, S&P Global, and Tesla. 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.

Amazon (NASDAQ: AMZN) is making significant progress in reducing the cost of serving customers while improving the speed of delivery and expanding selection.

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 »

*Stock prices used were the afternoon prices of May 29, 2025. The video was published on May 31, 2025.

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

Before you buy stock in Amazon, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

The S&P 500 (SNPINDEX: ^GSPC) delivered back-to-back annual gains of over 25% in 2023 and 2024 (when including dividends). The only other time the index had such a strong two-year run was during the dot-com internet boom in 1997 and 1998. As was the case back then, stocks in the technology and tech-adjacent industries drove most of the upside this time around.

The "Magnificent Seven" is a group of seven companies that lead different segments of the tech space. They earned the nickname for their enormous size and their tendency to outperform the broader S&P 500. In fact, investors who didn't own them during 2023 and 2024 likely underperformed the index by a very wide margin:

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 »

Data by YCharts.

However, the S&P 500 is off to a bumpy start to 2025 due to global trade tensions, which were sparked by President Donald Trump's "Liberation Day" tariffs. All of the Magnificent Seven stocks are trading down from their all-time highs, presenting long-term investors with a compelling opportunity. Shares of Meta Platforms (NASDAQ: META) and Amazon (NASDAQ: AMZN) are down 9% and 15%, respectively, from all-time highs hit in early 2025 (as of this writing).

Here's why investors might want to buy the dips.

The case for Meta Platforms

Meta is the parent company of social networks like Facebook, Instagram, and WhatsApp, which serve over 3.4 billion people every single day. Acquiring new users is becoming harder because nearly half the planet is already using those platforms, so the company is trying to boost engagement instead. The longer each user spends online, the more ads they see, and the more money Meta makes.

Meta uses artificial intelligence (AI) in its recommendation engine to learn what type of content Facebook and Instagram users enjoy viewing, and it uses that information to show them more of it. During the first quarter of 2025, CEO Mark Zuckerberg said this strategy led to a 6% increase in the amount of time users were spending on Instagram over the last six months, and a 7% increase for Facebook.

But Meta is also using AI to help businesses craft better ads. Soon, Zuckerberg says a business will simply have to tell Meta its goals (like brand awareness or selling a specific product) and its budget, and an AI assistant will handle the rest -- that includes designing the creative (the text, image, or video) and defining the audience. Most small businesses don't have their own marketing teams, so this could be a powerful tool that boosts Meta's share of the digital advertising market.

Meta AI is another innovation from the social media giant. It has become one of the most popular chatbots in the world with almost 1 billion monthly active users, despite only launching last year. It's built on Meta's Llama family of large language models (LLMs), which are now among the most intelligent in the AI industry. Meta plans to spend up to $72 billion on data center infrastructure and chips this year, most of which will be geared toward advancing Llama even further and meeting inference demand for Meta AI.

Meta has generated $25.64 in earnings per share (EPS) over the last four quarters, so based on its current stock price of around $650, it trades at a price-to-earnings (P/E) ratio of 25.2. That makes it the second-cheapest Magnificent Seven stock ahead of only Alphabet, which is battling a series of regulatory issues:

Data by YCharts.

Because of Meta's progress in AI, its solid (and growing) profits, and its valuation, I think the company is on its way to the exclusive $2 trillion club.

The case for Amazon

E-commerce remains the single biggest contributor to Amazon's overall revenue, but investors are currently more focused on the Amazon Web Services (AWS) cloud computing platform. It offers hundreds of solutions to help businesses navigate the digital world, but it's also trying to dominate the three core layers of AI: hardware infrastructure, LLMs, and software.

AWS operates data centers filled with chips from leading suppliers like Nvidia, and it rents the computing capacity to AI developers for a profit. But Amazon also designed its own chips, and the new Trainium2 can save developers up to 40% on AI training costs compared to competing hardware.

AWS also developed a family of LLMs called Nova, which includes the new NovaSonic speech-to-speech model for conversational AI applications. Ready-made models eliminate the need for developers to create their own from scratch, so using them can significantly accelerate their AI software projects. The Nova family is available on Amazon Bedrock, along with other LLMs from leading third parties like Meta and Anthropic.

On the software front, AWS now offers an integrated virtual assistant called Q, which can write computer code to help developers create software more quickly. It can also analyze internal data to provide businesses with actionable insights. In addition, Amazon developed a separate virtual assistant for Amazon.com called Rufus, which helps shoppers compare products and make more informed decisions.

Amazon generated $155.6 billion in total revenue during the first quarter of 2025. AWS accounted for just 19% of that total ($29.2 billion), yet it was responsible for 63% of the entire company's operating income. Segments like e-commerce operate on razor-thin margins, so AWS is the profit engine behind the whole organization, which is why investors monitor it so closely.

AWS has become a leader in AI infrastructure and services, and I think that will be Amazon's golden ticket to the ultra-exclusive $3 trillion club in the next couple of years, where it could sit alongside Microsoft, Apple, and Nvidia.

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

Before you buy stock in Meta Platforms, consider this:

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

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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. 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.

Market volatility over the past few months could lead investors to sell and take their winnings home before things get worse. But investing success means riding out the short-term waves and holding on to long-term winners. The S&P 500 (SNPINDEX: ^GSPC) has already made up whatever it lost in value earlier this year, and it would have been a shame to have sold at a low and missed out on the quick rebound.

If you can hold on for at least 20 years, you can choose excellent stocks and let them work their magic on your investments. Amazon (NASDAQ: AMZN), Shopify (NASDAQ: SHOP), MercadoLibre (NASDAQ: MELI), and SoFi Technologies (NASDAQ: SOFI) are four monster stocks that should reward you well over the next 20 years.

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

1. Amazon: E-commerce and AI

Amazon is the leader in e-commerce and cloud computing, two massive growth industries. It has about 40% of the U.S. market share in e-commerce and about 30% of the global market for cloud computing. Both of these industries are growing organically, and Amazon is benefiting from these organic tailwinds.

Shoppers know Amazon as the king of e-commerce, and the company is heavily investing in keeping its lead there. But management has identified generative artificial intelligence (AI), primarily through the Amazon Web Services (AWS) cloud-computing business, as its main growth driver over the next few years.

Amazon said it would invest upwards of $100 billion in 2025 alone to keep building out this business, and it offers a huge assortment of features and tools to every size and stripe of client. AWS itself generated a 17% year-over-year increase in sales in the first quarter and has a $117 billion annualized revenue run rate. Management expects that with generative AI, that rate will increase.

"We thought AWS had the chance to ultimately be a multihundred-billion-dollar revenue run rate business," CEO Andy Jassy recently said of the pre-generative AI opportunity. "We now think it could be even larger."

Advertising and streaming continue to grow and add value to the business, and Amazon is investing in new concepts like Zoox autonomous vehicles and Project Kuiper broadband. It has a huge growth runway, and its stock should keep rewarding investors over many years.

2. Shopify: The other e-commerce giant

You won't see Shopify on any list of highest e-commerce sales because it doesn't sell products, it sells e-commerce services, like websites and payment processing. But its gross merchandise volume (GMV) is similar to Amazon's e-commerce sales, giving you a picture of Shopify's important and dominant position in the e-commerce space.

Shopify is also benefiting from the organic tailwinds of e-commerce growing as a percentage of retail sales. According to eMarketer, e-commerce accounted for 20.3% of retail sales in 2024, and that's expected to increase to 23% by 2027. Even that's still a small percentage, and with each percentage point translating into trillions of dollars, Shopify has a long growth runway.

It also continues to identify new ways to expand its market share and help its clients increase their sales. It has gone from a platform helping small businesses get online to targeting large businesses with individual e-commerce components. It offers a full-service omnichannel platform combining physical and digital retail, and it's making a bigger move into international, where there are several bigger players. International sales only accounted for 30% of the total in Q1, and that could be a huge growth driver in the coming years.

Patient investors should expect Shopify to be a top stock as it keeps growing and innovating for the foreseeable future.

3. MercadoLibre: The Latin American tech disruptor

MercadoLibre is similar to Amazon in that its core business is e-commerce, but it has dipped its toes into several other businesses that are driving fantastic growth. It operates in Latin America and offers a host of digital services in both e-commerce and financial technology. It consistently reports strong growth across metrics, such as a 40% increase in GMV year over year and a 72% increase in total payment volume in the 2025 first quarter.

The opportunity here is enormous because Latin America lags many other global regions in both e-commerce and digital penetration. In fact, 85% of sales are still offline, and some of its regions are underbanked, leading to a greater necessity for digital financial services.

Because its regions are still in their early innings in its industries, there are so many levers MercadoLibre can pull to move growth. It's doing so step by step, bringing in new, unique visitors to its ecosystem and generating higher purchase frequency. It's launching all sorts of innovative services, such as a new, free streaming initiative powered by its growing ad business.

MercadoLibre has a wide-open runway and tons of opportunities to grow its business and stock gains.

4. SoFi: The modern way to bank

SoFi is a digital financial disruptor offering all banking services online. It targets the young professional who's just starting their financial journey and appreciates SoFi's tech focus and easy-to-use interface.

Although its core business is lending, it has successfully expanded into a large array of financial services like bank accounts and investing tools. These are fee-based products that have low costs and are becoming incredibly profitable.

Even the lending business is bouncing back as interest rates go lower, and lending revenue increased 25% year over year in Q1. Financial services, though, more than doubled, and contribution profit increased 299%.

It's adding members at a high rate and generating higher engagement through cross-selling and upselling, and SoFi has a massive growth opportunity over the next 20 years as it gets closer to its ambition of becoming a top-10 U.S. bank.

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

Before you buy stock in Amazon, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 982% — 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 19, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in MercadoLibre and SoFi Technologies. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Shopify. The Motley Fool has a disclosure policy.

Walmart (NYSE: WMT) is encroaching on Amazon's (NASDAQ: AMZN) turf and winning the battle.

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 »

*Stock prices used were the afternoon prices of May 24, 2025. The video was published on May 26, 2025.

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

Before you buy stock in Walmart, 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 Walmart 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!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — 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 19, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Amazon (NASDAQ: AMZN) is best known for its e-commerce marketplace and Prime subscription service. While online shopping and fast shipping are indeed two of Amazon's major pillars, the company has been quietly building new opportunities in the area of artificial intelligence (AI).

Let's explore what investments Amazon has made in AI over the last couple of years, and how they are reaping dividends for the company's growth. From there, I'll break down why AI is such a meaningful tailwind for the company and explain why I think Amazon is headed for a $5 trillion valuation over the next five years.

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 »

What are Amazon's AI-driven catalysts?

Amazon has been investing aggressively in several different areas of AI. Chief among them is that the company has plowed a whopping $8 billion into generative AI start-up Anthropic. Anthropic is now an integral part of Amazon's cloud infrastructure business, Amazon Web Services (AWS) -- spurring a new period of accelerating revenue and operating margins.

On top of that, Amazon has also been designing its own custom silicon chips -- dubbed Trainium and Inferentia. In theory, by using its own custom tech stack and moving away from a reliance on outside GPUs from Nvidia or Advanced Micro Devices, Amazon has the ability to enter new markets and generate significant cost synergies in the long run.

Lastly, Amazon is also leading the charge in AI robotics -- outfitting many of its fulfillment centers with machines that are able to automate human-driven processes. This is yet another way Amazon is positioning itself to yield greater returns on its AI investments by making core parts of the business more efficient.

Analyzing Amazon's valuation trends

Amazon and Anthropic initially announced their partnership on Sept. 25, 2023. Since that announcement, Amazon has added nearly $1 trillion in market capitalization (as of May 19). Admittedly, an increase of this magnitude in such a short time frame may suggest shares of Amazon are due for a pullback. While I wouldn't rule that out, I think the longer-term picture for Amazon remains bullish.

AMZN Market Cap data by YCharts

During Amazon's first-quarter earnings call earlier this month, CEO Andy Jassy told investors that the company's "AI business right now is a multibillion-dollar annual run rate business that's growing triple-digit percentages year over year." He followed that up by saying, "as fast as we actually put the capacity in, it's being consumed."

Jassy is essentially saying that demand for Amazon's AI services is so high that the company needs to quickly reinvest back into these operations in order to fulfill customer needs. These supply-demand dynamics aren't going to be solved in one quarter, but they are very good problems to have. The big picture is that customers can't get enough of Amazon's AI ecosystem, suggesting the business is in a strong position to scale over the coming years.

What would it take for Amazon to reach a $5 trillion valuation by 2030?

The chart illustrates Wall Street's consensus revenue estimates for Amazon over the next couple of years. Between now and 2027, analysts expect Amazon to maintain 10% annual revenue growth. If I assume this rate does not change, Amazon would be on pace to generate $1.1 trillion in sales by 2030.

AMZN Revenue Estimates for Current Fiscal Year data by YCharts

As of this writing, Amazon's price-to-sales (P/S) ratio is 3.4 -- much lower than many of its "Magnificent Seven" peers. If Amazon maintains this P/S multiple, the company would be trading for a market cap of roughly $3.8 trillion by 2030. In order to reach a $5 trillion valuation, Amazon's P/S would need to expand to roughly 4.5, assuming a 10% annual growth rate.

AMZN PS Ratio data by YCharts

The way I think about Amazon's valuation dynamics is that the company has already added nearly $1 trillion in value, despite AI being an incredibly nascent part of the business right now. Over the next five years, I think Amazon's AI-inspired investments will start to become more obvious -- seen through accelerating revenue across different areas of the business, widening operating margins, and robust free cash flow growth.

Should this come to fruition, I think Amazon could be in a position to witness either an increase in revenue above 10% annual growth, or an expansion in its multiples -- bringing it in line with other leading cloud and chip businesses such as Microsoft or Nvidia.

To me, Amazon has multiple avenues to achieve a $5 trillion valuation by 2030. I think the stock is trading at attractive levels right now, and long-term investors may want to consider scooping up shares and holding on tight.

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

Before you buy stock in Amazon, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 169% 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 19, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, 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.

There's no denying artificial intelligence (AI) technology has made enormous strides in just the past few years. But the businesses advancing it have still only scratched the surface of the underlying opportunity. Indeed, industry analytics outfit Precedence Research forecasts that the overall AI market will grow at an annualized pace of nearly 20% through 2034.

With that rapid-growth outlook as the backdrop, here are three of the best artificial intelligence stocks to buy right now, while they're all trading at a discount.

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 »

1. Arm Holdings

When conversations turn to the tech companies with the biggest potential to profit from AI, Arm Holdings (NASDAQ: ARM) is one of the least frequently mentioned. Don't be fooled, though: It will play a critical role in artificial intelligence's future.

Arm is a semiconductor company -- sort of. It doesn't make chips. Rather, it designs chips and chip components, and then licenses those designs to more familiar chip companies that may use them unaltered, or modify them to suit their purposes. Those chipmakers themselves often punt their manufacturing duties to third-party foundries.

It's possible you're regularly using a smartphone, computer, or other piece of consumer technology with an Arm-based chip inside it without even realizing it, in fact. As of its most recently completed quarter, the company was generating on the order of $4 billion worth of high-margin revenue per year.

But what specifically makes Arm a great artificial intelligence stock pick (besides its 20% pullback from its February peak)?

When AI was in its infancy, the amount of electricity the hardware used wasn't much of a concern -- engineers were simply trying to figure out how to make the tech work. Now that the technology is proven and going mainstream, though, engineers are grappling with the fact that artificial intelligence platforms are very, very power hungry. According to a Goldman Sachs (NYSE: GS) study, by 2030, the ongoing growth of AI data centers will increase the amount of electrical power drawn by data centers globally by 165% compared to what it was in 2023.

It's not just data centers. The chips in AI-capable smartphones also consume an unusual amount of power, draining batteries' charges at an inconvenient rate.

Well, Arm's chip designs happen to be built from the ground up to be power-efficient. Amazon's Arm-based Graviton processor uses 60% less electricity than comparable chips; Google's Arm-based Axion chip also requires 60% less power than comparable processors.

The importance of this competitive edge isn't always prioritized in an environment where processing speed, capacity, and performance often take center stage. There's a reason, however, that Arm's revenue is expected to grow on the close order of 20% per year for the next three years despite the uncertain macroeconomic backdrop.

2. SoundHound AI

The world's earliest attempts at voice-based interfaces weren't particularly impressive. Although some of them are still around (like voice-commanded phone menus, for which the acceptable response options are fairly limited), many of the higher-level projects using this idea have since been abandoned.

Last year, for example, fast-food chain McDonald's discontinued its use of IBM's automated order-taking tech -- mostly because it never worked quite as well as hoped.

Just don't jump to sweeping conclusions about the idea based on that one decision, though. The underlying tech was actually McDonald's before it was sold to IBM back in 2021 as part of what was more of a cheap experiment than an investment in a whole new profit center that was outside of either company's wheelhouse. Something more purpose-built, atop a more advanced AI platform, could prove more successful.

Enter SoundHound AI (NASDAQ: SOUN).

As its name suggests, SoundHound makes AI-powered voice communications work as was only dreamed of just a few years ago. It has been developing its current propriety AI platform (called Houndify) since 2015, marking the point where mere speech-recognition technology became speech-to-meaning technology, and even speech-to-understanding technology. There's arguably no other player nearly as far along as SoundHound is within the voice-driven sliver of the AI market.

As evidence of this argument, several automakers are also developing their in-car assistance tech around Houndify, while credit card company Mastercard features SoundHound's tech within the automated voice-ordering solution it now offers quick-service restaurants like the aforementioned McDonald's.

It's still not quite in its prime, and many consumers remain a bit hesitant to use automated voice-based interactions for many different aspects of their daily lives. They'll likely come around, though. Market research outfit Market.us believes the worldwide voice-based AI agent market alone will expand at an average annualized pace of nearly 35% through 2034. SoundHound AI is positioned to capture much of this growth.

In fact, it already is. Its first-quarter revenue improved an incredible 151% year over year, accelerating from the 85% growth it reported for the entirety of 2024.

3. BigBear.ai

Finally, add BigBear.ai (NYSE: BBAI) to your list of no-brainer artificial intelligence stocks to buy right now.

To date, most of the market's focus in the AI-powered decision-making software space has been on Palantir Technologies.

And understandably so. Not only did the Centers for Disease Control tap Palantir for help in getting a handle on the COVID-19 pandemic, but several arms of the Department of Defense also rely on its next-generation services to solve next-generation problems. These are high-profile deals. Never even mind the fact that Palantir is the biggest name in the artificial intelligence platform business.

Investment opportunities are relative, though; small companies with lots of growth potential are still capable of producing big gains for investors. There will just be fewer shareholders experiencing them.

BigBear is one such company.

At first glance, it may appear to be a near carbon copy of Palantir. Look deeper, though. BigBear.ai is different by virtue of being largely focused on businesses rather than government institutions. Manufacturing facilities, industrial warehouses, healthcare providers, and biopharma companies are its current core target markets -- although it can and does serve some public sector clients.

Although the private sector tends to make major capital investments at a slower, more methodical pace (since their stakeholders typically require careful care of resources), it's a much bigger opportunity than the government market. That's because AI can ultimately help organizations save money, make money, or both. And of course, both are priorities within the business world.

According to a forecast by Precedence Research, the decision-making piece of the artificial intelligence industry will grow at an average annual pace of 16% per year through 2034.

That doesn't mean this AI stock will always be easy to own in the near or distant future. Not only is BigBear.ai not profitable, its fairly small size means it doesn't enjoy the benefits of scale. It also has relatively few analysts following it and directing investors' attention toward it.

If you can stomach the level of risk and volatility involved, though, this last point might help inspire you to buy: Analysts' current consensus price target of $6.63 for BigBear.ai is nearly twice the stock's present price. That's not a bad tailwind to have while starting a new investment.

Should you invest $1,000 in Arm Holdings right now?

Before you buy stock in Arm Holdings, 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 Arm Holdings 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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, International Business Machines, Mastercard, and Palantir Technologies. The Motley Fool has a disclosure policy.

Two investing adages might seem to contradict each other. Many investors have long followed the maxim to "buy low and sell high." On the other hand, they've also been told: "Don't try to catch a falling knife."

Which of the familiar sayings applies to United Parcel Service (NYSE: UPS)? Shares of the package delivery giant have plunged more than 50% below the high set in 2022. However, I don't view UPS as a "falling knife" to avoid. Instead, I think this ultra-high-yield dividend stock is a great pick for long-term investors to buy right now.

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 »

Why UPS stock is down

When any stock plunges as much as UPS has, it's prudent to understand why. To do that, we need to look back a few years.

After the initial shock of the COVID-19 pandemic, UPS stock went on a tear. The stock skyrocketed nearly 150% between early March 2020 and early January 2022. That's not surprising. With many people working from home and many others trying to minimize contact with people to reduce their chances of getting sick, package delivery volumes rose significantly. UPS beefed up its delivery network operations in response.

The COVID-19 boom was only temporary, though. Once it began drawing to a close, UPS' business slowed down. The company also faced a challenging negotiation with the Teamsters Union. Although a strike was avoided, the ordeal took a toll on UPS' share price. The final agreement with the union also resulted in the company's profits falling.

Another shoe dropped earlier this year, with UPS announcing that it planned to cut its Amazon shipment volume by more than 50% by 2026. UPS stock declined yet again on this news. Amazon ranks as the company's largest customer, accounting for 11.8% of its total revenue in 2024.

Better days ahead?

UPS' earnings are growing again, rising 4.2% year over year in the first quarter of 2025. The higher costs in the Teamsters Union contract were front-loaded. The worst is now behind UPS on that front.

Both U.S. and international revenue are climbing, too. This is notable because the average daily volume associated with Amazon decreased by 16% in Q1 and even ran a little ahead of the company's plan.

UPS CEO Carol Tomé remains convinced that reducing the Amazon business makes sense. She said in the Q1 earnings call: "This volume is not profitable for us, nor a healthy fit for our network. The Amazon volume we plan to keep is profitable and it is healthy volume." UPS' network restructuring related to the Amazon glidedown will cut roughly $3.5 billion in costs this year.

Importantly, UPS is actively working to offset part of the Amazon volume with more profitable shipments. The company is especially focusing on healthcare, international, business-to-business (B2B), and small-to-medium-sized business (SMB) markets. Healthcare presents an especially great opportunity because it tends to be relatively recession-proof and is growing briskly.

Granted, the Trump administration's tariffs create significant uncertainty for UPS and many of its customers. In particular, shipment volumes from China to the U.S. could come under pressure. However, UPS thinks that these lower volumes will be partially offset by increased China-to-non-U.S. shipments and other international-to-U.S. shipments.

Why buy UPS stock now?

Why is UPS a great stock to buy right now? I think there are three key reasons.

First (and most importantly), the company's business will continue to be resilient over the long run. The demand for package deliveries will grow over the next decade and beyond. UPS operates one of the biggest delivery networks on the planet. The prohibitive cost of building such a network gives the company a solid business moat.

Second, UPS' forward dividend yield of 6.58% provides a strong head start for generating attractive total returns. Is the company's dividend safe? I think it's possible that the dividend payout could be cut. However, the focus on boosting profitability could allow UPS to fund dividends at least at current levels.

Third, the stock's valuation is attractive. UPS' shares trade at 14.6 times forward earnings, a historically low level for the company.

Some might view UPS as a "falling knife" to avoid. I believe, though, that buying this beaten-down stock now will pay off handsomely over the next few years.

Should you invest $1,000 in United Parcel Service 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 $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!*

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*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. Keith Speights has positions in Amazon and United Parcel Service. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.

The "Magnificent Seven" is a group of seven American companies with leadership positions in various segments of the technology industry. They got the nickname in 2023 because of their incredible size and their ability to consistently outperform the rest of the stock market.

The Magnificent Seven companies have a combined value of $16.7 trillion, which represents 31.6% of the entire value of the S&P 500 (SNPINDEX: ^GSPC), so they have an enormous influence over the performance of the index.

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 »

Market Cap data by YCharts.

When Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), and Tesla (NASDAQ: TSLA) are moving higher as a group, investors who don't own them will generally underperform the S&P 500.

I'm going to introduce you to an exchange-traded fund (ETF) that has more than half of the entire value of its portfolio invested in the Magnificent Seven stocks. It's the Vanguard Mega Cap Growth ETF (NYSEMKT: MGK), and it has consistently beaten the S&P 500 every year since it was established in 2007. Here's why investors might want to buy it for the long term.

A concentrated ETF filled with America's highest-quality companies

Some ETFs hold hundreds or even thousands of different stocks. But the Vanguard Mega Cap Growth ETF holds just 69, and the Magnificent Seven account for 54.9% of the total value of its portfolio:

Stock	Vanguard ETF Portfolio Weighting
1. Apple	13.37%
2. Microsoft	12.24%
3. Nvidia	10.48%
4. Amazon	7.20%
5. Alphabet	4.19%
6. Meta Platforms	4.02%
7. Tesla	3.42%

Data source: Vanguard. Portfolio weightings are accurate as of April 30, 2025, and are subject to change.

Artificial intelligence (AI) could fuel the next phase of growth for each of the Magnificent Seven companies, but in very different ways. Apple, for example, designed a series of chips for its latest iPhones, iPads, and Mac computers to run its new Apple Intelligence software. It provides a suite of AI features, including writing tools and a more powerful version of the Siri voice assistant, which transform the user experience for people with Apple devices.

Tesla is another consumer "hardware" company that has turned its attention to AI. The electric vehicle (EV) giant continues to improve its AI-powered full self-driving software, which could be active on public roads as soon as this year.

Nvidia supplies the world's best data center chips for developing AI models. Apple Intelligence wouldn't be possible without it, nor would Tesla's self-driving software. Microsoft, Amazon, and Alphabet are also some of Nvidia's top customers -- they fill their cloud data centers with AI chips and rent the computing power to developers for a profit.

Their cloud platforms also offer access to the latest ready-made large language models (LLMs) to help accelerate their customers' AI software ambitions.

Then there is Meta Platforms, which uses AI in its recommendation algorithm to show users more of the content they enjoy seeing on its Facebook and Instagram. It also launched an AI assistant last year called Meta AI, which already has nearly a billion users. The company's Llama family of LLMs that power Meta AI have become the most popular open-source models in the world.

Although the Magnificent Seven stocks dominate the Vanguard ETF, it does offer some diversification. Large-cap non-technology stocks like Eli Lilly, Visa, Costco Wholesale, and McDonald's are also among the ETF's top 20 positions.

This Vanguard ETF can help investors beat the S&P 500

The Vanguard Mega Cap Growth ETF delivered a compound annual return of 12.5% since its inception in 2007, comfortably beating the average annual gain of 9.6% in the S&P 500 over the same period.

But the ETF has a highly concentrated portfolio, which can be a recipe for volatility. For example, the S&P 500 fell by as much as 18.9% from its all-time high earlier this year as economic and political uncertainty surged due to President Donald Trump's "Liberation Day" tariffs. However, the ETF was down by 22.3% at the same time, because it has much larger positions in the high-flying Magnificent Seven stocks, which pulled back more sharply than the rest of the market amid the chaos.

As a result, investors shouldn't put all of their eggs in one basket. Instead, they should buy the ETF as part of a balanced portfolio, where it has the potential to boost overall returns.

For example, using the returns cited earlier, a $10,000 investment in the S&P 500 would be worth $15,814 in five years. But if you invest $5,000 in the S&P and $5,000 in the Vanguard ETF, your $10,000 could be worth $16,917 instead.

One thing is for certain: Investors will want exposure to the Magnificent Seven, not only because of their excellent long-term track record, but also because they are leading the way when it comes to new technologies like AI.

Should you invest $1,000 in Vanguard World Fund - Vanguard Mega Cap Growth ETF right now?

Before you buy stock in Vanguard World Fund - Vanguard Mega Cap Growth 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 World Fund - Vanguard Mega Cap Growth 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 $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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Nvidia, Tesla, and Visa. 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.

Apple (NASDAQ: AAPL) stock has been a blockbuster winner for long-term investors. However, the company is now hitting a rough patch. The stock is barely up over the past year, with revenue only slightly up from 2022. This has caused the stock to be dethroned as the largest company in the world by market cap by Nvidia and Microsoft, which are growing much faster than the iPhone maker.

By the end of this year, I believe another big tech stock will surpass Apple in market capitalization. Amazon (NASDAQ: AMZN) looks poised to leapfrog Apple due to its margin expansion, growth of artificial intelligence (AI), and Apple's looming lawsuits. Here's why I predict Amazon stock will finish 2025 ahead of Apple in market capitalization.

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 »

Data by YCharts.

Amazon is recording faster revenue growth

One notch in Amazon's belt compared to Apple is revenue growth. The company has grown its revenue by 102% in the last five years, compared to 46% for Apple, which mostly came during the post-pandemic surge. Amazon is growing faster than Apple at a larger revenue base, too, generating $650 billion in revenue over the last 12 months vs. $400 billion at Apple.

How is Amazon's revenue growing so quickly at such a large scale? It plays in two huge addressable markets: e-commerce and cloud computing. Online shopping is still (slowly) overtaking traditional retail in consumer wallet share, which will drive even further growth for Amazon in 2025. AI has become a boon for Amazon's cloud computing division in Amazon Web Services (AWS), which accelerated revenue growth to 17% year over year last quarter. This segment has sky-high profit margins.

Apple does not have this tailwind at its back, while Amazon will keep benefiting throughout the rest of the year.

More profit margin expansion, government lawsuits

Moving down the income statement, Amazon should have an easier time than Apple expanding its profit margin over the rest of this year and beyond. The stock market is forward-looking and will place a continued premium on Amazon's operating leverage potential. Apple's profit margins may move in the other direction if it gets hurt by tariff costs on imports to the United States from China. Its supply chain is already optimized to the gills, posting 32% operating margins over the last 12 months compared to 11% at Amazon.

Another factor that could hurt Apple's profitability is the looming lawsuits coming for its default search engine payment and App Store fees. A remedy in Google Search's monopoly lawsuit could be to prevent its $20 billion (or more) annual payment to Apple for making Google Search the default engine on the Safari browser. This is a huge percentage of Apple's $127 billion in annual operating income that could evaporate overnight.

A judge already ruled that Apple will need to let developers offer other payment methods within their applications, letting them bypass Apple's 30% fee on in-app purchases. If applications sidestep these payments, another huge cash cow for Apple will disappear.

Data by YCharts.

Amazon has a cheaper holistic valuation

Apple stock looks slightly cheaper than Amazon when defined by trailing earnings, with a price-to-earnings ratio (P/E) of 33 compared to 34 for Amazon. However, when we factor in Amazon's growth potential and the risks facing Apple's business, the future looks much brighter for Amazon's stock.

By the end of this year, it should be clear that Amazon's operating margin will keep expanding along with its durable revenue growth. Apple's business is at risk of losing two huge cash cows that will dampen its overall profitability.

Today, Apple's operating income of $127 billion greatly surpasses Amazon's $72 billion over the past 12 months. This gap today is why Amazon stock has a market cap of $2.18 trillion vs. Apple's $3.15 trillion. Through the rest of 2025, I expect this earnings gap to keep closing, which will cause investors to value Amazon more than Apple, and is why it will finish the year ahead in market capitalization.

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

Suzanne Frey, an executive at Alphabet, 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. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, 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.