Investors

Hertz Global (HTZ -2.01%) and Amazon (AMZN -1.55%) recently announced a deal in which the former will sell used cars on the latter’s website. Investors clearly believe the deal will help Hertz’s business. They sent the share price up 12.5%, from $5.20 to $5.85, from Aug. 19 through Aug. 27.

What has investors so excited? And, more importantly, is the deal a long-term value-creating opportunity for Hertz? It’s time to look closer at the deal and Hertz’s fundamentals.

Image source: Getty Images.

Deal details

Hertz will list its used vehicles for sale on the Amazon Autos website. However, it’s only a test right now, and it’s being rolled out in the metro areas of Dallas, Houston, Los Angeles, and Seattle. Car buyers can go on the site and browse used vehicles to purchase. Once they find something and complete the purchase, the new car owner can pick up the vehicle at various Hertz locations.

The benefits to Amazon Auto, which launched less than a year ago, are clear. The site previously offered car buyers with limited options. Under this arrangement, Amazon will greatly expand the number of listings across many more brands.

How does Hertz benefit?

If car buyers are willing to shop online for used cars, they’ll get an easier and more convenient process with a broad selection of automobiles. That could expand Hertz’s car sales.

Currently, Hertz sells its rental fleet cars through company-operated U.S. retail locations. This also produces other revenue, such as from selling warranties and providing financing. It’s unclear how many used vehicles Hertz sells, however. The company has mentioned that it sells thousands, but that makes it challenging to pinpoint the impact on Hertz’s cash flow.

Still, if the arrangement with Amazon proves mutually beneficial, Hertz will be able to scale the used car business and diversify its revenue stream. It’s also a step toward executing CEO Gil West’s plan to expand its retail business and raise awareness of the Hertz used car brand

Should you buy Hertz’s stock?

Hertz operates two segments: Americas RAC and international RAC. Each division rents vehicles and sells services like insurance and satellite radio. Right now, Hertz’s core rental business has been struggling, with shrinking sales and declining profitability. The company’s total second-quarter revenue dropped 7% to $2.2 billion, and it lost $104 million after adjusting for certain items.

It seems challenging to expand into other areas while its core rental business has struggled. Still, if Hertz can pull it off, shareholders could see a lot of upside based on the company’s valuation. You can use the price-to-sales (P/S) multiple rather than the more traditional price-to-earnings (P/E) ratio, since the company doesn’t report a profit. Hertz’s share price zoomed up 74% in the past year, and the P/S ratio doubled in the last year, but remains low at 0.2. Small capitalization stocks, as measured by the Russell 2000 index, trade at about a P/S ratio of over 1.

However, while the deal with Amazon may prove advantageous, it’s only in the test phase. Hence, long-term investors may wish to hold off, at least until results from the test markets have come in. You’ll know whether it’s going well if Amazon and Hertz decide to expand the program.

Over the past century, no asset class has rivaled the annualized return of stocks. But when the lens is narrowed to just the trailing decade, cryptocurrencies have absolutely crushed the benchmark S&P 500 in the annualized return column.

Though Bitcoin (BTC 0.46%) has led the way with its first-mover advantages, it’s XRP (XRP 0.56%) that’s been flying the highest of all the major digital assets of late. Over the trailing-12-month period, XRP has practically quintupled, up 396%, while Bitcoin has gained a more “modest” 84%, as of the late evening on Aug. 29.

Whereas stocks tend to ebb and flow because of tangible financial metrics, such as their operating results and prevailing economic data, emotions and hype are known to move digital currencies. There’s little question that anticipation and hype have helped lift XRP to a more than seven-year high. The question is: Will the old Wall Street adage “buy the rumor, sell the news” put an end to this monstrous rally in the world’s No. 3 digital asset?

Image source: Getty Images.

XRP entered 2025 in an ideal situation

Whereas Murphy’s Law states that “anything that can go wrong, will go wrong,” XRP has had virtually everything go its way since early November 2024.

In November, Donald Trump won the presidency, which was viewed as a positive for most cryptocurrencies. Aside from Trump’s tinkering with the idea of a Bitcoin strategic reserve during his campaign, he was viewed as the friendliest presidential candidate to the crypto industry.

Since Trump’s inauguration, he’s signed the Genius Act into law, which established stablecoin backing and redemption standards, audit requirements, and federal oversight for the largest stablecoin issuers. While this doesn’t directly affect XRP, it paints a picture of an administration that’s willing to remove tight restrictions that had previously been placed on digital assets.

Another hyped event for XRP has been the expected approval of a spot XRP exchange-traded fund (ETF). A crypto spot ETF gives a buyer exposure to a specific digital asset without having to directly purchase it on a crypto exchange. In turn, buyers would pay a nominal fee (the net expense ratio) that covers the management and marketing costs for the fund.

When spot Bitcoin ETFs were first approved, massive cash inflows were observed for weeks. If spot XRP ETFs were to get the nod from the Securities and Exchange Commission (SEC) come October, a similar multiweek period of cash inflows would be expected.

However, the most-hyped event of all was the expected end to five years of litigation and appeals between the SEC and Ripple regarding whether or not Ripple sold XRP as an unregistered security. Ripple is the largest holder of XRP coins and is the company utilizing XRP as its intermediary payment token on RippleNet.

Last month, the SEC and Ripple agreed to drop their respective appeals. The news investors had waited years for had finally arrived — and so has the selling pressure on XRP.

XRP’s faults may be difficult to mask without a carrot at the end of the stick

Since the SEC sued Ripple in 2020, ending this litigation had been viewed as the carrot at the end of the stick that kept the hype train rolling. But with the appeal process over, sweeping XRP’s tangible faults under the rug could be tougher than ever before.

On paper, the lure of XRP is that it can assist with the rapid settlement of cross-border payments. The XRP Ledger is capable of validating and settling transactions in roughly three to five seconds, with payments costing just a fraction of a penny. This is considerably more palatable than the decades-long standard for cross-border payments. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) can take days to settle international payments and is much costlier per transaction.

But there are some big-time caveats and catches to this seemingly slam-dunk thesis.

Image source: Getty Images.

For starters, banks aren’t required to use XRP as an intermediary on Ripple’s payment networks. If global financial institutions use Ripple’s payment network but not XRP, demand for XRP tokens will likely be insufficient to support its nearly 400% price appreciation over the trailing year.

The adoption rate for RippleNet isn’t all that impressive, either. Whereas more than 11,000 financial institutions are using SWIFT as their preferred cross-border payment solution, only an estimated 300 global financial institutions are relying on RippleNet in some capacity. While some investors might view this as a glass-half-full opportunity for RippleNet to gain share over time, it also speaks to the ironclad grip the SWIFT network has on international payments.

This is a good time to note that XRP lacks standalone value. Unlike Bitcoin, which can be used as a form of payment and is often viewed as an inflationary hedge amid a steadily increasing U.S. money supply, there is no standalone use case for XRP, save as an intermediary for some transactions on Ripple’s payment platform.

Lastly, XRP isn’t even guaranteed to be the preferred cross-border payment coin. Though there’s no denying it’s connections to larger financial institutions, Solana offers notably faster and inexpensive transaction settlement. In addition, peer-to-peer payment platform Stellar can settle payments just as quickly as XRP.

With XRP’s big event now firmly in the rearview mirror, profit-taking may be the new norm.

Earlier this month, Apple CEO Tim Cook joined President Trump and senior Cabinet members in the Oval Office to announce the company’s plan to invest $100 billion into U.S. manufacturing over the next four years. This comes on top of Apple’s previously unveiled $500 billion domestic infrastructure commitment.

Apple’s ramped-up infrastructure efforts have clear implications for Broadcom‘s (AVGO -3.65%) long-term growth trajectory. As Apple expands its U.S. footprint, Broadcom stands to benefit not only from increased demand for chips but also from its emerging role in powering next-generation networking, connectivity, and artificial intelligence (AI) applications.

Let’s break down why Apple’s continued investment in infrastructure strengthens Broadcom’s strategic position, and how it accelerates the company’s ambitions in AI and beyond.

Broadcom has deep inroads with hyperscalers

While Apple may be one of Broadcom’s most visible partners, the company has also been quietly building deep ties with AI hyperscalers — Alphabet being a notable one.

Broadcom’s portfolio spans custom silicon, networking switches, and optical interconnects — the foundational layers that power modern data centers. These may not be headline-grabbing products, but they serve as the invisible scaffolding that enables AI models to train at scale and keeps data workloads flowing smoothly — avoiding costly compute and connectivity bottlenecks.

What makes Apple’s reliance on Broadcom so compelling is how it bridges two high-growth landscapes: consumer electronics (i.e., semiconductor components for the iPhone) and enterprise-grade AI infrastructure. Broadcom’s established relationships with hyperscalers validate its role as a provider of specialized, mission-critical technologies. Meanwhile, Apple’s endorsement amplifies that credibility — signaling to the broader AI ecosystem that Broadcom is a trusted partner.

In essence, Broadcom is solidifying its influence across the entire technology stack — from chips inside of consumer devices to the infrastructure driving next-generation AI applications inside hyperscale data centers.

Image source: Getty Images.

Broadcom is a quiet beneficiary of rising AI infrastructure investment

The explosion of AI workloads has only heightened the need for networking gear and the specialized chips that enable big tech to operate at scale. While Broadcom dominates many of these use cases, it rarely commands the same spotlight as Nvidia, Advanced Micro Devices, and Taiwan Semiconductor Manufacturing.

The reason is straightforward: Broadcom isn’t building GPUs that capture headlines. Rather, the company designs the connective tissue that allows GPUs, CPUs, and memory chips to communicate efficiently. Without Broadcom’s technologies, generative AI advancements would remain throttled by data transfer limits and networking bottlenecks.

Is Broadcom stock a buy right now?

While Broadcom lacks the same levels of excitement that have crowned peers like Nvidia as an “AI darling,” this hasn’t translated into a bargain stock price. On the contrary, Broadcom now trades at a forward price-to-earnings (P/E) multiple of 45 — well above its three-year average and essentially at the highest point of the current AI cycle.

AVGO PE Ratio (Forward) data by YCharts

Broadcom’s premium valuation tells a clear story: The market increasingly views the company as a structural beneficiary of ongoing AI buildouts. Although expectations remain high, Broadcom’s relationships with hyperscalers, as well as its alliance with communications leaders such as Apple help diversify the company’s ecosystem and drive home its broad depth across various applications and use cases.

Unlike Nvidia or AMD, Broadcom does not need to rely on generational product cycles to capture the attention of investors. Instead, the company’s appeal lies in its subtle, less-visible services that keep the digital economy humming along.

This quiet, indispensable nature makes Broadcom less vulnerable to hype-driven volatility while still offering meaningful upside given its exposure to myriad secular trends reshaping the technology landscape.

While the stock isn’t cheap, Broadcom represents a durable infrastructure play as the AI narrative continues to unfold. To me, Broadcom is a compelling opportunity to buy and hold over the long term.

Microsoft (MSFT +0.00%) is trading at over $500, but I believe it’s setting up for much bigger gains. With Azure’s 39% growth, artificial intelligence integration, and a $69 billion gaming bet, the company is positioning itself for explosive upside — despite fierce competition.

Stock prices used were the market prices of Aug. 26, 2025. The video was published on Aug. 29, 2025.

The past couple of years have been something of a whirlwind for Palantir (PLTR -2.52%) stock investors. When the artificial intelligence (AI) revolution kicked off in late 2022, it played to the company’s strengths. With 20 years of data mining experience and AI expertise, Palantir quickly developed its Artificial Intelligence Platform (AIP), which has become the premier software system helping businesses make data-driven decisions. By integrating with existing business systems and layering generative AI on top, Palantir provides actionable insights in near real-time. Since the release of AIP in April 2023, Palantir has become a massive multibagger, with the stock soaring 1,760%.

However, the stock’s frothy valuation and questions about the ongoing adoption of AI have investors climbing a wall of worry, with many looking for signs that the AI revolution is on track.

Nvidia (NVDA -0.01%) has just provided the surest sign yet that the relentless adoption of AI is continuing.

Image source: Getty Images.

Enviable results

Despite facing tough triple-digit comps, Nvidia’s results were robust by any measure. During its fiscal 2026 second quarter (ended July 27), the company generated record revenue of $46.7 billion, up 56% year over year and 6% quarter over quarter. This drove adjusted earnings per share (EPS) of $1.05, which climbed 54% year over year.

For context, analysts’ consensus estimates were calling for revenue of $46.1 billion and EPS of $1.01, so Nvidia scaled both bars with room to spare.

A record-setting performance from the data center segment fueled the bullish results. The segment, which includes chips used for AI, data centers, and cloud computing, generated sales that surged 56% year over year to $41.1 billion, driven by the ongoing adoption of AI.

It’s important to note that export restrictions prevented the sale of H20 chips to China during the quarter, which weighed on the results. Those restrictions have since been rescinded, and Nvidia is working on a follow-up to the H20, based on its Blackwell architecture — reportedly dubbed the B30A. The company is in talks with the U.S. government to determine the limitations of the new data center chip for customers in China.

The icing on the cake was a new record-setting stock buyback plan. Nvidia announced a $60 billion share repurchase authorization, in addition to the $14.7 billion remaining on its previous buyback plan. Share repurchases are generally a sign of management’s confidence that the company’s stock is undervalued.

What does this all have to do with Palantir?

Beyond the good news for Nvidia investors, the results have broader implications about what’s happening across the AI landscape. Nvidia has long been the bellwether for AI adoption, and despite the market’s tepid response to its report, the results help put things into perspective.

While Nvidia’s 56% growth is impressive by any measure, it comes on top of 122% growth in the prior-year quarter. This helps to illustrate the continuing demand for AI infrastructure as more companies adopt this groundbreaking technology.

It also gives additional weight to Palantir’s equally robust results released earlier this month. In the second quarter, revenue surged 48% year over year (and 14% quarter over quarter) to $1 billion. This powered adjusted earnings per share (EPS) of $0.16, which surged 78% year over year.

Yet the overall results mask the truly phenomenal performance by the company’s U.S. commercial segment, which includes AIP. Revenue for the segment soared 93% year over year to $306 million, while its customer rolls increased 64%, fueled by record demand for AIP. Future demand looks even brighter as the segment’s total contract value soared 222% to $843 million. Even more impressive is Palantir’s remaining performance obligation (RPO), or contractually obligated sales that aren’t yet included in revenue, which soared 77% year over year to $2.42 billion.

The fact that Nvidia’s industry-leading graphics processing units (GPUs) continue to sell like hotcakes shows the ongoing momentum of AI adoption, which bodes well for Palantir.

The biggest AI-centric problem facing most business leaders is the lack of expertise required to implement AI into their operations, while ensuring a reasonable return on their investment. Palantir’s quarterly reports are rife with customer testimonials that detail just that.

For example, after deploying AIP, Cleveland Clinic reported a 38-minute decrease in emergency room wait times, a 40% reduction in unused orthopedic operating room time, and a 75% reduction in time spent calculating bed capacity. That’s one of dozens of AIP success stories.

To be clear, there’s still the matter of Palantir’s valuation to consider. The stock is currently trading for 185 times next year’s expected earnings. While that’s an egregious valuation to be sure, it might seem like a bargain five to 10 years down the road. CEO Alex Karp recently revealed ambitious plans to 10X revenue in the coming years. Given the company’s current growth rate, it could achieve that lofty benchmark at some point over the next decade.

For investors wanting in on the action but put off by Palantir’s exorbitant earnings multiple, I’d suggest establishing a small position and using dollar-cost averaging to build out a stake.

The biggest company on The Motley Fool’s updated list of the largest utility companies is in the United States. However, it is more than just a regulated electric utility, and that sets it apart from many of its U.S. peers that have made the list of largest utility companies.

And those differences are why NextEra Energy (NEE -0.54%) could be a huge long-term investment opportunity for growth investors, income investors, and (no shock) growth and income investors. Here’s what you need to know.

What does NextEra Energy do?

NextEra Energy is two businesses in one. The core of the company is its regulated electricity operations in Florida. The Sunshine State has long benefited from in-migration, as people seek out warmer weather, lower taxes, and a comfortable retirement. The company’s Florida Power & Light operation is one of the largest regulated utilities in the United States.

Image source: Getty Images.

Being regulated gives NextEra a monopoly in the areas it serves. In exchange for that monopoly, it has to have its rates and capital investment plans approved by the government.

The usual outcome is slow and steady growth over time, as regulators try to balance customer costs, reliability, and investor returns. All in all, this is a solid, slow, and steady growth foundation for NextEra.

Most utility businesses stop there. NextEra, however, has used this foundation to build one of the world’s largest solar and wind power businesses. It is a clean-energy giant, taking advantage of the world’s shift away from power based on dirtier carbon fuels and toward cleaner and renewable sources of energy. This is NextEra’s growth engine and will likely remain so for years to come.

One very big reason is that electricity demand is shifting into high gear. Between 2000 and 2020, demand increased 9%. Between 2020 and 2040, it is expected to expand by as much as 55%.

Driving that will be artificial intelligence and data centers, where demand is expected to increase 300% over a decade. And electric vehicles are expected to push another 9,000% in demand through 2050. All in, electricity is projected to grow from 21% of end power use to 32% of end use by 2050.

NextEra is positioned well on both sides of the equation

What’s exciting about NextEra Energy is that it isn’t just in the right place at the right time in one business. It is in the right place at the right time in two businesses.

Demand increases are going to push utility growth into a higher gear, helping the company’s Florida-based regulated operations. And the broader shift toward clean energy will also be a big boost to the company’s solar and wind operation. In many cases, it isn’t just more environmentally friendly to install clean energy than to build a power plant, it is also quicker and more cost effective.

This is where things start to get interesting. The average U.S. utility has a dividend yield of a little less than 2.7%. NextEra Energy’s yield is roughly 3%. In this respect, it looks like the stock is on sale right now and providing a yield well above the market on top of that.

But NextEra Energy is also growing its business by itself, in addition to outside forces. In the second quarter of 2025, revenue jumped 10% year over year, with earnings rising a little over 9%. That’s pretty impressive for a utility, since they are normally considered boring, slow growth investments.

And there’s likely more to come, highlighting that the clean energy business has 30 gigawatts worth of power projects in its backlog. Six gigawatts of that total are directly tied to technology companies and data centers.

On the dividend front, NextEra has increased its annual payout for over three decades. And the annualized growth rate over the past decade was a huge 10% a year. Management is currently projecting 10% dividend growth through at least 2026. So not only is this a high-yield story and a growth story, but it is also an attractive dividend growth story, too.

NextEra is the biggest utility and a big investment opportunity

If you are a dividend lover, a dividend growth lover, a growth lover, or a value lover, NextEra Energy will probably look attractive to you. That’s a huge amount of investment ground being covered by the world’s largest utility. And it highlights why you might just want to buy this industry giant today to take advantage of what looks like a huge long-term opportunity in the utility sector.

Warren Buffett has led Berkshire Hathaway for six decades. During that time, the one-time textile manufacturer that became a huge conglomerate never paid a dividend. Not even a penny.

However, Buffett loves dividend stocks. He bought 12 stocks in the second quarter of 2025. All of them pay dividends. Which is the best of the bunch for income investors?

Image source: The Motley Fool.

Buffett’s dozen dividend stocks

The following table lists Buffett’s dozen dividend stocks purchased in Q2 (listed alphabetically):

Data sources: Berkshire Hathaway 13F filings, Google Finance.

Half of these stocks were new additions to Berkshire’s portfolio. Buffett bought more than 5 million shares of UnitedHealth Group in Q2, the biggest purchase of the group. The legendary investor probably viewed the health insurance stock as a rare bargain in today’s market after UnitedHealth’s share price plunged roughly 50%.

You might have noticed two similarly named stocks on the list. Homebuilder Lennar has two share classes. Buffett initiated a new position in Lennar Class A and added to the existing stake in Lennar Class B. Other new stocks bought in Q2 were security-products maker Allegion, homebuilder D.R. Horton, outdoor advertising company Lamar Advertising, and steelmaker Nucor.

Buffett also added more shares of several existing holdings. He has owned a sizable position in Chevron since 2020. The “Oracle of Omaha” (or one of Berkshire’s two other investment managers) has built stakes in Constellation Brands, Domino’s Pizza, Heico, Pool, and Pool Corp. more recently.

How these stocks compare

Most income investors would probably rank dividend yield near the top of the list of factors they consider when selecting stocks to buy. We can eliminate a few of Buffett’s Q2 purchases from contention because of low dividend yields: Allegion, D.R. Horton, and Heico. Lamar Advertising offers the juiciest yield, followed by Chevron.

However, yield isn’t everything. Income investors also want sustainable dividends. One of the most popular ways to determine the sustainability of a dividend is the payout ratio. Lamar Advertising’s payout ratio of 137.5% raises questions about how long the company will be able to fund the dividend at current levels. Constellation Brands’ payout ratio of 104.5% is also somewhat concerning. All of the other dividend stocks bought by Buffett in Q2, though, have payout ratios below 100%.

Many income investors like stocks with long track records of dividend increases. Although there aren’t any Dividend Kings on Buffett’s Q2 list, there is one Dividend Champion (stocks with 25 or more years of dividend hikes). Chevron has increased its dividend for 38 consecutive years.

Valuation is a factor for some income investors. They don’t want to buy a stock that’s so overpriced it could fall and offset any dividends received. Heico’s forward price-to-earnings ratio of 59.5 could cause some income investors to cross it off the list. So could Pool Corp. and Lamar’s forward earnings multiples of 29.9 and 29.5, respectively.

The best of the bunch for income investors

I think two stocks stand out as especially good picks for income investors right now among the 12 stocks bought by Buffett in Q2.

The runner-up is UnitedHealth Group. The health insurer’s dividend yield is attractive. Its payout ratio is a low 36.8%. UnitedHealth should be able to return to growth next year as it implements premium increases.

But Chevron is the best of the bunch, in my opinion. The oil and gas giant offers a juicy dividend yield. It has an impressive track record of dividend increases. The stock isn’t cheap, but neither is it absurdly expensive, with shares trading at 20 times forward earnings. Income investors should be able to count on steady and growing dividends from Chevron for a long time to come.

In the last year, a narrative has formed around stablecoins disrupting cross-border payment fees. With the initial public offering (IPO) of Circle Internet Group and growing adoption of these fiat-backed cryptocurrencies, many investors have claimed that the traditional days of cross-border payments are behind us. This has sent shares of mobile remittance player Remitly Global (RELY 2.31%) down 30% from highs set earlier this year.

As a business that makes money on cross-border payment fees, Remitly could be threatened by stablecoins. But is it truly at risk? A new announcement from Remitly around stablecoins could be huge news regarding this narrative, and may turn stablecoins into a beneficiary for the business. Time to take a closer look at Remitly stock and see whether investors should buy the dip on this hated remittance player today.

Disrupting the stablecoin narrative

Along with its Q2 earnings report (which will be covered below), Remitly announced new products that its 8.5 million active customers can use earlier this month. First is the Remitly Wallet, a digital wallet through Remitly where customers can hold currencies instead of just sending them from a bank account. Importantly, stablecoins are included in the currencies customers can hold.

Second, Remitly is using payment provider Stripe to help fund remittance transactions on the platform with stablecoins. This expansion in the number of ways people can send and receive money through Remitly will make the platform more valuable for users, which should drive more customer adoption. Lastly, Remitly is utilizing stablecoins on its balance sheet to help move money across border in real time when funding transactions for users, which should reduce its operating costs while again improving the customer value proposition of the platform.

More growth and reduced costs should mean more profits for Remitly going forward.

Image source: Getty Images.

Strong growth and market share gains

The last quarter was stellar for Remitly. Revenue grew 34% year-over-year to $412 million on the back of 40% send volume growth, with positive net income of $6.5 million. If people are utilizing stablecoins to bypass Remitly’s remittance platform, it is not showing up in the numbers yet. The company is barely generating a profit, but that is because of all the new products its team is building, along with heavy marketing spend to acquire new users. Both are worthwhile buckets to pour money into as long as new customers keep joining Remitly and revenue is growing at this blistering rate.

As a disruptor in remittance payments, Remitly is gaining a ton of market share by stealing customer spending from the likes of Western Union. Legacy players are seeing declining send volumes as more customers adopt mobile native solutions like Remitly. The story is not over yet, though, with Remitly having an estimated market share of below 5% in total remittance payments around the world. Its revenue from outside North America has grown at close to 100% year-over-year and hit $350 million over the last 12 months.

RELY Gross Profit Margin data by YCharts

Why Remitly stock is a buy today

Despite this massive growth tailwind, investors are still discounting Remitly stock, likely due to the stablecoin disruption narrative and recent immigration changes in the United States. Immigration has been a headwind to the overall remittance market in recent quarters but has not impacted Remitly’s growth whatsoever, which is a good sign for the market share gainer.

At today’s price of $19 a share, the stock has a market cap of $3.9 billion. It is generating revenue of $1.46 billion and growing quickly, with room to double overall sales within a few years time to $3 billion. With gross profit margins of 58%, Remitly has plenty of room to expand its bottom-line net income margin. A figure of 20% is entirely reasonable over the long haul. $3 billion in revenue and a 20% net income margin is $600 million in net income, which would be a forward price-to-earnings ratio (P/E) of just 6.5 based on the current share price.

A future P/E below 10 in just a few years makes Remitly significantly undervalued at today’s share price, which is why the stock is a buy after its recent drawdown.

Billionaire Bill Ackman was busy in the second quarter, investing in two of the world’s largest tech companies. His hedge fund, Pershing Square Capital, started a new position in Amazon (AMZN 3.12%) and boosted its stake in Alphabet (GOOGL 3.10%) (GOOG 2.98%).

Ackman is a well-regarded investor known for running a concentrated portfolio: As of June 30, Pershing Square Capital’s portfolio had only 10 companies in it. So when it makes a big investment, it’s worth it for retail investors to pay attention and consider whether they want to follow.

Amazon

Pershing established a new position in Amazon in the second quarter, picking up 5.8 million shares. That made it the fund’s fifth-largest holding, accounting for 9.3% of its value as of Aug. 14.  

Amazon’s logistics network has always been the backbone of its e-commerce business, and now the company is employing artificial intelligence (AI) and even more robotics than before to make it even more efficient. The company is applying AI to such tasks as optimizing delivery routes, stocking warehouses more effectively, and directing drivers to hard-to-find drop-off locations in places like large apartment complexes.

Meanwhile, the company now has over 1 million robots working in its fulfillment facilities, and they’re being carefully orchestrated by its Deepfleet AI model. Its newer robots can do more than just lift heavy packages. Some can spot damaged goods better than humans (which lowers the number of returns), while some can even repair themselves. All of this saves money and speeds up shipping times.

AI is also strengthening Amazon’s advertising unit. Merchants can use its AI tools to create better product listings and ad campaigns. Advertising is a high-margin business that also has been one of the company’s fastest growing, with revenue up 23% last quarter.

Altogether, AI is helping drive strong operating leverage in Amazon’s e-commerce operations. Last quarter, its North American segment’s revenue rose 8% while its operating income climbed 16%. That kind of leverage is exactly what investors want to see.

Amazon’s cloud computing division, AWS, meanwhile, remains its most profitable segment and its fastest-growing. The company created the cloud infrastructure market and still holds a nearly 30% share of it. AI is now a major driver in that segment, too. Services like Bedrock and SageMaker allow customers to build and run models directly on AWS, while it recently introduced Strands and Agentcore to help customers build AI agents and safely run them in a secure, server-less environment. Meanwhile, the company’s custom-designed AI accelerator chips, Trainium and Inferentia, give it an edge in cost and performance. AWS continues to grow quickly: Revenue climbed 17.5% last quarter to $30.9 billion

Amazon is spending heavily on AI infrastructure, but history shows the company has a knack for winning big when it spends big. Trading at a forward price-to-earnings (P/E) ratio of about 30 based on analysts’ consensus 2026 estimates, the stock still looks appealing, particularly given its growth runway.

Alphabet

Amazon wasn’t the only tech stock Pershing was buying in the second quarter. It also picked up another 925,000 shares of Alphabet’s Class A stock. That increased its total stake in the company (which includes both Class A and Class C shares) by 8.6% to almost 10.8 million shares. Based on the latest public information, that made it the hedge fund’s third-largest holding, accounting for 15% of its value as of Aug 14.

Investors have worried that the growing use of AI chatbots will chip away at Alphabet’s Google Search business, but so far, that hasn’t happened. In fact, last quarter, Google Search’s revenue growth accelerated, increasing by 12% year over year to $54.2 billion. Alphabet has also built AI into its products. More than 2 billion people are already using AI Overviews in Google Search, and its new AI Mode is just starting to gain traction. The company is also using AI to advance its tools beyond simple text queries, with Google Lens and Circle to Search standing out as two prime examples. New commerce-focused tools like Shop by AI should also create new monetization opportunities for the company.

One key aspect of Alphabet’s competitive moat is distribution. Chrome currently controls two-thirds of the browser market, while its Android operating system runs more than 70% of smartphones. That makes Google the first touchpoint to the internet for billions of users. It also gives Alphabet a huge volume of data and search query histories that it can then funnel into its massive ad network.

Cloud computing is another big growth driver for Alphabet. Google Cloud’s revenue jumped by 32% in Q2 while its operating income more than doubled. Customers are drawn to Alphabet’s Gemini models, Vertex AI platform, and its custom-designed tensor processing units (TPUs). These TPUs lower costs for AI workloads and give Google Cloud a cost advantage. The business has finally reached scale and is now showing strong operating leverage.

Image source: Getty Images

Alphabet also has longer-term bets. It’s deploying its Waymo unit’s robotaxis into new cities as the driverless ride-share business shows strong momentum. Meanwhile, with its Willow quantum computing chip, it has made meaningful progress on error-reduction — one of the core challenges in quantum computing technology. These businesses are a long way from being mature, but their upside potential is enormous.

Despite all of this, Alphabet trades at just 19 times analysts’ 2026 earnings estimates. That is cheap for a company that’s an established leader in search, cloud, video streaming, mobile, and AI infrastructure. Among the big AI stocks, Alphabet looks the most attractively valued.

Solid buys

In my view, Amazon and Alphabet look like solid buys for long-term investors. While the stocks aren’t without risks, given their market positioning and current valuations, I think it makes sense to follow Ackman’s lead and own both stocks.

Data by YCharts.

The S&P 500 (^GSPC -0.40%) slipped 25.6 points, or 0.4%, to 6,370.17 on Thursday, marking its fifth straight daily decline. Losses were broad, with weakness across technology and cyclical sectors, as investors grew cautious ahead of key central bank commentary.

The Nasdaq Composite (^IXIC -0.34%) also moved lower, dropping 72 points, or 0.3%, to finish at 21,100.31. Tech stocks continued to face pressure amid uncertainty over how the Federal Reserve will balance slowing labor market signals with still-sticky inflation.

The Dow Jones Industrial Average (^DJI -0.34%) joined the decline, falling 152.81 points, or 0.3%, to 44,785.50. Financials and industrials slipped alongside technology, leaving all three major benchmarks in negative territory.

Looking ahead, attention is squarely on the Jackson Hole Economic Symposium, where Fed Chair Jerome Powell is set to speak on Friday. Markets are searching for clarity on whether policymakers will move toward easing or maintain a cautious stance given the mixed economic backdrop. Powell’s remarks could prove pivotal in shaping expectations for the September meeting and the broader trajectory of rates.

Market data sourced from Google Finance and Yahoo! Finance on Thursday, Aug. 21, 2025.

James Arthur McDonald Jr., an investor and financial analyst who frequently appeared on CNBC, was sentenced to five years in prison for defrauding investors in a multimillion-dollar scheme, the United States Attorney’s Office said on Monday.

McDonald, 53, a former San Gabriel Valley resident, was the CEO and chief investment officer of two Los Angeles-based companies: Hercules Investments LLC and Index Strategy Advisors Inc.

In late 2020, McDonald adopted a “risky short position” betting against the U.S. economy following the presidential election, with the idea that the combination of the COVID-19 pandemic and the election would trigger a major sell-off in the stock market, according to the Justice Department. However, when the expected market drop did not happen, Hercules’ clients lost between $30 million and $40 million.

McDonald “solicited millions of dollars’ worth of funds from investors” for the purposes of raising capital for Hercules at the start of 2021 after clients complained to the firm’s employees about their losses. However, in doing so, McDonald “misrepresented how the funds would be used” and failed to disclose the firm’s massive losses.

According to the Justice Department, McDonald obtained $675,000 from “one victim group” and then misappropriated most of the money including spending $174,610 at a Porsche dealership and transferring an additional $109,512 to the landlord of a home he was renting in Arcadia.

McDonald also defrauded clients at Index Strategy Advisors, his other firm, said the Justice Department, using less than half of $3.6 million he raised for trading purposes on personal and other expenditures.

McDonald commingled clients’ funds with his personal bank account and used the money to buy luxury cars, pay his rent, make credit card payments, pay off Hercules operating expenses and “to make Ponzi-like payments” to Index Strategy clients — including paying some of those clients using funds from other clients.

Prosecutors claimed that McDonald caused his victims more than $3 million in losses.

“To his victims, [McDonald] seemed to embody the American Dream,” prosecutors argued in a sentencing memorandum. “But looks can be deceiving, and as [McDonald’s] victims learned, their trust had been betrayed.”

In November 2021, McDonald failed to appear before the Securities and Exchange Commission to testify about the allegations he had defrauded investors, and remained a fugitive until last June when he was found at a residence in Port Orchard, Wash.

At the time of his arrest, law enforcement found a fake Washington, D.C., driver’s license with his photograph and the name “Brian Thomas.”

In April 2024, a U.S. District judge found McDonald and Hercules liable for violating federal securities law and ordered them to pay millions in disgorgement and civil penalties.

McDonald pleaded guilty to one count of securities fraud in February.

He will be ordered to pay restitution in this case before a United States district judge at a later date.

An $8bn trial, pitting Meta Platforms shareholders against Mark Zuckerberg and other current and former company leaders, over claims they illegally harvested the data of Facebook users in violation of a 2012 agreement with the United States Federal Trade Commission, is under way.

The trial kicked off on Wednesday with a privacy expert for the plaintiffs, Neil Richards of Washington University Law School, who testified about Facebook’s data policies.

“Facebook’s privacy disclosures were misleading,” he told the court.

Jeffrey Zients, White House chief of staff under former President Joe Biden and a Meta director for two years starting in May 2018, is expected to take the stand later on Wednesday in the non-jury trial before Kathaleen McCormick, chief judge of the Delaware Chancery Court.

The case will feature testimony from Zuckerberg and other billionaire defendants, including former Chief Operating Officer Sheryl Sandberg, venture capitalist and board member Marc Andreessen, as well as former board members Peter Thiel, Palantir Technologies cofounder, and Reed Hastings, cofounder of Netflix.

A lawyer for the defendants, who have denied the allegations, declined to comment.

McCormick, the judge who rescinded Elon Musk’s $56bn Tesla pay package last year, is expected to rule on liability and damages months after the trial concludes.

Cambridge Analytica scandal

The case began in 2018, following revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump’s successful US presidential campaign in 2016.

The FTC fined Facebook $5bn in the wake of the Cambridge Analytica scandal, saying the company had violated a 2012 agreement with the FTC to protect user data.

Shareholders want the defendants to reimburse Meta for the FTC fine and other legal costs, which the plaintiffs estimate total more than $8bn.

In court filings, the defendants described the allegations as “extreme” and said the evidence at trial will show Facebook hired an outside consulting firm to ensure compliance with the FTC agreement and that Facebook was a victim of Cambridge Analytica’s deceit.

Meta, which is not a defendant, declined to comment. On its website, the company has said it has invested billions of dollars into protecting user privacy since 2019.

The lawsuit is considered the first of its kind to go to trial that alleges that board members consciously failed to oversee their company. Known as a Caremark claim, such lawsuits are often described as the hardest to prove in Delaware corporate law. However, in recent years, Delaware courts have allowed a growing number of these claims to proceed.

Boeing’s current and former board members settled a case with similar claims in 2021 for $237.5m, the largest ever in an alleged breach of oversight lawsuit. The Boeing directors did not admit to wrongdoing.

The Meta trial comes four months after Delaware lawmakers overhauled the state’s corporate law to make it harder for shareholders to challenge deals struck with controlling shareholders like Zuckerberg. The bill, which did not address Caremark claims, was drafted after the state’s governor met with representatives of Meta.

Most publicly traded companies are incorporated in the state, which generates more than a quarter of the state’s budget revenue. Meta, which was reportedly considering leaving Delaware earlier this year, is still incorporated in the state.

Andreessen Horowitz, the venture capital fund co-founded by Andreessen, said earlier this month that it was reincorporating in Nevada from Delaware and encouraged other companies to do the same. The company cited the uncertainty of the state’s courts and referenced the Musk pay ruling.

Andreessen is expected to testify on Thursday.

In addition to privacy claims at the heart of the Meta case, plaintiffs allege that Zuckerberg anticipated that the Cambridge Analytica scandal would send the company’s stock lower and sold his Facebook shares as a result, pocketing at least $1bn.

Defendants said evidence will show that Zuckerberg did not trade on inside information and that he used a stock-trading plan that removes his control over sales and is designed to guard against insider trading.

SEOUL, July 9 (UPI) — A lawyer whose firm is suing MBK Partners over investor losses has urged the financial company to repay debts owed to those who purchased asset-backed bonds related to Home Plus, South Korea’s troubled discount chain.

LawVax attorney Jang Jin-seok stated that position during an interview with UPI on Tuesday. The Seoul-based law firm filed a criminal complaint with the prosecutors late last month against senior executives of MBK and Home Plus.

Included in them were MBK Chairman Michael Byungju Kim and Home Plus co-CEOs Kim Kwang-il and Joh Joo-yun.

The complaint alleges that they issued or helped issue commercial papers and asset-backed, short-term bonds knowing that Home Plus lacked the capacity to repay them, causing investors to lose about $400 million.

“Due to mounting losses and deteriorating credit ratings, Home Plus relied on short-term funding to stay afloat, and toward that end, it devised unique asset-based bonds, which attracted individual investors,” Jang said.

“And all of a sudden, Home Plus filed for corporate rehabilitation in early March, just after its credit ratings downgrade. This indicates that the retail chain had no intention of repaying its debts. At the very least, MBK and Home Plus must address this issue,” he said.

Home Plus refuted Jang’s claims.

“Home Plus made every effort to turn the business around to the last minute, as shown by its attempts to reduce debt ratios,” a company spokesperson said in a phone interview.

“However, these efforts were not fully effective, as the virus pandemic and the rise of e-commerce continued to negatively impact our business,” he said.

Home Plus noted that its debt ratio improved to 462% as of this January, compared to 1,506% in the same period of 2024.

MBK acquired Home Plus from Tesco in 2015 for $5.1 billion. However, the company has been in steady decline, particularly since 2021, posting consecutive annual losses.

Its operations suffered due to the COVID-19 pandemic and the rapid rise of online retailers like Coupang, which eroded its traditional brick-and-mortar business model.

On Feb. 28, South Korea’s credit rating agencies downgraded Home Plus’s corporate rating from A3 to A3-. Four days later, it filed for corporate rehabilitation with the Seoul Bankruptcy Court.

“It seems that MBK gave up Home Plus last year and dispatched Kim Kwang-il to the company to oversee its exit strategy,” Jang said.

“And the credit ratings cut may have convinced MBK and Home Plus that short-term funding was no longer viable, so they chose to walk away without caring about the debts owed to individual investors.”

Kim Kwang-il was appointed co-CEO of Home Plus early last year to lead the corporation with Joh Joo-yun, former chief of McDonald’s Korea.

Jang criticized Kim for taking on too many roles, noting that he reportedly serves multiple positions for 18 companies, mostly MBK affiliates like Home Plus and Lotte Card.

In regard to a potential sale of Home Plus, Jang also was skeptical. MBK is seeking to avoid liquidation by selling the retailer. To do so, the outfit pledged to write off its entire stake in Home Plus worth $1.8 billion.

“MBK now claims that Home Plus is an attractive opportunity after cancelling $1.8 billion stake,” Jang said. “If that is true, why doesn’t MBK take over operations of Home Plus again? In case MBK can revive the supermarket chain, it does not have to give up its stake on Home Plus.”

In response, Home Plus said that the attempt to sell the company is aimed at saving nearly 20,000 employees, along with numerous suppliers and stakeholders. It added that MBK has made significant sacrifices to support this.

Published on
10/06/2025 – 7:36 GMT+2

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Asian shares were marginally higher on Tuesday as investors kept an eye on US-China trade talks that might help stave off a recession.

Tokyo’s Nikkei 225 gained 0.9% to 38,445.68, while the Kospi in South Korea jumped 0.3% to 2,865.12.

Hong Kong’s Hang Seng edged 0.3% higher, to 24,261.26 and the Shanghai Composite index was up 0.1% at 3,403.52. In Taiwan, the Taiex surged 2.1% to 22.253,46.

Australia’s S&P/ASX 200 advanced just less than 0.9% to 8.588,10.

On Monday, the S&P 500 edged up just 0.1% and at 6,005.88 is within 2.3% of its record set in February. The Dow Jones Industrial Average slipped by 1 point, which is well below 0.1%, to 42,761.76.

The Nasdaq composite added 0.3% to 19,591.24.

A second day of talks between the US and China was planned after the two global powers met in London for negotiations.

The hope is that they can eventually reach a deal to reduce painfully high tariffs against each other. Most of the tariff hikes imposed since US President Donald Trump escalated his trade war have been paused to allow trade in everything from tiny tech gadgets to enormous machinery.

Hopes that President Donald Trump will lower his tariffs after reaching trade deals with countries around the world have helped the S&P 500 win back gains after it dropped roughly 20% from its record two months ago. The index is back above where it was when Trump shocked financial markets in April with his wide-ranging tariff announcement on so-called “Liberation Day”.

Some of the market’s biggest moves came from the announcement of big buyout deals. Qualcomm rallied 4.1% after saying it agreed to buy Alphawave Semi in a deal valued at $2.4bn (€2.1bn). IonQ, meanwhile, rose 2.7% after the quantum computing and networking company said it agreed to purchase Oxford Ionics for nearly $1.08bn (€947.1mn).

On the losing side of Wall Street was Warner Bros. Discovery, which flipped from a big early gain to a loss of 3% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products.

Tesla recovered some of its sharp, recent drop. The electric vehicle company tumbled last week as Elon Musk’s relationship with Trump broke apart, and it rose 4.6% on Monday after flipping between gains and losses earlier in the day.

The frayed relationship could end up damaging Musk’s other companies that get contracts from the US government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX’s expense, rose 2.5%.

In the bond market, the yield on the 10-year Treasury eased to 4.48% from 4.51% late Friday. It fell after a survey by the Federal Reserve Bank of New York found that consumers’ expectations for coming inflation eased slightly in May.

Economists expect a report due on Wednesday to show that inflation across the country accelerated last month to 2.5% from 2.3%.

The Federal Reserve has been keeping its main interest rate steady as it waits to assess the inflationary effects of Trump’s tariffs. A persistent increase in inflation expectations among US households could drive behaviour that creates a vicious cycle that only worsens inflation.

In other dealings early on Tuesday, US benchmark crude oil picked up 31 cents to $65.45 per barrel. Brent crude, the international standard, also gained 31 cents, to $67.35.

The dollar rose to 144.93 Japanese yen from 144.61 yen. The euro slipped to $1.1399 from $1.1421.

Published on
06/06/2025 – 6:42 GMT+2

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In three hours on Thursday, shares in Elon Musk’s electric vehicle company plunged by more than 14% in a stunning wipeout, as investors dumped their holdings amid a bitter war of words between the president and the world’s richest man.

By the end of the trading day, $150 billion (€139bn) of Tesla’s market value had been erased — more than what it would take to buy all the shares of Starbucks and hundreds of other big publicly traded US companies.

The disagreement started over the president’s budget bill, then quickly turned nasty after Musk said that Trump wouldn’t have been elected without his help. Trump then implied that he may turn the federal government against Musk’s companies, including Tesla and SpaceX.

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on his social messaging service Truth Social. “I was always surprised that Biden didn’t do it!”

The drop on Thursday partially reversed a big run-up in the eight weeks since Musk confirmed that Tesla would be testing an autonomous, driverless “robotaxi” service in Austin, Texas, this month.

Investors fear Trump might not be in such a rush to usher in a future of self-driving cars in the US, and that could hit Tesla.

“The whole goal of robotaxis is to have them in 20 or 25 cities next year,” Wedbush Securities analyst Dan Ives, said. “If you start to heighten the regulatory environment, that could delay that path.”

He added that there’s a fear Trump is not going to play ‘Mr Nice Guy’ anymore.

However, Trump’s threat to cut government contracts could be aimed more at another of Musk’s businesses, SpaceX. The privately held rocket company has received billions of dollars for sending astronauts and cargo to the International Space Station, providing launches and doing other work for NASA. The company is currently racing to develop a mega-rocket for the space agency to send astronauts to the Moon next year.

A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk’s once-close relationship with the president.

On a trip with Trump to the Middle East last month, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime use. Though its not clear how much politics has played a role, a string of other recent deals in Bangladesh, Pakistan, India and elsewhere has followed, as Trump has threatened tariffs and sent diplomats scrambling to please the president.

One measure of SpaceX’s success: A private financing round followed by a private sale of shares in recent months reportedly valued it at $350 billion (around €325bn), up from an estimated $210 billion (about €195.3bn) a year ago.

Now all that is possibly in danger. Tesla shares got an even bigger lift from Musk’s close relationship with Trump, initially at least.

After the presidential election in November, investors rushed into the stock, adding more than $450 billion (€418.5bn) to its value in a few weeks. The belief was that the company would see big gains as Trump eased regulatory oversight of Tesla. They also bet that the new administration would embrace Musk’s plans for millions of cars on US roads without drivers behind the wheel.

After hitting an all-time high on 17 December, the shares retreated as Musk’s time as head of a government cost-cutting group led to boycotts and a hit to Tesla’s reputation. They’ve recently popped higher again after Musk vowed to focus more on Tesla and its upcoming driverless taxi launch.

Now investors aren’t so sure, a worry that has translated into big paper losses in Tesla stock held by Musk personally.