buy

A couple of years ago, things looked dire for Plug Power (PLUG 3.42%) stock. It was plunging in value and it even issued a going concern warning, which means that the business was concerned about its finances and that there were significant doubts about its ability to continue operating.

The company says that risk no longer exists. And not only are its financials stronger, but the energy stock has also been red hot of late. This year, share prices of the hydrogen company are up an incredible 95%. In just the past six months, its stock price has more than tripled in value.

Has this once-risky stock become a good, safe option for investors?

Image source: Getty Images.

Why is there so much hype around Plug Power?

Energy has been a big investing theme this year, largely due to artificial intelligence (AI) and the need to power up large data centers. Plug Power has positioned itself as one of the leading companies in offering clean energy solutions with hydrogen fuel cells. Many investors likely see the zero-emission energy options that Plug Power offers as one of several potential solutions to rising energy needs in AI.

The more that tech companies invest in AI data centers, the greater the need may be for energy in the future. And it’s that potential growth that has many investors willing to look past Plug Power’s lack of profitability and shortcomings today — but doing so could be a perilous mistake.

Plug Power’s financials remain problematic

Plug Power may have removed the near-term going concern warning last year, but I have doubts about the company’s ability to survive in the long run. This is, after all, still a massive, cash-burning business. In the past six months, it has incurred net losses totaling $425.6 million, which was more than the revenue it generated over that time frame ($307.6 million). The business’s cost of sales was even higher at $435 million, resulting in negative margins and a loss before even factoring in overhead and other operating expenses.

It also burned through $297 million in cash over the course of its day-to-day operating activities during the past two quarters. Without a path to profitability or positive cash flow in the foreseeable future, there is plenty of risk for dilution and frequent share offerings in the stock’s future.

I’d stay away from Plug Power stock

Investing in hydrogen energy is a long-term play, and it’s one that’s full of risks. While hydrogen can play an important role in addressing the world’s global energy needs, not everyone is convinced that it will be the case. Some critics point to the inefficiency and high costs that come with hydrogen energy production. And there are alternative energy sources that may be cleaner and better options in the long run.

It’s easy to get swept up in the AI-driver energy hype, and that’s what may be happening with Plug Power. But that doesn’t mean this is a safe stock to invest in. For a while, this stock was going nowhere but down; it declined by more than 50% in each of the past three years. Then, the energy stock craze took off, and so did Plug Power’s valuation.

While it may look like a cheap stock to own given its massive decline in recent years and the fact that it’s trading at just 4 times its trailing revenue, this is still a highly risky investment to hold in your portfolio. Until and unless its fundamentals drastically improve, you’re likely better off avoiding Plug Power as this is a speculative stock to own, with plenty of downside risk.

USA Rare Earth (USAR 14.99%) posted huge gains in Thursday’s trading session. The deep-sea mining specialist’s share price gained 15%, even though the Dow Jones Industrial Average index declined 0.6% in the day’s trading. Meanwhile, the S&P 500 declined 0.3%, and the Nasdaq Composite declined 0.1%.

The key factors that pushed the broader market lower today were the same ones that powered big gains for USA Rare Earth stock. China plans to cut down on its export of rare-earth minerals to the U.S., but that could present a big opportunity for USA Rare Earth.

Image source: Getty Images.

Is USA Rare Earth stock a buy right now?

China is the world’s leading supplier of rare-earth minerals. According to some estimates, the country accounts for approximately 70% of global rare-earth mineral sourcing. If relations between the U.S. and China continue to worsen, the U.S. will likely have to increase its domestic sourcing of rare-earth minerals and trade in the category with aligned countries.

USA Rare Earth’s business is still in a pre-revenue state, and that makes the company a risky investment almost by definition. This characteristic makes it riskier than more well-established mining stocks. Conversely, the company expects to begin production at its Stillwater, Oklahoma, magnet facility next year and has other projects that could shift into production mode within the next two years.

USA Rare Earth continues to be a high-risk investment, and the stock is too growth-dependent to be a good fit for risk-averse investors. On the other hand, the company’s potential to play a leading role in supplying rare-earth minerals to the U.S. makes it a potentially explosive play.

Walmart (WMT -0.63%) is a stock that most investors probably consider to be a safe investment. Its stores are go-to locations for consumers, whether they’re buying groceries, day-to-day essentials, or discretionary items. The business has been resilient over the years and has shown strength while other retailers have struggled.

That safety has lured in investors at a time of uncertainty in the markets. But has that bullishness pushed its value up too much, too quickly? Currently, Walmart’s stock is trading at not just a 52-week high, but also at an all-time high. Is it still a good buy at these levels, or could it be due for a pullback?

Image source: Getty Images.

Walmart’s stock is trading at elevated levels

Investors have been paying a premium for Walmart’s stock due to the safety it offers and the solid, resilient earnings numbers it has been posting in recent quarters. But there’s no denying that the premium is high right now, with Walmart trading at a price-to-earnings multiple of nearly 40, which is far higher than its 10-year average.

WMT PE Ratio data by YCharts

Usually, for retail stocks such as Walmart, whose businesses are growing in the single digits, investors aren’t willing pay more than 30 times their trailing earnings, unless they are expecting significantly more growth ahead. However, that doesn’t look to be the case with Walmart; it’s forecasting between 3.75% and 4.75% full-year growth for its net sales for the current fiscal year (which ends in January).

Meanwhile, the company admits that it is facing rising costs due to tariffs and it may have to absorb some of the increases. Not only might the business’ margins suffer, but consumer demand may also diminish in future quarters if prices increase. This could lead to some underwhelming quarterly results in the months ahead.

Walmart could have even more problems to worry about

Another reason Walmart may encounter challenges is due to rising competition from Amazon, arguably its archrival at this point. Amazon recently announced that it is offering same-day grocery delivery in over 1,000 U.S. cities and its goal is to double that number by the end of the year. While Amazon’s grocery business hasn’t been a huge concern for Walmart in recent years, the tech giant is by no means giving up.

By offering same-day delivery options for groceries, that could be the move that puts Amazon head to head with Walmart in a key market, which could make it more challenging for the big-box retailer to not only grow its sales, but also its bottom line. And without strong earnings growth, Walmart’s already rich valuation could look much more expensive in the future.

Should you buy Walmart stock right now?

Walmart has a solid business that has generated nearly $700 billion in sales over the past 12 months. It’s a beast in retail and it isn’t going anywhere in the foreseeable future. Based on its strong fundamentals, it can remain a solid long-term investment.

That being said, investors should never ignore valuation because buying a stock at a high price can limit your gains from owning an investment, and it leaves little to no margin of safety. If you’re paying close to 40 times earnings for Walmart’s stock at a time when there’s growing economic uncertainty and when competition is also intensifying, that can result in a lot of pain, at least in the short term.

Given the high share price and downside risk that Walmart possesses right now, I think investors may be better off looking at cheaper growth stocks to buy.

It’s impossible to predict with certainty whether a recession is coming, but certain developments sure make it more likely. President Donald Trump’s tariff policies could lead to increased prices and plunge the economy into a downturn. The recent government shutdown, especially if it drags on, could lead us directly into a recession.

Of course, that may not happen, but it’s not a bad idea for investors to prepare for that possibility by investing in stocks that are well-equipped to perform well during recessions. Here are two great examples: Walmart (WMT 0.41%) and Johnson & Johnson (JNJ 0.42%).

Image source: Getty Images.

1. Walmart

Some might point out that Walmart, one of the leading retailers in the U.S., is facing challenges. Trump’s tariffs are increasing the company’s expenses and forcing it to pass these costs on to customers, which in turn affects purchasing decisions. How will Walmart handle a full-blown recession when the purse strings get even tighter? In my view, the company will be just fine. Walmart has performed well for decades, generating steady revenue and profits even if the economy is not doing well.

The past is no guarantee of future performance, but Walmart’s core business remains well-equipped to handle significant challenges. The company’s retail footprint in the U.S. is one of the strongest. Roughly 90% of Americans live within 10 miles of one of the company’s stores. So, for most U.S. consumers, Walmart is a convenient option.

Even if people become more price-sensitive during recessions, Walmart remains a great option. The company’s size grants it significant negotiating power when purchasing items from suppliers. This allows it to pass these cost savings to customers. Even in an inflationary environment due to tariffs, Walmart should remain one of the lower-cost options compared to its peers, who would be dealing with the same challenge. 

Furthermore, the company has become even more convenient by doubling down on its e-commerce efforts. Walmart has one of the largest e-commerce footprints in the U.S., ranking second only to Amazon.

It’s not just its size: Walmart is the second cheapest (again, behind Amazon) online retailer in the U.S. So, whether online or in its stores, Walmart should continue to offer competitive prices, making it a top option for shoppers looking to spend as little as possible.

Lastly, Walmart is an excellent dividend stock. The company is part of the elite group of Dividend Kings that have raised their payouts for at least 50 consecutive years — Walmart’s streak is at 53.

Opting to reinvest the dividend helps smooth out market losses. That’s another reason why Walmart is an incredible investment option when preparing for a recession.

2. Johnson & Johnson

Johnson & Johnson is a leading healthcare giant. It offers products and services, such as pharmaceutical drugs, for which demand is not heavily dependent on the state of the economy. Johnson & Johnson has a diversified pharmaceutical portfolio across several therapeutic areas, including some of the biggest, such as oncology and immunology. Despite losing patent protection for one of its biggest growth drivers, Stelara — an immunosuppressant — in the U.S. this year (and in Europe last year), the company has continued to post strong financial results.

In the second quarter, the company’s revenue increased by 5.8% year over year to $23.7 billion. Johnson & Johnson’s adjusted earnings per share declined by 1.8% year over year to $2.77, due to several factors, including the effect of acquisitions. Nevertheless, this is nothing to be worried about.

Overall, Johnson & Johnson is performing well, and it should continue to do so. The company’s navigation of the Stelara patent cliff shows its ability to overcome these meaningful challenges for drugmakers. Johnson & Johnson’s medtech business enhances its operations with greater diversity. With the company working on the promising Ottava robotic-assisted surgery (RAS) system, it could capitalize on this massive growth opportunity over the long run as the RAS market remains underpenetrated.

Furthermore, with recent developments in the pharmaceutical industry, tariffs may not be as significant a problem for Johnson & Johnson. The company will face some headwinds, including legal challenges, but its robust balance sheet enables it to effectively navigate those obstacles.

Finally, Johnson & Johnson is also a Dividend King, having achieved 62 consecutive years of dividend increases. The company is an excellent choice to get you through a recession.

Is Carnival (CCL -1.44%) (CUK -1.65%) stock’s run finally over? The cruise industry leader has made an incredible comeback after falling off a cliff when the pandemic started. It’s back to business and its usual, sales-generating self, with sky-high demand and record operating profits.

The stock price has matched its ascent, and Carnival stock is up 270% over the past three years. It has required a good amount of confidence from investors to stay with it over this time, but it’s paid off. However, after the most recent earnings results, the stock has started to drop again. Is this a buying opportunity? Wall Street analysts say yes. Are they right?

Image source: Carnival.

Endless seas, endless demand

Carnival is the largest cruise operator in the world, with 90 ships across its portfolio of brands, which includes Princess, Holland, Aida, and others. Demand is outstripping capacity, and it’s ordering more ships to handle all of the people who want to take a historic trip on a luxury liner.

It’s also working hard to generate that demand, with many new features and destinations to attract new and repeat business. In July, it opened Celebration Key, a Caribbean asset that’s exclusive to Carnival travelers. It’s keeping busy there, and management expects it to have visitors nearly every day this year, with two ships in port 85% of the time. It’s getting ready to launch or expand several other exclusive Caribbean assets.

Management is moving ships to where demand is highest, and it already has plans in the works to increase capacity in these locations for the 2027 and 2028 sailing seasons. It’s opened up bookings for new options in South Florida and Texas, and it’s opening new home ports in Norfolk, Virginia and Baltimore, Maryland. It also announced its first-ever dedicated Hawaii series sailing from California.

There’s incredible momentum at Carnival. Almost half of 2026 is already on the books, and in the U.S. and Europe, ticket prices are at historic highs. Occupancy trends remain at historical highs as well.

Are new problems emerging?

For all intensive purposes, Carnival’s fiscal third-quarter (ended Aug. 31) earnings were phenomenal. It beat guidance across metrics, and it reported its highest-ever quarterly adjusted net income at $2 billion. It raised full-year guidance across metrics as well, and this was the third time this year that it did so.

Other positive news is that as interest rates go down, it’s paying off its high debt and refinancing at better rates, saving millions in interest expense.

Despite the wins in basically every area, Carnival tumbled after the report, and it’s still falling, down 7% since the results were released.

It could be tied to the remaining debt of $26.5 billion or to the slowing down of some year-over-year increases. Revenue, for example, increased only 4% from last year. The market may also not have liked Carnival’s plan to convert some of its debt into stock, which dilutes the current outstanding shares. Another likely explanation is that crude oil prices rose on the day of the report, and all of the major cruise stocks fell.

Go with Wall Street

Wall Street sees this opportunity and says go for it. Of covering analysts, 73% call it a buy, with an average price target of 27% over the next 12 to 18 months and a high of 50%.

Investors should always take Wall Street’s approach with a grain of salt and dig further. But in this case, so long as you aren’t totally risk averse and you have a long-term investing timeline, I think Wall Street is on the money here. Carnival has demonstrated strong management, resilience, and cost efficiency, and it’s investing in its future. Keep in mind that you can’t time the market, and the stock could continue to drop before getting back up again, but this looks like an opportunity to buy Carnival stock on the dip.

On October 7, 2025, Sage Capital Advisors, LLC disclosed a buy of Verizon(VZ -0.01%) shares, with an estimated transaction value of $4.67 million based on quarterly average pricing.

What happened

According to a filing with the Securities and Exchange Commission dated October 7, 2025, the firm increased its position in Verizon by 107,798 shares during the quarter. The estimated value of shares added was $4.67 million, bringing the fund’s total Verizon stake to 246,445 shares, worth $10.83 million as of September 30, 2025.

What else to know

The increased Verizon position now accounts for 2.6% of the fund’s reportable equity holdings

Top holdings after the filing:

• NASDAQ:AAPL: $37.26 million (8.9% of AUM) as of September 30, 2025
• NASDAQ:MSFT: $21.92 million (5.2% of AUM) as of September 30, 2025
• NASDAQ:NVDA: $19.31 million (4.6% of AUM) as of September 30, 2025
• NASDAQ:GOOGL: $18.69 million (4.4% of AUM) as of September 30, 2025
• NASDAQ:AMZN: $16.32 million (3.9% of AUM) as of September 30, 2025

As of October 6, 2025, Verizon shares were priced at $41.44, down 5.47% over the past year and have underperformed the S&P 500 by 18.9 percentage points.

Company Overview

Company Snapshot

Offers wireless and wireline communications, internet access, video, and a range of network solutions for consumers, businesses, and government clients.

Generates revenue through subscription-based service plans, equipment sales, and network access fees, leveraging a nationwide infrastructure.

Serves individual consumers, enterprises, and public sector organizations across the United States and internationally.

Verizon is a leading provider of communications and technology services, operating at national and global scale.

Foolish take

To start, let’s admit what Verizon stock is — and what it is not. In short, Verizon is a stock for income-oriented investors, seeking a way to generate cash with the possibility of modest growth.

In that context, Verizon has done what one might expect. Its ample dividend, which yields 6.5%, provides plenty of income for investors that need it. Meanwhile, its total return — which combines its dividend yield with its stock price return — has lagged the S&P 500.

For example, over the last decade, Verizon stock has generated a total return compound annual growth rate (CAGR) of 4.7%. Meanwhile, the S&P 500 has generated a total return CAGR of 15.0% over that same period.

In other words, Verizon hasn’t kept pace with the broader market, but that’s not surprising given its business model and the challenges the company faces.

One of the biggest challenges for Verizon is its balance sheet. Specifically, it has over $166 billion in net debt, which acts as a drag on its ability to return value to shareholders. Verizon’s net debt has actually increased by 48% over the last decade, which makes it more difficult for the company to buy back shares, increase its dividend payment, or make strategic acquisitions.

The company’s high debt load is one reason why growth-oriented investors should look elsewhere. Simply put, Verizon isn’t going to be able to generate rapid growth. Rather, it will focus on generating cash, servicing its debt, and paying its generous dividend.

Therefore, Verizon remains a stock to consider, at least for income-seeking investors.

Glossary

13F AUM: The total value of assets under management reported in a fund’s quarterly SEC Form 13F filing.
Transaction value: The estimated dollar amount involved in a specific buy or sell of securities.
Stake: The total number of shares or percentage ownership a fund holds in a particular company.
Fund AUM: The overall market value of assets managed by an investment fund.
Top holdings: The largest investments in a fund’s portfolio, usually ranked by value.
Dividend yield: Annual dividend income expressed as a percentage of the stock’s current price.
Subscription-based service plans: Ongoing contracts where customers pay regularly for continued access to services.
Network access fees: Charges paid by customers or partners to use a company’s communication infrastructure.
Public sector organizations: Government agencies and entities that purchase goods or services.
TTM: The 12-month period ending with the most recent quarterly report.

CALVIN Klein is practically retail royalty when it comes to boxers, and a multipack has been slashed by 46% in the Amazon Prime Day sale.

A three-pack of classic black boxers would usually costs £42, but shoppers can pick up the set for £22.87 for a limited time.

Calvin Klein 3-Pack Boxers, £22.87 (was £42)

Calvin Klein boxers are the most popular men’s underwear for an reason, and the deal works out as just £7.60 per pair.

Stock is selling seriously fast, but other colourways have also been slashed.

Fashion fans can also get a three-pack with a red, white and blue pairs for £22.91.

The boxers would make the perfect Christmas gift for men, or as a treat to yourself.

Amazon’s Big Deal Days sale is running until tomorrow, but as one of the bestsellers so far, it’s likely that all sizes will be gone before the deal expires.

For more of the best discounts, read our roundup of the best Prime Day deals, which we’re constantly updating with more deals.

Amazon Prime Day: the 10 best deals

The Amazon Prime Big Deal Days sale kicks off today and runs until midnight tomorrow (Wednesday 8th October) – here’s our pick of the best deals.

*If you click on a link in this boxout we will earn affiliate revenue

1. Amazon Fire TV Stick HD, £19.99 (was £39.99) – buy here
2. Poounur Fitness Smartwatch, £23.99 (was £129.99) – buy here
3. Ninja 7.6L Foodi Dual Zone Digital Air Fryer, £119 (was £218.99) – buy here
4. BaByliss Air Style 1000 £29.99 (was £75) – buy here
5. LKOUY Portable Charger, £12.99 (was £59.99) – buy here
6. Silentnight
7. Remington Shine Therapy 45mm Hair Straightener, £29.99 (was £79.99) – buy here
8. Apple iPhone 16e, £494 (was £549) – buy here
9. Amazon Fire HD 10 tablet, £69.99 (was £149.99) – buy here
10. Felix 40-pack Jelly Wet Cat Food, £9.48 (was £14.77) – buy here

When the sale lands, you’ll find more top bargains here:

Just remember, you’ll need to sign up to Amazon Prime to take advantage of these bargains.

The classic designer boxers have received brilliant ratings from shoppers, with over 5,700 five-star reviews on the Amazon website.

One wrote: “I recently purchased these Calvin Klein underwear for my partner, and he’s extremely pleased with the quality, comfort, and fit. 

From the moment they arrived, I could tell they were made from high-quality materials, and they definitely live up to the reputation Calvin Klein has for premium undergarments. 

The fit is absolutely spot-on, and my partner says they are some of the most comfortable underwear he has ever worn.”

Another added: “The fit is so precise it feels like Calvin Klein himself took my measurements.

Five stars is an insult, these deserve their own constellation.”

Amazon has been cutting prices across all sections, and shoppers can save on everything from Dyson Airwrap alternatives to Samsung tablets reduced from £260 to £146.

Pfizer (PFE -0.34%) has a huge 6.3% dividend yield. That’s actually a lot lower than it was not too long ago, thanks to a large stock advance in recent days based on news. But Pfizer’s price rebound actually started in April. Is it time to jump in before more on Wall Street start buying Pfizer’s depressed stock?

Image source: Getty Images.

What does Pfizer do?

Pfizer is a pharmaceutical company. This is a highly complex business that involves huge costs. A company needs to find potential new drug candidates, which requires a material commitment to research staff and facilities. Promising drugs then need to be researched and developed. Then they need to go through the approval process. And finally, assuming the drugs are actually useful and safe, they need to be marketed.

There are massive costs all along the way in what is a very long process of bringing a drug to market. As such, drug makers are granted a temporary period in which they have the exclusive right to sell a newly developed drug. That can lead to huge profits, at least for a period of time. When a drug patent runs out, competitors can make generic versions of the drug, which usually leads to the revenue from the original drug falling drastically. That’s known as a patent cliff.

Drug companies are always working to develop new drugs to offset the income statement hit when patent cliffs come up. That’s the big-picture cycle that Pfizer is always in the middle of. And it has done a very good job of managing to survive and thrive over time. But new drugs and patent cliffs don’t always line up quite as well as hoped, so there can be material short-term turbulence in earnings.

PFE data by YCharts

What’s up with Pfizer’s big price drop?

Pfizer’s stock price is currently down over 50% from the peaks it hit in late 2021. That high water mark was a bit of an anomaly, as it coincided with the coronavirus pandemic. Wall Street extrapolated the vaccine opportunity from COVID-19 way too far into the future. When the world learned to live with the illness, Pfizer’s stock plunged.

On top of that, Pfizer is currently facing down a patent cliff, with drugs for oncology (Ibrance) and cardiovascular health (Eliquis and Vyndaqel) set to lose patent protections in 2027 and 2028. This is a notable issue and it won’t be simple to solve. In fact, after the company’s own weight loss drug flamed out.

However, Pfizer has just inked an acquisition to gain access to a new weight loss drug opportunity. The deal to buy Metsera (MTSR 0.19%) is expensive and fairly complex, involving an earnout provision. The upfront cost is $47.50 per Metsera share (roughly $4.9 billion), with three earnouts that could add $22.50 per share to the cost. That said, this deal quickly solves a problem for Pfizer.

Pfizer has also made quick work of dealing with increasing regulatory pressure. It was the first company to come to an agreement with the U.S. government around drug pricing. The “specific terms of the agreement remain confidential,” but Pfizer has agreed to make material capital investments in U.S.-based assets in an effort to avoid tariffs.

Both of these moves appear to have resulted in Wall Street taking a more positive view of Pfizer’s future. The tariff deal, specifically, led to a huge one-day gain in Pfizer’s stock. That said, there is still a lot of work to do before Pfizer’s business fortunes are on the mend. But the situation does appear to be brightening.

Has enough changed to make Pfizer a buy?

Pfizer’s payout ratio is quite high, hovering around 90%. And the board of directors has made the call to cut the dividend in the past, specifically in 2009 when Pfizer bought Wyeth. That cut and the lofty payout ratio make Pfizer a potentially risky choice for conservative income investors looking a reliable dividend, even though the stock’s yield is attractively high.

That said, as a turnaround investment, Pfizer looks a lot more attractive. As the drug company has done before, it is taking the steps necessary to survive and thrive over the long term. In fact, the stock has risen from a 52-week low around $22 to a recent price of roughly $27, which is a 20% increase.

Clearly, Wall Street is starting to see the silver lining in Pfizer’s clouds. And if the dividend survives the current headwinds, all the better. Just be careful if you go in counting on that dividend to survive.

For years, federal subsidies have played a critical role in accelerating the adoption of electric vehicles (EV). Most notably, President Joe Biden’s Inflation Reduction Act included a $7,500 tax credit designed to make EV purchases more affordable and spur demand. Under President Donald Trump, however, policy priorities have shifted. As part of the newly enacted “big, beautiful bill,” the EV tax credit was eliminated as of Sept. 30.

Let’s examine how this policy change could affect Tesla (TSLA -1.41%) and what it could mean for the company’s trajectory going forward.

Image source: Tesla.

Spoiler alert: Tesla crushed Q3 deliveries

Shortly after the legislation was signed into law, I predicted that eliminating the EV tax credit would actually provide Tesla with a short-term boost. The logic was straightforward: Consumers who had been undecided about purchasing an EV would likely accelerate their decisions in order to take advantage of the $7,500 credit before it expired.

According to consensus estimates from FactSet and Bloomberg, Wall Street expected Tesla’s third quarter vehicle deliveries to fall in the range of 439,800 to 447,600 units. In reality, Tesla delivered 497,099 cars during the quarter — absolutely shattering analyst expectations.

In short, the removal of the EV tax credit was far from a death knell for Tesla. Relying solely on subsidies to determine the health of Tesla’s business and its future roadmap is a narrow view of the company’s potential. As the discussion below will show, Tesla’s long-term investment case extends well beyond government incentives.

Tesla’s expanding vision: More than just cars

Investing in Tesla requires shareholders to be fully aligned with Elon Musk’s broader technological ambitions. At its core, Musk’s vision for Tesla is centered on artificial intelligence (AI), robotics, and autonomous systems.

Consider Optimus, Tesla’s humanoid robot project. While still in early development, Optimus is designed as a scalable, general-purpose robot with the potential to augment human labor within factories — boosting productivity and delivering exponential cost savings over time. In fact, Musk himself has touted that Optimus could represent 80% of Tesla’s future value once scaled.

Equally transformative is Tesla’s vision to create a robotaxi network. The company aims to deploy a fleet of fully autonomous vehicles capable of generating recurring revenue streams that far exceed the economics of one-time vehicle sales. If successful, robotaxi could not only disrupt incumbents in the mobility market — such as Lyft, Uber Technologies, DoorDash, or Hertz — but it could also unlock a new business model for Tesla: A software-driven, high-margin service powered by its Full Self-Driving (FSD) platform.

On a deeper level, Tesla’s potential extends beyond physical products and into the intangible realm of machine intelligence. Musk has repeatedly hinted at closer integration between Tesla and his separate venture, xAI — which is developing a large language model (LLM) known as Grok to compete with OpenAI. Such a partnership could meaningfully enhance Tesla’s software stack, enabling a more intelligent and connected ecosystem that spans vehicles, robots, and AI-powered services.

Is Tesla stock a buy now?

The loss of the $7,500 EV subsidy may affect short-term affordability for certain buyer segments, but ultimately it does not fundamentally change Tesla’s long-term investment thesis.

That said, valuation deserves careful attention. As of Oct. 2, Tesla shares were trading near all-time highs. Recent momentum has been fueled in part by Musk’s $1 billion open-market purchase of Tesla stock, as well as traders positioning ahead of the Q3 delivery beat — which indeed materialized.

TSLA data by YCharts

For these reasons, I would be cautious about chasing Tesla at current levels. While projects like Optimus, the robotaxi network, and potential xAI synergies are exciting, none have yet generated material revenue or profit. Each remains highly speculative at this stage.

For now, investors may be better served monitoring Tesla’s execution on the AI front and considering entry points on pullbacks rather than buying into the stock at peak optimism.

It’s hard to narrow down the best of any category to only one favorite. That’s true whether we’re talking about the greatest football player of all time, the best actor, or the top musical artist.

Choosing the most outstanding artificial intelligence (AI) stock is difficult, too. What is the single best stock to buy for the AI revolution?

Image source: Getty Images.

Multiple worthy contenders

Answering that question isn’t easy because there are multiple worthy contenders. Nvidia (NVDA -0.77%) absolutely makes the list. It’s the largest company in the world based on market cap. Nvidia’s GPUs remain the gold standard for training and deploying AI systems. The company’s technology is also used in AI-powered robots and self-driving vehicles.

I like Microsoft (MSFT 0.26%), too. Its Azure is the second-largest cloud platform. The company has embedded generative AI into its software products that are used by millions of people across the world. Microsoft also arguably represents the best way to invest in ChatGPT developer and AI pioneer OpenAI, which doesn’t trade publicly at this point. The two companies are close partners, and Microsoft has invested in OpenAI.

If you’re thinking about the next frontiers for AI, Meta Platforms (META -2.29%) especially stands out. The Facebook and Instagram parent is going all-in on developing artificial superintelligence (ASI). Meta also leads the fast-growing AI glasses market.

Ark Invest’s Cathy Wood and Wedbush analyst Dan Ives think that Tesla (TSLA -1.41%) is the best AI stock. Tesla ranks as the largest holding in Wood’s Ark Invest portfolio. Ives views Tesla as the most undervalued AI stock on the market. Tesla is best known for its electric vehicles (which feature AI self-driving technology), but CEO Elon Musk predicts that its Optimus humanoid robots will be the company’s greatest growth driver in the future.

Checking off all the AI boxes

I think solid cases can be made for Nvidia, Microsoft, Meta, and Tesla as the single best AI stock to buy. However, my vote goes to another AI leader — Google parent Alphabet (GOOG -0.04%) (GOOGL -0.14%). This company checks off all the AI boxes, in my view.

Alphabet’s Google Cloud is the fastest-growing major cloud provider. The unit uses Nvidia’s GPUs, but has also developed Tensor Processing Units (TPUs) that can be more cost-effective in specific machine learning operations.

Like Microsoft, Alphabet has integrated generative AI into many of its products, including Google Search and Google Workspace productivity software. Its Google Gemini large language model (LLM) competes against OpenAI’s GPT-5. Google’s research into transformers (the “T” in GPT) paved the way for today’s LLMs, by the way.

Google DeepMind is actively working on artificial general intelligence (AGI), a critical stepping stone to ASI. Google Glasses were a predecessor to Meta’s AI glasses. Google teamed up with Warby Parker to develop smart glasses using the extended-reality operating system Android XR that will compete against Meta’s devices.

Alphabet’s Waymo unit has a solid head start on Tesla in the autonomous ride-hailing market. Google DeepMind is developing humanoid robots that use the Gemini 2.0 AI model. And, with apologies to Wedbush’s Ives, Alphabet’s stock appears to be more attractively valued than Tesla on every commonly used metric.

Is Alphabet the single best stock to buy for the AI revolution?

Are there risks for Alphabet? Absolutely. Rivals are hoping to chip away at Google Search’s market share. Some industry observers have even predicted that generative AI presents an existential threat to Google Search. Alphabet’s dominance in multiple arenas makes it a big target for regulatory agencies in the U.S. and Europe.

However, Google’s integration of generative AI into its search engine appears to be paying off so far. The regulatory threat against Alphabet also doesn’t seem nearly as concerning after a federal judge didn’t impose the worst-case penalties against the company in a recent decision in an antitrust case.

Multiple stocks will be big winners in the AI revolution, probably including all of the ones discussed earlier. However, if I had to pick the single best AI stock to buy, it would be Alphabet.

Berkshire Hathaway CEO Warren Buffett helped turn the investment conglomerate into one of the world’s most valuable companies. With a market capitalization of approximately $1.08 trillion as of this writing, Berkshire ranks as the world’s 11th-biggest business (at the time of this writing).

Given Berkshire’s incredible success, it’s little wonder that many investors pay close attention to the company’s stock holdings and strategies. Read on to see why two Motley Fool contributors think that these Berkshire Hathaway portfolio components stand out as great buys right now.

Image source: Getty Images.

One of Buffett’s favorites

Jennifer Saibil (Apple): Warren Buffett has been selling Apple (AAPL 0.28%) stock left and right, so I might be going against the grain to say that Apple is one of his best stocks to buy today. But Buffett himself is a contrarian investor, so I’m only following in his footsteps.

In any case, Apple is still the largest stock in the portfolio, accounting for more than a fifth of the total, so Buffett hasn’t lost confidence in it at all. He has said he would never sell as long as he’s controlling Berkshire Hathaway, but that time is coming to an end, and investors are already speculating as to whether Greg Abel will keep it in the portfolio.

But many of the same reasons Buffett originally bought it still hold today. Apple has a large and differentiated consumer products business with a sticky ecosystem, and loyal fans purchase an assortment of its devices, which easily connect to each other. Although it’s often labeled as a tech business, which isn’t in Buffett’s wheelhouse, it’s at least as much the kind of consumer products business that he loves. The tech part also gives him exposure to artificial intelligence (AI), which may not be the reason he bought it, but is a reason many other investors might find it exciting.

So far, Apple Intelligence has disappointed investors. Apple hasn’t released AI services that stand out, and it doesn’t have a strong timeline for when it will.

Still, the recent debut of its newest iPhone, the iPhone Air, demonstrates why fans love Apple and rush to buy its latest launches. It’s the thinnest smartphone on the market, and the design appeals to style-conscious users who often wear their devices as statement pieces. Apple just debuted several new launches that will go on sale later this month, including the new iPhone17 that ramps up the quality and capabilities users love and pay up for, and new AirPods that use Apple Intelligence to translate language in real time.

In other words, Apple is still on top of its game, and it isn’t likely that its customers are going anywhere else anytime soon. However, Apple stock fell after the new products were announced, and it’s down 10% this year. The market didn’t seem to think its launches had enough innovation, especially with AI. That makes this a great opportunity to buy on the dip for the long-term investor.

Amazon stock still looks like a great long-term play

Keith Noonan (Amazon): Like Apple, Amazon (AMZN -1.34%) stock has been a high-profile tech-sector underperformer in 2025. The e-commerce and cloud computing giant’s share price is up just 2% across this year’s trading. Meanwhile, the S&P 500 index’s level has risen roughly 15%, and the Nasdaq Composite‘s level has surged approximately 18%.

Also like Apple, Amazon is also part of Berkshire Hathaway’s stock portfolio. Coming in at just 0.7% of Berkshire’s public stock holdings, Amazon occupies a relatively small position in the investment conglomerate’s portfolio — but I think the tech leader stands out as a strong long-term investment at today’s prices.

Trading at roughly 33.5 times this year’s expected earnings, Amazon admittedly still has a growth-dependent valuation. On the other hand, the extent to which the stock has underperformed the broader market in recent years points to an opportunity. For reference, the company’s share price has risen just 43% over the last five years. Meanwhile, the S&P 500 and Nasdaq Composite have both more than doubled across that stretch.

There are some good reasons behind the underperformance. For starters, the company’s e-commerce business faced some substantial headwinds from supply chain disruptions and inflationary trends connected to the pandemic. With the majority of the company’s sales still coming from its e-commerce business, Amazon is also facing some pressures from tariffs.

On the other hand, Amazon remains one of the world’s strongest businesses — and it’s likely in the early stages of capitalizing on AI-related tailwinds that power incredible new growth phases. The growth catalysts that AI can present for the company’s cloud-infrastructure services business seem to be acknowledged but still broadly underappreciated. Meanwhile, the market seems to be largely overlooking the transformative impact that AI and robotics will have on margins for its e-commerce business. With Amazon positioned to benefit from powerful tech trends, the stock looks like a smart buy while it’s still a market laggard.

Quantum computing holds a lot of promise to impact fields such as climate science, pharmaceuticals, artificial intelligence (AI) modeling, and much more. Many investors are keen on getting in on the ground floor of new tech trends because, as artificial intelligence stocks have proven, buying early can pay off in spades.

That optimism may be fueling the staggering gains of more than 600% that IonQ (IONQ 5.29%) has returned over the past year. Some investors, no doubt, are wondering if they’re missing out by not owning IonQ. But there are a few reasons why investors may want to pause before buying IonQ stock. Here are a few.

Image source: Getty Images.

Expenses are rising, and losses are widening

IonQ is in growth mode right now, which means that the company is investing heavily into building its technology so that it can, ideally, outpace its competitors and generate significant revenue and earnings down the road.

There’s nothing wrong with that, and many growth companies, especially in the tech sector, do this. But it’s important to highlight how much money IonQ is losing in relation to its revenue. The company’s research and development spending spiked more than 230% in Q2 as the company invested in new tech and acquisitions. For reference, IonQ spent more on R&D in Q2 of 2025 than it did in the first nine months of last year.

That spending contributed to significant losses for the company of $177.5 million, up from a loss of just $37.5 million in the year-ago quarter. If we look at IonQ’s loss on an earnings before interest, taxes, depreciation, and amortization basis (EBITDA), things look a little better, but not great. The company’s EBITDA loss was $36.5 million in the quarter, an increase from $23.7 million in the year-ago quarter.

Revenue is growing quickly, with sales jumping 81% in the quarter, but it’s still a modest amount of about $21 million. With losses expanding and IonQ likely to continue spending on R&D and potential acquisitions, revenue will have to accelerate dramatically for the company to eventually offset its losses.

The stock is pricey, and quantum computing is speculative

Even if you’re comfortable with the company’s losses, I think IonQ’s valuation and the speculative nature of the quantum computing market are two more reasons to hold off on buying IonQ. The company’s shares have a price-to-sales ratio of 303, which is very expensive even by tech stock standards — with software application and infrastructure stocks having an average P/S ratio of just 4.

That means IonQ’s sales have to grow at a tremendous rate in order to justify its stock’s current premium price tag, making its most recent revenue increase of 83% in Q2 appear relatively modest.

What’s more, quantum computing is still in its early stages, and even some technology heavy hitters, including Alphabet and Microsoft, believe its practical use cases are still years away. This means IonQ could continue investing in quantum computing technologies, widening its losses, with revenue increases that don’t keep pace with spending, all while betting that quantum computing demand will be there years from now.

IonQ is not a buy

When you add up all of the above, I think IonQ is too risky to buy right now. Its share price has surged at a time when it seems like nothing could dent the stock market’s returns, and I think a little too much optimism has crept into the market, pushing valuations very high.

I think investors would be better off monitoring how well the company’s revenue grows over the coming quarters, see if it can narrow its losses, and find out whether the quantum computing market delivers on its high hopes. But for now, IonQ looks too speculative for my liking.

“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”

– John D. Rockefeller

Rockefeller was onto something there: Receiving quarterly dividend payments is one of the most satisfying things for anyone looking to reinvest for the power of compounding.

These two dividend stocks offer investors not only a long history of consistent dividends (and increases), they also both have strong economic moats to help ensure financial growth over the long haul. Here’s why these two deserve income investors’ consideration.

Getting back to its higher-margin roots

The Canadian National Railway (CNI 1.99%) is a powerful company, driving the economy by transporting more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America annually. It has nearly 20,000 miles of rail lines and related transportation services, connecting Canada’s East and West Coasts, and the Midwest, including a valuable route through Chicago and all the way to New Orleans.

What makes CN (as it’s known for short) a great dividend stock is an economic moat that’s based not only on its geographic reach but also on its extensive railroad infrastructure that’s nearly impossible to replicate. And it’s the primary and most significant rail operator for the Port of Prince Rupert in British Columbia, which contributes to its intermodal growth potential.

Those competitive advantages and its moat help the company continue to print cash, and in turn increase its dividend. The growth of both is obvious in the graph below.

CNI Free Cash Flow data by YCharts.

CN has closed the margin gap with competitors in recent years, after having led the industry in the early 2000s thanks to pioneering the practice of precision scheduled railroading (PSR). However, the father of PSR, Hunter Harrison, took his talents to competitors in 2009, and while his innovations still have their imprint on the business, the company needs to refocus on margins.

While that process develops, investors have a respectable dividend yield of 2.7% and a history of consistent increases.

A snack and beverage juggernaut

PepsiCo (PEP -0.24%) is a household name and global leader in snacks and beverages with brands including its namesake Pepsi, as well as Gatorade, Lay’s, Cheetos, and Doritos, among many others. The company dominates the global market for savory snacks and is the second-largest beverage provider, behind only Coca-Cola.

One factor in investors’ favor is the company’s diversification with exposure to carbonated soft drinks, water, sports and energy drinks, and convenience foods that generate roughly 55% of revenue. PepsiCo is truly global: International markets made up roughly 40% of both total sales and operating profits in 2024.

Image source: Getty Images.

This could prove to be a good time to pour a small investment into the company. The past few years of less than desirable growth — due to self-inflicted wounds and underinvesting in its marketing and brands — has left the stock trading lower over the past year. Management is working to reverse that and has steadied the top and bottom lines, so there should be room for improvement and a return to growth.

Not only does the demand for PepsiCo’s snacks and beverages remain resilient through economic cycles, but it also attracts investors with a healthy 4% dividend yield.

Are the stocks buys?

Over the past year, PepsiCo and CN have traded 17% and 19% lower, respectively. But a couple of missteps and headwinds won’t stop these two juggernauts for long because their competitive advantages are durable. PepsiCo is benefiting from the growth in its snack business and international expansion, while the Canadian National Railway is getting back to its roots and closing the margin gap with competitors, fueling its dividend in the future. Both warrant consideration for a small position for long-term investors looking for dividend income.

Artificial intelligence (AI) isn’t just a buzzword. It’s a top priority for companies of all sizes and in all industries. The most successful businesses in the future will be those that can harness the power of this technology.

Investors must pay close attention, and the good news is that it’s not too late to join the party. Here’s one leading AI stock that I think investors should buy before the end of 2025.

AI from A to Z

You don’t have to search far and wide to find a smart AI bet. Look no further than Alphabet (GOOGL -0.16%) (GOOG -0.04%). About a decade ago, the company began shifting its strategy to focus more on AI. These days, it’s a leader in the space.

Alphabet’s family of large language models, called Gemini, are integrated with its various user-facing products and services. The company’s ad customers also benefit from AI tools that drive creativity and boost targeting capabilities that can increase return on money spent.

Google DeepMind is a leader when it comes to AI research, and Alphabet is developing its own chips, called Tensor Processing Units. And with Google Cloud, the business owns a powerful platform that enables other companies to build their own AI applications.

Time to buy

Despite being one of best ways to put money to work behind the AI trend, shares aren’t expensive. They trade at a forward price-to-earnings ratio of 23.4. I think investors would be smart to buy the stock now.

After sliding sharply on Thursday and Friday, Tesla (TSLA -1.41%) is back in focus ahead of its next earnings report, scheduled for Oct. 22. With a combination of record quarterly deliveries, a sharp sell-off, and an earnings report on the horizon, it’s a good time to look closely at the growth stock. Is the pullback a buying opportunity?

The electric vehicle (EV) maker, which also sells batteries and energy-storage systems and is increasingly leaning into software and services with its Full Self-Driving (Supervised) driver-assistance technology and its autonomous ride-sharing robotaxi operation, has some massive catalysts ahead. But it may have to endure a tough fourth quarter first, making the question of whether shares are a buy a difficult one. The stock’s high valuation makes the decision even harder.

With this backdrop in mind, here are four reasons investors might want to buy the stock and one important reason they may want to avoid it.

Image source: Getty Images.

A return to growth in its core automotive business

Tesla delivered about 497,100 vehicles in the third quarter, a new quarterly record and, importantly, a return to year-over-year growth of about 7% versus the same period last year. That reversal follows two straight quarters of declines: First-quarter 2025 deliveries fell 13% year over year to 336,681, and second-quarter 2025 deliveries slipped 13% to 384,122. Together, these figures frame Q3 not just as a huge sequential jump but also as a clear break in a tough 2025 trend.

Even though the rebound was helped by the expiration of a key $7,500 U.S. electric vehicle credit, it’s worth noting that third-quarter deliveries were far above analysts’ consensus forecast for only about 448,000 vehicles.

Energy is quietly becoming a substantial catalyst

Alongside vehicles, Tesla’s fast-growing energy storage business took another major step forward in Q3. Tesla deployed 12.5 gigawatt hours (GWh) of storage in the third quarter, its highest on record and well above both the 9.6 GWh reported in the second quarter of 2025 and the 6.9 GWh posted in the third quarter of 2024.

This key segment is now generating substantial gross profit for the company and is likely to continue growing as a percentage of overall revenue.

Fading credits may sting, but product and pricing help

The $7,500 federal electric vehicle credit expired on Sept. 30 — a change that likely pulled some U.S. demand into Q3 and could weigh on Q4. But there are two offsets worth watching. First, Tesla’s sweeping post-COVID-19 price cuts have made its lineup far more accessible than a few years ago.

Second, the recently overhauled Model Y, which Tesla is calling Juniper, gives the company a timely hero product to market into the holidays. While these may not be enough to fully offset the loss of the electric vehicle incentive, they are key catalysts that can help the company begin building momentum going into 2026.

A more affordable model is coming

More importantly, the company has a more affordable model coming soon. Indeed, Tesla said in its second-quarter update that it produced its first units of the new model in June, with volume production planned before the year ends. While comments from Tesla CEO Elon Musk in the company’s second-quarter earnings call suggest this may simply be a cheaper version of the new Model Y, it’s still worth getting excited about. A lower-priced car could help offset the loss of the now-expired federal credit.

If the company releases a meaningfully lower-priced model with a compelling range and features, the addition could significantly expand Tesla’s addressable market next year.

A new, higher-margin revenue stream

And don’t forget what is probably Tesla‘s most important catalyst: a recently launched limited robotaxi pilot program in Austin. It is early for the autonomous ride-sharing program, and a cautious rollout and regulatory constraints mean the near-term financial impact is likely small, but this could morph into a major profit stream for Tesla over time.

If the service scales and more owners opt into Full Self-Driving (Supervised), software and services could grow as a share of revenue. This will likely be a positive for margins and valuation over time. Additionally, growing buzz about robotaxi and Tesla’s Full Self-Driving (Supervised) software could help lure in new Tesla buyers, helping accelerate sales growth.

The reason not to buy? Valuation still leaves little room for error

Even after the sell-off, the stock trades at more than 250 times earnings as of this writing. A price-to-earnings (P/E) ratio like this makes the S&P 500‘s P/E of about 26 look cheap — and it leaves almost no room for error. The valuation arguably already prices in substantial progress on autonomy, software monetization, and lower-priced vehicles while also expecting energy to keep compounding. Ultimately, shares could take a beating if Tesla drops the ball in any way.

Despite the company’s powerful catalysts, the bear case (valuation) is simpler and, for now, heavy enough to matter. Considering all these bullish reasons to buy shares in the context of the stock’s high valuation, investors should proceed with caution. For investors convinced by Tesla’s long-term roadmap, a small position could make sense with the expectation of volatility and the discipline to add only if shares retreat further. Everyone else may prefer to wait for a potential further decline in the share price or for fundamentals to catch up.

UiPath (PATH 1.18%) finally gave the market something to get excited about. The stock popped after the company laid out a series of new collaborations with Nvidia, Alphabet, Snowflake, and OpenAI. For a business that has been slogging through a multiyear turnaround, this was great news, as it shows a company ready to play a central role in how enterprises actually use artificial intelligence (AI).

Going down a new path

UiPath is no longer trying to be just a robotic process automation (RPA) company that uses software bots to automate rule-based tasks such as data entry. Instead, it is shifting to agentic automation, where its AI agent orchestration platform can coordinate how humans, bots, and different AI agents all work together. These new partnerships are about pushing that vision into the real world.

Image source: Getty Images

The deal with Nvidia focuses on industries that have little room for error. UiPath will use Nvidia’s Nemotron models and NIM microservices to power agents that can run on-premises in regulated environments like healthcare and fraud detection, where data can’t leave secure systems. Meanwhile, it will bring Alphabet’s Gemini models into its platform, so people can use automation with voice commands.

In addition, by linking up with Snowflake, it will tie Snowflake’s Cortex AI to its orchestration platform to help customers act on data insights in real time. And finally, its OpenAI partnership adds a ChatGPT connector that lets customers weave advanced large language models (LLMs) right into their workflows without rebuilding everything from scratch.

When you look at these moves together, UiPath is trying to position itself as the Switzerland of enterprise AI agents: integrating with everyone and letting customers pick whichever models they want without locking themselves into a single vendor. That pitch resonates because companies are wary of vendor lock-in, and having one orchestration platform that can handle all these AI agents could become a valuable advantage. The collaboration with Snowflake looks particularly compelling because the combination should be able to offer an alternative approach to Palantir that can deliver similar data-driven automation and real-world insights using a customer’s data that is already warehoused inside Snowflake servers.

Meanwhile, even before announcing these partnerships, UiPath was already seeing early signs that its turnaround was starting to take hold.

In its most recent quarter, the company’s annual recurring revenue (ARR) climbed 11% to $1.72 billion, beating the high end of guidance. Cloud ARR jumped 25% to cross the $1 billion mark, proving that the migration to the cloud is moving along. Net revenue retention stabilized at 108% after several quarters of slippage, which is important because it suggests existing customers are still spending more. Its public sector business, which had been frozen earlier in the year, is starting to come back, and adjusted operating margins jumped to 17% as the company’s past cost cuts and restructuring efforts began to show up in its numbers.

Is the stock a buy?

While UiPath still has plenty to prove, there are other encouraging signs. The return of founder Daniel Dines as CEO has given the company a steadier hand and clearer focus on its agentic automation vision. More than 450 customers are already building AI agents on its platform, and 95% of new customers are adopting its core automation products too, suggesting the new AI tools are complementing rather than replacing its traditional offerings.

Trading at a forward price-to-sales (P/S) ratio of roughly 4.1 times expected 2026 revenue, the stock’s valuation is inexpensive for a business with improving fundamentals. If these partnerships can further help accelerate growth, UiPath’s stock could have plenty of upside ahead.

That said, this is not a low-risk story, and there will likely be bumps along the way. However, for investors willing to bet on a company that looks like it is getting its act together and has some powerful partners lined up, the stock looks like an interesting buy.

If you’re hesitant to put $1,000 into a new trade in any of the stock market’s most popular picks right now, you’re not crazy. The S&P 500 (SNPINDEX: ^GSPC) is now priced at a frothy 25 times its trailing earnings, while data from Yardeni Research indicates the “Magnificent Seven” stocks that have led the market higher since 2023 sport an average forward-looking price/earnings ratio of more than 30. That’s a lot, leaving them — along with the overall market — vulnerable to weakness. Factor in the tariff wars that don’t appear to be cooling off, and it’s easy to justify staying on the sidelines.

The situation doesn’t require you to sit out altogether, though. It just means you should make a point of investing that $1,000 in growth companies with few (if any) direct ties to the United States, and stocks with more reasonable valuations relative to their potential growth.

One name worth a $1,000 investment comes to mind above all the rest.

What’s MercadoLibre?

If you’ve ever heard of MercadoLibre (MELI -3.18%), then there’s a good chance you’ve heard it called the “Amazon (AMZN -1.34%) of Latin America.” And it’s not an unfitting description. It isn’t a perfectly accurate one, though. Yes, MercadoLibre helps companies sell goods online. Unlike Amazon, though, this company also operates a major digital payments business that looks more like PayPal‘s, yet also manages a logistics arm that supports its e-commerce, provides a range of banking and bank-like services to merchants, and even helps brick-and-mortar stores handle inventory and payments. It’s a proverbial soup-to-nuts business.

And it’s growing. Last quarter’s revenue growth of 34% carried its top line to nearly $6.8 billion, accelerating long-established bigger-picture uptrends, and pumping up profits by almost as much.

Data source: Simply Wall St. Chart by author.

All of it’s just happening in Latin America, with the bulk of its business taking shape in Brazil, Mexico, and Argentina.

The thing is, this is exactly where you’d want one of your holdings to focus right now in the way MercadoLibre is positioning itself for the future.

Plugging into the continent’s connectivity revolution

Getting straight to the point, where North America’s internet connectivity industry was 20 years ago is in many ways where South America’s is now. Although the internet has existed there since its infancy, it’s only now becoming commonplace. For perspective, whereas Pew Research says 96% of U.S. adults now have access to broadband internet, Standard & Poor’s reports that less than 60% of Latin American and Caribbean households are likely to even have the option of fixed broadband service before the end of this year.

There’s a geographically unique nuance worth noting, however. That is, a wide and growing swath of the region’s population uses their smartphones as their primary — and sometimes only — point of access to the World Wide Web. GSMA Intelligence suggests Latin America’s 2023 count of 418 million mobile internet users should reach 485 million by 2030. Even then, though, there’s room for continued growth. At 485 million, that would still only be a penetration rate of 72% of the region’s population.

And just like here, it’s not taking South America’s consumers very long to figure out that their handheld devices are great tools for shopping online, and even making digital payments. Industry research outfit Payments and Commerce Market Intelligence expects the continent’s e-commerce industry to grow 21% year over year in 2025, en route to nearly doubling in size between 2023 and 2027. Simultaneously, the research outfit reports 60% of consumer spending in Latin America is now facilitated by digital and electronic payments, led by Brazil — where MercadoLibre is a force.

The company is simply riding this growth trend. Analysts expect MercadoLibre’s top line to more than double between last year and 2027, more than doubling its bottom line with it.

Just focus on the bigger picture

There is some drama. Investors keeping tabs on this company may recall that shares tumbled in early August in response to the company’s disappointing Q2 profit. Despite the strong sales growth, per-share earnings of $10.39 fell short of analysts’ estimates of $11.93, falling 1.6% from the year-ago comparison. Blame free shipping, mostly. Taking a page out of Amazon’s playbook, MercadoLibre spent more on free shipping in Brazil than investors were anticipating.

Now, just take a step back and look at the bigger picture that most investors seem to be seeing again, nudging the stock higher as a result. The free shipping strategy worked out all right for Amazon. It might work out even better for MercadoLibre in the long run, given just how fragmented the region’s e-commerce market currently is. In this vein, eMarketer says MercadoLibre’s market-leading share of the region’s e-commerce business still only accounts for about one-third of the industry’s total sales, with no other player accounting for more than 5% of the regional market’s online shopping.

In other words, there’s an opportunity for an enterprise that’s willing and able to act on it. MercadoLibre seems to be that enterprise. Current and interested investors are just going to need to be patient, as the world was with Amazon.

This might help: Despite the added expense of free shipping that’s likely to linger for a while as a means of turning consumers into regular customers, the analyst community isn’t dissuaded. The vast majority of them still rate MercadoLibre stock as a strong buy, maintaining a consensus target of $2,920.91, which is 17% above the ticker’s present price. That’s not a bad tailwind to start out a new trade with if you have $1,000 available to invest.