Key Points

• Nvidia has ownership stakes in "neocloud" companies Nebius Group and CoreWeave.

• While each company is positioned to benefit from investments in AI infrastructure, CoreWeave's growth prospects appear more robust over the long term.

• Wall Street is forecasting CoreWeave's revenue to triple over the next couple of years, which should help pave a path to profitability.

• 10 stocks we like better than CoreWeave ›

Following the end of each quarter, financial services firms that manage over $100 million in stocks are required to file a form 13F with the Securities and Exchange Commission (SEC). These filings represent an itemized breakdown of all the stocks that the fund bought and sold during the most recent quarter.

While investors may not realize it, corporations can also invest their cash into equity positions of other businesses. According to Nvidia's recent 13F filing, the semiconductor darling currently holds positions across six stocks. Two of its holdings are spread between artificial intelligence (AI) data center stocks, Nebius Group and CoreWeave (NASDAQ: CRWV).

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 »

Fresh off a hot initial public offering (IPO) earlier this year, CoreWeave has emerged as an integral player in the AI infrastructure market. Let's dive into CoreWeave's business and explore how the company is transforming the AI landscape.

What does CoreWeave do?

For the last few years, investors have learned about the important role that advanced chipsets known as graphics processing units (GPUs) play in the development of generative AI. The GPU market is largely dominated by Nvidia and Advanced Micro Devices, both of which are able to command hefty price tags for their coveted data center hardware.

While AI has served as an unprecedented tailwind for the chip market, one of the subtle nuances is that this demand has brought a series of complications to supply and demand dynamics.

This is where CoreWeave comes into play. CoreWeave operates as a "neocloud," which is a specialized type of business that allows companies to access GPU architecture through cloud-based infrastructure. This flexible model appeals to businesses that may not be able to purchase GPUs directly from Nvidia or its cohorts due to rising price dynamics.

By offering an agile and potentially more affordable model than cloud hyperscalers such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform, CoreWeave has been able to attract a number of high-profile customers and ink a series of multiyear, billion-dollar deals.

What does CoreWeave's growth look like?

For the quarter ended March 31, CoreWeave generated $982 million in revenue -- up 420% year over year. While the company's net loss widened more than twofold compared to the year-ago quarter, CoreWeave has some catalysts that should quickly turn around the dynamics of its profitability profile. See estimates in the chart below.

CRWV Revenue Estimates for Current Fiscal Year data by YCharts

During the earnings call, management raised guidance for both revenue and capital expenditures (capex). While more spending may stifle profitability in the short term, these investments are necessary foundations for the longer-term opportunity in AI infrastructure.

As Wall Street's estimates pictured in the chart above showcase, CoreWeave's investments today should help secure more access to Nvidia's Blackwell GPU architecture and should ultimately serve as a tailwind for more accelerated growth down the road.

Is CoreWeave stock a buy right now?

In the chart below, I compare CoreWeave to Oracle on a price-to-sales (P/S) basis. Oracle is also a leading player in infrastructure-as-a-service (IaaS), having just signed a $30 billion cloud deal of its own, so it's comparable to CoreWeave. That single deal is expected to bring in nearly twice the amount of CoreWeave's total 2027 revenue. And yet, investors are placing a twofold premium on CoreWeave's P/S multiple when compared to Oracle.

CRWV PS Ratio data by YCharts

I think there are a couple of nuances to point out when it comes to CoreWeave's valuation relative to a peer such as Oracle.

First, Oracle is experiencing a transition period -- effectively replacing slow-growth (or no-growth) segments of the business with its new, budding data center infrastructure operation. For this reason, investors are likely applying a discount to Oracle relative to a high-growth AI stock such as CoreWeave.

Moreover, CoreWeave completed an IPO earlier this year. Since then, the company has inked an $11.2 billion deal with OpenAI, announced the planned acquisition of Core Scientific to bolster its platform, and earned a spot in some of Wall Street's most respected institutional portfolios.

This confluence of factors is more than enough to garner outsize excitement and enthusiasm from investors. For these reasons, I'm not surprised to see CoreWeave trading at such a premium.

I think the most prudent course of action for investors is to buy CoreWeave stock at different price points over a long-term time horizon. If you invest the same amount of money at set time intervals, that is known as dollar-cost averaging, and can help mitigate risk by removing specific timing and price points from the equation.

Overall, I see CoreWeave as a compelling opportunity that is well positioned to dominate the infrastructure chapter of the AI narrative. If I could buy only one Nvidia-backed data center stock, CoreWeave would be it.

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

Before you buy stock in CoreWeave, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Adam Spatacco has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Nebius 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.

Key Points

• Artificial intelligence-powered drug development isn't a mere premise anymore. Recursion Pharmaceuticals has made it a reality.

• The next era of e-commerce favors platforms like Shopify's, which allows brands to connect with consumers outside of massive digital shopping malls.

• U.S. drivers may not be big fans of electric vehicles, but that's not the case everywhere else.

• 10 stocks we like better than Shopify ›

Are Americans saving enough money to fund a comfortable retirement? Probably not. As the Motley Fool's own research indicates, as of 2022 the median retirement savings for U.S. households is a mere $87,000. That means half of the country has saved up more, while the other half has saved less. Even being in the upper half of the crowd, however, isn't necessarily enough.

Committing more of your income to the effort is still only half the battle though. You'll also need to get more out of your money while you're growing your nest egg. This means achieving bigger gains without taking on significantly more risk.

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 »

Here's a closer look at three growth stocks you could buy and hold for decades as a means of supercharging your portfolio's growth. While each of these tickers brings some added risk and volatility to the table that will require regular monitoring, their long-term upside potential is arguably worth the work.

Recursion Pharmaceuticals

While artificial intelligence (AI) still has of room for improvement, the writing is on the wall -- the technology will be tackling complex problems that individuals and institutions just can't. This includes designing and testing pharmaceuticals.

Well, the future is here. Recursion Pharmaceuticals (NASDAQ: RXRX) has built an AI-powered platform capable of virtually testing a drug rather than requiring a full-blown clinical trial of an idea. Leveraging 36 petabytes (36 million gigabytes) of digital biological and chemical data, its so-called Recursion OS can accomplish what would normally take years and millions of dollars in a matter of days at a fraction of the cost.

And it's no mere theory. The technology is not only functioning -- it's commercialized. A handful of pharma companies including Roche and Sanofi are using Recursion OS to tackle some of their own developmental work, while Recursion is working on some drugs of its own. All of these drug candidates will still need to go through the actual clinical trial process to satisfy regulatory agencies like the FDA. Recursion's software facilitates focus though, by virtue of weeding out less promising drug prospects so more resources can be devoted to more promising ones. That's huge.

It's still relatively early for Recursion, and for that matter, the AI-assisted drug-development industry itself. Recursion Pharmaceuticals remains in the red, and will likely remain there for at least a few more years. This arguably makes Recursion the riskiest of the three stocks being put under the microscope here.

Just understand the potential reward is commensurate with the risk. Recursion Pharmaceuticals is nearing a revenue and profit turning point in front of what Straits Research believes will be average annualized growth of nearly 32% for the artificial intelligence drug-development industry through 2030. This tailwind alone should be enough to push Recursion to profitability. That makes this stock's prolonged and persistent weakness since peaking in 2021 is a fantastic buying opportunity.

Shopify

Amazon (NASDAQ: AMZN) is in no immediate danger of being dethroned as the king of North America's e-commerce scene. But it's no longer able to simply bully the rest of the industry. Competitors are successfully pushing back... just not in the way you might have expected. Rather than one or two rival names making inroads, brands and merchants are taking matters into their own hands by setting up their own online stores as a means of working all the way around Amazon's domination.

And they've largely got Shopify (NASDAQ: SHOP) to thank for the option.

In simplest terms, Shopify helps companies establish their own in-house e-commerce presence. From websites to payment-processing to inventory-management to marketing, Shopify can do it all, making it easy for businesses of all sizes to stay focused on more important matters (like running that business). Although the company no longer discloses how many clients are using its technology, it does divulge the scope of its business. Last year, Shopify's solutions facilitated the sale of $292.3 billion worth of goods and services, up 24% year over year to extend a long-established growth streak. Shopify collected $8.9 billion worth of revenue for itself in the process, turning a little over $1 billion of it into net income.

SHOP Revenue (Quarterly) data by YCharts

This growth still only scratches the surface of the opportunity though. Market research outfit eMarketer reports that only a little more than one-fifth of the world's retail spending is currently done online. The rest is still taking place in brick-and-mortar stores.

While certainly some of these sales will never move online, much of it can. Brand-owned and merchant-managed online stores are positioned to capture more than their fair share of whatever growth awaits the e-commerce industry, however, as these players increasingly see the value in establishing their own direct relationships with customers. In this vein, analysts expect Shopify to produce top-line growth in the ballpark of 20% in each of the three years ahead.

Nio

Finally, add Nio (NYSE: NIO) to your list of stocks to buy and hold for decades if you want a shot at building a bigger retirement nest egg.

It wouldn't be surprising if you'd never heard of it. Although it's finding a bit of traction in Europe, the Chinese maker of electric vehicles predominantly serves China itself. It delivered 72,056 electrified cars during the second quarter of this year, up nearly 26% from the year-ago comparison, underscoring production growth that's been in place for some time now.

Think the electric vehicle (EV) market is hitting a wall due to disinterest? Not so fast. That's largely an American phenomenon. Data gathered by CleanTechnica indicates sales of electric vehicles in China soared 25% to 1.1 million units last month, accounting for more than half of the country's entire automobile sales.

That's still just the beginning though. The International Energy Agency expected EVs to account for 80% of China's total car sales by 2030, thanks to supportive policies that encourage the alternative to combustion-powered vehicles. It's making inroads in Europe as well, for the same reason. And, while there's little incentive for the company to make a push into the United States' anemic EV market right now, if and when domestic interest perks up, Nio has maintained tentative plans for that possibility.

It could be a while before Nio works its way out of the red and into the black -- it simply needs more scale. This could make the stock a little less than completely comfortable to own in the interim.

It's making clear progress on the production as well as the profitability front though, and will almost certainly get there sooner or later, and likely sooner. Given how inevitable this outcome now seems, the market's apt to reward the progress en route to fiscal viability.

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

Before you buy stock in Shopify, consider this:

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

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

Key Points

• Rivian manages its key components in-house, including a proprietary technology platform for vehicle controls and autonomous driving features.

• It leveraged its technology to form a joint venture with Volkswagen, accelerating the development of next-generation electric vehicles.

• Rivian is scheduled to begin construction of a new EV manufacturing facility in Georgia in 2026.

• 10 stocks we like better than Rivian Automotive ›

Rivian Automotive (NASDAQ: RIVN) has captured some investor attention in its quest to establish its place in the electric vehicle (EV) market. Following a meteoric rise after its initial public offering in late 2021, Rivian's stock plummeted in the two years that followed. The stock is still down 92% from its peak.

However, recent developments, including its announcement of a joint venture with Volkswagen (OTC: VWAP.Y) and consecutive quarters of positive gross profits, show that Rivian may be turning a corner. Still, challenges remain as the company prepares to expand its manufacturing capacity and scale up production over the next several years. If you're thinking of investing in Rivian, here's what you need to know.

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 »

Rivian's in-house focus and technology platform

Rivian manages nearly all aspects of its business, from engineering to manufacturing, in-house. The company has developed a technology platform that encompasses a comprehensive software stack, covering everything from vehicle controls to the user interface, and enabling over-the-air updates and feature enhancements. Additionally, it features an in-house built autonomy platform with driver-assist technology that can be utilized for autonomous driving.

The company leveraged this technology to establish a joint venture with the Volkswagen Group that focuses on software, electronic control units (ECUs), and related network architecture design and development.

Volkswagen plans to utilize Rivian's zonal ECU architecture and software stack across its multiple brands. In November, Rivian received $1.3 billion for intellectual property licensed to Volkswagen. Volkswagen has also committed to making additional equity investments of up to approximately $2.5 billion in multiple tranches.

Amazon is a major customer and investor

One key aspect of Rivian's business since 2019 has been its partnership with Amazon (NASDAQ: AMZN) to develop the Rivian Commercial Van and Electric Delivery Van variants. Today, there are more than 20,000 of these vehicles on the road. In November 2023, their agreement was amended to adjust specific exclusivity rights for Amazon, allowing Rivian to sell its commercial vans to other customers.

The Amazon contract has been a major portion of Rivian's business. In 2024, Rivian generated over $1.04 billion in revenue from Amazon -- 21% of its total revenue. In 2025's first quarter, revenue from Amazon totaled $99 million, a significant decrease from the $338 million reported in the same quarter last year.

Amazon also holds a significant stake in Rivian, representing 13.3% of its voting power. This partnership with one of the world's largest retailers has been instrumental in helping Rivian establish its foothold in the competitive automotive industry. Still, it will be crucial for the EV maker to develop its other partnerships and revenue streams.

What's next for Rivian?

Rivian has a history of incurring significant net losses, including a net loss of $4.8 billion last year and a $541 million loss in 2025's first quarter.

However, the company did achieve a gross profit of $206 million in Q1, its highest gross profit to date. It was also the company's second consecutive quarter of gross profitability. Management expects to achieve a positive gross profit for 2025 as it continues to focus on cost efficiencies.

RIVN Revenue (Quarterly) data by YCharts.

The EV maker will continue to ramp up production and add to its facilities. It plans to build a second manufacturing facility near Social Circle, Georgia, to meet demand from the United States and international markets. The plant is expected to have an annual capacity of 400,000 vehicles. It will be built in two phases, each contributing 200,000 units of annual capacity.

Construction of that Georgia facility is expected to begin in 2026, with production on the first manufacturing line projected to start in 2028. Vehicles produced there will be on the company's midsize platform, which includes its R2 and R3 models. Development of this facility is supported by a loan arrangement with the U.S. Department of Energy for up to approximately $6.6 billion.

Is Rivian right for you?

Rivian is expanding its manufacturing footprint, strategically developing its software and services ecosystem, and forming strategic partnerships with key customers and partners. The company is making solid progress in revenue and gross profit, and I would like to see it continue to improve its cost efficiency and profitability.

Investors buying today could be getting on the ground floor. That said, analysts project that the EV maker will continue to lose money through 2028, as it will take time and capital to build out its facilities and scale up production. For these reasons, Rivian is a high-risk, high-potential-reward stock that may take years to pay off, making it best suited for aggressive investors with long-term buy-and-hold timelines.

Should you invest $1,000 in Rivian Automotive right now?

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

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.

Key Points

• Nvidia has the most powerful computer chips, and the major AI developers rely on them to drive their businesses.

• The total AI opportunity is expected to increase at a high rate over the next five years.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) has been that rare stock that has catapulted investors to millionaire status on its own. But up more than 1,500% over the past five years, and with a $4 trillion market cap, can it really still offer growth for investors?

It can. Here's why.

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 »

The age of AI

All signs are that artificial intelligence (AI) will continue to drive innovation over the next few years as more businesses see how it can help them succeed and grow. As there's greater development in AI, it becomes cheaper and more abundant, and companies that aren't using it to become more efficient and user-friendly are losing out.

Nvidia is the leader in the graphics processing units (GPU) that power these trends, with an overwhelming amount of market share. The AI market is growing at a fast pace, and the major players, like Amazon and Microsoft, need Nvidia's powerful chips to drive their efforts. Even companies like Amazon that are creating their own chips to offer more budget-conscious options still partner with Nvidia for their larger clients' needs.

According to Statista, the AI market is expected to increase at a compound annual growth rate (CAGR) of 26.6% over the next five years. That's slower than Nvidia's current revenue growth. If you can imagine Nvidia keeping up such a CAGR for its own sales, keeping its price-to-sales ratio constant, that would lead to its stock price nearly tripling.

Even if the price-to-sales ratio decreases, there could be some serious gains ahead for Nvidia investors over the next five years and beyond.

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 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.

Key Points

• Spending on artificial intelligence could reach an astounding $4.8 trillion by 2033.

• Nvidia's GPUs are critical for the training and deployment of complex AI models.

• AI developers want the best cloud infrastructure, and Amazon leads in this area.

• 10 stocks we like better than Nvidia ›

Fortunes have been made by investing in artificial intelligence (AI) stocks. But there's still a lot of room left to go. The United Nations, for instance, believes that the AI market will grow from $189 billion worldwide in 2023 to nearly $5 trillion by 2033. Want to make sure your portfolio benefits? The two AI stocks below are for you.

Nvidia remains the smartest AI investment

When it comes to AI stocks, Nvidia (NASDAQ: NVDA) is king. Even if you're already familiar with this stock, there's a good chance that shares are much cheaper than you realize.

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 »

If you've been following the AI market, you'll know that Nvidia is the most valuable GPU maker in the world. GPUs sit at the heart of the AI revolution. They're critical for training and deploying complex AI models. They also make it possible for end users to access these models en masse from anywhere in the world.

Right now, Nvidia's GPUs dominate the market. The firm has an estimated 90% market share for AI GPUs. Its performance and ecosystem advantages have granted the company the highest gross margins in the industry. Wall Street analysts are unsurprisingly excited.

Wedbush Securities analyst Dan Ives believes Nvidia's market cap will surge to $5 trillion within months. The biggest near-term catalyst: the decision by the U.S. government to allow Nvidia's new GPUs to be exported to China, a country that previously accounted for around 13% of the company's sales.

While shares are expensive based on trailing earnings, the stock trades at just 39 times forward earnings. Considering the AI boom is expected to persist for a decade or more, expect Nvidia to maintain double-digit annual growth rates for years to come. This should quickly eat into the upfront valuation premium, making shares a relative bargain for patient investors.

Amazon is an artificial intelligence powerhouse

Apart from Nvidia, Amazon (NASDAQ: AMZN) stock looks like one of the best ways to invest in the AI revolution over the long term. That's because its most profitable business segment, Amazon Web Services, sits at the center of everything AI.

We've already discussed how Nvidia's GPUs sit between AI developers and the end users themselves. But there's one other industry that also sits at the center of the action: cloud infrastructure providers. Most estimates believe Amazon's AWS division is the largest cloud infrastructure provider in the world. Data compiled by Statista gives AWS a 30% global market share, nearly as much as the next two competitors combined.

While the data center industry is a bit more commoditized than the GPU market, there's clear differentiation by the players that can afford to invest at scale. Developers -- AI developers in particular -- want the best infrastructure possible. That includes the best hardware and the most locations from a geographic perspective. This makes it quicker, cheaper, and more convenient for customers.

As the largest cloud provider in the world, Amazon is second to none in its ability to invest and expand its network. This should continue to place AWS at the center of increased spending.

"Companies are spending and they're spending more, and they plan to spend even more," Baird analyst Colin Sebastian recently told GeekWire. "We did a survey last month of 100 corporations, and 87% of them said they will increase spending on Gen AI over the next year -- and a grand total of zero out of 100 said they would spend less."

The AI spending boom is real. Demand should grow by 20% to 30% annually for years to come. With Amazon trading at 37 times earnings, most of its growth in this area is masked by its relatively slower growing e-commerce division. But as AWS becomes a bigger driver of Amazon's overall business, we could see growth rates accelerate, making shares a relative bargain in hindsight.

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

Now, it’s worth noting Stock Advisor’s total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

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

Key Points

• Alphabet's AI strengths are being overlooked by the market.

• Amazon is using AI behind the scenes to become more efficient and drive growth.

• Meta Platforms and Pinterest are both using AI to drive advertising revenue growth.

• 10 stocks we like better than Alphabet ›

The artificial intelligence (AI) boom continues to drive growth and transform industries, but it's not just infrastructure players that are benefiting. Some of the best long-term opportunities are with companies deploying AI behind the scenes.

Let's look at five brilliant AI-related growth stocks to buy and hold for the long haul.

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. Alphabet

Investors continue to underestimate Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), as they worry about AI disrupting its search business. But that view ignores what Google, its major component, actually does. This is a company built around content discovery -- not just traditional search -- and it's integrating AI into tools billions of people already use. And no other company is better at monetizing that content discovery through advertising than Alphabet. Its search data and digital ad network just cannot be matched.

The Chrome browser and Android operating system give it unmatched distribution; Chrome is the default search engine on the majority of devices, giving it a huge built-in advantage. And a recent Oppenheimer survey revealed that users found Google Search's new AI Mode more helpful than not only traditional search but also ChatGPT.

YouTube remains the world's largest ad-supported streaming platform. Google Cloud, Alphabet's cloud computing unit, is growing fast, helping companies build, train, and run AI models.

Google is also becoming a chip leader. Its Tensor Processing Units (TPUs) are helping to power AI development, while its Willow quantum computing chip may be a future growth driver. And Alphabet subsidiary Waymo is expanding its robotaxi footprint.

Taken altogether, Alphabet is one of the most innovative companies in the world, and one you want to own.

2. Amazon

Amazon (NASDAQ: AMZN) is using AI to become even more dominant. While it's best known for e-commerce and cloud computing, the company's behind-the-scenes work is where the real long-term value is being built.

On the logistics and warehouse side, Amazon is using AI to determine where to store inventory, create more efficient delivery routes, and even navigate hard-to-find drop-off points. Its robotics division just passed 1 million deployed units, and some of its AI-powered robots can detect damaged products or even repair themselves. Amazon also created a new AI model called DeepFleet that coordinates its entire robot fleet to help boost throughput.

The company's largest and fastest-growing business is Amazon Web Services (AWS). It helps customers build AI models and apps with tools like Bedrock and SageMaker, and then has them run those programs on its infrastructure. It's also developed custom AI chips that give it a cost advantage, and continues to invest in AI infrastructure to meet rising demand.

Overall, Amazon is well positioned for an increasingly AI-focused world.

3. Meta Platforms

Meta Platforms (NASDAQ: META) owns one of the world's most valuable digital advertising businesses, and AI is making it better. Its Llama models are driving more engagement across Facebook and Instagram, boosting user time spent on the apps. That gives Meta more ad inventory to sell. It's also using AI to help advertisers create better campaigns and target potential customers, which is increasing demand and leading to higher ad prices.

But Meta's growth story is just getting started. The company is only now beginning to serve ads on WhatsApp, which has over 3 billion users. It's also rolling out ads on Threads, its new social platform, which had 350 million users at the end of the first quarter. With two massive platforms still early in their monetization cycles and AI continuing to drive performance, Meta looks like a long-term winner in the AI-powered digital economy.

But the company is not stopping there. CEO Mark Zuckerberg is spending aggressively to poach top AI talent. This is all part of an effort to -- as Zuckerberg says -- "deliver personal superintelligence to everyone in the world." If it's successful, Meta could become the top AI stock to own.

4. Pinterest

Meta isn't the only social media company using AI to drive growth. Pinterest (NYSE: PINS) has been using AI to evolve into a more shoppable and advertiser-friendly platform. The company has built a multimodal model that understands both images and text, allowing for better personalization and powering new features like visual search. Users can now click on items within images and shop for similar products directly, making Pinterest far more transactional and more attractive to both users and advertisers.

It's also working to simplify advertising on its platform. Performance+, its new AI-powered ad product, automates everything from campaign creation to targeting and bidding. That makes the platform easier to use for advertisers and helps them save time and drive better outcomes.

Pinterest has a global user base that has historically been undermonetized, especially compared to those of its peers. But with AI improving engagement, search, and ad performance, the company has a big opportunity to start to close that gap. If it can continue executing on its vision of merging content discovery with commerce, Pinterest could be a breakout growth story over the long term.

5. Toast

Toast (NYSE: TOST) has become one of the leading software platforms for the restaurant industry. What started as simply a point-of-sale system is now a full-stack software platform that helps restaurants streamline operations and drive more sales. Its newest tools -- like the AI-powered intelligence engine ToastIQ and the agent and assistant Sous Chef -- are designed to help restaurants make better decisions in real time.

Meanwhile, the company said a restaurant piloting its new menu upsell tool saw average order volume increase by 6%, while another restaurant group testing its new AI-powered advertising tool saw more than a "10x return on ad spend" with Google Ads.

Toast directly benefits from its customers' success, earning a cut of sales through payment processing. That creates a strong alignment between the business and its customers, so the company continues to innovate to help drive restaurant sales. Toast added 6,000 new locations in Q1 and now serves more than 140,000 restaurants. It's also expanding into chains like Applebee's and Topgolf, as well as adjacent verticals like hotel food service and retailers. It's slowly expanding overseas as well.

Toast's pace of innovation and expanding customer base give it a long runway of growth. This makes it a growth stock you want to own for the long term.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 21, 2025

Geoffrey Seiler has positions in Alphabet, Pinterest, and Toast. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Pinterest, and Toast. The Motley Fool recommends Topgolf Callaway Brands. The Motley Fool has a disclosure policy.

Key Points

• Amazon’s flexibility is the source of its competitive edge, and the reason it can continue growing indefinitely.

• Uber Technologies is plugged into a major societal shift that could fuel big growth well into the distant future.

• American Express’ business is more -- and more resilient -- than it seems on the surface.

• 10 stocks we like better than Amazon ›

Is your retirement nest egg where it needs to be right now? That is to say, is it big enough at this stage of your life to ensure it will be big enough then?

Most Americans don't think theirs is. Although most people are saving something, as data from The Motley Fool's in-house research arm highlights, only 34% of Americans feel like they're actually on track for the comfortable retirement they're envisioning for themselves. The other 66% fear their golden years are going to be underfunded.

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

If you're one of the 66%, although you can't go back in time and change the past, you can change your current growth trajectory by owning more of the right growth stocks. Here's a closer look at three such names that could beef up the returns on your retirement savings.

Amazon

Yes, Amazon (NASDAQ: AMZN) is a frequently recommended trade. It's almost a cliché, in fact. The stock's also one of the market's most reliable long-term performers, with a future that's just as bright as its brilliant past.

Amazon is not only one of the stock market's biggest companies in terms of market cap, it is the top name in North American e-commerce. Numbers from Digital Commerce 360 indicate that Amazon consistently controls roughly 40% of the continent's ever-growing online shopping industry. While its overseas reach isn't nearly as wide, its international arm is now at least reliably operationally profitable as well, thanks to several years of steady growth.

Yet, e-commerce isn't Amazon's breadwinning business. Although it only accounts for about 16% of its total top line, its cloud computing arm, Amazon Web Services, produces on the order of 60% of the company's total earnings. The growth of both types of business has produced consistent double-digit sales growth for years, which is expected to remain firm for least several more.

Amazon's peer-beating growth rate could actually last indefinitely for one overarching reason. That's Amazon's ability and willingness to adapt -- or even enter new lines of business -- as merited.

Think about it. This company hasn't always been in the cloud computing business. That arm wasn't launched until 2006. Amazon Prime didn't exist until 2005. Even its most basic e-commerce operation has evolved since its infancy. While the website still looks about the same as it did years ago, it's now being monetized as an advertising medium more so than an e-commerce platform. Amazon collected more than $56 billion worth of high-margin ad revenue from its sellers last year, in exchange for featuring their goods. For perspective, that's more operating profit than its domestic and international e-commerce arms produced on a combined basis.

There's every reason to believe Amazon can and will remain a growth monster well into the distant future.

Uber Technologies

Ride-hailing outfit Uber Technologies (NYSE: UBER) isn't just catching on with consumers. It's tapped into a massive sociocultural shift. That's the fading interest in car ownership in favor of using alternative forms of personal mobility (like ride-hailing).

Data from the Federal Highway Administration puts things in perspective, highlighting how the number of licensed U.S. drivers between the ages of 16 and 19 has fallen from 65% as of 1995 to only about one-third now. That's just part of a much bigger paradigm. More and more people are never getting their license at any age.

Then again, why would they become licensed drivers if they're less and less likely to own a car to drive?

While older drivers remain relatively interested in ownership of a vehicle, data from a recent survey performed by Deloitte indicates that 44% of Americans between the ages of 18 and 34 would be willing to not own their own car. This disinterest is growing as time marches on, pointing not just to changing preferences, but a major societal shift as to what constitutes "normal" mobility options.

Uber Technologies' results have long reflected its role in this shift. Revenue growth in the mid-teens is the norm now, and likely to remain the norm for a long while as individual car ownership continues to decline. An outlook from Straits Research suggests that the worldwide ride-hailing and taxi market is poised to grow at an average annualized pace of more than 11% through 2033, although this pace of progress could last far longer than that.

UBER Revenue (Quarterly) data by YCharts.

The kicker: People are quickly falling in love with the idea of same-day delivery of online purchases too, which Uber now also offers. On a constant-currency basis, Uber's delivery revenue grew 22% to nearly $3.8 billion in the first quarter of this year, and now accounts for a little over 30% of the company's total top line.

American Express

Finally, add American Express (NYSE: AXP) to your list of stocks you can -- and arguably should -- buy and hold for decades in your retirement account.

Ostensibly it's a credit card outfit, in the same vein as Visa and Mastercard. There are certainly plenty of similarities between the three companies. There are also a couple of critical distinguishing factors, however.

Whereas Visa and Mastercard only manage payment networks and charge a modest fee for each purchase they facilitate, American Express manages its own payment network in addition to being the credit card issuer itself. This is no trivial detail, either. This much control of the purchase and payment process means serious operational savings.

Perhaps the more important factor at work here, however, is the fact that American Express isn't as much of a credit card middleman as it is an operator of a perks and rewards program that just so happens to be built around credit cards. Some people are willing to pay up to $695 per year just to be able to access private airport lounges, enjoy discounted hotel stays, and receive credit toward entertainment purchases and ride-hailing services (and more).

This makes American Express cards particularly appealing to a more affluent crowd that's less likely to curtail their spending or fail to make payments when economic headwinds constrict personal budgets. That's a nuance that the company's management wasn't shy about highlighting following April's release of its first-quarter results.

You'll probably never see double-digit growth from American Express. You certainly haven't in the recent or not-so-recent past! You will, however, see persistent revenue and profit growth supporting consistent dividend growth and stock buybacks, which quietly add value in their own often-overlooked way. That's how an investment in this stock has easily beaten the performance of the S&P 500 over the course of the past 30 years, when reinvesting the dividends it's paid since then.

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. American Express is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Mastercard, Uber Technologies, and Visa. The Motley Fool has a disclosure policy.

Key Points

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

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

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

• 10 stocks we like better than IonQ ›

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

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

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 »

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do quantum computing stocks compare to the valuations above?

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

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

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

Are we in a quantum computing stock bubble?

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

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

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

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

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

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

Before you buy stock in IonQ, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Microsoft, Peloton Interactive, VeriSign, Zoom Communications, and eBay. The Motley Fool recommends Wayfair and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• At 20 times earnings, investors are likely overlooking Google parent Alphabet's vast potential.

• Autonomous driving could be a game changer for Uber stock.

• Southeast Asian tech conglomerate Sea Limited appears to be following Amazon's path to success.

• 10 stocks we like better than Alphabet ›

Starting off a portfolio with $1,000 may seem overly modest, but it can be a great place to begin. The more challenging task is finding stocks that can turn $1,000 into a significantly larger sum without incurring excessive risk.

Admittedly, investing in individual stocks is not entirely risk-free. Nonetheless, staying with established companies dramatically reduces investor risks, and the undervaluation in these three companies positions investors for gains as they realize more of their growth potential.

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. Alphabet

One of the more compelling bargains on the market today is Google's parent company, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG).

Despite being an early pioneer in AI, Alphabet appeared to be caught flat-footed when OpenAI introduced its generative AI-driven version of ChatGPT. The company released Google Gemini soon after, but Google Search remains under threat from competition for the first time in decades.

Also, Alphabet still generates around 74% of its revenue from digital advertising. Since its generative AI directs users to websites less often, it has resulted in fewer opportunities to generate ad-driven income.

Google Cloud now accounts for 14% of the company's revenue. Moreover, its autonomous driving company, Waymo, could become a revenue source as self-driving cars become more prevalent. Alphabet also holds $95 billion in liquidity and generated almost $75 billion in free cash flow over the trailing 12 months, giving the company tremendous resources to compete in other business ventures.

Amid these struggles, Alphabet stock trades for just 21 times earnings. Given its optionality and non-ad revenue sources, its growth is likely not yet complete, meaning it could still experience market-beating growth for years to come.

2. Uber

Investors know Uber Technologies (NYSE: UBER) as the leader in ridesharing and one of the leading delivery companies. The company has established a globally recognized brand in these industries, as well as its freight business.

Although the mobility and delivery segments remain on a long-term growth trajectory, Uber's real future may lie in autonomous vehicles. The company has partnered with autonomous vehicle companies such as Alphabet's Waymo and the General Motors subsidiary Cruise.

Uber provides a platform to arrange rides and bring customers to these companies, allowing its partners to focus on improving autonomous driving and, to a lesser extent, air taxis, such as those being developed by companies like Joby Aviation.

Thanks to that emerging industry, Straits Research believes the autonomous vehicle will take the global ridesharing market to a 21% compound annual growth rate (CAGR) through 2033, reaching a size of $918 billion.

Uber earned $44 billion in revenue in 2024, although it generated just over half of that from ridesharing, suggesting that Uber will likely claim a significant portion of the anticipated growth over the next few years.

A one-time income tax benefit makes its 16 P/E ratio a deceptive valuation measure. Nonetheless, with a 25 forward P/E ratio, Uber could be an excellent choice for both growth and value investors seeking outsize returns.

3. Sea Limited

Sea Limited (NYSE: SE) is not a household name for American investors, as its e-commerce and fintech arms operate primarily in Southeast Asia. However, for those who missed out on Amazon, the tech conglomerate may serve as a second-chance stock.

The company's Shopee segment is the leading e-retailer in Southeast Asia, a region with a population of around 650 million. Since its failed attempts to sell in most of its non-Asian markets, it has taken a page from Amazon's playbook and invested heavily in logistics.

Additionally, fintech giant Monee adds mobile payment options to cash-focused consumers in the developed world, while gaming company Garena had the world's most downloaded mobile game in 2024, Free Fire.

While Monee has remained consistently strong, Shopee's growth has recovered amid its investments in logistics. Furthermore, after several quarters of revenue declines, Garena has recovered amid Free Fire's renewed popularity.

With all three segments in growth mode, Sea Limited's revenue rose 30% year over year in the first quarter of 2025, far above the 5% annual growth in the first quarter of 2023.

This has led to an improved valuation, and while its P/E ratio of 112 may appear pricey, the forward P/E of 40, which is based on predicted growth, arguably makes this stock a bargain. Considering that its $94 billion market cap is a small fraction of Amazon's $2.4 trillion market cap, it appears positioned for considerable growth from current levels.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

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. Will Healy has positions in Sea Limited and Uber Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Sea Limited, and Uber Technologies. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Key Points

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

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

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

• 10 stocks we like better than Nvidia ›

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

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

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 »

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

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

Nvidia: The data center AI chip leader

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

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

Amazon and Microsoft: Winning in AI through the cloud

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

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

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

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

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

Arista Networks and Broadcom: The networking tech that underpins AI

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

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

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

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

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

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

Before you buy stock in Nvidia, consider this:

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Arista Networks, Goldman Sachs Group, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• It's now possible to trade certain stocks on Solana's blockchain.

• That capability is attracting a lot of capital, and very quickly.

• You don't necessarily want to be investing in these tokenized assets just yet.

• 10 stocks we like better than Solana ›

Wall Street's market closes at 4 p.m. eastern time, but blockchains are open all night long. Thanks in part due to that after‑hours void, a tiny slice of the stock market has quietly migrated onto Solana (CRYPTO: SOL), turning a small but growing selection of stocks into tokens that trade 24/7.

Between mid‑June and July 4, Solana's on‑chain value of those tokenized stocks more than tripled, from about $13 million to $48 million, a jump powered almost entirely by a new platform called xStocks. By July 16, the chain featured more than $100 million worth of stocks, indicating that the pace of growth is still incredible.

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 »

The quantity of dollars involved here might look trivial, but the growth rate is anything but. Let's dig into why this is happening, and what it could mean for long‑term investors in Solana and other cryptocurrencies.

Stock tokenization just went white-hot

The xStocks platform went live on June 30 with more than 60 U.S. tickers set up. This included companies you might own, like Microsoft, Tesla, Nvidia, Amazon, Meta Platforms, and more, all minted as a Solana token and tradable on major crypto exchanges like Kraken, Bybit, and several decentralized exchanges (DEXes) too.

Those tokens are said to be backed 1‑for‑1 by shares of the underlying stocks. Transactions settle in seconds, and they can move peer‑to‑peer at sub‑penny network fees. They can also be traded at any hour of the day or night, which is an experience most brokerage apps simply cannot match.

Speed and novelty explain part of the surge, but the quality of the technology enabling the move matters too.

Solana's cheap and fast transactions make sending fractional shares around the network highly economical, which in turn invites small investors, and also the development of relatively small-time decentralized finance (DeFi) applications that cater to that same group. The launch also coincided with the launch of so‑called "tax coins," an emerging segment of tokens that skim a trading levy and automatically funnel the proceeds into xStocks to distribute to holders as on‑chain dividends. Further DeFi innovation involving tokenized assets like stocks is all but guaranteed, and at the moment, Solana is where it all happens.

But before you rush in and buy tokenized stocks on Solana, be aware that there is a substantial amount of fine print here.

Liquidity is razor‑thin on tokenized stocks in a way that most investors never need to think about normally. Many xStocks trade only a few thousand dollars a day, so the risk of your purchases or sales failing due to insufficient liquidity is significant in some cases.

Furthermore, most tokenized stocks still fall under securities laws, no matter what wrapper they wear. If there are issues with regulators, platforms could be forced to delist assets or exclude U.S. users overnight, and that might make the tokenized stocks worthless or untradeable.

What this means for holders

Tokenized stocks are only one strand of Solana's real‑world asset (RWA) push, but they arrive as the chain is already outpacing rivals.

Total RWA value on Solana, which includes everything from U.S. Treasuries to funds, has surged 140% this year to reach roughly $564 million as of mid-July. If that trend holds, Solana could capture a meaningful share of the trillions in assets that consultants expect to go on‑chain by 2030. For reference, Boston Consulting Group (BCG) pegs the total addressable market for tokenized illiquid assets at about $16 trillion within five years.

For holders, the mechanics of how to benefit from this trend are very straightforward. Every stock transfer or dividend a smart contract triggers in turn burns a smidge of the coin in fees, tightening supply. It also implies that users and investors had to hold some of the coin to pay the fees. In theory, a booming stock token venue could replicate what meme coins did for Solana's fee revenue last winter, but with Wall Street credibility attached.

Investors intrigued by this development should consider two things.

First, as far as the tokenized stocks themselves go, you don't need to rush to buy them. If you're the average investor, you probably shouldn't be buying them at all for at least a few more quarters to let the open issues get settled. Just buy the stocks on the traditional equity market as you usually do, assuming you want to hold them at all.

Second, if you believe public stocks will migrate on‑chain in size and that Solana's speed will keep it competitive, buying and holding the coin for the long haul will give you exposure to the upside from that trend.

In short, the explosion of stock tokenization on the chain is quite bullish, and it's ensuring that Solana's long-term picture keeps looking better and better.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

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. Alex Carchidi has positions in Amazon, Meta Platforms, Nvidia, Solana, and Tesla. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, Nvidia, Solana, 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.

In this podcast, Motley Fool host Anand Chokkavelu and contributors Jason Hall and Matt Frankel discuss:

• AI stocks in the data center space (including CoreWeave).
• Winners and losers in energy and solar from Trump's "big, beautiful bill."
• Ranking the intellectual property of Warner Bros. Discovery, Comcast, Disney, and Netflix.
• Prime Day and other made-up holidays.
• Stocks to watch.

And Dave Schaeffer, founder and CEO of Cogent Communications, talks with Motley Fool analysts Asit Sharma and Sanmeet Deo about how Cogent's deals with customers like Netflix and Meta Platforms work and what keeps him awake at night.

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 »

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,053%* — a market-crushing outperformance compared to 180% for the S&P 500.

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

See the stocks »

*Stock Advisor returns as of July 14, 2025

This podcast was recorded on July 11, 2025.

Anand Chokkavelu: Yes, we're talking all kinds of stocks. This week's Motley Fool Money Radio Show starts now. It's the Motley Fool Money Radio Show. I'm Anand Chokkavelu. Joining me are two of my favorite fools, Jason Hall and Matt Frankel. Today, we'll talk about stock market winners and losers from the Big Beautiful Bill. We'll pit Superman versus the Hulk, and we'll of course debate stocks on our radar. But first, we'll discuss whether there's an AI opportunity in investing in data centers. Upstart data center company, CoreWeave, again made news this week this time for announcing the purchase of Core Scientific for $9 billion. This allows it to add infrastructure to consolidate vertically as it seeks to gain market share among AI and high performance computing customers. CoreWeave is just the tip of the data center iceberg. Matt, what categories of data center opportunities are out there?

Matt Frankel: First, you have hyper scalers. These are companies like AWS, Microsoft, Desha. They are companies that operate the large scale data centers. They offer computing and storage infrastructures to customers. As Anand put it, there's CoreWeave, which is one of the least understood recent IPOs that I know. [laughs] They rent out GPU data center infrastructures to customers. It's not always practical for companies to invest in all of NVIDIA's latest chips on their own, for example. That's really what they do. There's the REITs still, Digital Realty and Equinix are the two big ones. They own the data centers. CoreWeave is actually a big Digital Realty tenant. Then there's power generation. I know Jason's going to talk about this a little bit later in the show, but data centers consume a lot of power, and it's growing at an exponential pace. These chips that NVIDIA produces, they are power drains. Nuclear, especially, could be a big part of the solution, but solar and other renewables are also in there.

Jason Hall: We're definitely in the land grab phase of the infrastructure buildout for accelerated computing. I think accelerated computing is maybe a better description than just AI. We talk about the Cloud REIT large. As we see more of the companies involved start to monetize things like AI agents at scale. I think that's where these investments are going to pay off.

Anand Chokkavelu: Big question. Do any of these categories interest you all for investing?

Matt Frankel: Well, I'm well known as being the real estate guy at the Motley Fool, so it shouldn't be a big surprise, but Digital Realty is my second largest and my second longest running REIT investment in my portfolio. I'm an Amazon shareholder, and I know that's not their only business, but AWS is the primary reason I own it. I don't own CoreWeave yet, and I think the stock is a little bit pricey, to say the least. But the more I read about it, the more I'm intrigued by the company. As I mentioned, they're a big tenant of Digital Realty, so I have some exposure already.

Jason Hall: The things about CoreWeave that concern me is the stock is definitely expensive. But if the opportunity is even close to as large as we think, it could still work out, but they're going to need a lot of money to pay for what they're trying to do and depending on how much of that is from raising debt versus secondary offerings of shares, there's still a lot of questions there. But, Anand, you've given me a chance to talk about Brookfield here. [laughs] How do I not take that opportunity? But I do think that there's a couple of Brookfield entities that are positioned really well here. I want to talk about the providing the energy part of it. Brookfield Renewable is really in the driver seat here as a global provider of renewable energy on multi decade contracts. It is not just accelerated computing, it's the energy transition REIT large. We've already seen it strike big deals with Microsoft and others to provide renewable power on those multi decade contracts. The dividend is really attractive, too. BEP, that's the partnership, yields over 5%. The corporate shares BEPC, it yields about 4.5%. Since mid 2020, that's when Brookfield Renewable rolled the corporation part out and restructured its dividend. The payouts been increased almost 30%. There's a lot to like here. Beyond the yield, I think it's primed to be a total return dynamo over the next decade. If you don't want to own a company that's in the energy part, you want to own the infrastructure, just take a look at sister company Brookfield Infrastructure. The tickers there are BIP and BIPC.

Anand Chokkavelu: Of course, these aren't the only AI stocks out there. Hi, NVIDIA. Do any other areas of AI interest you guys?

Matt Frankel: I love that. You can't talk about AI and data centers without talking about the chipmakers. NVIDIA just hit $4 trillion today as the day we're recording this. NVIDIA is an amazing business, and it has more room to grow than people think just in the data center accelerator space, which is why they're getting so much attention for good reason. The market size is expected to roughly double over the next five years. That's not even to mention the opportunities they have in chips for autonomous vehicles, chips for gaming and more but I prefer AMD, which is often referred to as NVIDIA junior, but I don't think it should be. It's an incredibly well run company that's been a mistake to bet against in the past. As Intel found out the hard way, just having a dominant market share in an area of chip making is not always enough.

Jason Hall: An area of the market that I think could do really well some of the legacy enterprise software giants. I think there may be underappreciated winners from AI. I'll use Salesforce, ticker CRM as an example. It's really starting to get traction with things like it's data cloud and with AI agents. It's starting to sell. We're seeing really rapid uptake of those things and monetization. It has a benefit, an advantage over a lot of these AI start-ups that are just pure AI businesses. It's already a trusted integrated partner with hundreds of thousands of enterprises. It knows their business, it knows their challenges, regulations, opportunities and that credibility, I think, is an edge that we don't give enough credit to. We shouldn't underestimate switching costs, I guess, is what I'm really getting at. You look at Salesforce rates for about 21 times free cash flow and less than seven times sales. That's a really good opportunity. I think it equates to double digit returns if it can just grow revenue around 8-12% a year over the long term, which I think it can.

Anand Chokkavelu: We started to talk a bit about energy and the need for it with all this AI. Let's talk about the energy industry implications of the Big Beautiful Bill, which was signed into law last week. Jason, can you give us the summary of the energy portions?

Jason Hall: Summarizing anything's hard for me, but I'll try. I think the short version is the incentives for renewables, they're getting gutted, really. There's a 30% investment tax credit or ITC for short. The residential solar and battery systems portion of that had been in place to run through 2032 before gradually declining for a few years after that. That now expires. The systems have to be fully installed and commissioned by the end of this year. The commercial ITC for solar and wind projects was on a similar track, but now it expires at the end of 2027, but those projects must begin construction by July 4th of 2026 to qualify for that 30% tax credit. It also terminates the tax credit for new and used EVs, $7,500 for a new EV and up to 4,000 for a used EV. The purchase has to happen before September 30th of this year, so a couple of months. Lastly, it ends the US regulatory credits around vehicle emissions that automakers buy largely from Tesla. This is a significant and profitable revenue stream for EV makers that essentially is going away.

Matt Frankel: Jason, when you say renewables are being gutted, you're essentially referring to solar and wind, if I'm not mistaken. It's not gutting anything for nuclear power, correct?

Jason Hall: That's correct. These things you get are the pure renewables as we think of them.

Anand Chokkavelu: Let's put a fine point on this with specifics. Who are the relative winners and losers, Jason?

Jason Hall: This could be an hour long show, but I'll try to summarize it here. Thinking about the companies that are most directly affected, I think Canadian Solar, which is a large manufacturer of solar panels and energy storage, and they really largely target the utility market, but also residential is definitely a loser here. In the near term Sunrun, its business model is tied to these tax credits as an installer and to some degree, First Solar is also going to be affected. I don't think there's really any winners out of this when it comes to solar. But I think Enphase is probably still in a better position in the market may believe. Maybe First Solar as well. It's been through these battles before, and it has been a winner over the long term. If you look at wind, GE Vernova has been on a huge run. I love that business, but I don't love the stock right now. Tesla, I think maybe one of the bigger losers that investors haven't really considered. Last fiscal year, it earned 2.76 billion in revenue from regulatory credits. That's largely pure profit. Then there's also the loss of those EV tax credits for buyers. That might be offset from some incentives for US made autos that are part of the bill now that were part of the law, but I think this puts Tesla in a tougher spot. The tailwinds are not favorable for fossil fuels before this. This doesn't really change any of that. There's opportunities there, but not because of the law.

Matt Frankel: The reason I asked about nuclear a minute ago is because that's really what I see as the big winner here. I like some of the nuclear focused utility providers. Constellation Energy is one that comes to mind. One of their stated goals is to have the largest carbon free nuclear power fleet in the US by 2040. Jacob Solutions, they provide consulting and design services to the industry. Ticker symbol is J, so it's really easy to remember. They recently had some really big nuclear contract wins. I'm going to push back on Jason's Tesla as a big loser. One, they're American made cars. They qualify for that new auto loan interest deduction, so that could help offset what they're losing from the EV tax credits. They have a big energy storage business, and AI has not only giant power demands, but very variable power demands, and it's going to create a lot of need for large scale energy storage, and Tesla does that. I think they're worth watching.

Jason Hall: That's the one part of Tesla's business that's done extraordinarily well. Over the past few years, as the EV business has weakened, is that the battery business.

Anand Chokkavelu: Now quickly the big question, is solar still investable, Jason?

Jason Hall: I think so. We have a very US centric view, obviously, and the US is a massive important market for solar. But you look around the world and the regulatory environment is still largely favorable. I think if you're willing to write out plenty of volatility, that global opportunity is still really good. Businesses like Enphase, businesses like First Solar that have been through these battles before, and even a Canadian Solar, where it has a ton of projects that it's been funding to build on its books that the math just got changed for them in some big ways. The valuation is so cheap that I think that there's some opportunity there.

Matt Frankel: Taking a step back, the reason you have incentives for solar energy, for EVs, for all this, is because without them, they're not price competitive with the existing technologies. The gap has narrowed significantly, especially in solar over the past say 10 years as to the efficiency of the products themselves and just how much they cost. Eventually, solar is going to be able to stand on its own without incentives. But like Jason said, you have to be able to write out some volatility because that could be five years, that could be 10 years, that could be 20 years so eventually, it won't matter.

Anand Chokkavelu: After the break, we'll move from solar to something else that gets its power from the yellow sun. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Anand Chokkavelu, here with Jason Hall and Matt Frankel. One of our Brothers Discovery's much anticipated latest reboot of Superman hits theaters on Friday. Hoping the Justice League can one day catch Disney's Marvel cinematic universe and hot on the heels of last week's Jurassic World Rebirth from Comcast. In honor of Summer movies, we're going to rank those three companies based on the value of their intellectual property. We'll throw in Netflix for good measure. Its headline this week was stating that half of its global audience now watches anime. Chokkavelu household certainly does with one piece. My kids have gotten me into it. For those unfamiliar, they have more episodes than the Simpsons. Matt, once again, your four choices are Warner Brothers Discovery. That includes the DC Universe, Superman, Wonder Woman, Green Lantern, Harry Potter, the Matrix, Looney Tunes, all our favorite HBO shows. You got Comcast with Shrek, Minions, Kung Fu Panda. You got Disney with Marvel, Star Wars, Pixar and Mickey Mouse. Finally, you got Netflix with things like Stranger Things, Bridgerton, Squid Game, newer Adam Sandler movies, and tons of niche content. Mentioned anime, you could argue whether that's niche content or not at this point. Whose intellectual property do you most value, Matt?

Matt Frankel: See, I said Disney. All four of these have excellent intellectual property, and I'll give you a more elaborate description there. In my household, you mentioned your household, how you have all these streaming things. We have a streaming service from all four of these. We have the Peacock service, which is a comcast product. We have HBO Max, which is a Warner Brothers discovery product. We have Disney Plus, and we have Netflix. Disney Plus also has Hulu attached to it. I ask myself, which is the least dispensable? I could cancel all the other ones before I'd be allowed to cancel Disney Plus for the other members of my household. Their film franchises are beyond compare. They have a much longer history of building intellectual property than all of these, especially in terms of valuables. Mickey Mouse is so old, it's not even intellectual property anymore. It's over 100-years-old, so I think it's actually in the public domain now. I have to say Disney, although it's a lot closer than I would have thought a few years ago.

Jason Hall: Yeah, if you had have asked me a few years ago, I absolutely would have said Disney, but I'm going to give the advantage to Netflix here. Let me contextualize that. I think the total value of Disney's IP is probably higher, but Netflix's ability to monetize it more effectively all over the world, I think, is even better than Disney's. I don't think any of these businesses in their studios have done a better job of making content that's relevant in more markets around the world than Netflix does. Let's be honest, I was able to watch Happy Gilmore with my eight year old son this weekend and I watched that on Netflix, that's bridging generations right there.

Anand Chokkavelu: Three things. One, Chokkavelu household is very excited for Happy Gilmore, too. Even my wife is in on it. Two, the Steamboat Willie era, Mickey Mouse is free to the world. The other ones aren't. I'm glad I'm not the only one with way too many streaming services, Matt. Let's talk about Last Place. Who are you cutting first, Matt?

Matt Frankel: Well, all those streaming services are still less than I was paying for direct TV a few years ago, so I think I'm doing all right. For me, the last place, it was between Comcast and Warner Brothers Discovery, both of which have amazing intellectual property, just to show you what a tight race this is. Comcast has universal. I was just in Orlando, and the universal theme parks are massive down there. But I have to put Comcast in last place. Just because Warner Brothers, I think the HBO Max acquisition was such a big advantage for them. They have some of the most valuable television assets of all time. More people watch the sopranos now than they did when it was originally on TV. It's a very valuable valuable asset, Game of Thrones. All these HBO shows that are among the highest rated shows of all time are part of their library. In addition to their film studio and all the other assets that we can't name because it's not that long of a show. I'd have to give Comcast last place, although, like I said, there's a good argument to be made for most of these to be in the top one or two.

Jason Hall: Yeah, I think that's fair. I agree with Matt that Comcast is the Number 4 here. But I don't think that's a flaw. It's just the nature of its business. About two thirds of its business comes from its cable subscriptions and high speed Internet. It's built differently than these other companies. I think it's fine that it's a little bit smaller.

Anand Chokkavelu: I will say, just to defend Comcast a little. I was thinking about my parents live in Florida, and it's high time we bring my two boys to Disney World or something like that. Honestly, the Universal theme park, the new one with Nintendo, Mario and the Harry Potter realm, it's close. We might we might prefer that one, but just to give a little love to Comcast and Universal. Jason Hall and Matt Frankel, we'll see you a little bit later in the show, but up next, we'll talk to the founder of one of the top five networks in the world, so stick around. This is Motley Fool Money. [MUSIC].

Welcome back to Motley Fool Money. I'm Anand Chokkavelu. Dave Schaeffer is the founder and CEO of Internet Service Provider Cogent Communications. Believe it or not, Cogent's the seventh successful company Dave Schaeffer has founded. Shaffer joined Fool analysts Asit Sharma and Sanmeet Deo to discuss how it deals with customers like Netflix and Meta platforms work and what keeps him up at night.

Asit Sharma: Well, hello, fools. I am Asit Sharma and I'm joined by fellow analyst Sanmeet Deo today, and our guest is Dave Schaeffer. Dave is CEO of Cogent Communications. He's also the founder of this company founded in 1999. Dave has grown Cogent Communications into a global tier one Internet service provider. It's ranked as one of the top five networks in the world. Dave is also a serial entrepreneur. He's founded six successful businesses prior to Cogent, and foolishly, he's also one of the longest serving founder CEOs in the public markets. We're delighted to have him with us today. Dave Schaeffer, welcome.

Dave Schaeffer: Hey, well, thanks for that great introduction.

Asit Sharma: To get started, let's jump in. Dave, for our members who might be unfamiliar with the ISP or Internet service provider industry, can you just explain what Cogent does and how it makes money?

Dave Schaeffer: Yeah, sure. Cogent provides Internet access to customers and to other service providers. I think virtually everyone uses the Internet, but rarely understands how it operates. Cogent has a network of approximately 99,000 route miles of intercity fiber that circumnavigates the globe and serves six continents. We then have an additional 34,000 route miles of fiber in 292 markets in 57 countries around the world. That network is solely built for the purpose of delivering Internet connectivity. When a customer buys Internet access, what they are really buying are interfaced routed bit miles connected to other networks. If you tried to sell a customer that they would have no idea what you're talking about. The average bit on the public Internet travels about 2,800 miles. It goes through eight and a half unique routers and 2.4 networks between origin and destination. Coaching carries approximately 25% of the world's Internet traffic on its network and has more other networks connected directly to it than any other network.

Asit Sharma: Yours is a primary network. Oftentimes, we hear of middlemen carriers in between ourselves sending that bit. Let's say I'm chatting with Sanmeet over Slack, sending him some bits as we have been exchanging through the day and him receiving that. But you are, I think we can think of Cogent as being the primary fiber that is the backbone of this information communication network, is that correct?

Dave Schaeffer: That is correct. We operate two very different customer segments, roughly 95% of our traffic, but only 37% of our revenue comes from selling to other service providers. We provide Internet connectivity to 8,200 access networks around the world and about 7,000 content generating businesses. Whether it be Bell Canada, British Telecom, China Telecom, Comcast or Cox. They could be customers of Cogent on the access side, where they aggregate literally billions of end users. Then on the other side, we sell connectivity to large content generating companies like Google, Amazon, Microsoft, and Meta, where they use us as their Internet provider. The second portion of Cogent's business is selling directly to end users. That represents about 63% of our revenues, but only approximately 5% of our total traffic. Cogent is an ISP, primarily in North America, where we connect to a billion square feet of office space, where we sell directly to end users. Then globally, we sell to multinational companies, oftentimes using last mile connections from third parties.

Asit Sharma: I always like to understand how exactly the companies I'm looking at make money. For example, for Netflix or Meta, or you pick a content provider, whoever it might be, when they work with you, explain that to me how they buy? Do they buy bandwidth in a package? Do they have a contract? How does that work? When they look to you to say, hey, we want to buy some bandwidth?

Dave Schaeffer: Yeah, so typically, we will provide them connections in multiple markets around the world. They will then have a minimum commitment level, and then above that, they pay on a metered basis. The way in which we bill is megabits per second at peak load over the course of the month. We bill at the 95th percentile, which means if you have a very spiky event that lasts less than 18 hours in a month, you don't pay for that incremental bandwidth but everything below that peak utilization, you pay a bill on a per megabit basis.

Dave Schaeffer: That is the way in which any service provider, whether it be an access network like Telkom South Africa, or a cable company like Rogers in Canada would buy from us. But for our corporate customers, the billing model is very different. For corporate customers, they typically buy in end user locations, not in data centers, and they are paying us a flat monthly fee for a fixed connection that is unmetered. I think of it as an all you can eat model.

Sanmeet Deo: There is a monthly recurring revenue that you get. It's just that with your network or your content customers, it could vary based on their usage. They could dial it up, dial it down, based on, like, this week, actually, they're dropping Squid Game, so they can anticipate they're going to need a lot of bandwidth versus maybe next month, their content late is a little lower, so they won't use up as much versus the corporate customers are paying more of a recurring, not based on volume. Is that accurate?

Dave Schaeffer: Is correct, Sanmeet. Virtually all of our revenue is predictable, even for those variable usage customers, there is oftentimes a very consistent pattern to their usage, and their bills do not vary by more than a couple percent month over month.

Sanmeet Deo: Dave, let's go on to looking at a review of recent performance. 2024 was a great year for Cogent. It crossed $1 billion in annual revenue. Can you just walk us through the highlights of your key business segments, wholesale, enterprise, net-centric? What drove the performance? Also did anything about the year surprise you as you went through it?

Dave Schaeffer: Two things. First of all our Internet based business represents 88% of our revenues across all three segments. We do derive about 12% of revenues from selling some adjacent services. Those being co location in our data center footprint. Optical transport or wavelength services and the leasing out of IPV4 addresses. We did generate about $1 billion in revenue in 2024 and 2024 was a year of significant transition for Cogent. Cogent had organically grown between 2005 and 2020 as a public company with no M&A at a compounded growth rate of 10.2% per year average over that period. We also were able to experience significant margin expansion during that period, where our EBITDA margins expanded at roughly 220 basis points per year over that same 15 year measurement period. When COVID hit, our corporate segment slowed materially because people were not going to offices, and as a result, Cogent's total growth rate had decreased to about 5% and our rate of margin expansion slowed to about 100 basis points. In May of '23, we acquired the former Sprint Long Distance Network, a Sprint Global Markets Group business from T-Mobile. That business was actually in decline and burning cash. In 2024, we significantly reduced that cash burn, and we were able to begin to repurpose some of the flow Sprint assets. In order to facilitate this transaction, T-Mobile paid us in cash over a 54 month period beginning in May of '23, $700 million. In 2024, a significant milestone for Cogent was our ability to take out much of that burn from that business and to actually accelerate the decline in that acquired business, as many of the products that were being sold or gross margin negative services.

Anand Chokkavelu: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure. Please check out our show notes. Up next, we've got stocks on our radar. Stay right here. You're listening to Motley Fool Money.

I'm Anand Chokkavelu, joined again by Jason Hall and Matt Frankel. This week's been Prime Day week invented out of thin air in 2015 to boost sales. It's almost literally become Christmas in July for Amazon, and to a lesser extent, all the imitating retailers. Got me wondering. Is this the greatest feat of something from nothing marketing we've seen? If not, what's competing with it, Jason?

Jason Hall: I think it's not even something from nothing. I think they stole this idea. Christmas in July has been around literally since the 1900. I think they're getting maybe a little bit too much credit for just being a really big retailer, smart enough to say, hey, we're doing a sale when there was nothing else going on, and people were like, oh, it's a big sale. Well, people kept coming, so it just gets bigger every single year.

Matt Frankel: Before e-commerce, Jason's right, remember the Sunday paper that had all the flyers from all the stores. They'd have their semi annual sales. The President's Day weekend sales were the ones I remember that were the biggest deals ever that really were just meant to invigorate sales in a historically slow time of year. But really, this concept has been applied over and over. Think of how many tourist destinations create random festivals in the worst months to go, like, weather wise. I used to live in Key West, Florida, and the biggest party of the year is called Fantasy Fest. It was created to invigorate tourism during hurricane season. It's a concept that's worked over and over, and this is a big one.

Anand Chokkavelu: Dan.

Dan Boyd: I just wanted to jump in here and mention Father's Day and Mother's Day. Surprised that you guys didn't mention those. We're all fathers here on the podcast, so I know that we enjoy Father's Day, but, like, come on. They're nothing. They were just created to sell stuff.

Anand Chokkavelu: You're not going to mention Valentine's Day, Mr. Grinch.

Dan Boyd: Valentine's Day has somewhat historical significance with all the St. Valentine's stuff. I didn't want to go too far into it in my grumpiness Anand, but I guess we can throw that one on the fire.

Anand Chokkavelu: Speaking of Singles Day in China. The Alibaba took that cemented in the '90s. I think less commercy, but then it became more commercy. Two other things, Sears' catalog. Let's not forget. A lot of times Sears really is the Amazon before Amazon we forget about it because we see it at its late phases. It wasn't the first catalog, Tiffany, Montgomery Ward, they beat it to the punch. But when it was going, it was called the Consumer Bible. Then on a smaller scale, I'll give one more. Just shout out to Spotify rapped. They do a wonderful job inventing a thing to get us more engaged. Let's get to the stocks on our radar. Our man behind the glass, who we just recently, Dan Boyd, is going to hit you with a question. We're more likely, historically, an amusing comment. Jason, you're up first. What are you looking at this week?

Jason Hall: How about Church and Dwight? Ticker C-H-D. I don't know if we give some of these legacy consumer brands companies enough talk. What's Church and Dwight? You've probably heard of Arm & Hammer baking soda. But they also own a lot of other retail brands. You might be familiar with Orajel, if you've ever had a sore tooth or you have a baby that kind of thing comes up. They own Trojan, which is another brand that people might be familiar with. But here's my personal. Right now, I have a cold. I'm living and functioning off of Zicam. That's a Church and Dwight product that's really getting me through. Over the long term, it's been a great investment. Over the past 10 years, the stocks returned about 10.5% in total returns. That's underperformed the market, but it's better than the market's long term average. I think there might be something there.

Anand Chokkavelu: Dan, a question about Church and Dwight?

Dan Boyd: Not really a question, Anand, but more of a comment. Jason, you forgot to mention OxiClean in the Church and Dwight product catalog here as a parent of a three-year-old and a nine month old laundry is a very important thing on our house, and I don't think we could survive without that OxiClean.

Jason Hall: I will raise your three-year-old and nine month old with an eight and a half year old who plays soccer. My house runs on that stuff. I'm with you there.

Anand Chokkavelu: Matt, what's on your radar?

Matt Frankel: Well, now what's on my radar is the OxiClean that I have in the closet right there. But as far as the stock, I'd have to say SoFi. Ticker symbol S-O-F-I. Fantastic momentum. They've done a great job of creating capital white revenue streams in recent years. The growth is actually accelerating. They recently announced they're bringing crypto back to their platform now that the banks are allowed to do so. That's going to be a big driver. Not only crypto, they're going a step further. They're going to start bringing blockchain facilitated money transfers across border for free. They have lots of big plans. They recently started doing private equity investing for everybody. Guys like you and me can invest in companies like SpaceX and OpenAI that are pre IPO through SoFi's platform through venture funds. There's a lot going on in this business, and it's still a relatively small bank, and they aim to be a Top 10 bank within the next decade.

Anand Chokkavelu: Dan, question about SoFi.

Dan Boyd: Well, absolute F to name. SoFi, just terrible. I feel like smart people like them could have come up with something better, but private equity investing is very interesting, Matt, though a little scared to me without the reporting regulations that public companies have to do.

Matt Frankel: I do think it was a natural thing, though, now that all these companies are waiting longer than ever to go public. SpaceX is a massive business. OpenAI has a, $100 billion plus valuation. There's a lot to like there and a lot of potential.

Anand Chokkavelu: Dan, which company you're putting on your watch list, OxiClean or private equity stuff.

Dan Boyd: I'm going to go with Church and Dwight for some of that beautiful OxiClean.

Anand Chokkavelu: That's all for this week. See you next time.

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. Anand Chokkavelu, CFA has positions in Alphabet, Amazon, First Solar, Microsoft, Netflix, Salesforce, SoFi Technologies, Walt Disney, and Warner Bros. Discovery. Asit Sharma has positions in Amazon, Digital Realty Trust, Microsoft, Nvidia, Salesforce, Upstart, and Walt Disney. Dan Boyd has positions in Amazon and Walt Disney. Jason Hall has positions in Brookfield Asset Management, Brookfield Infrastructure, Brookfield Renewable, Enphase Energy, First Solar, Nvidia, SoFi Technologies, Upstart, and Walt Disney and has the following options: short January 2026 $27 calls on SoFi Technologies, short January 2027 $32.50 puts on Upstart, and short January 2027 $40 puts on Enphase Energy. Matt Frankel has positions in Amazon, Brookfield Asset Management, Digital Realty Trust, SoFi Technologies, Upstart, and Walt Disney and has the following options: short December 2025 $95 calls on Upstart. Sanmeet Deo has positions in Alphabet, Amazon, Netflix, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Brookfield Asset Management, Constellation Energy, Digital Realty Trust, Equinix, First Solar, Meta Platforms, Microsoft, Netflix, Nvidia, Salesforce, Tesla, Upstart, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Alibaba Group, Brookfield Renewable, Comcast, Enphase Energy, Ge Vernova, and T-Mobile US and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Many AI stocks suffered in the first half as investors fled growth-oriented stocks, but positive momentum has returned in recent weeks.

• These two players are leaders in their industries and are ready to benefit from the AI boom.

• 10 stocks we like better than Amazon ›

The first half of the year was a difficult one for many artificial intelligence (AI) stocks as investors fled high-growth players. The reason? They worried that President Donald Trump's import tariff plan might lift prices for a wide range of goods -- and this could hurt the consumer's buying power, weigh on corporate expenses, and eventually stop growth companies in their tracks.

As a result, the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite slid in April, but in recent weeks, investor sentiment has improved. Initial trade deals with the U.K. and China helped, as did commentary from tech giants, who reiterated capital spending plans, suggesting that potential tariffs wouldn't stop their momentum.

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 »

Though the tariff situation remains uncertain, the market's more sanguine view, as well as certain companies' solid long-term outlooks, make now a fantastic time to get in on AI stocks. And two in particular may be well positioned to soar in the second half.

1. Amazon

The best word to describe Amazon's (NASDAQ: AMZN) stock performance in the first half is "lackluster." The company actually finished the half at the same level it started, posting a 0% move for the period. Investors may have been concerned about Amazon getting hit by tariffs in two ways: Higher prices may weigh on e-commerce demand and revenue, and Amazon Web Services (AWS) might see customers rein in spending.

But there's reason to believe those problems won't occur. Amazon has a wide selection of products and sourcing countries, making it easy for the company to be nimble in an import tariff environment. As for AWS, so far, the strong spending message from companies suggests customers are sticking by their AI strategies and aren't slowing down.

I also like the idea that Amazon has proven its ability to handle difficult environments. A few years ago, when inflation was soaring, the company revamped its cost structure. That move had immediate results, helping Amazon recover from its first annual loss in about a decade. This new cost structure should also make it easier for the company to overcome future pressures on costs, such as import tariffs.

AMZN Net Income (Annual) data by YCharts.

Finally, AI infrastructure buildout continues, and AWS, as the world's biggest cloud company, should benefit as its customers seek compute and other AI solutions. This should keep Amazon's billion-dollar earnings growing. And that, as well as a valuation of 35 times forward earnings estimates, down from more than 40 times late last year, could prompt investors to pile into this stock in the second half.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) stock slipped more than 6% in the first half of the year amid the general uncertainties I mentioned above. It's on the rebound from its lowest point in April, having gained more than 20% since, and I think the stock will move considerably higher in the months to come amid the improving sentiment for growth players.

Like Amazon, Alphabet is a market leader that has proven itself over time, generating significant growth and billions of dollars in earnings. This is thanks to the company's Google platform and its cloud computing business, Google Cloud. The Google platform brings in revenue through advertising, as advertisers flock to the world's internet search leader to reach us where they know we'll be, and Google Cloud's wide range of services is also a billion-dollar revenue driver.

And AI is at the center of the story right now. The company has developed its own large language model (LLM), and this is fueling better search experiences for users and more targeted ad campaigns for advertisers. Both of these elements should keep advertisers spending, and even increasing spending, on Google.

As for Google Cloud, AI products and services have been driving growth, and the unit reported a 28% increase in revenue to more than $12 billion in the latest quarter. This momentum should continue as cloud customers develop and scale up their AI programs, as we're still in the early days of the AI story.

What may particularly attract investors to Alphabet right now is its dirt-cheap valuation, trading for only 18 times forward earnings estimates. And that could help this top AI stock to roar higher in the second half of 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

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

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.

Key Points

• Microsoft is the second-largest company by market cap, behind Nvidia.

• The cloud computing leader is well positioned to be the next $4 trillion stock.

• Microsoft could continue to perform well long after it reaches $4 trillion.

• 10 stocks we like better than Microsoft ›

Nvidia (NASDAQ: NVDA) has been firing on all cylinders over the past two years, and the company just added one more accomplishment to its long list of medals: The chipmaker became the first stock to hit the $4 trillion mark. It now sits as the most valuable company in the world, but others are close behind.

Other corporations will eventually reach that valuation too, perhaps even sooner than many think. And the stock most likely to get to $4 trillion next is Microsoft (NASDAQ: MSFT). Read on to find out why.

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 »

Why Microsoft has the clear edge

Most of the members of the "Magnificent Seven" have market caps above $1 trillion, but some are much closer to the $4 trillion mark than others. The two largest companies behind Nvidia are Apple, valued at $3.16 trillion, and Microsoft, at $3.72 trillion. The others are much further behind.

And while there's the possibility that they will soar while these two drop, assuming they all perform relatively similarly in the next few months, Microsoft will get there first simply because it's the closest.

However, Microsoft has an excellent chance of performing better than, at the very least, its closest competitor, Apple. The iPhone maker has been hit hard this year due to the current U.S. administration's trade policies. The Trump administration aims to bring manufacturing back to the United States, which poses a challenge for Apple, as the company outsources most of its manufacturing to countries such as China, a favorite target of Trump's aggressive tariffs, and other Asian nations.

Trump recently doubled down on his threat of aggressive tariffs. Additionally, Apple has fallen behind Microsoft and its tech peers in the artificial intelligence (AI) race. While I think Apple could still perform well over the long run, the company's short-term prospects don't look attractive.

What about Microsoft? The tech leader delivered excellent results during its latest update, which covered the third quarter of its fiscal year 2025, ending on March 31. Microsoft's cloud computing and AI businesses are booming. It has been gaining ground on Amazon in the competitive cloud field.

Further, the company's latest update provided strong guidance, indicating a growing demand for its services, despite a somewhat shaky macroeconomic environment. The smart money is on Microsoft outperforming Apple in the next few months.

Amazon, Alphabet, and Meta Platforms are also performing well, but with market caps of $2.36 trillion, $2.15 trillion, and $1.82 trillion, they are too far behind to make serious runs at the $4 trillion mark before Microsoft.

For all these reasons, Microsoft seems by far the most likely to join Nvidia in the $4 trillion single-company (for now) club next.

To $4 trillion and beyond

$4 trillion isn't a finish line. Once Microsoft reaches that point -- whenever that may be -- there will still be plenty of upside left for the company afterward. In fact, here is another prediction: Microsoft will reach a $10 trillion valuation within the next decade.

From its current levels, that would require a compound annual growth rate of at least 10.4%. That's no easy feat, but Microsoft can pull it off as the company continues to make headway within its two biggest sources of growth: AI and cloud computing.

While the company is already generating significant sales from these businesses, this is likely still the early stages of these industries' growth stories. According to Andy Jassy, CEO of Amazon, more than 85% of IT spending still occurs on-premises. Meanwhile, AI applications reached a new level a little less than three years ago with the launch of ChatGPT by OpenAI, a Microsoft-backed company. Both technologies enable businesses across all industries to reduce costs and increase efficiency.

Companies that don't use cloud computing or AI services might, eventually, become like modern businesses that don't use computers: They hardly exist. That could be the scale of the revolution investors are witnessing, and Microsoft is one of the leaders driving it. Though competition will continue to intensify, the tech giant has a strong competitive edge due to switching costs. Plus, it has already proven it can perform well despite competitive pressure from Alphabet and Amazon.

Microsoft's long-term prospects look attractive thanks to this duo of massive growth drivers. Investors shouldn't buy the stock because it could soon reach $4 trillion. They should purchase it because it will likely continue performing well long after that.

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

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

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

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

Key Points

• Coupang just publicly unveiled its cloud computing service.

• The service adds another engine to power the company's growth prospects.

• The stock trades at a cheap valuation if you have a long time horizon.

• 10 stocks we like better than Coupang ›

Another technology player just got into the artificial intelligence (AI) game. Coupang (NYSE: CPNG) recently unveiled its new intelligent cloud computing service focused on AI, which is vying for government funding as South Korea aims to become a cloud computing hub. The e-commerce platform is expanding into another technology field, giving the company an even longer runway to grow.

Similar to Amazon, Coupang has begun in e-commerce and has now taken those resources to build a cloud computing service. Here's why Coupang just became a must-own stock in the technology sector.

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 »

AI cloud computing in Korea

According to its press release, Coupang has been investing in AI computing infrastructure for years to power its warehouses, website analytics, and logistics network. Now, it is beginning to outsource its data centers to third parties. Named the Coupang Intelligent Cloud (CIC), earlier this month management officially unveiled the division, which is a major departure from its commerce platform.

It is curious timing -- and perhaps not coincidental -- to have this announcement come right around when the government of South Korea plans to spend $1 billion on a GPU cluster for AI in Seoul. Coupang is one of the companies vying for this contract, which could kick-start growth for this new endeavor. As a Korean company, the government of South Korea is more likely to choose Coupang for this deal, making it one of the potential candidates to win the contract.

Cloud computing is a huge and lucrative market, which makes it an exciting sector for Coupang to tackle. Just take a look at Amazon, which generates more than $100 billion in revenue from its cloud computing division. This won't happen to Coupang overnight, but the company just massively expanded its addressable market by entering a sector that is now supercharged by the AI revolution.

Taking earnings and reinvesting in hypergrowth

In e-commerce, Coupang still has plenty of room left to expand its operations in South Korea. Its revenue from its original e-commerce marketplace grew 16% year over year last quarter to $6.9 billion, and is still a small slice of the total Korean retail market. With $2 billion in annual operating cash flow, Coupang is now a self-sustaining operator, which gives it the flexibility to reinvest into new revenue segments.

And boy, is it ever reinvesting. It has the newly introduced cloud segment, which can take a lot of capital expenditures as the company looks to build new data centers. There is food delivery, financial technology, video streaming, advertising, and the Farfetch luxury marketplace it just acquired. Most important may be the geographic expansion into Taiwan, which has accelerated revenue growth at the company's "developing offerings" segment to 78% year over year on a foreign currency neutral basis. The segment now does $1 billion in quarterly revenue and should become an increasingly important part of the overall Coupang business in the next few years.

CPNG Revenue (TTM) data by YCharts

Why Coupang stock is a buy

There is reason to be highly optimistic around Coupang's future growth prospects. Its core business is still chugging along, Taiwan and other developing offerings are growing quickly, and it just added this new cloud computing division. From my seat, this sounds a lot like Amazon in the early days, and readers are well aware of how well this stock has performed for shareholders in the last two decades.

Coupang stock is up 41% in the last year, but I think the party is just getting started. At a market cap of $55 billion, the stock trades at what looks like an expensive price-to-earnings ratio (P/E) of 215, but this is misleading compared to Coupang's forward earnings potential. The company generates $31 billion in annual revenue and believes it can reach 10% profit margins once it stops reinvesting for growth.

Given its current revenue growth potential, I think the company can quickly get to $50 billion in revenue and eventually has a path to $100 billion in annual sales. Margins may even end up higher than 10% due to the growth of advertisements and this new cloud computing division.

That $50 billion in revenue and 10% profit margins would result in $5 billion in earnings, or a forward P/E barely over 10 compared to the stock's current market cap. This will happen faster than investors think. Coupang stock looks like a fantastic AI stock to add to your portfolio right now.

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

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

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

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

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

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

In this podcast, Motley Fool host Anand Chokkavelu and contributors Jason Hall and Matt Frankel discuss:

• The Aug.1 tariffs.
• This year's four-day Prime Day (and whether Amazon stock is a deal).
• Elon Musk's political party and Tesla.
• Bold predictions.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

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 »

A full transcript is below.

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 $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $998,376!*

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

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

This podcast was recorded on July 08, 2025.

Anand Chokkavelu: What are you buying today? Motley Fool Money starts now. I'm Anand Chokkavelu and I'm joined by two of my favorite Fools, Matt Frankel and Jason Hall. They we're talking Amazon's Prime Day. It's more like a prime week at this point, the latest on Tesla and Elon Musk, and we'll make some bold predictions. But first, let's update ourselves on tariffs. What's going on there, Matt?

Matt Frankel: Well, the tariff news seems to be changing so quickly. We're only recording this a few hours before it's being published, and I'm worried, if I'm being honest. The president announced a whole new round of tariffs yesterday, set to begin on August 1st for 14 countries, and that includes Japan and South Korea, which are our Number 4 in six trading partners, actually. Those both got 25% tariff rates. Some of the announced rates were as high as 40%. The president also said that the August 1st date is not set in stone. He said, "It's firm, but not 100% firm." I really think this is more noise than news at this point. Remember the initial Liberation Day tariff rates with the thing that looked like the cheesecake factory menu, [laughs] and then the pause that was announced until July 9th? This might be an effective negotiation tactic to get better trade deals. To be fair, it looks like it might be. But until anything actually goes into effect and is actually finalized and signed by both parties, it's noise. But in other tariff news, there is a good possibility that we're going to see a European Union trade deal soon. Each of the countries in the union are small trading partners, but collectively, they actually would make up our number one trading partner in terms of both imports and the trade deficit we have. It's definitely worth watching.

Jason Hall: From an investing perspective, maybe the Taco trade's real and still alive? I don't know. We've got another extension, another delay here, so there is a group that are going to say it's another chicken out moment. But I don't know if that's really investable for most of us. But thinking about the broad economic impact, I do think that for our trading partners, they're in a tough position. There's the tension between continuing to delay and avoid substantial tariffs because it seems like they keep getting kicked down the curb. But also, all of their industry and government spending, they still have to plan, too. All of the uncertainty weighs in there. But if you look at the markets, it seems like the markets are just shrugging this off is what's become business as usual. Maybe it's this fall before we really find out if litigation continues to play out, and eventually this ends up at the Supreme Court, it might have been a whole lot of work for the Supreme Court to say, hey, Congress, you guys need to do something. The president can't do this. We'll see.

Anand Chokkavelu: Jason, today's Amazon's Prime Day. We all know the deal. This is Amazon's once brilliant move to juice sales during the summer doldrums, maybe pull forward some of that back to school shopping, taking a little market share. It's grown to four days long now. It's doubled from last year. Any takeaways for investors? You know what? Is Amazon's stock priced as a Prime deal at this?

Jason Hall: You're not including the early days, the pre-Prime days deals that they do for people that can't hold off and wait for the four whole days. My wife may or may not have changed my Amazon password as an Amazon shopper. I'll tell you, there are some things that I'm looking at, for sure, but there's not much of an investing takeaway from that. It has become an event. It's become a retail event. But if we start looking at the business, the e-commerce business has really bounced back. There was some much needed restructuring a couple of years ago of expenses after the massive expansion during the pandemic. But that added scale, it's really, really paying off. It's e-commerce- revenue since 2019, so clean before the pandemic is up 77%. They've added $110 billion in e-commerce sales on a trailing 12 month basis.

Here's another interesting data point. Third party services revenue, that's also up by over $100 billion. Amazon's role as a giant in fulfillment has also exploded along with its own sales. But on AWS is still the big profit driver. Generates more than half of operating income, but only off of 17% of revenue over the past four quarters. Now, the stock, is it a Prime day deal? Maybe. Trades for less than 21 times operating cash flow. If you look back over the past decade, that's cheap. Here's the problem. They put about 85% of that operating cash flow right back into the business. But they need to right now, especially building up the tech infrastructure and R&D spending, but only time is going to tell if it can start converting those investments into free cash flow.

Matt Frankel: AWS is definitely the biggest profit driver for now. You also didn't mention the advertising that they're building out. That's one of the faster growing parts of their revenue, which is technically reported under the e-commerce platform. But it's a higher margin type of revenue than it gets elsewhere. Amazon certainly is not as cheap as it was just a few months ago, but it still looks very attractively valued, considering the recent progress with both efficiency and profitability of the business and all that growth you mentioned.

Anand Chokkavelu: Well, you got to raise the price right before you do the discount. [laughs] It's just a little stock trick. Speaking of those deals, any top prime deals for your household, Jason?

Jason Hall: I have to admit I'm eyeing a robot lawnmower. But I'm not convinced just yet, but since it's not Prime Day, it's Prime Week, like you said, I got a little time to think about it.

Matt Frankel: In the past few years, we've bought the kids the new Fire tablets because they're so cheap on Prime Day. I haven't looked yet, but I'm sure my wife has and has a plan. I like it when she does the shopping, because then when a bunch of packages show up and it's like Christmas.

Anand Chokkavelu: We've got a kid who never brushes his teeth and has destroyed his previous electric toothbrush, but we still waited a week to see if there are any deals. Spoiler alert, no deals on the specific toothbrush [laughs] we wanted. We also looked at Walmart and Target who do similar Remora to the Amazon Shark sales. But we'll see. I'm sure we'll be buying a bunch of stuff.

Jason Hall: Well, Anand, do you know what you call a kid that won't brush their teeth?

Anand Chokkavelu: What?

Jason Hall: A kid.

Anand Chokkavelu: [laughs] Exactly. But this is where he's beyond the normal distribution.

Matt Frankel: I was going to say you've won, too. [laughs]

Anand Chokkavelu: Right. At least versus his brother and all of his cousins. Let's move on to the boy who may have cried wolf on focusing less on politics and more on Tesla. What's up with Elon Musk today, Matt?

Matt Frankel: Oh, I assume you're talking about the new political party that he's starting the American Party, because there's a lot that's up with Elon Musk. Between Tesla, between SpaceX, between xAI, between all the other things, there's a lot that's up with Elon Musk. He wanted to add one more thing to his plate by creating his own [laughs] political party. To be fair, he ran a poll on X, formerly Twitter, asking who would want a third party. Overwhelmingly from millions of votes and not just like his own followers, through millions of votes 80% or so said yes. One of the party's stated goals is to get Republicans out of office who voted for Trump's bill. We all saw the big public fallout between him and the president. That's really what led to this. He describes the party as a tech centric, budget conscious, pro energy, and centrist party with the goal of drawing both disaffected Democrats and Republicans. Now, this is easier said than done.

This is not the first attempt to create a third party. There are actually like four or five of them already in existence that don't have any traction. It's very difficult to gain any traction as a third party. You would essentially have to set up a political party in all 50 states because all the local rules and things like that, it's all different. You need a lot of money, which fortunately he has. How much he wants to spend on this is another issue. But he has the resources to do it if he wants to.

Jason Hall: I think the investing take, if we circle back around to Tesla and is honored as you joked there at the beginning, the boy who cried wolf, clearly, Tesla shareholders, as much as from a political perspective, I'm sure there's a lot of people, no matter your political affiliation, that are so frustrated with the environment that support the idea of this. Tesla needs to figure out how to start selling more Teslas. They need the resources from selling more Teslas to pay for so many things. The company is at a major inflection point right now. Dan Ives talked about this with where they stand with trying to start bringing robotics to commercial use in the next few years. We've seen what's going on in Austin with autonomous driving. That's such a massive future part of the business. You got to start selling more Teslas and generate the cash flow to fund these things. There's even more headwinds now with some things in the spending bill that was passed that are going to gut a pretty important part of Tesla's profitability with emissions credits. There's a lot of reasons for investors to certainly be concerned about this wherever you stand as an engaged citizen.

Anand Chokkavelu: Elon Musk is famous for his bold predictions. After this break, we'll have some of our own.

Time for a segment we call bold predictions. Jason, start us off. What's your bold prediction?

Jason Hall: I'm going to stick with the theme from the show today, Anand, and talk about Tesla. I think Tesla's stock in the near term, it's probably going to rebound. But those robotics ambitions, the autonomous driving ambitions, I think they might be about as successful as the Solar Roof has been so far, and that's to say not very. At least not within the next five years' time. Now, a couple of reasons why. Number 1, I think we've seen some very ambitious, you talked about Musk's predictions about things. They've accomplished a lot of great things, but always years and years later. I think that's going to continue to play out.

But I think the concern that I have, and this is really at the heart of the prediction is that while the stock might rebound in the near term, I think the next few years are going to be really, really tough for Tesla and probably tough for Tesla shareholders because there's so much of those future prospects that are baked into today's price. I think as the realization comes out that those things are going to take longer and longer to monetize, and they might be harder to monetize if Tesla can't start selling more Teslas instead of less Teslas, then shareholders may be really in for a tough time in the next five years or so.

Matt Frankel: I'll make a very bold prediction, and I'm going to say that the Fed is going to surprise the market and cut rates this month when they meet at the end of July. The market's only pricing in about a 10% chance of that happening right now. But based on what the Fed governors have said, other than Jerome Pell, it's more likely than that to happen. I think there's a lot of economic data between now and then, a lot of trade deals that can be settled between now and then to calm the Fed's nerves. I think it's going to happen earlier than people think.

Jason Hall: That would be positive for Tesla.

Matt Frankel: True.

Anand Chokkavelu: Here at The Motley Fool, we live on feedback and Amazon gift cards. Be part of that feedback or to ask a question. Email us at podcast at fool.com. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards. It is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes.

Anand Chokkavelu: Jason Hall, Matt Frankel, the entire Motley Fool Money team, I'm Anand Chokkavelu. My bold prediction is that we'll see you tomorrow.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anand Chokkavelu, CFA has positions in Amazon and Target. Jason Hall has no position in any of the stocks mentioned. Matt Frankel has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Target, Tesla, and Walmart. The Motley Fool has a disclosure policy.

Key Points

• The artificial intelligence trend will be a huge growth engine for Amazon's cloud computing division.

• Efficiency improvements should help expand profit margins for its e-commerce business.

• Anticipation of the company's earnings growth could help drive the shares higher in 2025's second half.

• 10 stocks we like better than Amazon ›

Only three stocks so far have ever achieved a market capitalization of $3 trillion: Microsoft, Nvidia, and Apple. Tremendous wealth has been created for some long-term investors in these companies -- only two countries (China and the United States) have gross domestic products greater than their combined worth today.

In recent years, artificial intelligence (AI) and other technology tailwinds have driven these stocks to previously inconceivable heights, and it looks like the party is just getting started. So, which stock will be next to reach $3 trillion?

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 »

I think it will be Amazon (NASDAQ: AMZN), and it will happen before the year is done. Here's why.

The next wave of cloud growth

Amazon was positioned perfectly to take advantage of the AI revolution. Over the last two decades, it has built the leading cloud computing infrastructure company, Amazon Web Services (AWS), which as of its last reported quarter had booked more than $110 billion in trailing-12-month revenue. New AI workloads require immense amounts of computing power, which only some of the large cloud providers have the capacity to provide.

AWS's revenue growth has accelerated in recent quarters, hitting 17% growth year-over-year in Q1 of this year. With spending on AI just getting started, the unit's revenue growth could stay in the double-digit percentages for many years. Its profit margins are also expanding, and hit 37.5% over the last 12 months.

Assuming that its double-digit percentage revenue growth continues over the next several years, Amazon Web Services will reach $200 billion in annual revenue within the decade. At its current 37.5% operating margin, that would equate to a cool $75 billion in operating income just from AWS. Investors can anticipate this growth and should start pricing those expected profits into the stock as the second half of 2025 progresses.

Automation and margin expansion

For years, Amazon's e-commerce platform operated at razor-thin margins. Over the past 12 months, the company's North America division generated close to $400 billion in revenue but produced just $25.8 billion in operating income, or a 6.3% profit margin.

However, in the last few quarters, the fruits of Amazon's long-term investments have begun to ripen in the form of profit margin expansion. The company spent billions of dollars to build out a vertically integrated delivery network that will give it operating leverage at increasing scale. It now has an advertising division generating tens of billions of dollars in annual revenue. It's beginning to roll out more advanced robotics systems at its warehouses, so they will require fewer workers to operate. All of this should lead to long-term profit margin expansion.

Indeed, its North American segment's operating margin has begun to expand already, but it still has plenty of room to grow. With growing contributions to the top line from high-margin revenue sources like subscriptions, advertising, and third-party seller services combined with a highly efficient and automated logistics network, Amazon could easily expand its North American operating margin to 15% within the next few years. On $500 billion in annual revenue, that would equate to $75 billion in annual operating income from the retail-focused segment.

AMZN Operating Income (TTM) data by YCharts.

The path to $3 trillion

Currently, Amazon's market cap is in the neighborhood of $2.3 trillion. But over the course of the rest of this year, investors should get a clearer picture of its profit margin expansion story and the earnings growth it can expect due to the AI trend and its ever more efficient e-commerce network.

Today, the AWS and North American (retail) segments combine to produce annual operating income of $72 billion. But based on these projections, within a decade, we can expect that figure to hit $150 billion. And that is assuming that the international segment -- which still operates at quite narrow margins -- provides zero operating income.

It won't happen this year, but investors habitually price the future of companies into their stocks, and it will become increasingly clear that Amazon still has huge potential to grow its earnings over the next decade.

For a company with $150 billion in annual earnings, a $3 trillion market cap would give it an earnings ratio of 20. That's an entirely reasonable valuation for a business such as Amazon. It's not guaranteed to reach that market cap in 2025, but I believe investors will grow increasingly optimistic about Amazon's future earnings potential as we progress through the second half of this year, driving its share price to new heights and keeping its shareholders fat and happy.

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 $694,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $998,376!*

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

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

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 Amazon. The Motley Fool has positions in and recommends 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.

Key Points

• Artificial intelligence investments are finally translating into massive revenue growth and expanding profit margins.

• These three companies offer different ways to profit from the AI revolution at reasonable valuations.

• 10 stocks we like better than Palantir Technologies ›

Investors are starting to grumble about the noteworthy valuations of top artificial intelligence (AI) stocks. However, a closer look reveals those valuations may be bargains in disguise.

Why? The AI gold rush has entered a new phase. What started as speculative hype has transformed into concrete financial results, with revenue growth accelerating and profit margins expanding across the space. While investors worry about stretched valuations, the three companies discussed below are delivering AI-driven growth that justifies premium prices.

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 »

A core AI holding

Palantir Technologies (NASDAQ: PLTR) posted 39% year-over-year revenue growth in Q1 2025 to $884 million. U.S. commercial revenue, a key driver, surged 71% year over year. Management guided full-year 2025 revenue to a range of $3.89 billion to $3.9 billion, representing approximately 36% growth.

The company highlighted strong AI demand, with both commercial momentum and margins accelerating. In Q1 2025, 55% of Palantir's revenue came from government contracts, providing a stable base. The accelerating commercial growth has led to Palantir trading at premium multiples, often exceeding 250 times forward earnings, which is a valuation level that typically deters traditional value investors.

While CEO Alex Karp's shareholder letters are known for their unconventional style, the company's financial performance, particularly the rapid growth in U.S. commercial revenue and expanding margins, is a primary focus for many investors.

The quiet AI giant

Amazon (NASDAQ: AMZN) doesn't get the AI credit it deserves. While Microsoft Azure and Alphabet's Google Cloud dominate headlines, Amazon Web Services (AWS) has quietly carved out a dominant position in the cloud economy -- and serves as a key backbone of AI infrastructure worldwide.

AWS crossed $100 billion in annual revenue for the first time in 2024, growing 19% to $107.6 billion. More importantly, operating income soared from $24.6 billion to $39.8 billion -- a margin-expansion story hiding in plain sight. The company plans to spend $100 billion on AI infrastructure in 2025 alone.

CEO Andy Jassy sees AWS evolving from a "multi-$100 billion business" to something much larger, as 85% of global IT spending remains on-premises. The AI opportunity accelerates this shift.

AWS already generates billions from AI services with triple-digit growth rates. Trading at under 25 times projected 2027 earnings, Amazon offers compelling risk-reward in cloud AI at a reasonable valuation.

There are 1 billion AI users (and counting)

Meta Platforms (NASDAQ: META) effectively addressed skeptics with its robust Q1 2025 results. The company reported a 16% increase in revenue to $42.3 billion, while earnings per share surged 37% to $6.43, comfortably exceeding analyst estimates.

A key highlight was the rapid adoption of Meta AI, which reached nearly 1 billion monthly active users, underscoring the company's ability to develop and scale consumer AI products globally. AI-driven ad enhancements also contributed meaningfully, lifting the average price per ad by 10%, alongside 5% year-over-year growth in ad impressions.

Meta's commitment to AI leadership is reflected in its planned $64 billion to $72 billion investment in AI infrastructure during 2025. The company's Llama open-source models position Meta uniquely within the AI ecosystem, fostering both developer engagement and commercial leverage. Additionally, the company's Advantage+ suite has demonstrated clear value for advertisers, delivering a 46% lift in incremental conversions during testing.

Despite its scale and aggressive investment, Meta's valuation remains attractive, trading at just 23 times projected 2027 earnings. Coupled with double-digit revenue growth and a wide competitive moat, the stock appears undervalued, relative to many AI-focused peers.

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

Before you buy stock in Palantir Technologies, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $687,764!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $980,723!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

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

Key Points

• Anticipated deregulation and advancements in artificial intelligence have pushed valuations sky-high, but select opportunities remain.

• Nebius Group's 385% year-over-year revenue growth and path to $1 billion in annual recurring revenue make today's premium valuation tomorrow's bargain.

• Rocket Lab's evolution from launch provider to full-stack space company justifies its premium valuation.

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

Growth stocks have made a strong comeback after a rocky start to the year, driven by anticipated deregulation and significant breakthroughs in artificial intelligence (AI). Valuations have surged, and at first glance, bargains seem extinct.

Look closer. Two high-powered growth stocks buck this trend, offering compelling opportunities despite price tags that would terrify traditional investors.

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 »

When 70 times sales is cheap

Nebius Group (NASDAQ: NBIS) trades at over 70 times trailing sales, an astronomical valuation by any measure. Why is this valuation deceptive in light of its AI tailwinds? Because the company is growing so fast that backward-looking metrics become meaningless.

The company posted 385% year-over-year revenue growth in Q1 2025. Annual recurring revenue hit $310 million in April, and management guides to $750 million to $1 billion by year's end. When revenue triples in 12 months, that multiple of 70 times trailing sales effectively collapses to under 25 times on forward estimates -- before factoring in the next wave of AI infrastructure demand. The window to act closes fast.

Nebius builds physical clusters of graphics processing units (GPUs) for enterprises desperate for AI compute power. Its Kansas City facility will house 35,000 Nvidia GPUs when complete, one of the largest deployments outside Amazon or Microsoft.

Nebius's enterprise customers span from autonomous vehicle developers to large language model startups, all battling for scarce GPU access as AI adoption accelerates. Nebius's compute clusters power everything from next-generation autonomous driving algorithms to cutting-edge generative AI platforms, making it indispensable to industries chasing exponential AI growth. With $1.44 billion in cash and manageable debt from recent convertible notes, the company can fund this massive expansion.

Nvidia's direct investment speaks volumes. When the world's dominant AI chip maker backs your infrastructure buildout, it validates the technology and strategy. Early access to Blackwell chips gives Nebius pricing advantages that competitors can't match. Jeff Bezos doubled down through Bezos Expeditions' investment in Nebius's Toloka AI subsidiary.

With first-mover scale, privileged access to Blackwell chips, and $2.4 billion in total funding, including recent convertible notes, Nebius has carved out a widening moat in the AI compute arms race, one that's hard for new entrants to replicate without billions in upfront capital.

A space race winner

Humanity is going to the stars. That much is certain. Rocket Lab (NASDAQ: RKLB) trades at 41 times trailing sales, but this valuation misses the transformation under way.

Q1 2025 revenue hit $123 million, up 32% year over year, with more coming from spacecraft components than launches. Today, over 50% of Rocket Lab's revenue comes from spacecraft systems, not launches, a diversification that boosts margins and stabilizes growth.

This shift to higher-margin, recurring revenue from spacecraft components fundamentally changes the investment thesis from a pure-play launch company to a diversified space infrastructure provider.

At the start of the year, Rocket Lab was selected as one of five providers for the U.S. Space Force's $5.6 billion National Security Space Launch Phase 3 Lane 1 program, positioning the company to compete for high-priority defense missions. The company also participates in multiple billion-dollar defense frameworks, including the Department of Defense's MACH-TB hypersonic testing program.

These selections validate Rocket Lab's technology while providing multiyear revenue opportunities. With satellite demand far outstripping global launch capacity, Rocket Lab's position as a trusted provider -- and one of the few with access to major defense frameworks -- gives it pricing power, resilience, and a clear runway for growth.

Why premium prices make sense here

These valuations look expensive because the market applies traditional metrics to revolutionary businesses. AI infrastructure and space commercialization represent generational shifts with economics that break conventional models.

Nebius benefits from AI compute demand doubling every six months. Rocket Lab rides satellite launches projected to increase fivefold by 2030. Both companies execute against opportunities larger than their current valuations suggest.

The real risk isn't paying premium prices for companies growing at triple-digit rates. It's watching from the sidelines as others capture the upside of tomorrow's giants. For investors willing to think beyond outdated valuation fears, Nebius Group and Rocket Lab offer rare asymmetric opportunities in industries poised for exponential growth.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,048%* — a market-crushing outperformance compared to 179% for the S&P 500.

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

See the stocks »

*Stock Advisor returns as of July 7, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. George Budwell has positions in Microsoft, Nvidia, and Rocket Lab. The Motley Fool has positions in and recommends Amazon, Microsoft, Nvidia, and Rocket Lab. The Motley Fool recommends Nebius 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.

Key Points

• CoreWeave scored significant wins in the first half, with revenue and stock performance soaring.

• The company is a key partner of Nvidia and depends greatly on demand for the AI leader’s chips.

CoreWeave (NASDAQ: CRWV) delivered an exciting first half to investors. The company, known for its close relationship with artificial intelligence (AI) chip giant Nvidia (NASDAQ: NVDA), made its market debut, reported triple-digit quarterly revenue growth, and went on to gain 300%.

Investors are excited about CoreWeave as the company has seen soaring demand for its AI cloud services, and with the AI market potentially heading for $2 trillion in a few years, this momentum could continue. And just last week, this up-and-coming AI giant delivered even more fantastic news to shareholders. Let's check it out.

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 »

More than 250,000 Nvidia GPUs

First, though, let's catch up on the CoreWeave story so far. As mentioned, the company is linked to Nvidia, and this is in two ways: CoreWeave's main business is the leasing out of compute power in the form of Nvidia graphics processing units (GPUs), or the main chips fueling key AI tasks such as the training and inferencing of models. The company has a fleet of more than 250,000 GPUs operating in about 32 data centers, and customers can rent access to them by the hour or for a much longer period. So CoreWeave offers them a great deal of flexibility.

The second link to Nvidia is the fact that this AI powerhouse holds a 7% stake in CoreWeave. This support is a positive sign for CoreWeave and its investors because Nvidia, with its dominant position in AI, knows how to recognize potential winners. So, if Nvidia is investing in an AI company, other investors may want to give that particular company a closer look.

Now, let's consider the fantastic news CoreWeave just delivered to shareholders. The company said it became the first to make Nvidia's latest chip update -- Blackwell Ultra -- commercially available. This is in the form of the Nvidia GB300 NVL72 system built by Dell, a platform that CoreWeave says represents a "major leap" for AI reasoning and AI agent projects.

The GB300 NVL72 brings 1.5 times greater AI performance than the initial Blackwell chip -- GB200 -- that was launched in the fourth quarter of last year. And CoreWeave then was the first to make the Blackwell system available to customers too.

CoreWeave competes with other cloud providers such as Amazon's Amazon Web Services and Microsoft Azure, and those companies have both hefty resources and a broad customer base -- and they, too, offer Nvidia products and services. But, what could help CoreWeave stand out over time is this first access to Nvidia products and the fact that CoreWeave specializes in AI workloads. So, CoreWeave being first to launch Blackwell and Blackwell Ultra is key because it's establishing itself as the place for customers to go if they aim to gain immediate access to Nvidia's latest innovations.

CoreWeave revenue climbs 400%

This could help boost CoreWeave's already soaring demand. In the most recent quarter, revenue climbed more than 400% as customers rushed to the company for compute power. Considering CoreWeave now is launching Blackwell Ultra, it's reasonable to expect strong growth in the upcoming quarter too amid demand for this high-performance platform.

All of this is great news for early investors in this young AI stock. But what if you haven't yet invested in CoreWeave? Is it too late to get in on this soaring stock? This depends on your appetite for risk and your investment horizon.

Stocks never rise in a straight line without any sort of pause. So, it's possible that in the near- or mid-term, CoreWeave will see its shares stagnate or dip. And, though demand is high, it's important to remember that risk is present too: CoreWeave must invest heavily in GPUs in order to keep up with demand, and this may make it difficult to reach and secure profitability. This will be a point to watch in the upcoming quarters.

All of this means CoreWeave isn't the best fit for cautious investors or those who are uncomfortable with some ups and downs. But, aggressive investors with a long investing horizon may pick up a few shares of this highflyer and hold on -- if AI momentum continues at this pace and demand for Nvidia's GPUs remains strong, CoreWeave and its shareholders may be among the first to benefit.

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

Before you buy stock in CoreWeave, consider this:

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

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

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