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The Best Stocks to Invest $1,000 in Right Now

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.

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 »

A pile of $20 bills.

Image source: Getty Images.

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.

GM and Redwood teaming up to make batteries for energy storage

16 July 2025 at 18:00
photo of Redwood Materials’ energy storage system
Redwood Materials’ energy storage system in Nevada. | Image: Redwood Materials

General Motors and Redwood Materials are joining forces yet again, this time with the intent to build energy storage units made out of new batteries and recycled EV packs.

The two companies signed a non-binding memorandum of understanding to build energy storage out of US-manufactured batteries, as well as “second-life” EV packs from GM’s vehicles. The announcement comes on the heels of Redwood’s decision to move more aggressively into the energy storage business with the creation of a new division. The company’s first project will be building a storage system for an AI development center in California.

Battery storage systems play a crucial role in balancing energy for the grid. These systems can store energy from a variety of sources, including renewables like wind and solar, releasing it when needed, which helps save power during periods of low demand.

The rise of AI is putting increasing pressure on the grid, in the US and globally. The steepest rise in global electricity demand is coming from new data centers in the US and China, as well as the manufacturing of electric vehicles, batteries, solar panels, and semiconductors.

The rise of AI is putting increasing pressure on the grid, in the US and globally

GM has a preexisting partnership with Redwood to recycle scrap from its battery manufacturing facilities in Warren, Ohio, and Spring Hill, Tennessee, as well as end-of-life EV batteries . The automaker says this new deal will help power its ambitions to expand beyond EV batteries and into grid management and energy storage. GM has its own energy division that sells power banks, charging equipment, solar panels, and management software to residential and commercial customers.

“The market for grid-scale batteries and backup power isn’t just expanding, it’s becoming essential
infrastructure,” said Kurt Kelty, GM’s VP of batteries, propulsion, and sustainability, in a statement. “Electricity demand is climbing, and it’s only going to accelerate. To meet that challenge, the U.S. needs energy storage solutions that can be deployed quickly, economically, and made right here at home. GM batteries can play an integral role.”

Redwood Materials was founded in 2017 by Tesla’s former chief technologist JB Straubel. In addition to breaking down scrap from Tesla’s battery-making process with Panasonic, Redwood recycles batteries from Ford, Toyota, Nissan, Specialized, Amazon, Lyft, Rad Power Bikes, Lime, stationary storage facilities, and others. The company also produces cathodes at a facility in Nevada, and eventually at its under-construction site in South Carolina.

Why GM’s CEO is still betting on electric vehicles (and racing)

13 July 2025 at 11:00
illustration of GM CEO Mary Barra

GM was the first major US automaker to make the promise to go all-electric by 2035, just four years ago. Those promises have since turned into rough estimates under the second Donald Trump presidency, with the company softening language about its electrification goals. But GM is riding high on EV sales, and as CEO Mary Barra puts it, EVs are still the future - just on a delayed (and very flexible) timeline.

"We still believe in an all-electric future," Barra told The Verge in an exclusive interview at the Le Mans race in France. "The regulations were getting in front of where the consumer demand was, largely because of charging infrastruct …

Read the full story at The Verge.

Species at 30 makes for a great guilty pleasure

13 July 2025 at 19:20

Earlier this month, Hollywood mourned the passing of Michael Madsen, a gifted actor best known for his critically acclaimed roles in Reservoir Dogs, Kill Bill, and Donnie Brasco, among others. Few obituaries have mentioned one of his lesser-known roles: a black ops mercenary hired to help hunt down an escaped human/alien hybrid in 1995's Species. The sci-fi thriller turns 30 this year and while it garnered decidedly mixed reviews upon release, the film holds up quite well as a not-quite-campy B monster movie that makes for a great guilty pleasure.

(Many spoilers below.)

Screenwriter Dennis Feldman (The Golden Child) was partially inspired by an Arthur C. Clarke article discussing how the odds were slim that an extraterrestrial craft would ever visit Earth, given the great distances that would need to be traversed (assuming that traveling faster than the speed of light would be highly unlikely). Feldman was intrigued by the prospect of making extraterrestrial contact via information: specifically, alien instructions on how to build an instrument that could talk to terrestrial humans.

Read full article

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Where Will Tesla Stock Be in 5 Years?

Tesla (NASDAQ: TSLA) is one of the most valuable companies in the world, but it's running into operational challenges as auto demand stalls and autonomous robotaxis have yet to reach operations. In five years, the company will likely look very different and that may not be great for the stock.

*Stock prices used were end-of-day prices of June 3, 2025. The video was published on June 8, 2025.

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 »

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

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

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

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $376,048!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,816!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $655,255!*

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

See the 3 stocks »

*Stock Advisor returns as of June 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Mobileye Global. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Tesla. The Motley Fool recommends General Motors, Mobileye Global, and Volkswagen Ag. The Motley Fool has a disclosure policy.

Chevrolet Corvette ZR1 first drive: hype meets hyperspeed

30 May 2025 at 14:00
photo of Chevy Corvette ZR1
The Corvette has always punched above its weight in the competitive ring of international performance cars. | Image: Tim Stevens

Back in March, we brought you an exclusive look into how Chevrolet's engineers tuned and tweaked, sculpted and simulated to turn the eighth-generation Corvette into a 233-mph missile, the 1,064-horsepower ZR1. But while I'm a racing simulator fan through and through, there's nothing like driving a real car on a real track, and this past week it was time to do exactly that.

That track, the Circuit of the Americas (COTA) in Austin, Texas, is as real as it gets. Host of the Formula One United States Grand Prix since 2012, it's three and a half miles of sinuous asphalt with enough turns to see just how well those engineers sorted the car's handling, plus a long back straight just perfect for letting that big motor really sing.

Staying stuck

COTA is also the perfect place to test out the ZR1's downforce, something that wasn't so much of a factor leading up to the car's record-breaking 233-mph run. More downforce means more grip, which is always nice, but it usually comes with the penalty of aerodynamic drag.

That's one reason why there's actually two different ZR1s. First is the base model, with just the (relatively) petite spoiler on the back of the trunk l …

Read the full story at The Verge.

Why Are Tesla Sales Dropping So Fast?

Tesla's (NASDAQ: TSLA) sales were down 49% in Europe in April, accelerating losses the company reported earlier in the year. That bodes poorly for the company's finances ahead of possible subsidy cuts in the U.S.

*Stock prices used were end-of-day prices of May 27, 2025. The video was published on May 28, 2025.

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 »

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

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

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

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $351,386!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $38,008!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $653,389!*

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

See the 3 stocks »

*Stock Advisor returns as of May 19, 2025

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors and Volkswagen Ag. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Chevy expands 2026 Silverado EV lineup with Trail Boss addition

21 May 2025 at 20:06
photo of Chevy Silverado EV Trail Boss
The Chevy Silverado EV Trail Boss is being positioned as the ultimate off-roader. | Image: Chevy

The 2026 Chevy Silverado EV is going off road — way off road — with the addition of the Trail Boss trim to the electric pickup’s lineup. The electric version of the automaker’s popular off-road trim, Trail Boss offers more capability and — insanely — even more range for the already class-leading Silverado EV.

The upgraded electric truck has 2-inches of extra lift for more clearance while grinding gravel and climbing boulders, including 35-inch all-terrain tires and 18-inch wheels. Despite the added height, the Trail Boss will get a staggering GM-estimated range of 478 miles if you opt for the max range battery.

And in terms of maneuverability, Sidewinder mode enables all four tires to turn in the same direction for diagonal driving. It sounds similar to the Silverado’s sister truck, GMC’s Hummer EV with its Crab Walk and King Crab diagonal driving features.

But Sidewinder is also available to the RST trim, so what else is cool about Trail Boss? How about a trim-exclusive Terrain mode, which offers additional control while traversing uneven trails at low speeds. Compared to other drive modes, Terrain unlocks sharper 4-wheel steer, giving drivers better ability to control torque and traction at low speeds.

Speaking of power, the Trail Boss version of the Silverado EV will put out 725 horsepower and 775 lb-ft of torque when combined with the max range battery. That battery also offers a max towing capacity of 12,500 lbs along with a 2,100 payload capacity. Of course, you should expect some range loss while towing heavy loads.

Chevy is also dialing up the tech, offering enhanced Super Cruise with hands-free highway driving on both the Trail Boss and LT trims of the truck. The driver assist feature is also available while towing.

The automaker is also lowering the base price for the Silverado EV to $54,895, including destination charges, which is down from the previous base price of $57,095. The interior features a 17.7 inch center touchscreen alongside an 11-inch instrument gauge, which now comes standard on the Work Truck for the first time.

But the Trail Boss will run a lot higher, with the extended range version starting at $72,095 and the max range blasting off at $88,695. What, you thought all that extra range would be cheap?

Stock Market Falls as Tariff Fears Rise

The stock market is down slightly for the day at noon ET as investors take the risk of the impact from tariffs more seriously. Earnings from Domino's (NASDAQ: DPZ) have also dampened the market's enthusiasm as consumers pull back on pizza spending.

*Stock prices used were end-of-day prices of April 28, 2025. The video was published on April 28, 2025.

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 »

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

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

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

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

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% 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 April 28, 2025

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Tesla Stock Jumps 8% Despite Terrible Results

Tesla (NASDAQ: TSLA) stock has climbed 8% after reporting what can only be described as a terrible first quarter of 2025. The company's sales dropped, and it was profitable only because of regulatory credit sales. Travis Hoium digs into the results in this video.

*Stock prices used were end-of-day prices of April 22, 2025. The video was published on April 23, 2025.

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 »

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

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

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

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $256,447!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,869!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $561,046!*

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

See the 3 stocks »

*Stock Advisor returns as of April 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Mobileye Global. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool recommends General Motors and Mobileye Global. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

1 Way Tariffs Could Cripple GM for Investors

The markets received good news when it was announced that President Donald Trump would pause reciprocal tariffs on most countries for 90 days and is opting to implement a base 10% tariff on most goods. Automakers, however, didn't catch a break as the pause didn't extend to the 25% duty on vehicle imports.

Worse yet, the automotive industry is expected to get slapped with an additional 25% tariff on automotive parts next month. The problem for General Motors (NYSE: GM) investors is that this could force the company to change one thing it's done really well recently: buying back shares.

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 »

Share buybacks

When it comes to share buybacks, General Motors has been in overdrive, eating up shares in recent years. Between 2023 and 2025, GM announced $16 billion in share buybacks, and it's had a significant impact on how the stock has traded. That's a huge amount when you consider that the Detroit automaker has a market capitalization of $45 billion. As GM started buying back large amounts of shares, you can see the impact on the stock price.

GM Chart

GM data by YCharts

The trend continues as GM just announced recently it approved a $0.03 per share increase to the dividend, or a 25% hike, and also a new $6 billion share repurchase authorization. Further, the automaker began an accelerated share repurchase program to execute $2 billion of the authorization in the near term.

Turbulent tariffs

Unfortunately, General Motors is perhaps the worst of its domestic peers to get hit by Trump's tariff plan. While it was recently announced that the reciprocal tariffs would be paused for most countries for 90 days, in favor of a base 10% tariff on most goods, the automotive tariffs were not included in that pause.

The reason behind GM's looming tariff pain is that while the company produces more than half of the vehicles that it sells in the U.S. domestically, only about a third of its vehicles are produced using American parts. That might not sound like a big deal, but take it from JPMorgan analyst Ryan Brinkman:

We estimate GM imports ~$56 billion of vehicles annually from Mexico and Canada, which after adjusting for content originating in the U.S. may amount to ~$38 billion--subject to a ~$10 billion tariff under a 25% rate .... For parts, we estimate GM's share of the ~$92 billion imported by the industry may be ~$4 billion, implying a total tariff exposure of ~$14 billion before coping mechanisms.

GM's larger reliance on imports and parts created significant downside, causing Brinkman to lower his GM price target by $11, down to $53 per share. GM was trading at roughly $44 Thursday morning.

What it all means

The impact from tariffs shouldn't be underestimated and could become crippling, and it puts GM in a tough position. One option is to pause the share buybacks to conserve cash, or in a show of strength it could press on with its accelerated purchase program. Your guess is as good as mine what GM will do, and management has mentioned the company is exploring several options to mitigate tariffs.

For investors, however, the pause of reciprocal tariffs is an example of how quickly these developments can reverse course. As crippling as these tariffs may be in the near term, it would be wise not to make any knee-jerk reactions, and over the long term GM will almost certainly continue returning significant value to shareholders through share buybacks.

Should you invest $1,000 in General Motors right now?

Before you buy stock in General Motors, 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 General Motors 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 $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 2025

JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Miller has positions in General Motors. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Amazon Could Beat Tesla to This Massive Market. Are Investors Missing Something?

There's been no shortage of woes for Tesla (NASDAQ: TSLA) this year.

The company just reported a 13% decline in first-quarter deliveries. The brand is in the midst of an unprecedented crisis due to CEO Elon Musk's political turn, helming the operation known as the Department of Government Efficiency and weighing in on elections across the U.S. and in Europe. And President Donald Trump's tariffs threaten to further weaken the economy, specifically impacting the auto 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. Learn More »

Coming into 2025, Tesla was already struggling as deliveries fell in 2024, marking its first annual decline in unit sales.

However, despite those troubles, Tesla stock has been resilient, largely because investors have high hopes for its autonomous vehicle (AV) technology, which Musk said would make Tesla the world's most valuable company. In particular, the Tesla CEO has talked up a robotaxi network from his company, which he believes will be key in achieving that valuation.

The company unveiled its Cybercab robotaxi at a launch last October, but the event underwhelmed Wall Street, and it has not yet performed an autonomous vehicle ride. Tesla plans to begin offering autonomous rides in June in Austin, Texas.

However, the robotaxi market could get crowded quickly as the company seems to have new competition from Amazon (NASDAQ: AMZN).

A woman getting into a Zoox autonomous vehicle.

Image source: Amazon.

Here comes Zoox

Amazon is a huge company, best known for its e-commerce and cloud-computing businesses. However, the company also has a self-driving car business after acquiring Zoox for $1.2 billion. Zoox has quietly prepared to launch an autonomous vehicle ride-sharing service in several cities across the country, and it could do so before Tesla.

Zoox announced recently that it was launching its sixth testing site in the U.S., this time in Los Angeles.

Amazon's ride-sharing service is also aiming to begin serving riders in Las Vegas and San Francisco, though it's unclear when. Zoox is different from most of its autonomous vehicle peers as it has four inward-facing seats, allowing for a more social experience than the typical vehicle and it has double doors that allow for easy entry and exit, making it look more like a shuttle van. The company says it's a robotaxi, not a car.

Can Amazon challenge Tesla in AVs?

At this point, it's speculative to assess Zoox's potential in autonomy, but it's clear that the space is becoming more crowded as Alphabet's Waymo continues to spread to new cities and as other companies work toward autonomous ride-sharing.

Tesla is also facing deep-pocketed rivals in Alphabet and Amazon, both of which generate tens of billions of annual free cash flow, some of which they can throw at the autonomous vehicle market.

Tesla does have a singular advantage with millions of cars on the road, but its full self-driving technology still requires supervision. Launch of the ride-sharing service is expected to include unsupervised full self-driving, available to Tesla owners.

If the technology proves to be capable of navigating the roads safely, it could be the game changer that Musk hopes it will be as the millions of Tesla owners could subscribe to FSD and theoretically lease their own vehicles out for ride-sharing -- provided the software is there to support it.

However, the arrival of well-heeled debutantes like Zoox shows that Tesla may not dominate the robotaxi market the way the bulls expect.

It's also worth remembering the safety risks in AVs. Other companies' autonomous dreams have gone up in smoke, including Uber Technologies and General Motors, which recently pulled all its Cruise vehicles off the road and ended that program.

Better buy: Amazon vs. Tesla

At this point, Tesla seems priced for perfection, and that perfection includes unsupervised FSD and a burgeoning ride-sharing network. Amazon, on the other hand, has a much more diversified revenue base, a cheaper valuation, and better growth prospects, considering the problems with Tesla's EV business.

Zoox's ramp-up toward a mainstream AV company is likely to be significantly slower than Tesla's, but safety is the biggest hurdle in the industry, not speed.

Overall, Amazon looks like the better buy here. While Zoox might not be a major factor in its business right now, it could be down the road, and it gives investors potential exposure to the robotaxi market.

Keep an eye on Zoox over the coming months as 2025 looks set to be a big year for robotaxis.

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 $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% 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 April 10, 2025

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

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