In this podcast, Motley Fool analyst Jason Moser and contributor Lou Whiteman discuss:

• Starbucks' move to sell part of its China business.
• Hershey hires a new CEO.
• Meta moves for more talent and invests in eyewear.
• What should be on investors' radar this earnings season.

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.

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A full transcript is below.

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

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This podcast was recorded on July 09, 2025.

Jason Moser: Starbucks pivots in China and Meta makes some big investments. You're listening to Motley Fool Money. Welcome to Motley Fool Money. I'm Jason Moser, joining me today. It's Motley Fool analysts Lou Whiteman. Lou, thanks for being here.

Lou Whiteman: Great to be seen.

Jason Moser: On today's show, Hershey has a new CEO. Meta is making some big investments in AI, and earning season is, believe it or not, right around the corner. But today, we begin with the king of coffee. Reports are that Starbucks has garnered quite a bit of interest in its China business, as it looks possibly selling a majority stake in that business. The company said, "We remain committed to China and want to retain a meaningful stake in the business. Any deal must make sense for Starbucks business and partners." Lou, China has been a bit of a challenge for Starbucks as of late. Do you think this is the right move to try to sell the majority stake in this business?

Lou Whiteman: I do. I like this a lot. New CEO Brian Niccol, he's got a lot on his plate. He's articulated a plan, the back to Starbucks. He's going to revitalize to domestic business. But look, it's going to take time, it's going to take resources. Finding a partner to work with China, it would allow Starbucks to retain some of the upside, but it is a massive market. I get it. But it would provide a cash infusion and take one thing off that plate off of that daily agenda. It feels like a win-win.

Jason Moser: It seems like there was a lot of interest. Something close to 30 equity firms and whatnot actually submit it.

Lou Whiteman: Big money?

Jason Moser: Yeah, big money, valuing it anywhere from, 5-$10 billion, I saw. You talk about the growth opportunity in China, and that's been part of the story. I think with Starbucks for many of us for many years, it's not to say they haven't grown there. They have almost 8,000 stores in China to date. But, they're talking about really going so far beyond that. It's 10% of overall revenue right now. It's meaningful, but it seems like it could be more meaningful. How big do you think they can grow as part of the business?

Lou Whiteman: They talk about 20,000 locations, which is more than double. That, honestly, I don't know about that. That's part of why I think I'm OK with them at least finding a partner or keeping some upside, but not all of it. I think the Chinese consumer, like the American consumer and most other consumers, I think they're going to lean into domestic brands over international ones as that market matures. I think to some extent, it's happening. Maybe refocusing the operations, finding a partner, growing that way and doing it, not just rubber stamping what Starbucks is here. I think there's probably room for growth, but I don't think maybe it's what we were talking about a few years ago, and I don't think it's priority one right now for them, either.

Jason Moser: This seems like a little bit like history repeating itself. You remember in the early days when they were growing internationally, and they had, in most places, they were taking that company owned approach to the stores. Then, it turns out not every country is the same, Lou, and the cultural clashes, the differences, it was all very different in so many different ways, in so many different locations. They pivoted to partnering up with local partners in those respective markets. I'm with you. I think this is a good move. I actually like it. I think it gives them the opportunity to participate in the upside without having to devote so many resources to it. I like the decision. I feel like this is something that Niccol has been mulling around for a while. I'd be curious to know. He's closing in on a year in September with the company. What grade would you give Brian Niccol today?

Lou Whiteman: Forget what I think. [LAUGHTER] Howard Schultz seems bought in. I think we can all agree. Howard's very smart and also can be a meddler. I think Howard Schultz giving him an A is very important. But I don't think Howard's wrong. I think Niccol's plan to refocus Starbucks give us back the experience we fell in love with and also adjust the menu, so we're not waiting in line for 40 minutes in the drive through. It all makes sense. It's a strong grade, it's an incomplete grade because it's one thing to say it. We have to execute and do it. But I like where they're going with.

Jason Moser: The stock is basically flat since Niccol took over, or you think it's just a couple of percentage points. But it still boasts a premium multiple at 34 times earnings, do you think this stock from to date, do you think this is an outperformer in the coming five years?

Lou Whiteman: I think so. I'll be honest. The valuation gives me pause. I don't think it's going to be, I think maybe the hypergrowth days are over. But look, the brand resonates. I think you'll see operational improvements under Niccol which will boost results. You have, what, 2.5% dividend yield to boost your total return. Yeah, maybe it isn't what the growth was before, but it still, I think, has the bones of a market beater of just a top operator.

Jason Moser: Yeah, I'm with you. I'm hanging on in my shares too. Well, next up, Hershey has a new CEO.

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Jason Moser: Hershey Company has a new CEO, Wendy's CEO Kirk Tanner will replace Michele Buck, who's retiring after almost eight years as CEO of the company. Tanner will take over on August 18th and previously served over 30 years at Pepsi. Lou, I was talking with our colleague, Ant Schiavone, who follows Hershey closely. He said that while Tanner definitely has the resume to be CEO with those three decades at PepsiCo., and he had a short stint at Wendy's, it started in February 2024. It was a bit shaky. Shares down around 40% during his tenure. They had to cut the dividend earlier this year. The Ant noted that was likely to happen regardless who was CEO. What do you think his biggest challenge right off the bat is going to be taking over for such a, I mean, this is just a legendary, iconic American brand. They're going through some tough times. What do you think the biggest challenge he's facing us?

Lou Whiteman: A brand that has always or mostly promoted from within, too, which I think is interesting, too. I think you said it well. It's hard to judge the time at Wendy's, both because it was so short and he did step in at a difficult time. But it feels like Hershey's is more similar to what he did at Pepsi and he was successful there. Wendy's is more retail focused. I think that's a positive. I suspect his biggest challenge is to continue the pivoted way from chocolate, from cocoa prices. Hershey's has quietly built up this roster.

Jason Moser: What?

Lou Whiteman: Pirate Booties, Dot's Pretzels, SkinnyPop. It feels like there's further opportunities to go in that direction, and bringing someone in from Pepsi suggests to me, at least that that's where the board is focused. That's his challenges to execute there and make that happen.

Jason Moser: I think you're right. You got to broaden that portfolio because we've seen this over the last several quarters, years, the cocoa prices have really been hammering Hershey, and it's always fun to pay attention during Halloween to see what candy he's selling. Last year, we definitely saw a trend toward, like, the fruity, sugary candies, chocolate, a little bit less so because it was getting more expensive. Then the dreaded shrinkflation came into play. They're making the candy bar smaller Lou. Not cool, but I guess I get it.

Lou Whiteman: Hey, my doctor likes it, even if I don't.

Jason Moser: Exactly. We talked about Brian Niccol. Now we're talking about Hershey here with Kirk Tanner. When you see new leadership in play here, how long do you typically give new leadership to start delivering?

Lou Whiteman: It's so hard, because obviously, every situation is different. You have to factor in macro, what situation does a new leader drop into. But look, generally, I think, at least a year, we talk about this a lot. We're long term focused investors. We understand that quarter to quarter fluctuations happen, and they're part of the business, and we don't panic. We don't freak out with one quarter. We don't get too excited. I think we have to give leadership the same understanding, the same philosophy. In a case like this the challenges, the consumer, cocoa prices, perhaps maybe you need more time, but I'll tell you what I do want Jamo and what I'd like to see is within a year, what Niccol gave us, I want to hear our leadership articulate a plan. I want something I can evaluate from here. You may not be able to solve the problem in a year, but I want to hear how you're planning on doing it within a year.

Jason Moser: I like that. One of Tanner's go to moves at Wendy's was offbeat collaborations. They did a Girl Scout thin mint frost Deep. Tried that one, it was good. Spicy Taki chip chicken sandwiches. Hey, man, I love Takis and I love chicken sandwiches.

Lou Whiteman: I don't love that.

Jason Moser: Sponge Bob brand and burgers. Let's play armchair CEO for a second. What brand collaboration would you recommend for Hershey's?

Lou Whiteman: The company that brought us peanut butter and chocolate, [LAUGHTER] they have to get collaborations. This is a no brainer, but I love Dot's Pretzels. Looking at the website, they have cinnamon season. They have barbecue. They have honey mustard. They don't have chocolate covered pretzels.

Jason Moser: That crossed my mind.

Lou Whiteman: It seems so obvious.

Jason Moser: I have more of a salt tooth than a sweet tooth. I was thinking, I love Dot's Pretzels. I have in the pantry at home. I also like SkinnyPop. That's pretty good stuff. I was thinking, Hey, you get SkinnyPop and you partner up with McCormick for some old bay SkinnyPop? You can cheat and put the stuff on at home, but I guarantee the stuff in the bag is going to be way better. You're bringing two worlds together right there. I'd be all in.

Lou Whiteman: My Baltimore roots are speaking to me right now. [LAUGHTER] I'm in for that. Mr. Tanner, get on that.

Jason Moser: Last question on Hershey, do you think Tanner is still here in five years?

Lou Whiteman: I do. I do think fit matters, and I think the resume implies a better fit, like we said. To use the Willy Wonka, I think maybe this is a golden ticket, and I think it can work out well for Tanner and for Hershey shareholders.

Jason Moser: Lou Meta continues to make big investments in AI. Founder and CEO Mark Zuckerberg is spending big to recruit AI talent. We're talking tens, hundreds of millions of dollars from reports. Now we also saw that the company's taking a minority stake in Ray-Ban maker Es Luxottica, and that really plays into these Ray-Ban AI glasses that they're starting to get out there. I'll be interested to see how this holiday season, how those are received. Now, as we saw with the Metaverse, Zuckerberg's playbook is to go big or go home, $3.5 billion investment in Ray-Ban, reportedly hundreds of millions of dollars in recruiting bonuses. that's a lot. What should investors make of all the spending?

Lou Whiteman: Usually I find interesting back in January, Meta committed to, what, spending $70 billion in CapEX, mostly to build out AI. Our focus was on chips at the time. Certainly Invidia is getting a lot of love here. But, it feels like we're kidding that next step, where, what do we do with all that capacity, making the magic happen? Look, if you think chips are hard to come by and they are, just how hard is it going to be to get the right talent and the right partners and all of that. I think be aggressive makes sense. Zuckerberg likes to be aggressive, but focus on the big picture of try and be a first mover here. I get what they're doing, and I think it makes sense, because at some point, we got to use all these chips or something, and it better be neat.

Jason Moser: Yeah, this is an arms race like we haven't seen in some time. All these companies is just foot on the gas, and they're spending a lot, but clearly, that's telling us something. I think we're in the middle of something big here. Now, the Metaverse spending, that led to the year of efficiency, if you remember that. Investors became worried about return on investment, do you see this playing out the same way or like, how long of a leash does Meta have here to ultimately build out their AO chops and demonstrate real return?

Lou Whiteman: I'm curious what you think. I think here the difference is last time they were out on their own. They literally changed their name to Meta. They were the Metaverse island. For better or for worse, it ended up worse. They owned that space, and there's a lot more there with AI, I think.

Jason Moser: I agree.

Lou Whiteman: If there's not, we have a lot of people going along for the ride. I think as long as everyone else is spending, I think it's a much longer leash.

Jason Moser: I think so, too. I think you said it perfectly. There's a there there. AI, it just seems so much bigger. When we're looking at augmented and virtual reality in the Metaverse, it's fascinating technology, but it certainly is more niche, and it's really not quite developed. The obvious use cases that we're seeing play out with AI. The stock, let's talk about the stock. It's had a good year to date. It's up almost 25%, outperforming the market nicely. At around 28 times earnings today, is this something you're interested in? Do you think this is an outperformer over the next five years at today's levels?

Lou Whiteman: So 28 times earnings. What? That's second most affordable among the Mac 7, which for what it is. But look, for all the talk about AI, we you bury the lead when you don't talk about that core advertising business and its ability to just generate. I'm excited about AI, but I just that core business, I don't see a disruption on the horizon here, and with that business, I think the stock beats to market. That is the engine.

Jason Moser: I think AI is really ultimately making that core business even better. That really is the point. they're going to do ancillary stuff with it. But it is making that core business better, and man, they really own a big slice of that ad market, like you said. Next up, earning season is right around the corner. Lou, believe it or not, earnings season is upon us again. JP Morgan unofficially kicks things off on Tuesday, July 15th. What's something that you'll be paying close attention to this earning season? A trend, policy, specific company, and industry? What you got.

Lou Whiteman: We just talked about Meta's year of efficiency. If we want to talk about so far this year, and we're still early into this year. It has been the year of uncertainty, for public companies. Investors largely gave management teams a pass last quarter when they said, I don't know when it comes to guidance. I think that's understandable. I was one of those investors who, I don't know what's going on either, so that's fine. Two related big picture questions I have as I'm watching now is, A, is there more clarity now than there was three months ago? Is there more management teams that are willing to stick their neck out? Since I'm guessing the answer is maybe not, will investors continue to be patient? Will the 'I don't know answer', will that be acceptable now the way it was last quarter? I think, probably, but I'm curious to see how things play out just kind of. We're always forward looking. As investors, it's scary when there's clouds forward. It's a weird time. How about you.

Jason Moser: Well, I think in regard to your points there, two. We're seeing a lot of headlines coming out here again, regarding tariffs. It's leading right in earnings season. It would be understandable if you hear that uncertainty language. But I don't know, do you feel like folks are just getting tariff exhaustion. Like, it's just day after day, so you know that it's happening, and at some point, you just got to let it go and keep running your business.

Lou Whiteman: Yeah, it feels like it's going to net out as a drag on earnings indefinitely that we're just going to have to grin and bear it with, which is a terrible medium because it's just going to be a slog, unfortunately.

Jason Moser: Well, you asked what I was looking at, and for me, it's in regard to enterprise spending trends, over the last several quarters, there's a phrase that we've seen on a lot of these earnings calls, whether it's Twilio or Cloudflare or CrowdStrike, Palo Alto. You name it. These big enterprise servers, the phrase elongated sales cycles, to your point about uncertainty. Their enterprise customers are just simply not quite certain what the future holds. They're spending with some trepidation and maybe not fully committing. We saw just elongated sales cycles on so many earnings calls over the last several quarters. I wonder if that's starting to come to a close. I wonder if we're going to start seeing some more bold spending from a lot of these big enterprises. I'm going to be following a lot of those companies like I just mentioned, those earnings calls, and that will be one key term that I'll be searching through all those calls, elongated sales cycles. That's just telling you, they're just not spending as much as quickly, and we want to see that turnaround.

Lou Whiteman: It's a great point because putting it both together, there is so much uncertainty. It's understandable not to want to make bold moves, but at some point, business has to go on. Where are we in balancing that? That's going to be fascinating to say.

Jason Moser: Well, we'll leave it there. Lou Whiteman, thanks again for being here.

Lou Whiteman: Always a pleasure.

Jason Moser: 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, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. Advertisements or sponsored content are provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. I'm Jason Moser. Thanks for listening. Will see you.

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. JPMorgan Chase is an advertising partner of Motley Fool Money. Jason Moser has positions in McCormick, Starbucks, and Twilio. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Hershey, JPMorgan Chase, Meta Platforms, Starbucks, and Twilio. The Motley Fool recommends McCormick and Palo Alto Networks. The Motley Fool has a disclosure policy.

Key Points

• Palo Alto has made impressive gains thanks to strong demand for its next-gen cybersecurity offerings.

• Its revenue pipeline is increasing at a nice clip, and its earnings growth is likely to accelerate.

• Investors will have to pay a premium valuation if they wish to buy the stock right now.

Palo Alto Networks (NASDAQ: PANW) stock has been in fine form on the stock market in the past three months, clocking healthy gains of 18% as of this writing. That's impressive, considering that investors were not impressed when the company released its fiscal 2025 third-quarter results (for the three months ended April 30) on May 20.

Though the company delivered better-than-expected results and guidance, investors were concerned about its margins. Palo Alto's non-GAAP gross margin of 76% was slightly lower than the 77.2% consensus estimate. However, it appears that investors are now looking past that margin miss and have regained confidence in Palo Alto stock.

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Let's see why that has been the case, and check whether the stock is worth buying following its recent rally.

Palo Alto Networks' growth is likely to accelerate

One of the reasons why investors are probably becoming bullish about Palo Alto is because of the company's fast-improving revenue pipeline. This was evident from the 19% year-over-year growth in Palo Alto's remaining performance obligations (RPO) in the previous quarter to $13.5 billion, which was higher than the 15% increase in its top line.

RPO is the total value of a company's contracts that are yet to be fulfilled at the end of a quarter. So, the faster increase in this metric is an indication that Palo Alto is winning more contracts than it is fulfilling right now. That should ideally lead to an improvement in the company's growth rate going forward. Importantly, Palo Alto expects to finish the current fiscal year with an increase of 19% to 20% in its RPO to just over $15 billion, which would be almost identical to the RPO growth it reported in the previous fiscal year.

A key reason why Palo Alto's revenue pipeline is increasing at a nice clip is because of the fast-improving demand for the company's next-generation security (NGS) offerings. These solutions include the company's Cortex extended security intelligence and automation management (XSIAM) platform, which uses artificial intelligence (AI) and machine learning (ML) to stop cyber threats and respond to security incidents, among other things.

Palo Alto says that the annual recurring revenue (ARR) of its XSIAM platform increased by more than 200% year over year in the previous quarter. That's not surprising. The company claims that this platform allows customers to reduce the median time to resolve security incidents to as low as one minute, compared to the earlier response time of two to three days before using XSIAM. What's more, 60% of XSIAM customers have a median time of less than 10 minutes in resolving security incidents.

The healthy traction of such products explains why Palo Alto's NGS ARR increased by an impressive 34% year over year last quarter to just over $5 billion, significantly outpacing the growth in its revenue and RPO.

Another factor that's helping Palo Alto build up a robust revenue pipeline is its platformization strategy, through which it is bundling its various products and services with the aim of simplifying the approach to cybersecurity. Palo Alto believes that platformization will enable customers to make cyber defenses more efficient by integrating different solutions into a single platform while reducing costs related to the training and management of security analysts. The good part is that this strategy is gaining traction among customers.

The company ended the previous quarter with 1,250 customers on its platformization contracts as compared to 900 in the year-ago period. Palo Alto points out that a fourth of its top 5,000 customers are currently on platformization contracts, indicating that it can score more platformization deals going forward. Importantly, platformization is helping Palo Alto score bigger deals, which should eventually aid its margins and drive stronger bottom-line growth.

This is precisely what analysts are expecting, as we can see in the following chart.

PANW EPS Estimates for Current Fiscal Year data by YCharts.

A potential red flag for investors

However, investors looking to buy the stock right now need to be aware of one problem.

While Palo Alto has been recording healthy double-digit growth and its earnings growth is set to accelerate, the stock's valuation suggests that it may have run ahead of itself. Palo Alto is trading at 117 times trailing earnings and 55 times forward earnings, which makes the stock quite expensive when compared to other cybersecurity companies that are showing a faster pace of growth.

Even if we look beyond the cybersecurity industry, there are other tech stocks that have been consistently delivering stronger growth and are trading at significantly cheaper valuations. As such, there are better bets for investors looking to add a tech stock to their portfolios right now.

Of course, keeping Palo Alto on your watchlist and accumulating it on the dips would be a good idea for the long run. This cybersecurity stock has the potential to justify its valuation by clocking stronger earnings growth rates. But buying it right now may not be the smartest thing to do thanks to its expensive valuation.

Should you invest $1,000 in Palo Alto Networks right now?

Before you buy stock in Palo Alto Networks, 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 Palo Alto Networks 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 $697,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $939,655!*

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*Stock Advisor returns as of June 30, 2025

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

Are you just as afraid of a market pullback right now as you are of missing out on upside? If so, you're not alone. This is a confusing environment for investors. Major names like Nvidia and Home Depot are sending mixed messages, while the market itself seems to be waiting for more clarity about tariffs and the Trump administration's trade war.

There are some tickers with bullish backstories, though, that are bigger than any environmental or economic backdrop. You just have to look a bit off the beaten path to find them.

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If you've got $1,000 -- or any other amount of money -- lying around available to invest, here are three solid prospects to consider.

CRISPR Therapeutics

Biotech stocks can be tricky investments to handle. Oftentimes, you're betting on a potentially game-changing premise well before it's profitable, or even before there's a marketable product. That's obviously risky. But the potential upside can be tremendous.

CRISPR Therapeutics (NASDAQ: CRSP) is not yet profitable, but the underlying science that makes the drugs it's currently developing possible holds enough promise to eventually get the company out of the red and into the black.

CRISPR Therapeutics specializes in gene editing. Company co-founder Dr. Emmanuelle Charpentier developed a way to cut a strand of damaged DNA and then force the genetic code's own built-in repair process to fix what's broken. While CRISPR's Casgevy (for the treatment of sickle cell disease and beta thalassemia) is its only approved drug based on this science, this biotechnology has a range of potential applications. Treating cancer and autoimmune diseases is arguably the biggest.

That any drugs based on this science have been approved bodes well for the concept, and CRISPR's got a total of five different clinical trials underway right now. Those are what most interested investors are eyeing. Ditto analysts, who collectively sport a consensus price target of $77.38, more than twice the stock's present price.

So why are CRISPR Therapeutics shares still drifting lower from their 2021 peak, knocking on the door of new 52-week lows? That's just part of the challenge of buying, holding, and even selling biotech stocks. Sometimes they reflect potential revenue and earnings too soon. Other times, investors lose interest when they've waited a little too long for results.

Don't overthink it, though. Just take a step back and recognize that analysts expect revenue to jump from $50 million this year to nearly $200 million next year and then to more than double again the year after that. This explosive growth should come on the heels of at least one more drug approval, although more than one approval is just as possible.

This growth will presumably stir up a bullish tailwind for the stock.

Palo Alto Networks

There's no sensational singular bullish argument for owning a stake in Palo Alto Networks (NASDAQ: PANW). There are dozens of solid reasons, though.

On the unlikely chance you've never heard of it, Palo Alto is a cybersecurity company. Firewalls, VPNs, threat detection, and breach response are all in its wheelhouse. There's nothing unique about its offerings, even if the company is the biggest and best-known name in the cybersecurity industry, that's more than reached full maturity.

That's not necessarily a bad thing, however, given the nature of this business.

Think about it. As the world uses computers more and more, it's going to need more and more cybersecurity solutions. That's why Precedence Research believes the global cybersecurity market is set to grow at an annualized pace of 12.6% through 2034. Palo Alto's top line is expected to slightly outpace this industry growth based on the consensus analyst forecast, but only slightly. There's little doubt that it will be able to leverage its size to achieve at least its fair share of this growth, though. Again, cybersecurity is a business that's unlikely to go away.

Don't tarry if you're interested. While this stock looks a bit frothy following its big rebound from its March low, it's still only priced around its early-2024 peak. The lack of net forward progress since then is sure to be catching the eye of many would-be buyers.

NextEra Energy

Finally, add utility name NextEra Energy (NYSE: NEE) to your list of stocks to buy with an idle $1,000.

Utility stocks are usually anything but exciting. That's because the highly regulated industry is anything but a high-growth one, and the business itself hasn't changed much since its inception. Ditto its individual companies. In many cases, these outfits are not only working with the same infrastructure they were working with decades ago, but they're also grappling with legacy capital structures and mindsets.

Not NextEra Energy, though. Although its roots are traditional, over the course of the past several years, this organization has made a deliberate effort not just to embrace cleaner, renewable energy sources, but also to evolve its utility business in a way that makes sense in the modern era. As of the end of last year, more than half of its power production comes from renewables like wind and solar, while roughly one-third comes from natural gas. Another 8% is nuclear, which President Donald Trump just gave a boost to last month with four executive orders aimed at revitalizing the U.S. nuclear energy sector.

Notice fossil fuels aren't part of the mix.

And yet, even though the company is spending more on energy infrastructure than any other utility outfit, it's still profitable.

This utility outfit is largely future-proof. That is to say, even though how utilities will be regulated and restricted by future emissions mandates isn't completely clear right now, all of NextEra Energy's future power production will likely satisfy whatever requirements await.

There won't be any explosive growth from NextEra, in the near or distant future. There should be plenty of reliable growth here, however, regardless of the economic environment.

There's also a respectable amount of reliable recurring income. Newcomers will be stepping into this stock while its forward-looking dividend yield stands at just under 3.4%. Not bad.

That's based on a dividend, by the way, that's more than doubled over the past 10 years and been raised every year for well over two decades. Even if dividend income isn't your big goal right now, this is reliable cash flow that you can use to buy stocks as other opportunities arise.

Should you invest $1,000 in Palo Alto Networks right now?

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

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

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

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*Stock Advisor returns as of June 2, 2025

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics, Home Depot, NextEra Energy, and Nvidia. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

While on-again, off-again tariffs have created a lot of uncertainty and volatility in the stock market, one set of companies that should see minimal impact one way or the other are cybersecurity providers. After all, cybercriminals and hackers aren't downsizing their attacks due to tariffs.

Let's look at four top cybersecurity stocks that investors might want to consider buying this month.

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1. Palo Alto Networks

Palo Alto Networks (NASDAQ: PANW) is in the midst of a transformation from being largely a provider of next-generation firewalls to becoming a comprehensive cybersecurity platform. Last year, it embarked on a new "platformization" strategy where it stopped selling new point solutions and began consolidating customers onto one of its three main cybersecurity platforms. To do this, it gave away some of its services for free to entice customers to ditch disparate point solutions and centralize on its platforms.

Thus far, the strategy appears to be working, with 1,150 of its top 5,000 customers now using one of its platforms. It hopes to have 2,500 to 3,500 platformization customers by fiscal year 2030. Its main platform is network security, but it has also been seeing a lot of growth coming from its threat detection and response solution Cortex, and its cloud security solution Prisma Cloud.

While its platformization strategy temporarily slowed its growth, it was the right move for the long term, and investors should be rewarded.

2. CrowdStrike

CrowdStrike (NASDAQ: CRWD) is another cybersecurity company that should benefit from the trend of companies looking to consolidate their cybersecurity needs onto a single platform. The company is best known as the leader in endpoint security, which is the protection of devices connected to a network, such as a smartphone or laptop. In fact, it is regularly at the top of Gartner's rankings for best endpoint security.

The company offers a comprehensive suite of cybersecurity protection, including threat intelligence, zero trust, logscale SIEM (log management and threat detections), and cloud security. And its flexible licensing and procurement service, Falcon Flex, is helping drive adoption of its modules.

Falcon Flex gives customers the flexibility to quickly deploy CrowdStrike solutions when and where they need them. Last quarter, 67% of CrowdStrike's customers deployed five or more of its modules, while 21% used eight or more.

With the impact of its highly publicized information technology outage now in the rearview mirror, and customer commitment packages (a set of incentives offered to affected customers, including discounts, subscription extensions, and other compensation deals) rolling off the books later this year, the company should begin to see growth start accelerating. That makes this a good time to jump into the stock.

3. Zscaler

Zscaler (NASDAQ: ZS) is a leader in zero-trust security, a model based on the principle that no user or device should be trusted. Instead, access to applications and data must be continuously verified, authorized, and revalidated to ensure security at every step.

Zero trust is becoming an increasingly important part of the cybersecurity landscape, and the company has been doing a great job of upselling its customers to new zero-trust systems. These include its Zscaler Private Access, which is being used to replace virtual private networks (VPNs), including within the federal government. Other products gaining traction include Zscaler Digital Experience, Zero Trust for Branch and Cloud, and artificial intelligence (AI) analytics.

It has also moved into data security to help prevent data loss in public AI apps. Last quarter, it saw a 40% increase in annual contract value for its data security products.

Overall, the company is growing, with revenue climbing 23% year over year last quarter. Its net dollar retention rate was 115%, showing its strong growth within its existing customer base. With zero trust and data protection becoming more important, Zscaler has a bright future.

4. SentinelOne

SentinelOne (NYSE: S) is a fast-growing endpoint cybersecurity company, trading at a low valuation. Its forward price-to-sales (P/S) multiple is only 6.6 times, despite having 29% revenue growth last quarter.

The company has a big opportunity in the second half of the year, when personal computer (PC) vendor Lenovo will begin shipping its computers with SentinelOne's Singularity Platform installed. Lenovo is the world's largest enterprise PC vendor, selling 61.8 million PCs last year, so this is a big deal for SentinelOne.

The company has also been doing a good job of upselling its Purple AI, which uses AI to help analysts detect complex security threats through the use of natural language prompts. It predicts that Purple's use of hyper-automation to enhance security operations by automating complex, multi-step processes will become "the bedrock for agentic AI in cybersecurity." Purple can also be run across vendor platforms, including Zscaler and Palo Alto.

Given its growth, the opportunities in front of it, and its valuation, SentinelOne is a stock investors can look to add to their portfolios.

Should you invest $1,000 in Palo Alto Networks right now?

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

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

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

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Geoffrey Seiler has positions in SentinelOne. The Motley Fool has positions in and recommends CrowdStrike and Zscaler. The Motley Fool recommends Gartner and Palo Alto Networks. The Motley Fool has a disclosure policy.

Shares of cybersecurity leaders CrowdStrike Holdings (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Fortinet (NASDAQ: FTNT) rallied 13%, 6%, and 13%, respectively, this week as of noon ET on Friday, according to data provided by S&P Global Market Intelligence.

The primary reason for these increases is related to a 90-day pause on the newly proposed tariffs that the United States announced, prompting a virtually marketwide rally.

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However, there was also company-specific news that added to this rally.

On Monday morning, Wedbush Securities listed CrowdStrike and Palo Alto Networks as two "defensive" plays in an era of potentially higher tariffs. Then, on Thursday, HSBC upgraded Palo Alto to a hold from a sell while reiterating that Fortinet was its top cybersecurity stock.

Here's why I can't help but agree with these bullish notions on these three stocks.

A trio of defensive growth stocks

These three cybersecurity leaders grew sales between 14% and 25% in their most recent quarters. Despite their status as growth stocks, it is also fair to call each of the businesses a defensive stock, as Wedbush stated.

A recent survey by cybersecurity provider Red Canary of security leaders at an array of businesses found that 63% of companies increased their cybersecurity spending. Still, only 37% thought it was enough to be entirely secure. Cybersecurity spending remains crucial for businesses, with numerous hacks costing hundreds of millions of dollars (if not over a billion) in recent years.

And the need will only become more pressing as we continue to move into an artificial intelligence-influenced world. The same Red Canary survey found that roughly 62% of security leaders said that AI threats make it more challenging to keep their businesses safe.

Simply put, CrowdStrike, Palo Alto, and Fortinet offer investors the best of both worlds: high growth and defensive, recurring sales.

The case for CrowdStrike

CrowdStrike is best known for its leadership in detecting endpoint threats, and its cloud-based Falcon platform is quickly becoming a full suite of cybersecurity safeguards. Its AI-powered platform is a must-have for most of the biggest names in the business world and is currently used by roughly 70% of the Fortune 100, 18 of the top 20 U.S. banks, and 44 of the 50 U.S. states.

The company's newer products for identity protection, cloud security, and security information and event management grew by 70% to 140% since last year, so this notion of a full-suite platform continues to gain momentum.

The stock won't be confused as being cheap, trading at 84 times free cash flow (FCF). But management is forecasting $10 billion in annual recurring revenue (ARR) by 2031 -- up from $3.9 billion today -- so it could quickly outgrow this valuation.

The case for Palo Alto Networks

Palo Alto Networks has generated annualized returns of 26% since its 2012 initial public offering (IPO) while becoming a leader alongside Fortinet in firewall solutions. But this success didn't prevent the stock from being hammered in early 2024 as it shifted from individual solutions to a platform model, which it dubbed "platformization."

This adjustment meant it had to entice many existing customers to come along for the ride by temporarily offering deeply discounted solutions (if not free ones) while they acclimated themselves to the new setup. Just one year later, though, this shift seems to be a success.

The company grew sales, remaining performance obligations (RPO), and next-generation ARR solutions by 14%, 21%, and 37%, respectively, in its latest quarter, so it looks to have made the right move (so far).

It might be a leap of faith for investors to buy tech-dense cybersecurity offerings like Palo Alto, but it has several leadership ratings from Gartner's Magic Quadrant rankings across several niche categories.

Should sales and FCF growth accelerate to match the company's impressive 21% growth in RPOs (a forward-looking metric), it could prove to be a fantastic investment at 40 times FCF, thanks to its mission-critical offerings.

The case for Fortinet

Fortinet and Palo Alto are the two top dogs in their firewall niche. Like Palo Alto, Fortinet has delivered incredible 30% annualized returns since its IPO in 2009.

Both companies hold leadership rankings from Gartner in several cybersecurity categories, so they will always seem to be linked together.

One area where Fortinet is dissimilar -- in a good way -- from its two peers in this article is that it protects shareholder value better. Whereas CrowdStrike and Palo Alto have let their number of shares outstanding rise by 15% and 14% over the last five years, Fortinet has lowered its count by 5%.

This ballooning share count from CrowdStrike and Palo Alto stems from hefty stock-based compensation (SBC), which equals roughly 22% and 13%, respectively, of their total revenue. Meanwhile, Fortinet's SBC only accounts for 4% of revenue. This signals (in my opinion) that Fortinet does a better job of protecting shareholder value.

Fortinet works with 77 of the Fortune 100 and virtually all of the business leaders in each industry, much like CrowdStrike. This scale, paired with the fact that Fortinet has nearly twice as many U.S. patents as CrowdStrike and Palo Alto combined, hints that the company will be hard to disrupt anytime soon.

The stock trades at 39 times FCF, and management is guiding for more than 12% billings growth over the next five years. So it should be a great example of a defensive growth stock.

The final takeaway

All told, I believe buying a basket of this trio of defensive growth stocks might be the way to go.

Although they all compete with one another, the last five to ten years have shown that the rising tide of the cybersecurity industry -- which is growing by double digits seemingly in perpetuity -- is plenty to lift all three stocks' boats, helping them to beat the market.

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

Before you buy stock in CrowdStrike, 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 CrowdStrike 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 $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% 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

HSBC Holdings is an advertising partner of Motley Fool Money. Josh Kohn-Lindquist has positions in CrowdStrike and Fortinet. The Motley Fool has positions in and recommends CrowdStrike and Fortinet. The Motley Fool recommends HSBC Holdings and Palo Alto Networks. The Motley Fool has a disclosure policy.

With the S&P 500 (SNPINDEX: ^GSPC) ending last week down more than 10% in two days, the stock market experienced its first crash since March 2020, when the COVID-19 pandemic began to escalate. The culprit this time was the U.S. enacting punitive tariffs against much of the rest of the world and an ensuing trade war. These tariffs were even applied to two islands uninhabited by humans, with the Trump administration saying the duties were added so that other countries could not evade tariffs by shipping goods through the ports of these islands.

With the market in turmoil and a lot of volatility likely ahead, let's look at four ways investors can navigate the current market crash.

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1. Have liquidity

In a bear market or an impending bear market, one of the most important things investors can have is liquidity, or cash on the sidelines. By having available cash, investors can then take advantage of market dips.

If you're fully invested, consider selling some of your least favorite positions to raise some cash that can later be used to buy ideas you have more conviction in. If these are in a non-retirement account, you'd also get the potential benefit of a tax loss when you next file.

To be clear, you don't want to start panicking and just sell stocks. Instead, you want to look at this as an opportunity to high-grade (improve the quality of) your portfolio.

2. Create a list of high-quality stocks to buy

Another important thing you can do is create a list of high-quality stocks and the prices at which you'd start buying them. Undoubtedly, there have been stocks you've liked in the past, but their valuations were too high.

This could be highfliers like Palantir Technologies (NASDAQ: PLTR) or Cava Group (NYSE: CAVA) whose businesses are doing great but whose stock valuations just skyrocketed over the past year or two. Perhaps it could be stocks in industries that have always tended to have high multiplies, such as cybersecurity companies like CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW). There could also be blue chip tech names like Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) or Amazon (NASDAQ: AMZN) whose stocks have just gotten cheaper, given their collection of businesses and future prospects.

The key, though, is to gather a list of high-quality stocks you'd be comfortable owning over the long run. And then, when they reach your price target, be ready to start building positions in them. Just do the research beforehand so you're ready to pounce.

3. Consider writing puts

A more advanced strategy to use in a down market is to write (sell) put options. By writing a put option, you collect a cash premium up front, but you are then obligated to buy that stock if the buyer exercises his option to sell it to you. As such, you want to do this only with stocks and at prices where you would want to buy them.

For example, if Amazon was on your list of stocks to buy at $150, you could write a put on Amazon stock with a strike price of $150 and a May 9 expiration and collect around $3.70 in premium. If the stock falls below $150 and the option is exercised, you'd own the stock at $150. Note that each option represents 100 shares. If Amazon doesn't fall to that price, you just collect the premium, which would be worth around $370 for each option.

This strategy's intention is twofold. One is to let you buy into a stock you want to own at a lower price. However, if the stock never reaches that price, you still earn some return.

The downside to this strategy is that it does tie up some capital, which you could potentially use elsewhere. That is why I prefer to keep the expiration dates short, at about a month.

In addition, if the stock blows past your price target on the downside, you are still obligated to buy at the strike price. This is most likely to occur if a major event happened when the market was closed, and it opened way down. However, the assumption we are using is that you'd be a buyer of the stock at the strike price regardless. The other disadvantage is that if the market does make a quick reversal, you would lose out compared to if you had jumped in right away and bought the stock.

However, this is a nice strategy to supplement your investments, allowing you to earn some extra cash as you wait for stocks to hit your buy prices.

4. Dollar-cost average with ETFs

Another strategy investors should consider is dollar-cost averaging. In this strategy, you make investments at set times and dollar amounts regardless of their prices.

This strategy works particularly well with exchange-traded funds (ETFs) such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the Invesco QQQ ETF (NASDAQ: QQQ). These two ETFs track major market indexes that have proven to be long-term winners. The Vanguard ETF tracks the S&P 500, which comprises the 500 largest stocks traded in the U.S., while the QQQ ETF tracks the Nasdaq-100, which is more tech- and growth-oriented.

With ETFs, you don't have to worry about individual stock research. You can buy an ETF that immediately gives you a portfolio of leading stocks. Consistently dollar-cost averaging into index ETFs is a great way to build long-term wealth, and a down market is a great place to start implementing this strategy.

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 Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $590,231!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 5, 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. Geoffrey Seiler has positions in Alphabet, Invesco QQQ Trust, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Palantir Technologies, and Vanguard S&P 500 ETF. The Motley Fool recommends Cava Group and Palo Alto Networks. The Motley Fool has a disclosure policy.