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There’s a strong argument that no other brand is as recognizable worldwide as Coca-Cola (KO 0.12%). There are very few places you can go in the world and not find Coca-Cola’s products. This vast distribution and brand recognition are largely why Coca-Cola has been a beverage powerhouse for decades.

The beverage giant has also been a staple in many portfolios for decades, bringing some stability and attractive income to the table. If you’re interested in adding this blue-chip stock to your portfolio, here are five things you should know beforehand.

Image source: Getty Images.

1. Coca-Cola is still a prime dividend stock

The first thing to know about Coca-Cola’s stock has to do with its main appeal: its reliable, above-average dividend. The current quarterly dividend is $0.51, with an average yield of around 2.9%, just below its 3% average for the past decade.

This yield is more than double the S&P 500 average, which is great, but the long-term attraction is the consistency with which Coca-Cola increases its annual dividend. When it announced it would increase its quarterly dividend to $0.51 ($2.04 annually) in February, this marked the company’s 63rd consecutive year of increases, making it a Dividend King. The dividend has doubled since 2012.

KO Dividend Yield data by YCharts

2. Coca-Cola has offset stagnant volume with pricing power

When your brand moat is as strong as Coca-Cola’s, it gives you pricing power that lesser-established brands typically don’t have. This is a great thing for Coca-Cola because its volume has been flat to slightly down in recent times.

The second quarter (Q2) is a key example of Coca-Cola’s pricing power at work. Although its global unit case volume declined by 1% year over year, its organic revenue (revenue that excludes currency swings and acquisitions/divestitures) increased by 5% year over year.

Coca-Cola uses a metric called price/mix, which tells you how much more money it’s making by either raising prices or selling more profitable products instead of just selling more products overall. In the second quarter, this price/mix was 6%, which is illustrated by the difference in volume decline and revenue growth.

3. Coca-Cola Zero Sugar is leading growth for Coca-Cola

Coca-Cola’s flagship Coca-Cola soda will likely always be its bread and butter, but recent changes in consumer preferences have brought a new growth beverage to the light. Coca-Cola Zero Sugar — which, as the name implies, is a sugar-free alternative to the Classic Coke — is Coca-Cola’s fastest-growing brand.

In Q2, Coca-Cola Zero Sugar volume grew 14% year over year. Below is how other specific beverages and categories performed in the quarter:

Source: Coca-Cola’s second quarter results.

It’s important to note that Coca-Cola Zero Sugar is a specific drink that falls in the “Trademark Coca-Cola” subcategory that also includes Coca-Cola Classic, Diet Coke, and other regional-specific Coke variants (like Coca-Cola Sin Azúcar in Latin America).

4. Coca-Cola continues to have industry-leading margins

Unlike its main competitor, PepsiCo, Coca-Cola only sells beverages. Its main business model is selling concentrates and syrups to its bottling partners, who then produce the products and distribute them themselves.

This slimmed-down operation has helped Coca-Cola operate with industry-leading margins because it doesn’t have to indulge in the food business, which can be capital-intensive and much less profitable. Here is how Coca-Cola’s various margins compare to PepsiCo:

KO Gross Profit Margin (Quarterly) data by YCharts

5. Coca-Cola isn’t afraid to adjust its portfolio

Despite how successful a lot of Coca-Cola’s brands are, the company continues to reshape its portfolio to adjust to what consumers want, both adding what works and removing what doesn’t work. At one point, Coca-Cola’s portfolio consisted of over 400 brands. Today, it consists of around 200.

It has adapted to consumers leaning toward sugar-free options, the growth of plant-based beverages, and the popular alcohol ready-to-drink segment. The latter is especially noteworthy because Coca-Cola had traditionally steered clear of the alcohol segment, but began making attempts to become a total beverage company.

This willingness to adapt is important when you’re investing in a company like Coca-Cola for the long term. It also explains how the company has maintained its market-leading position for so long.

Taiwan Semiconductor Manufacturing (TSM 0.24%) is far from the flashiest artificial intelligence (AI) name out there. It doesn’t design chips like Nvidia, Advanced Micro Devices, and Broadcom, and, as such, it doesn’t tend to get the same hype.

However, all these chipmakers hand their designs to TSMC for large-scale manufacturing, turning them into real products. That’s why it’s not only one of the best, but one of the safest ways to invest in the AI infrastructure buildout. It wins no matter which chip designer takes the lead, and it’s generating a ton of cash doing it.

Even Nvidia’s CEO Jensen Huang went out of his way to praise the company. He called TSMC “one of the greatest companies in the history of humanity,” adding that “anybody who wants to buy TSMC stock is a very smart person.” That is not the kind of praise Huang throws around lightly.

Image source: Getty Images.

TSMC has a foundry nobody can catch

TSMC is the top foundry in the world, producing most of the world’s advanced chips. Rival Intel (INTC 2.20%) has been trying to build its own foundry business, but it is losing money and hasn’t been able to gain any ground. In fact, the U.S. government recently made a large investment in the struggling company, reportedly to help bolster it.

Samsung, meanwhile, has struggled with production yields. It also recently lost one of its advanced chip designs, as Alphabet switched to TSMC for its Tensor G5 chip used in its Pixel smartphones. Neither Intel nor Samsung has shown that they can match the scale or reliability of TSMC.

That’s why TSMC has locked in almost every large AI chipmaker as a customer. Chip designers are constantly looking to shrink node sizes, and TSMC is the only foundry that has shown it can consistently produce advanced nodes with strong yields. Nodes are a reference to the size of the transistors used on a chip, measured in nanometers. With smaller nodes, more transistors can be packed onto the chip, which improves performance and power efficiency.

Smaller nodes are becoming an increasingly larger part of TSMC’s mix. Chips built on 7-nanometer or smaller nodes are already nearly three-quarters of TSMC’s revenue, while its 3nm chips alone are almost one-quarter. Meanwhile, it is already preparing to move into 2nm.

TSMC is a cash flow machine

One of the most overlooked parts of TSMC’s story is its cash generation. In 2024, it produced more than $26.5 billion in free cash flow. That was after spending heavily on building new fabs. So far this year, it’s already generated over $15 billion in free cash flow despite continued heavy capex spending. It’s also paying a growing dividend off that mountain of cash.

Most people think of foundries as low gross margin businesses; however, TSMC is changing that narrative. Its leadership in advanced nodes has given it strong pricing power over the years. Nobody else can deliver chips at the same density and yield, so customers are willing to pay up. That’s why its margins have stayed strong and have been increasing.

TSMC is an under-the-radar stock

Investors don’t talk about TSMC with the same excitement they talk about Nvidia or AMD. That could be because it’s not a brand consumers recognize, or perhaps because the foundry business isn’t just quite as exciting. It’s also not a U.S.-based company, with its headquarters in Taiwan.

However, TSMC has been one of the biggest beneficiaries of the AI buildout, and it should continue to be a big winner moving forward. Last quarter, its revenue climbed 44% to $30 billion, while its profits soared. Meanwhile, management expects AI chip demand to grow more than 40% annually through 2028. The company is working closely with its largest customers to increase capacity, so it should have good visibility into this growth.

Overall, TSMC is one of the most important companies in the AI supply chain. Without it, the current AI infrastructure buildout wouldn’t be possible. It’s growing rapidly, expanding margins, and generating a boatload of cash.

Despite that, the stock is one of the most attractively valued AI plays in the market, trading at a forward price-to-earnings (P/E) ratio of 24.5 times based on analysts’ 2025 estimates and a price/earnings-to-growth ratio (PEG) of less than 0.65. Stocks with PEG ratios below 1 are generally considered undervalued.

Investors would be smart to heed Jensen Huang’s advice and be a buyer of TSMC.

Well, that was fast.

Just one week after revealing a new logo that was nearly universally panned, Cracker Barrel Old Country Store (CBRL 8.01%) announced on Tuesday that it was scrapping its plans to change the logo. On Wednesday, the company’s shares — which had tumbled more than 10% after the new logo was revealed — had rebounded by 8.0% by the time the closing bell rang.

For investors who bought the dip, it’s a pretty good outcome. But is it too late for everyone else to buy in?

Why shares were down

On Aug. 19, Cracker Barrel launched a fall campaign it dubbed “All the More.” It was mostly a pretty standard seasonal restaurant campaign. It announced a partnership with country music star Jordan Davis and introduced some seasonal fall menu items like a cinnamon roll skillet and Uncle Herschel’s Favorite (“back by popular demand”).

However, the campaign also featured “updated creative,” including a change to the restaurant’s logo that removed the eponymous barrel and the iconic “old timer” figure — referred to by many as “Uncle Herschel” — leaving only an orange background and the words “Cracker Barrel.”

The backlash was immediate and intense, with many criticizing the stripped-down logo as generic or too reminiscent of other restaurant logos, such as Denny’s or Golden Corral. On Tuesday, even President Donald Trump weighed in on Truth Social, “Cracker Barrel should go back to the old logo, admit a mistake based on customer response (the ultimate Poll), and manage the company better than ever before.”

Despite the negative reactions, Cracker Barrel initially doubled down on its logo decision, with a spokesperson saying the feedback had been “overwhelmingly positive and enthusiastic about the refreshed dining and shopping experience” (a statement which, you’ll notice, pointedly does not say anything about feedback regarding the logo specifically), and attributing the backlash to a “vocal minority.”

However, by Tuesday, shortly after President Trump’s post, the company changed its tune. “We thank our guests for sharing your voices and love for Cracker Barrel. We said we would listen, and we have,” the company said. “Our new logo is going away and our ‘Old Timer’ will remain.” The new logo has been removed from the company’s website.

Does it matter for the stock?

If you believe that any publicity is good publicity, this ruckus might result in some short-term positives for the company. Cracker Barrel’s name has been in the news (and, more importantly, in the zeitgeist) for a week now, and it’s even making me hungry for hash brown casserole. Many people are praising management for its ultimate decision. This could be a golden opportunity for the company, as Trump suggested in his Truth Social post, writing: “They got a Billion Dollars worth of free publicity if they play their cards right. Very tricky to do, but a great opportunity.”

Image source: Getty Images.

That publicity might increase foot traffic to Cracker Barrel’s stores in the short term, which would be a welcome boost for the company. In its most recent quarter, same-store restaurant sales increased by just 1%, while same-store retail sales declined 3.8%. Overall, revenue has been stagnant since the pandemic lockdown reopenings, only up 5.7% since 2022. Net income has slipped by more than 50% and profit margins have declined to just 1.7%.

Those metrics aren’t just bad, they’re worse than most of its peer companies, including Brinker International (EAT -3.52%), which owns Chili’s and Maggiano’s; and Darden Restaurants (DRI 0.14%), which owns Olive Garden and Cheddar’s, among many others. Perhaps the problem is the breakfast: Dine Brands (DIN 1.15%), which owns IHOP and Applebee’s, has struggled with a similar drop in profits, but even Dine’s profit margin is above 5%.

In short, it will take more than the publicity surrounding this logo controversy to fuel a long-term turnaround at Cracker Barrel. According to CEO Julie Felss Masino, the company is “in the middle of a three-year transformation” that’s expected to cost $700 million and include changes to the company’s advertising, menus, and store layouts. If this is how well things are going, investors will face a long and rocky road, no matter what Cracker Barrel’s logo ends up looking like.

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.

Shares of Nvidia (NVDA -0.01%) are down 3% in Wednesday’s after-hours trading as of 7:42 p.m. ET, following the artificial intelligence (AI) tech leader’s release of its report for its second quarter of fiscal 2026 (ended July 27, 2025).

The stock’s modest decline can likely be mainly attributable to the uncertainty still surrounding the Chinese data center market. On the earnings call, management said it has received U.S. government licenses to resume selling its H20 data center AI chip to several Chinese customers, and that it has the immediate capacity to sell $3 billion to $5 billion of these chips to China in the third quarter. However, due to geopolitical issues still being “open,” as management put it, it did not assume any H20 sales in its third-quarter guidance.

That said, Q2 revenue and adjusted earnings per share both beat Wall Street’s estimates, as did Q3 guidance for both the top and bottom lines.

In my Nvidia earnings preview, this chain of events is as I predicted: “I’m predicting it [Nvidia] will beat Wall Street’s earnings estimate. That said, I think the stock’s movement will largely depend on H20 news and related Q3 guidance.”

Image source: Getty Images.

Nvidia’s key numbers

Data source: Nvidia. YOY = year over year. GAAP = generally accepted accounting principles. Fiscal Q2 2026 ended July 27, 2025.

Investors should focus on the adjusted numbers, which exclude one-time items.

Wall Street was looking for adjusted EPS of $1.01 on revenue of $46.13 billion, so Nvidia exceeded both expectations. It also handily beat its own guidance, which was for adjusted EPS of $0.98 on revenue of $45 billion.

For the quarter, GAAP and adjusted gross margins were 72.4% and 72.7%, respectively.

Platform performance

Data source: Nvidia. OEM = original equipment manufacturer; OEM and other is not a target-market platform. YOY = year over year. QOQ = quarter over quarter.

The data center segment’s revenue accounted for about 88% of total revenue, so it continues to drive the company’s overall performance.

The data center platform’s strong year-over-year and sequential growth was driven by “demand for our accelerated computing platform used for large-language models, recommendation engines, and generative and agentic AI applications,” Colette Kress said in her CFO commentary.

Notably, within data center, Blackwell revenue grew 17% sequentially. Blackwell is Nvidia’s graphics processing unit (GPU) architecture that is currently in full production.

The other platforms also performed very well. Auto had particularly powerful year-over-year growth. Its growth was driven by “strong adoption of our self-driving platforms,” Kress said. The driverless vehicle revolution is advancing — and Nvidia is the best driverless vehicle stock, in my view.

What the CEO had to say

CEO Jensen Huang stated in the earnings release:

Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap — production of Blackwell Ultra is ramping at full speed, and demand is extraordinary. Nvidia NVLink rack-scale computing is revolutionary, arriving just in time as reasoning AI models drive orders-of-magnitude increases in training and inference performance. The AI race is on, and Blackwell is the platform at its center.

Guidance for the third quarter

For Q3 of fiscal 2026, which ends in late October, management expects revenue of $54 billion, which equates to growth of 54% year over year. This outlook does not assume any H20 chip sales to China.

Management also guided (albeit indirectly by providing a bunch of inputs) for adjusted EPS of $1.22, or 51% growth.

Going into the report, Wall Street had been modeling for Q3 adjusted EPS of $1.19 on revenue of $52.76 billion, so the company’s outlook beat both estimates.

A fantastic quarter and guidance

In short, Nvidia turned in a fantastic quarter and guidance. The stock’s modest decline is likely due to short-term traders and will be recovered shortly, in my opinion.

The results were particularly impressive since they did not include any sales of H20 data center AI chips to China due to the U.S. government’s export controls spanning the entire quarter. And Q3 guidance was also particularly impressive for the same reason — it assumes no H20 sales to China. So any H20 chips that are sold to China in Q3 will be icing on the cake.

The media sector offers some distinctly different investment options. Newsmax (NMAX -1.47%) entered the stock market as recently as March 2025, and the largely digital provider of conservative news coverage has only one quarterly earnings report under its belt. By contrast, The New York Times Company (NYT 0.77%) was founded in 1851 and entered the public stock market 56 years ago.

You can look at this matchup as a political struggle, but I’m more interested in their business models. Which media stock operates from the stronger financial foundation, setting shareholders up for better long-term returns?

Newsmax and The New York Times, by the numbers

Both companies recently published their results for the period ending on June 30, 2025. Let’s see how they stack up.

Newsmax posted strong top-line growth. Its second-quarter sales rose 18.4% year over year, landing at $46.4 million. The company reached 26 million cable news viewers in this quarter.

With $198 million of cash equivalents and no long-term debt to speak of, Newsmax’s balance sheet looks robust at first glance. However, its bottom-line profits are consistently negative, and the cash balance was built on $426.6 million of additional paid-in capital — financial backing provided by founder Christopher Ruddy and the stock offering in March.

Investors should watch how this shareholder-backed company manages its return on equity in the long run. It’s a negative number for now, even if you back out a $68.4 million legal expense from Newsmax’s expenses.

New York Times saw a slower 9.7% revenue increase in the same reporting period, as expected from a more mature company. Revenue landed at $685.9 million, with 51% coming from digital-only subscription sales. Net income rose 26.6% to $82.9 million, while free cash flow fell 30% year over year to $72.6 million.

New York Times’ cash balance stood at $951.5 million by the end of June. Like Newsmax, this company doesn’t carry any long-term debt. Once again, return on equity is an important financial metric to watch, with the current value perched at 17.1%.

Long story short, The New York Times is an older and larger business with slower growth but robust profits. The return-on-equity figures weigh heavily in the larger company’s favor at this point, due to Newsmax’s unprofitable operations.

Image source: Getty Images.

The stock performance scorecard

That brings me over from financial statements to the stocks themselves.

Newsmax shares are trading 94% below their all-time high, which was set amid the frenzied market action on the IPO date. Skipping ahead to calmer times, the three-month return as of August 26 is a negative 29.7%.

Profit-based valuation metrics don’t make sense for this stock yet, and Newsmax hasn’t reported a full year of revenue figures, so it’s hard to pin a reasonable market value on the stock. For what it’s worth, Newsmax trades at 18.5x the company’s book value and 10x its net cash balance.

New York Times investors pocketed a 7.8% total return in the last three months and a market-beating 92.5% in three years. Neither a market darling nor a bargain, the stock trades at a modest 30.7x trailing earnings and 21.3x free cash flow.

It’s a mixed bag if you compare the two stocks on the metrics that actually apply to Newsmax. The New York Times stock trades at 5x book value and 18x its cash reserves.

Boring beats volatile in this media matchup

Newsmax is still finding its bearings on the public market. The stock has been volatile in the first few months, and the company’s main revenue source is the unpredictable flow of advertising sales.

The New York Times has been around forever and runs a more robust business model with more subscription revenue than ad sales. The stock isn’t exactly cheap, but its valuation isn’t terribly lofty, either.

For better or worse, many people might pick either one of these stocks to match their political leanings. That’s fine, as long as you keep the investment on the small side.

Emotional investing is rarely a recipe for strong returns. If you turn down the adrenaline spigot, The New York Times looks like a modestly priced value stock, while Newsmax seems too hot to handle in 2025.

Shares of MongoDB (MDB 34.70%) charged sharply higher on Wednesday, surging as much as 34.3%. As of 11:47 a.m. ET, the stock is still up 34%.

The catalyst that drove the database-as-a-service provider higher was the company’s financial results, which were far better than even the most bullish forecast.

Image source: Getty Images.

Blowing past expectations

For its fiscal 2026 second quarter (ended Jul. 31), MongoDB delivered revenue of $591.4 million, up 24% year over year, signaling that its strategy to address the booming demand for artificial intelligence (AI) is paying off. As a result, the company delivered adjusted earnings per share (EPS) of $1.00, compared to a loss per share of $0.70 in the prior-year quarter.

The results blew past management’s previous guidance and caught Wall Street off guard. Analysts’ consensus estimates were calling for revenue of $554 million and adjusted EPS of $0.67, so MongoDB sailed past even the loftiest expectations.

Further fueling investor enthusiasm was the company’s robust customer acquisitions. MongoDB added 2,800 net new customers, with the total growing to 58,300, up 18% year over year.

The company also continues to generate plenty of cash, with operating cash flow of $72.1 million and free cash flow of $69.9 million.

The AI wildcard

Over the past couple of years, MongoDB has been focused on providing its users with the tools they need to use AI. CEO Dev Ittycheria noted that while AI is not yet a “material driver” of the company’s growth, he noted that “enterprise uptake of AI is still early.” He went on to say that the “real enduring value” will come from custom AI solutions that will transform their businesses, and that MongoDB provides the tools that will help developers prosper.

Management gave investors other reasons to celebrate, as the company raised its full-year forecast for the second consecutive quarter. MongoDB is now guiding for fiscal 2026 revenue of $2.35 billion, or roughly 17% growth. The company also significantly increased its profit outlook to $3.68, up from $3.03 at the midpoint of its guidance. This shows the company is focusing on expanding its profit margins.

MongoDB stock isn’t cheap, selling for 11 times sales. However, that’s roughly half its average multiple of 20 since the company’s IPO in late 2017.

Cava Group (CAVA 1.28%) and its customers know all about dips. The chain’s tzatziki, spicy hummus, Greek green goddess, and signature “crazy feta” are so popular that even some local grocers stock them in eight-ounce containers. Investors are also learning all about Cava dips.

Shares of the fast-growing operator of fast-casual restaurants specializing in Mediterranean cuisine have fallen sharply in recent months. Cava stock is down 62% since peaking in November. A feel-good rebuttal is that the stock has roughly tripled since going public at $22 two years ago, but that doesn’t help the investor who warmed up to the the Cava story late last year.

How did the stock get here? Will it continue to head lower? There’s a lot to cover here, but like its crazy feta, I also want to argue that it’s a tasty dip worth buying.

Mediterranean goes subterranean

Cava is a leader in fast casual, a potent subset of eateries bridging the gap between fast food and casual dining. It’s also riding high on consumers embracing the health benefits of savory Mediterranean diets. When Cava hit the market in the springtime of 2023, its prospectus spelled out the unique characteristics of its customer base as primarily well-off and young. Household income was north of $150,000 for 37% of its patrons (and above $100,000 for 59% of its base). Cava also noted that 28% of its visitors are between 25 and 34 years old. Female-identifying guests accounted for 55% of its visitors.

Backed by heady expansion and stellar comps, Cava became a new industry darling for investors. As the pandemic-era recovery found more companies calling employees back to in-office work, Cava would become even more popular as a hotspot for workday lunches or picking up food on the way home from work. The affluent nature of its fans made it less likely to fall into a funk if the economy should falter.

The stock’s initial ascent was fueled by its improving fundamentals. It turned profitable in its first quarter as a public company, and continues to pad its bottom-line results. Revenue growth would accelerate in 2023 as well as 2024. The chain has been feeling a bit more mortal lately. Year-over-year revenue growth has decelerated for three straight quarters. Same-restaurant sales are also slowing. Let’s size up where Cava stands now, and if its deflated share price during the slowdown makes it a compelling buy here.

Image source: Cava Group.

Stepping on the scale

There are two sides to Cava’s latest quarter. Compared to most restaurants that slumped with sluggish sales, negative comps, and bottom-line hits through the second quarter of this year, Cava’s report two weeks ago was a breath of fresh feta. Revenue rose 20% to $278.2 million, up an even tastier 63% compared to where it was two springtimes earlier. It ended the quarter with 398 locations, a nearly 17% increase over the past year. Comps were up 2.1%. This is well below its previous store-level leaps, but a rare positive showing in a quarter of industry negativity. Chipotle Mexican Grill — the gold standard in fast casual — saw its second-quarter revenue inch just 3% higher with a 4% decline in comps.

Slowing growth isn’t a good look, but it does move the bar higher. Average sales volume for a Cava store over the past 52 weeks is now $2.9 million, up from $2.7 million a week earlier. Cava’s reported net income of $18.4 million was lower than it was a year earlier, but it was 10% higher on an adjusted basis. The chain’s adjusted net income margin contracted during the quarter, but its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) moved higher. It wasn’t a great report, but most eateries would’ve loved to put out numbers like that in this challenging climate.

It’s true that 20% top-line growth is nearly half the 39% jump that it posted back in November of last year when its stock hit an all-time high. Growth has been cut in half. Why shouldn’t the stock’s market value be cut by more than half? It’s not a fair judgment for Cava.

The chain is still posting double-digit revenue growth and positive comps at a time when many of its peers are struggling. It’s not a failure risk. There is no long-term debt on its balance sheet, just the long-term lease obligations of its growing company-operated empire.

Cava’s trading at an enterprise value that is 7.2 times its trailing revenue. This is higher than Chipotle’s multiple of 5.2, but it’s a historical discount for a company that is now proven with more than $1 billion in sales over the past 12 months. If you think Chipotle’s P/E ratio is rich at 38, you won’t be relieved to see Cava trading for 58 times its trailing inflated profitability. However, companies deserve a premium when they are operating at a higher level than their peers. There is still a long runway for growth. It still expects to top 1,000 locations by 2032, a 150% burst in the next seven years. Scalability will boost profitability under a kinder climate.

Cava may not seem textbook cheap, but it doesn’t mean that it will get cheaper. Buying quality at a discount — and that’s where Cava finds itself right now — could be the right move for opportunistic investors.

Enterprises are using artificial intelligence (AI) at an increasing rate, which is creating a new attack surface for hackers to exploit. AI-powered attacks are also on the rise, which calls for highly sophisticated cybersecurity solutions.

Palo Alto Networks and CrowdStrike lead the cybersecurity industry, but they aren’t the only vendors experiencing a surge in demand for their products. Tenable (TENB -1.50%) is a specialist in vulnerability management, helping enterprises thwart the very threats posed by AI.

With a market capitalization of just $3.7 billion, Tenable is still a tiny player in the cybersecurity space. However, the company’s operating results for the recent second quarter of 2025 (ended June 30) revealed accelerating revenue growth, an uplift in guidance, and a record number of high-spending customers.

Tenable stock remains 49% below its 2022 record high, but here’s why it’s time for investors to pay attention to this up-and-coming cybersecurity powerhouse.

Image source: Getty Images.

A vulnerability management specialist

Tenable owns Nessus, which is the cybersecurity industry’s most accurate and most widely deployed vulnerability management platform. It proactively scans devices, networks, and operating systems to identify potential weak points, so they can be patched before malicious actors exploit them.

But Nessus has become an onramp to Tenable’s growing portfolio of other advanced cybersecurity products. The company has consolidated many of them to create a comprehensive exposure management platform called Tenable One, which protects cloud networks, employee identities, endpoints, infrastructure, and more.

Tenable has the world’s largest repository of exposure data, which allows Tenable One to proactively surface and mitigate threats better than any other platform of its kind.

The company also offers a product called AI Exposure, which helps enterprises secure their AI software, AI platforms, and AI agents. It gives managers visibility into how employees are using AI across the organization, and it allows them to build guardrails to reduce risk. This is especially useful when employees are plugging sensitive internal data into large language models (LLMs) from third-party developers.

Accelerating revenue growth and increased guidance

Tenable generated $247.3 million in revenue during the second quarter of 2025, which was comfortably above management’s forecast of $241 million to $243 million. It represented a year-over-year increase of 12%, which marked an acceleration from the 11% growth the company delivered in the first quarter.

The strong result was driven by high-spending enterprises. Tenable had a record 2,118 customers with at least $100,000 in annual contract value during the second quarter, which highlights how important advanced cybersecurity solutions are becoming to large organizations.

Tenable’s recent momentum might be a sign of things to come, because management adjusted its 2025 full-year revenue guidance to $984 million (at the midpoint of the range), which was an increase of $9 million from its previous forecast three months ago.

Management also made further progress at the bottom line during the second quarter. The company suffered a small loss on a GAAP (generally accepted accounting principles) basis, but after excluding one-off and non-cash expenses like stock-based compensation, the company generated an adjusted (non-GAAP) profit of $41.4 million. That figure was up by almost 9% compared to the year-ago period.

Tenable’s ability to deliver accelerating revenue growth without sacrificing profitability is a sign of strong organic demand for its products.

Tenable stock looks attractive at the current level

The 49% decline in Tenable stock since 2022, combined with the company’s consistent revenue growth, has pushed its price-to-sales (P/S) ratio down to just 3.9. That is a substantial discount to the valuations of industry leaders like Palo Alto and CrowdStrike:

CRWD PS Ratio data by YCharts

Palo Alto and CrowdStrike operate much larger businesses than Tenable, and they are also delivering faster revenue growth. However, considering Tenable’s momentum right now, I think the valuation gap deserves to be much narrower. Plus, Tenable values its addressable market at $50 billion in the exposure management space alone, and the company’s current revenue suggests it has barely scratched the surface of that opportunity.

As a result, Tenable could be a great long-term buy for investors who are looking to add a cybersecurity stock to their portfolio.

The tech-laden Nasdaq Composite index clocked impressive gains in the past decade, rising 374% during this period and outpacing the S&P 500 index’s jump of 240%. The disruptive nature of technology companies is a key reason why the Nasdaq has delivered above-average returns. Tech companies can grow at faster rates thanks to the innovation taking place in this sector. New products, services, and features can witness rapid adoption by customers, organizations, and governments, leading to robust revenue and earnings growth for tech stocks.

Taiwan Semiconductor Manufacturing (TSM 1.26%), popularly known as TSMC, enables innovation and disruption with its advanced chip manufacturing processes. Not surprisingly, TSMC stock has shot up a remarkable 12.5x in the past decade, significantly outpacing the Nasdaq Composite index’s jump.

Let’s look at the reasons why it has real potential to keep outperforming the Nasdaq Composite in the next 10 years.

Image source: Getty Images.

TSMC’s growth is likely to accelerate in the coming decade

TSMC is the world’s largest semiconductor foundry. According to Counterpoint Research, it controlled 35% of the global Foundry 2.0 market in the first quarter of 2025, growing its share by almost six percentage points from the year-ago period.

The Foundry 1.0 market is defined by pure chip manufacturing, while Foundry 2.0 includes ancillary services such as advanced packaging, assembly and testing, and photomasking. TSMC, which was a pure-play chip manufacturer earlier, has been expanding its expertise to offer Foundry 2.0 solutions to its customer base.

This explains why the company keeps gaining a bigger share of this market. TSMC established a massive lead over its rivals in the Foundry 2.0 space, with second-placed Intel controlling just over 6% of this market in the first quarter. Another thing worth noting is that the Foundry 2.0 market saw a 13% year-over-year increase in revenue in Q1 2025 to $72 billion, driven by the growth of artificial intelligence (AI) and high-performance computing chips.

TSMC’s advanced chip manufacturing processes are tapped by several fabless chip designers such as AMD, Nvidia, Broadcom, Sony, Apple, Qualcomm, and others, who don’t have manufacturing facilities of their own. These companies have been tapping TSMC’s 3nm (nanometer) and 5nm process nodes to fabricate AI chips that go into multiple applications ranging from data centers to consumer electronics devices to vehicles.

Specifically, 60% of TSMC’s revenue came from the high-performance computing (HPC) segment in the previous quarter, while smartphones accounted for 27%. The Internet of Things (IoT) and the automotive segment aren’t moving the needle in a significant way for the company right now. However, all these end markets are expected to clock healthy growth over the next decade, paving the way for secular growth at TSMC.

Deloitte, for instance, points out that the growth of AI is expected to lead to a 30x increase in data center power demand by 2035. This rapid surge will be driven by the construction of more data centers needed to tackle AI workloads. According to one estimate, AI-focused data center spending is expected to jump by almost 4x by 2030, which should allow TSMC to sell more of its advanced chips.

Meanwhile, the adoption of AI in other areas, such as robotics and the automotive industry, can create more lucrative growth opportunities for TSMC. In all, the AI chip market expects to clock an annual growth rate of close to 35% through 2035. TSMC’s solid share of the foundry market puts it in a solid position to make the most of this massive growth opportunity.

Product development moves should help it maintain its solid position

TSMC’s growth picked up impressively in the past couple of years on account of the AI boom.

Data by YCharts.

The company expects 30% revenue growth this year. It can sustain such impressive growth levels in the future as well, since it is focused on further advancing its manufacturing processes, which should enable it to maintain its healthy lead in this market. For example, TSMC is already constructing 2nm and A16 (1.6nm) chip fabrication facilities.

These new processes are expected to deliver significant performance and efficiency gains over the company’s current 3nm chip node. The 2nm process, for instance, is expected to deliver a 10% to 15% increase in performance while reducing power consumption by 20% to 30%. The A16 process is also expected to replicate such gains when compared to the 2nm process.

The improved performance of TSMC’s new chips should come in handy while tackling AI workloads in the cloud and in edge devices such as smartphones and personal computers. So, TSMC seems set to retain its lead in the foundry market in the future. As such, it is a no-brainer buy right now at 25 times earnings since its healthy financial performance can help this AI stock outpace the Nasdaq Composite’s gains over the next 10 years.

The S&P 500 and Nasdaq Composite are hovering around all-time highs. A big part of the rally is investor excitement for sustained artificial intelligence (AI)-driven growth and adjustments to Federal Reserve policy that open the door to interest rate cuts.

While investor sentiment and macroeconomic factors undoubtedly influence short-term price action, the stock market’s long-term performance ultimately boils down to earnings.

Nvidia (NVDA 1.10%) will report its second-quarter fiscal 2026 earnings on Aug. 27 after market close. Here’s why expectations are high, and why the “Ten Titans” stock could single-handedly move the S&P 500.

Image source: Getty Images.

Nvidia’s profound impact on the S&P 500

The Ten Titans are the largest growth stocks by market cap — making up a staggering 38% of the S&P 500.

Nvidia is the largest — with a 7.5% weighting in the index.

The other Titans are Microsoft, Apple, Amazon, Alphabet, Meta Platforms, Broadcom, Tesla, Oracle, and Netflix.

Aside from its value, Nvidia is also a major contributor to S&P 500 earnings growth.

NVDA Market Cap data by YCharts

Megacap tech companies influence the value of the S&P 500 and its earnings. And since many of the top earners are growing quickly, the market arguably deserves to have a premium valuation.

Since the start of 2023, Nvidia added roughly $4 trillion in market cap to the S&P 500. But it also added over $70 billion in net income — as its trailing-12-month earnings went from just $5.96 billion at the end of 2022 to $76.8 billion today. That’s like creating the combined earnings contribution of Bank of America, Walmart, Coca-Cola, and Costco Wholesale in the span of less than three years.

Nvidia’s value creation for its shareholders, and the scale of just how big the business is from an earnings standpoint, is unlike anything the market has ever seen. But investors care more about where a company is going than where it has been.

Nvidia’s unprecedented profit growth

Expectations are high for Nvidia to continue blowing expectations out of the water. Over the last three years, Nvidia’s stock price rose after its quarterly earnings report 75% of the time. Analysts have spent the last few years flat-footed and scrambling to raise their price targets as Nvidia keeps raising the bar. It looks like they aren’t making that mistake any longer — as near-term forecasts are incredibly ambitious.

As mentioned, Nvidia’s trailing-12-month net income is $76.8 billion, which translates to $3.10 in diluted earnings per share (EPS). Consensus analyst estimates have Nvidia bringing in $1 per share in earnings for the quarter it reports on Wednesday and $4.35 for fiscal 2026. Going out further, analyst consensus estimates call for 37.8% in earnings growth in fiscal 2027, which would bring Nvidia’s diluted EPS to $6 per share.

NVDA Net Income (TTM) data by YCharts

Based on Nvidia’s current outstanding share count, that would translate to net income of $107.7 billion in fiscal 2026 and $148.5 billion in fiscal 2027. Unless other leaders like Alphabet, Microsoft, or Apple accelerate their earnings growth rates, Nvidia could become the most profitable U.S. company by the time it closes out fiscal 2027 in January of calendar year 2027. These projections strike at the core of why some investors are willing to pay so much for shares in the business today.

The key to Nvidia’s lasting success

Nvidia can single-handedly move the stock market due to its high weighting in the S&P 500. However, its influence goes beyond its own stock, as strong earnings from Nvidia could also be a boon for other semiconductor stocks, like Broadcom. But the ripple effect is even more impactful.

In Nvidia’s first quarter of fiscal 2026, four customers made up 54% of total revenue. Although not directly named by Nvidia, those four customers are almost certainly Amazon, Microsoft, Alphabet, and Meta Platforms. So strong earnings from Nvidia would basically mean that these hyperscalers continue to spend big on AI — a positive sign for the overall AI investment thesis.

However, Nvidia’s long-term growth and the stickiness of its earnings ultimately depend on its customers translating AI capital expenditures (capex) into earnings — which hasn’t really happened yet.

ORCL CAPEX To Revenue (TTM) data by YCharts

Cloud computing hyperscalers are spending a lot on capital expenditures (capex) as a percentage of revenue — showcasing accelerated investment in AI. But eventually, the ratio should decrease if investments translate to higher revenue.

Investors may want to keep an eye on the capex-to-revenue metric because it provides a reading on where we are in the AI spending cycle. Today, it’s all about expansion. But soon, the page will turn, and investors will pressure companies to prove that the outsize spending was worth it.

The right way to approach Nvidia

Almost all of Nvidia’s revenue comes from selling graphics processing units, software, and associated infrastructure to data centers. And most of that revenue comes from just a handful of customers. It doesn’t take a lot to connect the dots and figure out just how dependent Nvidia is on sustained AI investment.

If the investments pay off, the Ten Titans could continue making up a larger share of the S&P 500, both in terms of market cap and earnings. But if there’s a cooldown in spending, a downturn in the business cycle, or increased competition, Nvidia could also sell off considerably. So it’s best only to approach Nvidia with a long-term investment time horizon, so you aren’t banking on everything going right over the next year and a half.

All told, investors should be aware of potentially market-moving events but not overhaul their portfolio or make emotional decisions based on quarterly earnings.

Shares of Trump Media & Technology Group (DJT 6.62%) are jumping on Monday, up 7% as of 1:34 p.m. ET. The jump comes as the S&P 500 and the Nasdaq Composite are little changed.

Trump Media, the parent company of Truth Social, is teaming up with a major cryptocurrency exchange to launch a new company that will adopt a crypto accumulation strategy.

Trump Media will add Cronos to its books

The new company will build a significant position in Cronos (CRO), the crypto token of Crypto.com, and go public via the special purpose acquisition company (SPAC) Yorkville Acquisition, with the ticker MCGA.

The venture’s funding mix includes about $1 billion of CRO tokens, $200 million in cash, $220 million in warrants, and an equity line up to $5 billion from a Yorkville affiliate. Trump Media plans to buy roughly $105 million of CRO for its balance sheet, and Crypto.com will invest roughly $50 million in Trump Media stock.

This comes after Trump Media jumped on the crypto accumulation strategy bandwagon recently, purchasing large amounts of Bitcoin using a mix of debt and equity sales. The strategy was pioneered by Michael Saylor’s MicroStrategy (doing business as Strategy) and is a high-risk move that could pay off if Bitcoin continues to rise in price significantly.

Image source: Getty Images.

Trump Media’s valuation is divorced from reality

The latest move from Trump Media is its latest attempt to generate value. The company’s main asset, Truth Social, is a money-losing machine. At the moment, Trump Media has annual revenue of a few million dollars and is losing money hand over fist, yet its stock carries a valuation above $5 billion. The company’s pivot into Bitcoin accumulation (and now Cronos accumulation) requires taking on significant debt or diluting its stock through equity sales. It’s not a gambit I think will pay off. This is not a stock you want to own.

The Trade Desk (TTD 0.81%) is one of the most closely watched companies in the advertising technology space. Its platform helps brands and agencies buy digital ads across various channels, including connected TV (CTV), audio, display, and mobile. The company has built a reputation as a disruptor, benefiting from the secular shift away from traditional linear TV and the move toward more automated, data-driven ad buying.

However, even great companies face risks, and investors should carefully weigh these before investing. In The Trade Desk’s case, two stand out: ongoing operational challenges that could slow growth, and a valuation that leaves little room for error.

Image source: Getty Images.

The Trade Desk faces risks that could impact its long-term growth

On the surface, The Trade Desk looks unstoppable. It continues to win share as advertisers reallocate budgets from traditional channels toward digital and CTV. However, beneath that momentum, the company is facing a few operational hurdles.

The biggest one involves its UID2 identity solution. With third-party cookies being phased out by Google in 2025, The Trade Desk has promoted UID2 as an industry standard to enable targeted advertising while preserving user privacy. Adoption has been broad and partners such as Walt Disney, Fox, Roku, and many publishers have integrated UID2. Still, it’s far from guaranteed that UID2 will emerge as the universal replacement. Google has its own Privacy Sandbox framework, and other walled gardens, such as Apple, are unlikely to adopt UID2.

This means The Trade Desk’s future growth in open-internet advertising depends heavily on how well UID2 gains traction versus rival identity solutions. If adoption slows or if regulators impose stricter privacy rules, the company’s targeting capabilities — and therefore its value proposition to advertisers — could weaken.

Another challenge is the competitive intensity in connected TV. While CTV is The Trade Desk’s fastest-growing segment, competition is intensifying as streamers like Netflix, Amazon, and Disney ramp up their advertising businesses. These platforms are building in-house tech and are under pressure to maximize revenue per user, which could limit the scale of inventory they make available through third-party demand-side platforms like The Trade Desk. In other words, if major streamers decide to keep more ad buying within their ecosystems, The Trade Desk’s CTV runway could narrow.

Internally, the company is undergoing one of the most significant adjustments with significant changes in the senior management team. For example, in the second quarter of 2025 alone , it saw the hiring of a new CFO and a new board member with expertise in data, AI, and advertising. Managing this transition while scaling the business is not an easy task.

Together, these operational challenges may derail The Trade Desk from its historically high growth trajectory.

The stock price isn’t a bargain despite the uncertainties ahead

The second red flag that investors need to consider is valuation. Even after a sharp pullback in recent months, The Trade Desk trades at approximately 63 times earnings and nearly 10 times sales. That’s an expensive price tag for a company operating in a cyclical industry where growth depends on macro ad spending trends.

To be fair, The Trade Desk has earned its premium multiple. It has consistently grown its revenue , maintained profitability, and adjusted its strategies as the industry has developed — introducing platforms such as Kokai AI, UID2, and others.

Additionally, it operates in an industry with a global total addressable market (TAM) of nearly $1 trillion . Within this industry, connected TV (CTV) is one of the fastest-growing segments — an area where the company has invested heavily over the years to capitalize on the tailwind.

But here’s the thing. Even if The Trade Desk continues to march ahead, sustaining its current valuation requires near-flawless execution. Any stumble — whether slower UID2 adoption, increased competition in CTV, or a cyclical ad slowdown — could trigger a sharp contraction in multiple.

That’s the risk of buying in at a premium: The business can do well, but the stock may not if expectations are too high.

What does it mean for investors?

The Trade Desk has undeniable strengths: It’s founder-led and well-positioned for the secular shift toward programmatic advertising.

However, it’s essential to balance the bullish case with the risks. Operational challenges around identity and CTV competition could complicate execution. And with the stock still trading at a steep valuation, investors aren’t getting much of a discount for taking on that uncertainty.

If you’re considering buying The Trade Desk stock today, the prudent move may be to wait for a better entry point or clearer signs of UID2’s industry dominance before committing your hard-earned capital.

Wall Street analysts tend to be a decidedly optimistic bunch. Of the 503 stocks in the S&P 500 (^GSPC -0.43%) (there are more than 500 because some companies have multiple share classes), analysts rate 409 as buys or strong buys. As you might imagine, the artificial intelligence (AI) stocks that have propelled the market higher in recent years are among Wall Street’s favorites.

However, this bullishness has its limits. There’s an especially popular AI stock among retail investors that could plunge 70% or more, according to one Wall Street analyst.

Image source: Getty Images.

An AI favorite

The stock I’m referring to is Palantir Technologies (PLTR -0.98%), which been one of the hottest stocks on the market. Palantir has skyrocketed more than 23x since the beginning of 2023.

Sure, Palantir’s shares have pulled back by a double-digit percentage from its recent high. However, the stock has still roughly doubled year to date. That’s enough to rank Palantir as the best-performing member of the S&P 500.

The excitement about Palantir stems primarily from the growing demand for its products. The company makes software for analysis, pattern detection, and AI-assisted decision-making. In the second quarter of 2025, Palantir’s revenue jumped 48% year over year, and the company projects next quarter’s revenue growth will be even higher.

Palantir CEO Alex Karp wrote to shareholders earlier this month, “For a start-up, even one only a thousandth of our size, this growth rate would be striking, the talk of the town.” He added, “For a business of our scale, however, it is, we continue to believe, nearly without precedent or comparison.” Karp thinks, “This is still only the beginning of something much larger and, we believe, even more significant.”

The biggest Palantir bear on Wall Street

One analyst isn’t on the Palantir bandwagon, though. RBC Capital‘s Rishi Jaluria is the biggest Palantir bear on Wall Street. His 12-month price target for the stock is a little over 70% below the AI software company’s current share price, and that’s after Jaluria raised his price target from $40 to $45 earlier this month.

Before Palantir’s Q2 update, Jaluria wrote to investors that Palantir’s “valuation seems unsustainable.” Even after Palantir’s strong earnings results, Jaluria pointed to the stock’s “unfavorable risk-reward profile.”

Several Wall Street analysts are concerned about Palantir’s valuation with its sky-high forward price-to-earnings ratio (P/E) of 250. Three others, in addition to Jaluria, rated the stock as an underperform or sell in a survey of analysts conducted by LSEG in August. Another 17 analysts recommended holding the stock, with only four rating Palantir as a buy or strong buy.

However, Jaluria is much more negative about Palantir stock than his peers. The average 12-month price target for Palantir is only slightly below the current share price.

Jaluria isn’t bearish about every AI stock, though. The RBC analyst thinks some companies will be bigger winners than others as AI adoption increases. He has especially singled out software leaders, including Microsoft and Intuit, as good picks.

Could Palantir really plunge more than 70%?

Could RBC’s Jaluria be right that Palantir’s share price could plunge more than 70%? Maybe. However, I suspect that his low price target is overly pessimistic.

Don’t get me wrong — I agree with Jaluria and other analysts who view Palantir as overpriced. The company’s growth prospects — even though they’re impressive — don’t justify its stock valuation, in my opinion. I think Jefferies analyst Brent Thill is correct in stating that Palantir’s premium multiple is “disconnected from even optimistic growth scenarios.”

I suspect that we could see Palantir’s share price fall well below the current level over the next 12 months. But I doubt that Palantir’s share price will fall nearly as much as Jaluria predicts.

Mizuho analyst Gregg Moskowitz recently argued that Palantir’s “uniqueness demands substantial credit,” pointing to the company’s ability to profit from AI, government digitization, and other trends. If he’s right (and I think he is), it means that Palantir could have a higher floor than the stock’s biggest Wall Street bears project.

On Dec. 31, 2021, shares of Domino’s Pizza (DPZ 2.08%) closed at an all-time high of $564.33 per share. And investors were undoubtedly thrilled. After all, anyone who invested $10,000 just five years earlier had seen the value climb to over $35,000 during this time.

Unfortunately, Domino’s Pizza stock hasn’t performed as well for investors since that all-time high on the final day of 2021. Since then, shares have dropped by about 20% — not something one wishes to see after patiently holding for about 3.5 years.

Image source: Getty Images.

Domino’s has only grown at a modest pace in recent years, which is certainly contributing to its underwhelming stock performance. Revenue in 2024 was only 8% higher from revenue in 2021. And its earnings per share (EPS) of $16.69 in 2024 was only up 23% from EPS of $13.54 in 2021.

Companies that only post single-digit growth numbers often fail to outperform the S&P 500 over the long term. And that’s what’s happened with Domino’s Pizza stock, considering the S&P 500 is up more than 30% since Domino’s hit its all-time high.

Can Domino’s stock do better from here?

Domino’s Pizza needs better growth for its stock to perform better. And being the largest pizza chain in the world already, this could be challenging. Management only expects single-digit top-line growth for the foreseeable future. But with share repurchases, it could push its EPS growth to about 10% annually.

This still might not be enough growth on the bottom line to outperform the S&P 500 over the long term. That said, it could be enough growth to allow the stock to rise in coming years, albeit at a modest pace.

Therefore, while it may not be a market beater, investors can be encouraged that Domino’s Pizza could reach a new all-time high within the next few years.

NuScale Power (SMR 2.45%) is making material progress with its business, and Wall Street has rewarded it for its achievements. But it still hasn’t reached one critical milestone. And how you interpret that fact will make a big difference in whether or not you’ll think that NuScale Power is a buy right now.

What does NuScale Power do?

At this moment, NuScale Power is largely a consultant, providing analysis services that generate revenue. But what it really wants to do is build small modular nuclear reactors, also known as SMRs. The consulting work it is providing now is to Romanian power company RoPower, which is trying to reach a final decision on whether it will build a power plant using NuScale’s SMRs.

Image source: Getty Images.

SMRs are a new technology in the nuclear power industry, which up until now has featured large, permanently installed reactors constructed on site. These are costly and time consuming to build. SMRs would change the nuclear power model in a big way. The reactor would be built in a factory while the facility is built concurrently, helping to reduce costs and increase speed. They would be small enough to transport to the locations where they were needed and safe enough to be placed relatively close to population centers. They could be a great alternative power source for companies from electric utilities to data center owners.

NuScale has achieved some important milestones. For example, management likes to highlight that the company “remains the only SMR technology company to have received approval from the U.S. Nuclear Regulatory Commission (NRC) for its SMR technology design.” On that front, NuScale has received approval for an upgraded version of its tech that can provide a higher electricity output than its original model. So not only has its SMR design been approved by the NRC, but it has been approved twice.

The next big step for NuScale

The biggest achievement for NuScale so far, however, was winning a contract to provide design and engineering services for six SMR modules to RoPower. That work is being done in preparation for the customer’s final decision on whether to go ahead with the project, under which those six modules would be linked together to create one large nuclear power plant. RoPower is expected to make the final call on this capital investment in the first half of 2026. The timeline for that decision has been pushed out a bit from its earlier target date: That isn’t unusual in this industry, but it highlights the risks for NuScale Power and its investors.

Right now, NuScale Power is providing consulting services to RoPower to help the utility make the final call on the investment. This is a big deal: NuScale Power is already investing in the production of the parts needed to build the six SMRs that RoPower is expected to buy. And, perhaps even more important, the RoPower deal would be the first commercial sale of NuScale’s SMRs. If the project gets the green light, NuScale will have a customer to use as an example when it’s trying to sell additional SMRs to new customers.

In other words, there is a lot on the line for NuScale, and over the next year or so, investors will learn a lot about its future. Given the roughly 300% increase in NuScale Power’s stock price over the past year, however, it looks like investors have priced in a lot of expected good news. And that creates a problem for investors.

Buy now or wait for the RoPower deal?

Because the company is not profitable, investors can’t use the price-to-earnings ratio to put a valuation on it. Meanwhile, because its sales are so modest, its price-to-sales ratio is a very high 70. Even so, if you’re a fairly aggressive investor and you expect a positive outcome with the RoPower deal, you should consider buying NuScale Power today. If that deal to actually construct and install those six SMRs does go through, the future will look materially brighter for NuScale Power, and likely for its stock, too.

That said, more conservative investors interested in the company would probably be better off waiting for the RoPower deal to actually get finalized. If the RoPower transaction falls apart, NuScale’s stock could slide significantly. While waiting to buy could mean missing out on some of the potential gains, it probably won’t mean missing out on all of them, given the long-term opportunities presented by SMR technology.

Palantir (PLTR -0.98%) stock saw another pullback in Monday’s trading. The company’s share price closed out the daily session down 1% but had been down as much as 5.9% shortly before 10 a.m. ET. The S&P 500 (^GSPC -0.43%) ended the day down 0.4%, and the Nasdaq Composite (^IXIC -0.22%) was down 0.2%.

While there doesn’t appear to have been any major business news behind Palantir’s valuation contraction today, the broader market saw moderate selling pressures that seem to have impacted the stock. The stock is now down 10% over the last week of trading and 16% from its all-time high.

Image source: Getty Images.

Is Palantir stock a buy right now?

Palantir is one of the strongest overall players in the artificial intelligence (AI) software space, and it’s been posting momentous sales and earnings growth. On the other hand, it’s not as if the company hasn’t already gotten a lot of valuation credit for its strong business growth and long-term expansion opportunities.

PLTR PE Ratio (Forward) data by YCharts

Trading at approximately 90 times this year’s expected sales and 242 times expected non-GAAP (generally accepted accounting principles) adjusted earnings, Palantir has a valuation profile that stands out as being extraordinarily growth dependent even among the field of high-flying AI stocks. Despite the stock seeing a significant pullback from its all-time high, Palantir is still up 108% across 2025’s trading and 1,840% over the last three years.

Recent sell-offs connected to macroeconomic risk factors and concerns about the current state of practical business applications for AI technologies are a reminder of the high level of risk that comes with investing in a company that already has a lot of explosive growth priced into its valuation. Along those lines, Palantir is probably still too richly valued to be a sensible investment for investors without very high levels of risk tolerance.

While I think the stock looks quite risky right now, I also think that it has a good chance of significantly outperforming the broader market over the next five years. In addition to very strong momentum with private-sector customers, Palantir’s heavy exposure to the defense industry suggests that the stock comes with characteristics that help offset some of the risks associated with the biggest sources of potential geopolitical destabilization for the market.

Investors sure liked what they saw when peering through the viewfinder of GoPro (GPRO 35.54%) stock on Monday. Absent of any proprietary, share price-moving news, the company seemed to benefit from what appeared to be the latest meme stock rally.

With this considerable tailwind, GoPro shares closed the day almost 36% higher in price, numerous orders of magnitude better than the S&P 500‘s (^GSPC -0.43%) 0.4% drop.

A modern watercooler stock

GoPro is one of the latest crop of meme stocks, and as ever, that clutch of titles can rocket higher or plunge lower, depending on internet chatter.

Image source: Getty Images.

This has happened to GoPro before, and it seems as if it fueled Monday’s surge — after all, the company had no news of its own to report, nor did it disclose any developments in its operations (or with its stock) in any regulatory filing.

One key element that puts GoPro in a position where it can be very volatile on the market is its extremely low price (which was barely over $1.20 Monday morning before the rally kicked in). At such a level, it doesn’t take much to move a stock drastically either up or down, so even a little bit of online buzz can move GoPro sharply.

A concerning quarter

Although the company didn’t have any news to report today, it’s hit the headline in recent trading sessions. Earlier this month it published its second-quarter earnings report, revealing a worrying (18%) year-over-year decline in revenue, on the back of a 23% decline in action cameras, its main product category.

It also posted the latest in a string of bottom-line losses, although that latest deficit was narrower than that of the year-ago period.

Dutch Bros (BROS 6.46%) stock is finally getting some market love. It’s more than doubled in value over the past year, and it trades at a P/E ratio of 193. That’s expensive by almost any standard, but it’s not the only valuation ratio worth a look. The valuation could also be justified given the company’s growth prospects.

Here’s a deeper look.

Image source: Dutch Bros.

High growth, high profits for Dutch Bros

With performance as good as Dutch Bros’ has been posting since it went public in 2021, it’s surprising that it’s taken the market this long to take notice. It reliably reports high sales growth, and profits continue to rise. In the 2025 second quarter, revenue increased 28% year over year, while net income rose from $22.2 million last year to $38.4 million this year.

However, there were reasons the market was concerned until recently. It didn’t report its first annual profit until 2023. In addition, investors were worried about its chances when same-store sales growth was low, even in negative territory for a short time, and most of the increase was coming from price hikes.

Dutch Bros has moved way past that now. Earnings per share (EPS) increased from $0.03 to $0.34 in 2024, and from $0.12 to $0.20 in the 2025 second quarter year over year. Same-store sales were up 6.1% in the quarter, with a 3.7% rise in transactions.

More importantly, analysts expect EPS to increase about 350% over the next three years.

Data by YCharts.

There’s a lot of expectation here. Dutch Bros has a huge growth runway in opening new stores, and net income is following. While there’s some growth built into Dutch Bros’ current price, the opportunity is enormous, which is why it commands a premium valuation. As for other valuation methods, the forward one-year P/E ratio is a more reasonable 74, and the price-to-sales ratio is a very reasonable 5.

Warren Buffett’s incredible track record makes him one of the best investors ever. There’s no denying that. His successful ability at allocating capital has made Berkshire Hathaway a trillion-dollar business. It makes sense that the average investor might keep a close eye on what’s in its portfolio in order to find potential ideas.

As of Aug. 21, the conglomerate owned more than 605 million shares in a leading bank, a holding valued at $29 billion, making it Berkshire’s third largest position. While this financial stock has produced a total return of more than 118% in the past five years, Berkshire has been a notable seller in the past year or so.

So should you still buy shares right now?

Image source: Getty Images.

Operating from a position of strength

The business in Berkshire’s portfolio that investors might consider is Bank of America (BAC -0.10%). With $3.4 trillion in total assets, it’s the second-biggest bank in the U.S. based on this metric. Based on the company’s second-quarter financial performance, investors have reasons to be confident.

During the quarter, net revenue increased by 4% year over year. There was 7% loan growth. Net interest income was up for the fourth straight quarter. In a sign of credit quality, the net charge-off rate improved compared to Q2 2024. And the bank remains a leader in deposit gathering, with top retail market share.

Bank of America is a dominant financial services entity. Besides the factors already mentioned, one obvious reason why is because of how diversified its operations are. It has its hands in consumer and small business banking, corporate and investment banking, capital markets, and wealth management. If any segment comes under weakness, it can be offset by better results elsewhere.

Investors should follow in Buffett’s footsteps in the sense that they should try and identify businesses that have an economic moat, or durable competitive advantages that help them outperform rivals and new entrants. Bank of America fits the bill. Its massive scale gives it a cost advantage. And as is the case with banks, there are switching costs for customers.

Tremendous capital returns

During the second quarter, Bank of America generated $7.1 billion in net income. The business is consistently profitable. This setup allows management to return lots of capital to shareholders.

Bank of America bought back $5.3 billion worth of its own stock in Q2. And it paid out $2 billion in dividends. The current dividend yield of 2.29%, which is significantly higher than the S&P 500‘s 1.25%, provides a nice income stream.

Investors can expect the capital returns to continue. Bank of America just approved authorization for $40 billion in share repurchases. And in the past decade, the dividend has climbed 460%.

Taking a cautionary view

Valuation can have a notable impact on the returns investors achieve. Bank of America shares trade at a price-to-book (P/B) ratio of 1.3 today. This is higher than the trailing five- and 10-year average.

Additionally, investors have to think about the broader economy. For what it’s worth, there’s always a certain level of uncertainty. And no one has any clue what interest rates are going to do, although there is a view that they will come down. Regardless, there’s always the threat of a looming recession, which would negatively impact Bank of America and the industry at large. This is something bank investors can’t ignore.

The fact that Buffett and Berkshire have been selling could be an ominous signal. And maybe it’s best if investors avoid Bank of America right now. That perspective could change if the valuation was much more compelling, like at a P/B multiple below one.