stocks

Healthcare stocks have struggled since interest rates began climbing in 2022. Rising yields pulled capital away from speculative biotech and drug development, pushing valuations lower even as research pipelines advanced. Many promising companies now trade at a fraction of their previous highs, while investors pour money into artificial intelligence (AI) names trading at record multiples.

That gap creates opportunity. Several healthcare innovators are approaching pivotal stages of development, yet their share prices still reflect caution rather than potential. These four healthcare stocks stand out as timely buys in a market that has overlooked their progress.

Image source: Getty Images.

Commercial momentum building

Crispr Therapeutics (CRSP -2.44%) and Vertex Pharmaceuticals (VRTX -1.68%) developed Casgevy, the first gene-editing treatment approved for sickle cell disease and beta-thalassemia, two inherited blood disorders.

Vertex reported $30 million in Casgevy sales in the second quarter of 2025, a sharp uptick from prior quarters, showing the drug is starting to gain traction in the marketplace. Crispr receives 40% of the program’s profits through its partnership with Vertex.

By mid-2025, 75 hospitals and clinics worldwide had been cleared to administer Casgevy, and approximately 115 patients had begun the treatment process. As more centers gain experience, patient numbers and sales are expected to grow through 2025 and 2026.

Outside of Casgevy, Crispr is working on several new treatments it fully owns, such as CTX112, a cell-based therapy in early testing for cancer and immune diseases. Results from CTX112 or other key pipeline candidates in late 2025 could provide a boost to the stock if the data show clear progress.

Late-stage catalysts approaching

Intellia Therapeutics (NTLA -3.81%) is advancing two CRISPR gene-editing programs toward key readouts. It recently completed enrollment in its Phase 3 study for hereditary angioedema, a rare disease that causes sudden swelling attacks, using a treatment called lonvoguran ziclomeran (NTLA-2002). Topline results are expected in the first half of 2026, with a regulatory filing planned later that year.

Intellia is also pushing forward with its program for ATTR amyloidosis, a disease in which abnormal proteins build up and damage the heart and nerves, using a treatment called nex-z (NTLA-2001). A pivotal trial is underway, and earlier testing showed that a single dose can reduce the TTR protein by approximately 91% in many patients, with data showing sustained reductions over time.

If both programs succeed, Intellia could become one of the first companies to win approval for a single-dose, in vivo CRISPR therapy (where gene editing happens directly inside the body) — a potential breakthrough that could lift investor expectations and reset how gene-editing companies are valued.

Platform plays with pharma validation

Recursion Pharmaceuticals (RXRX -10.24%) runs a drug discovery platform powered by AI and backed by big pharma partnerships such as Sanofi, Roche, and Bayer. In its latest results, the company pulled in $19.2 million in revenue — primarily from collaborations.

Several clinical trial updates are expected later in 2025. If those trials show its AI-discovered drugs perform well in patients, the market may begin valuing its individual programs more favorably — and that could unlock significant upside for the stock.

Viking Therapeutics (VKTX -4.00%) is advancing VK2735, a dual GLP-1/GIP agonist, through late-stage development for obesity. In its mid-stage study, the injectable version produced up to 14.7% average weight loss after 13 weeks and is now being tested in a large late-stage trial across obesity and type 2 diabetes populations.

The stock declined in August 2025 after results from the oral formulation showed higher dropout rates caused by gastrointestinal side effects from rapid dose escalation. The findings reflected how the drug was given, not an underlying problem with the compound.

With a slower titration schedule, tolerability could improve meaningfully. Both the injectable and oral versions remain key to Viking’s obesity strategy, positioning the company to compete in a market expected to exceed $100 billion in annual sales.

Like it or not, and whether we trust driverless vehicles yet or not, they’re on the way, and the future is coming faster than many investors realize. The driverless vehicle market has enormous growth potential and is projected to be worth trillions of dollars in a decade’s time.

Don’t take it from me: Goldman Sachs Research predicts that robotaxis’ ride-share market alone is on the path for a 90% compound annual growth rate between 2025 and 2030, and that’s merely scratching the surface. If you’re looking to dip your toes into what could be a generational investing opportunity, here are three stocks to keep an eye on.

One way to play robotaxis

Mobileye Global (MBLY -6.56%) is in the business of developing and deploying Advanced Driver Assistance Systems (ADAS) and autonomous driving technologies and solutions. With a comprehensive collection of software and hardware technologies, Mobileye can offer end-to-end products and services for automakers. Investors should look at Mobileye as a solid robotaxi investment for those who don’t want to deal with the drama currently surrounding Tesla.

With the automotive industry heading toward driverless vehicles, Mobileye’s technology and systems will bolster automotive safety, productivity, and vehicle utilization through solutions such as Supervision, Chauffeur, Drive, and EyeQ. Meanwhile, management has been working hard to secure new ADAS deals with large customers, while finding new opportunities with untapped clients. One driving force for the company is a growing adoption of multicamera setups due to the need for increased safety and a push toward hands-free highway driving.

Adding to Mobileye’s growth is its strategic partnerships, including ZEEKR, using Mobileye as its launch partner for its ADAS, and its design wins with automakers such as Porsche and Mahindra, among other major OEMs. Just this spring, Volkswagen announced a collaboration with Mobileye to improve safety and driving comfort for some of its upcoming vehicle pipeline.

The company remains unprofitable, with full-year guidance expecting an operating loss between $436 million to $512 million. That said, Mobileye boasts roughly $1.7 billion in cash and cash equivalents, rising free cash flow, very little debt, and should be able to navigate choppy waters as the industry slowly figures out the path to full autonomous vehicles.

The business of connectivity

Aptiv PLC (APTV -2.47%) is a technology company working to bring the next generation of active safety, autonomous vehicles, smart cities, and connectivity through its decades of experience pioneering advances in the automotive industry.

While the stock has faltered from its all-time highs as electric vehicle hype died down with slower-than-anticipated adoption in the U.S. market, it’s still performing well, with earnings expected to check in at $7.48 per share in 2025, up significantly from $2.61 in 2021 — a compound annual growth rate of 30%.

Image source: Aptiv.

But its growth prospects might improve even more, with the company’s business split on the horizon for the first quarter of 2026. Aptiv plans to split into two companies: one that will focus on slower-growth electrical distribution systems (EDS), and the second on faster-growth safety and software — the latter aimed at a more driverless vehicle focus.

It’s easy to understand the rationale behind the business breakup when you consider the EDS business generated 2024 sales of $8.3 billion at earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margins of 9.5%, while the safety and software generated 2024 sales of $12.2 billion with EBITDA margins nearly double at 18.8%.

The new Aptiv with a focus on safety and software that enable higher levels of autonomous functions won’t be limited to vehicles either, with potential applications for planes and other machines. Aptiv has already begun branching out its overall business with its communications software acquisition of Wind River in 2022.

All things autonomous

Hesai Group (HSAI -11.13%) is a global leader in lidar solutions, with its products enabling a wide range of applications including passenger and commercial vehicles ADAS, autonomous vehicles, robotics, and nonautomotive applications such as last-mile delivery robots.

Throughout the company’s second quarter, Hesai secured a notable number of new design wins through 2026, with 20 models from nine leading OEMs, highlighted by a platform win for multiple 2026 models with one of its top two ADAS customers. The design wins help cement lidar as a standard feature across the specific customer’s model lineups and will drive the company’s order book higher in the near term.

Outside its automotive wins, the company’s robotics business is also doing well, ranking No. 1 in lidar shipments in China for the first half of 2025, per Gaogong Industry Research Institute. Its robotics business is well positioned for the wave of physical artificial intelligence (AI), with lidars becoming essential for AI to perceive and sort the dynamic world we operate in, especially in driverless vehicles.

“In the first six months of 2025, total shipments have already surpassed those of full-year 2024. According to Gasgoo, we ranked first in installation volume among long-range lidar suppliers during this period,” said Hesai cofounder and CEO Yifan “David” Li in a press release.

Are the stocks buys?

The number of robotaxis and driverless vehicles on the roads is set to increase in the coming years, especially as leading autonomous vehicle operators reduce costs and begin scaling the business. Right now, roughly 1,500 such vehicles operate across a handful of U.S. cities, but that figure is expected to soar to about 35,000 across the country in 2030.

Even then, driverless vehicles will represent a fraction of the rideshare market, leaving plenty of long-term growth for investors who believe these companies have injected their technologies and solutions into the industry. Mobileye, Aptiv, and Hesai are all proven companies with products poised to push the boundaries of driverless vehicles, robotaxis, and ADAS going forward, and savvy investors would be wise to keep them on a watch list.

ADVERTISEMENT

Rare earth stocks climbed in the US after Beijing tightened its control over these critical materials, used in the vast majority of electronic devices, from smartphones and cars to ballistic missiles.

Across the Atlantic, European markets opened in a mixed mood while the Middle East peace deal progresses, brokered by US President Donald Trump.

With investors also watching political uncertainty in France, the pan-European STOXX 600 was up around 0.1% at 11.45 CEST, and Paris’ CAC 40 also gained 0.1%.

Frankfurt’s DAX and London’s FTSE 100 both slipped 0.1%, after an earlier rise for the DAX.

“The FTSE 100 was stuck in the mud as the rest of Europe ploughed ahead at the end of the trading week,” said Russ Mould, investment director at AJ Bell.

“Strength in consumer stocks and utilities was offset by weakness in miners and healthcare,” he said — adding: “it was also notable that defence stocks were being sold down, including Babcock, which has rocketed this year.”

In other news, oil prices were down on Friday morning. The US benchmark crude cost around 0.4% less than at the previous close, and traded at $61.26 per barrel at around 11.45 CEST. The international benchmark Brent lost 0.49% and cost $64.90 per barrel at the same time.

Gold prices also rose after hitting new records recently, trading at $4,018.00 on Friday morning in Europe.

US futures were up slightly, the euro gained against the dollar at $1.1575, and the greenback slipped against the Japanese yen, to ¥152.7950. The British pound also fell against the dollar and cost $1.3290.

Rare earths companies gained overseas

As mining stocks led losses in Europe on Friday amid developments in Beijing, the STOXX Europe Basic Resources index shed 0.78%.

This follows a rally in the US, where rare earth stocks rose considerably after China announced that it would tighten control over its exports of these materials.

The country is dominating the market for rare earths. The world’s second-largest economy accounts for 70% of the global supply of these assets that are hugely significant for defence and technological infrastructure.

Following the news, investors in the US placed their hopes on American alternatives. US rare earth and critical mineral miners’ share prices surged on Thursday, partially due to market speculation that Washington will invest more in building out a domestic supply chain.

Many of these companies have seen their prices increase for months now, with several doubling or tripling since the beginning of the year.

USA Rare Earth Inc., a firm building a domestic rare earth magnet supply chain, gained nearly 15% on Thursday. Since January, it has risen 151%.

MP Materials Corp, an American rare-earth materials company headquartered in Las Vegas, Nevada, also gained more than 2.4% on Thursday, while it is up 341% since January.

Another company, Denver-based Energy Fuels Inc., gained 9.4%, bring its year-to-date rise to 284%.

NioCorp Developments, which benefits from Pentagon support, gained more than 12%, Rare Element Resources Ltd gained more than 10%, and Texas Mineral Resources Corp. gained 9.6% on Thursday.

Meanwhile, Australian rare-earth mining company Lynas Rare Earths lost nearly 3.8% in the Asian trade, and Australia’s Iluka Resources lost 3.22%.

Chinese Shenghe Resources, a partly state-owned rare earths mining and processing company listed on the Shanghai stock exchange, lost 5%.

Beijing’s measures mean that companies need to apply for a licence to export products containing certain Chinese-sourced rare earth metals.

The market has been rallying, pushing up valuations on lots of popular stocks to the point where they are no longer good buys. But there are still pockets of value to be found, even within the tech sector. This includes companies that are riding the wave of artificial intelligence (AI) growth.

Let’s look at three bargain basement stocks that are ready for a bull run that you might want to consider buying now.

Image source: Getty Images.

1. Taiwan Semiconductor Manufacturing

Even after a strong run this year, Taiwan Semiconductor Manufacturing (TSM 3.57%) still looks inexpensive relative to the role it plays in the semiconductor ecosystem. The stock trades at a forward price-to-earnings (P/E) ratio of 26.5 times 2026 earnings estimates, which is a bargain for a company that controls nearly all of the world’s most advanced chip production. Most investors focus on Nvidia when thinking about AI chips, but without TSMC’s technological expertise and scale, those AI chips would not even make it to market.

While Intel has been seeing a lot of investments recently, neither it nor any other rival has shown the ability to consistently shrink node sizes while keeping high production yields like TSMC. That has turned TSMC into a critical partner for chip designers who need its support for their future chip roadmaps. It has also given the company some nice pricing power at the same time that chip demand is on the rise. Management expects AI chip demand to grow at a compound annual growth rate (CAGR) of more than 40% annually through 2028, which is significant given how large the AI chip market has already become.

Between its growth and valuation, TSMC is a bargain AI stock to buy.

2. Pinterest

Pinterest (PINS 1.08%) does not get the same attention as rival Meta Platforms when it comes to AI. However, don’t let that fool you — Pinterest is also successfully using AI to drive growth. Meanwhile, investors can scoop up the stock on the cheap, with it trading at a forward P/E of just 15 times 2026 analyst estimates. For a company that has consistently been growing its revenue at a high- to mid-teens rate and seeing operating margin expansion, that’s a bargain price.

With the help of AI, Pinterest has transformed its platform from simply a digital vision board into a shoppable hub. It’s using AI to power visual search and improve personalization, which makes it easier for users not just to find inspiration but then to make purchases based on that inspiration directly from its site.

Meanwhile, behind the scenes, the company’s automated ad tool, Performance+, lets brands better target users and bid more effectively. It’s also formed a partnerships with Instacart so users who buy items from its site can get them delivered the same day.

Pinterest also has a big opportunity to better monetize its large international user base, and it has turned to Alphabet to help reach advertisers in emerging markets. Last quarter, its average revenue per user (ARPU) grew 26% in Europe and 44% in the rest of the world. That’s strong growth; however, its ARPU still trails peers by a wide margin, so there is still plenty of ARPU upside ahead.

Pinterest is a stock with a long runway for growth, trading at a discounted price.

3. GitLab

GitLab (GTLB 2.56%) may not be the first stock that comes to mind when you think of AI, but it is becoming an important player because of how much it improves developer productivity. Despite that role, the stock trades at a forward price-to-sales (P/S) ratio of under 7 times 2026 estimates, which is low for a company growing revenue close to 30% a year with gross margins near 90%.

Its Duo AI agent has been a game-changer by automating the routine work that clogs up a developer’s day. Developers spend only about 20% of their time coding, so freeing up more time to write code means more projects get done, which ultimately drives demand for GitLab’s platform. Early fears that AI might reduce the need for human coders have so far proven unfounded, with companies actually expanding their use of GitLab. This is evident in its net dollar retention number of 121%.

However, perhaps the most exciting part of the GitLab story is its announcement that it is shifting to a hybrid seat-plus-usage pricing model. This should let GitLab capture more value as usage scales, providing a built-in growth catalyst that is not yet fully priced in. With the AI-driven software buildout just getting started, the market seems to be overlooking GitLab’s role in that expansion.

For the better part of the last three years, seemingly nothing has sparked investor interest quite like the evolution of artificial intelligence (AI). Empowering software and systems with the tools to make split-second decisions without human intervention, as well as to become more proficient at their tasks over time, is viewed as a game-changing technology for most industries around the globe.

Over the last three decades, there’s pretty much always been a next-big-thing trend or technology to captivate the attention and capital of Wall Street and investors. Prior to AI, there was the advent of the internet, genome decoding, nanotechnology, 3D printing, blockchain technology, and the metaverse, to a name a few key trends.

But in rare instances of outsize optimism on Wall Street, two or more game-changing trends can coexist, as we’re witnessing now with the dual rise of AI and quantum computing.

Image source: Getty Images.

The four biggest pure-play quantum computing stocks — IonQ (IONQ 0.46%), Rigetti Computing (RGTI 5.30%), D-Wave Quantum (QBTS 2.00%), and Quantum Computing (QUBT -0.81%) — have rallied between 700% to 5,130%, respectively, over the trailing year (as of Oct. 3). Though optimism is readily apparent, there’s no denying that the time to be fearful when others are greedy has arrived for these four stocks.

What is quantum computing, and why are investors so excited about it?

Quantum computing relies on quantum mechanics to solve complex problems that traditional computers can’t do. What makes quantum computing so exciting is its many real-world possibilities.

For example, quantum computers can be used to run simulations to determine how molecules would behave. These interactions can be quantified to narrow best courses of actions when developing drugs and targeting hard-to-treat diseases. Think of it as genome decoding that’s been ramped up to improve the likelihood of success when developing novel therapies.

Quantum computers can also be deployed to vastly improve cybersecurity solutions. This technology can potentially break existing encryption methods and lead to the development of quantum-resistant solutions that create lock-tight protections for cloud-based systems and end users.

But perhaps the most exciting aspect of quantum computing is what it might be able to do for the AI revolution. Quantum computers can speed up the process by which AI algorithms help software and systems “learn” and become more proficient at their tasks. Training large language models could occur significantly faster with quantum-capable solutions.

Based on one of Wall Street’s lofty estimates, which comes courtesy of Boston Consulting Group, quantum computing can create between $450 billion and $850 billion in global economic value 15 years from now. This high-ceiling estimate corresponds with substantial forward-year sales growth forecasts for the aforementioned pure-play quantum computing stocks:

• IonQ: projected sales growth of 87% in 2026
• Rigetti Computing: projected sales growth of 161% in 2026
• D-Wave Quantum: projected sales growth of 56% in 2026
• Quantum Computing: projected sales growth of 412% in 2026

Though optimism is through the roof, billionaire Warren Buffett’s famous investing advice rings loud: “Be greedy when others are fearful, and be fearful when others are greedy.”

Image source: Getty Images.

The time to be fearful with quantum computing stocks is here

Berkshire Hathaway‘s billionaire boss Warren Buffett has absolutely crushed the benchmark S&P 500 over six decades by sticking to this ethos. He pounces when fear creates advantageous price dislocations and sits on his proverbial hands (or sells shares of existing holdings) when valuations no longer make sense. This latter scenario encompasses the need to be fearful when others are being greedy.

There’s no denying that, on paper, quantum computing offers a compelling long-term growth story. The possibility of improving drug development, cybersecurity, supply chains, financial modeling, and AI algorithms, among other use cases, offers intrigue.

But there’s also a long list of reasons why, if you own shares of IonQ, Rigetti Computing, D-Wave Quantum, and/or Quantum Computing, cashing in some or all of your chips right now makes complete sense.

To begin with, history hasn’t exactly been kind to game-changing technologies in their early expansion phase. Looking back more than 30 years, there hasn’t been a next-big-thing trend that’s avoided an eventual bubble-bursting event. Put in another context, investors and businesses have repeatedly overestimated the early stage adoption rate and/or utility of these newer technologies, leading to eventual disappointment.

While I’ve made this same argument with AI, it rings 100 times truer when it comes to quantum computing. Whereas AI hardware is flying off the proverbial shelf, and Wall Street’s most-influential businesses are eagerly deploying AI solutions, quantum computing utility is still very minimal. All the hallmarks of a bubble are firmly in place.

Secondly, these four pure-play stocks are all losing money hand over fist on an operating basis and aren’t particularly close to demonstrating their operating models are viable. Through the first-half of 2025, IonQ’s operating loss more than doubled to $236.3 million from the prior-year period, while Rigetti Computing’s operating loss jumped 27%.

IONQ PS Ratio data by YCharts.

To expand on this point, all four pure-play stocks are valued at price-to-sales (P/S) ratios that absolutely scream “bubble!” Companies on the leading edge of prior next-big-thing trends peaked at P/S ratios ranging from 30 to 40, with a little wiggle room in each direction. The trailing-12-month P/S ratios of Wall Street’s four quantum computing superstars are:

• IonQ: 319
• Rigetti Computing: 1,282.2
• D-Wave Quantum: 375.6
• Quantum Computing: 11,612.3

In no universe do the multibillion-dollar valuations currently assigned to these four stocks justify the relative pittance in continuous sales they’re generating. It’s another sign of a seemingly imminent bubble-bursting event.

The final reason investors should be fearful with these pure-play quantum computing stocks is because the “Magnificent Seven” have deeper pockets and an inside edge to the infrastructure that can fuel an eventual quantum computing revolution. Although companies like IonQ have landed meaningful partnerships, Mag-7 companies have the ability to aggressively spend on quantum computing solutions that may eventually lessen the need for hardware and software solutions from companies like IonQ, Rigetti, D-Wave, and Quantum Computing.

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

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

Image source: Getty Images.

1. Walmart

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

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

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

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

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

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

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

2. Johnson & Johnson

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

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

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

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

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

Destiny Wealth Partners reported in an SEC filing on Monday that it sold 59,354 shares of the iShares Biotechnology ETF (IBB) in the third quarter—an estimated $8.1 million transaction based on average pricing for the quarter.

What happened

According to a filing with the Securities and Exchange Commission on Monday, Destiny Wealth Partners reduced its holding in the iShares Biotechnology ETF (IBB) by 59,354 shares during the quarter. The estimated value of the shares sold was $8.1 million. The fund now holds 16,430 IBB shares valued at $2.4 million as of September 30.

What else to know

This sale left IBB representing 0.3% of Destiny Wealth Partners’ 13F reportable assets.

Top holdings after the filing:

• JAAA: $46.41 million (5.7% of AUM)
• VUG: $40.11 million (4.9% of AUM)
• DFLV: $32.03 million (3.9% of AUM)
• JCPB: $28.13 million (3.45% of AUM)
• AMZN: $27.70 million (3.4% of AUM)

As of Tuesday afternoon, IBB shares were priced at $149.73. The fund is up about 5% over the year.

Company overview

Company snapshot

• IBB seeks to track the investment results of a biotechnology-focused equity index, investing at least 80% of assets in component securities and economically similar investments.
• It operates as a non-diversified ETF, with periodic rebalancing to maintain index alignment.

The iShares Biotechnology ETF (IBB) offers investors access to the U.S. biotechnology sector through a passively managed fund. With over $6 billion in market capitalization, the ETF provides exposure to biotechnology companies.

Foolish take

Destiny Wealth Partners’ decision to unload roughly $8.1 million in iShares Biotechnology ETF (IBB) shares adds to a broader theme in markets this year: Institutional investors have been cooling on biotech. The sector has struggled to regain its pandemic-era momentum as investors favor AI, energy, and industrial plays. IBB is up about 5% over the past year, trailing the S&P 500’s 18% gain.

IBB’s two largest holdings—Vertex Pharmaceuticals and Amgen—have each slumped, down about 8% and 7%, respectively, over the past year. That drag has offset strength from smaller, high-growth biotech names focused on oncology and gene therapy. Meanwhile, the fund’s expense ratio of 0.44% sits slightly above broad-market ETF averages, reflecting the niche exposure investors are paying for.

For long-term investors, IBB still offers diversified exposure to the innovation pipeline driving future drug breakthroughs—but near-term returns will depend on FDA approvals, pricing clarity, and investor appetite for higher-risk growth sectors.

Glossary

ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.

Biotechnology ETF: An ETF focused on companies in the biotechnology industry, such as drug development and medical research.

AUM (Assets Under Management): The total market value of assets that an investment manager or fund controls on behalf of clients.

13F reportable AUM: The portion of a fund’s assets that must be disclosed in quarterly SEC Form 13F filings, typically U.S. equity holdings.

Non-diversified ETF: A fund that invests in fewer securities or sectors, increasing exposure to specific industries or companies.

Index-based selection: An investment strategy where holdings are chosen to match a specific market index, rather than by active management.

Component securities: The individual stocks or assets that make up an index or ETF portfolio.

Dividend yield: The annual dividend income expressed as a percentage of the investment’s current price.

Total return: The investment’s price change plus all dividends and distributions, assuming those payouts are reinvested.

Rebalancing: Adjusting a fund’s holdings periodically to maintain alignment with its target index or asset allocation.

You can make a little money go a long way, as long as you invest in the right growth stocks. The risks are understandably high. The valuations may seem outlandish today, but interesting things happen to stocks that are price for perfection when reality exceeds perfection.

I believe that Figma (FIG 7.74%), Axon Enterprise (AXON 0.90%), and Toast (TOST 0.85%) are three growth stocks to invest $1,000 right now. Let’s take a closer look.

1. Figma

Thrill seekers ride roller coasters over the summer. Investors looking for white-knuckled ups and downs found that in Figma. The developer of design tools for websites and mobile apps went public less than three months ago at $33. The IPO has not stood still. Figma traded as high as $143 out of the gate. It is trading 60% below that early August peak as of Monday’s close.

Figma hit the market checking all of the boxes and buzzwords that rightfully make growth investors tingly with wealth-altering potential. There are other cloud-based platforms that help spruce up and simplify digital offerings, and Figma isn’t the only one putting artificial intelligence (AI) front and center. It’s competitively priced, as low as $3 to as high as $90 a month for its premium subscriptions. Free starter accounts woo potential payers.

Image source: Getty Images.

You can’t be a growth stock without growth, and Figma delivers on that front. Revenue rose 48% last year. Canva — who could go public later this year — grew its top line at half of Figma’s clip in 2024. Canva is admittedly three times as a large as Figma in terms of revenue. Desktop publishing pioneer Adobe (ADBE 0.98%) competes with Figma and Canva with its Adobe XD vector design tool. It’s growing its overall business at a 10% to 11% pace for the fourth consecutive year.

Growth is slowing for Figma. Revenue rose 46% through the first three months of this year. Last month it announced 41% year-over-year growth for the second quarter, its first report as a public company. Don’t let that deter you from this opportunity to pick up Figma at a deep discount to its summertime high. Figma is now profitable. It’s also growing in popularity. Its customers are digging in with Figma. Its net dollar retention rate for customers with annual recurring revenue north of $10,000 is currently 129%. Put another way, major returning accounts are spending 29% more over the past year through Figma than the prior 12 months.

The stock isn’t cheap at 28 times trailing revenue and a forward earnings multiple approaching 200. This will scare many investors away and attract short sellers. Let it happen, Figma investors. When Canva surges on its IPO it will only draw more attention to the smaller player growing a lot faster.

2. Axon

If you’re comfortable with Figma-esque multiples, but want a more seasoned public company, Axon fits the bill. There’s a good chance that it has video evidence of its success. Axon is the leading provider of wearable body cameras used by law enforcement and other groups to record confrontations and events. It also runs Evidence.com, the cloud-based platform that stores its growing video files. Oh, it’s also still making its iconic TASER stun guns.

Axon is trading for 24 times revenue and 180 times earnings. It’s not for the squeamish, but it has always climbed the valuation wall of worry. It’s a 30-bagger over the past decade, and a still market-thumping 7-bagger over the last five years. It has earned the upticks. Annual revenue growth has topped 20% in each of the past 10 years, and business is actually picking up lately. This will be the third consecutive year of better-than-30% top-line growth. Customers pay Axon a premium for the security it provides. Investors pay a premium on Axon for the growth it provides.

3. Toast

Toast rounds out this list of companies providing tech tools to enhance the unlikely markets of site design, enforcement, and in this case restaurant stocks. Toast provides a cloud-based solution for eateries that is more than just the point-of-sale transaction settler that diners see. It helps operators manage everything including inventory, loyalty programs, table turns, and third-party delivery orders.

Success breeds success. Toast is becoming an essential investment in the cutthroat restaurant industry. The 148,000 different locations it’s currently serving is a 24% jump over the past year. There are currently challenges for the industry, but wait until Toast’s growth is more than just its expansion rate. The secret sauce to Toast is when operators dig deeper into its growing ecosystem. When the eatery space bounces back, Toast will spring even higher. The valuation multiples are lower than Figma and Axon, but is has the same scalability and dynamic runway for growth. Order up.

The Federal Reserve just cut interest rates. The goal was, basically, to protect the U.S. economy from falling into a recession.

Wall Street is expecting additional rate cuts from here, which could lead to positive outcomes for these three consumer goods companies. Each one comes with a different set of risks and potential rewards. Here’s why these stocks could be worth examining today, before more rate cuts are made.

Image source: Getty Images.

1. Target isn’t resonating with consumers right now

Target (TGT) is a large big box retailer, offering a range of products under one roof. It competes directly with Walmart (WMT 0.64%). That’s an important comparison point because Target is doing poorly right now and Walmart is doing quite well. To put numbers on that, Target’s same-store sales fell 1.9% in the second quarter of 2025 while Walmart’s same store sales rose 4.6% in its U.S. locations.

The big difference is that Target’s business model is to offer a more premium experience, while Walmart is squarely about its everyday low prices ethos. Consumers worried about the economy and inflation, which The Motley Fool’s research shows can ravage the buying power of the dollar, appear to be voting with their feet. However, if Federal Reserve rate cuts lead to a growth uptick, consumers could trade back up to Target.

Just such a shift has happened before, so expecting it to happen again isn’t a big stretch in a sector driven by consumer sentiment. That said, Target’s shares are down more than 40% from their 52-week high, making them look relatively cheap. And the Dividend King is offering an attractive 5% yield that’s backed by over five decades of annual dividend increases.

2. Lululemon is a luxury basics clothing retailer

The story around Lululemon (LULU -0.75%) is roughly similar to that of Target. Lululemon makes athletic wear basics. However, the cost of these basics is very high, so it is really a luxury retailer. To be fair, there’s a fashion twist here and the company has made past design missteps that can’t be ignored. But overall, it has been on trend more than it has been off trend.

But one thing Lululemon can’t control is the swings in the economy and how customers react to those swings. The company’s second quarter results weren’t bad if you take a top-level view of the income statement, with revenues up 7% and same-store sales up 1%. But that was entirely driven by international growth, with sales up just 1% in the Americas and same store sales off by 4%.

It clearly looks like consumers in the Americas are pulling back on what are really discretionary purchases, despite the basic nature of the items. If rate cuts make consumers more confident in the economy again, that trend could change. With the stock down more than 50% from its 52-week high, there could be some turnaround appeal here for more aggressive investors.

3. Coca-Cola is boring and doing fairly well

Coca-Cola (KO -0.83%), the last stock up on this list, is appropriate for conservative investors. The shares are only down around 10% from their 52-week highs. But that’s enough to have pushed the stock’s price-to-sales and price-to-earnings ratios below their five-year averages. It wouldn’t be fair to suggest that Coca-Cola is trading hands at fire-sale prices, but it does appear fairly priced to a little cheap. The stock doesn’t go on sale very often, so this could be a good opportunity for long-term investors who place a high value on dividends.

On the dividend front, the beverage giant is a Dividend King with over six decades of annual dividend increases behind it. The yield is notably above the market at nearly 3.1%. And it is one of the largest and best-run consumer staples companies on the planet. If you are risk averse, Coca-Cola is a solid option. And economic growth driven by rate cuts could make it that much easier for consumers to justify splurging on what is basically very expensive water.

There’s plenty of benefit to go around from rate cuts

Federal Reserve rate cuts are a bit of a blunt instrument when it comes to impacting the economy. But they can be very effective at freeing up capital for investment. If there are more rate cuts to come, as Wall Street seems to expect, Target, Lululemon, and Coca-Cola could all benefit if the outcome is continued, if not stronger, economic growth. The upside at Target and Lululemon is more material, but Coca-Cola shows that even the most conservative investors can get in on the rate-cut investment opportunity.

Investors who bought shares of Oklo (OKLO 12.73%) before its stock surged 50% in mid-September were probably thrilled when share prices of the nuclear reactor start-up hit $142 on Sept. 23.

They — along with anyone who jumped in on Sept. 23 — probably weren’t feeling quite so festive at the end of that week. The company’s shares crashed below $111 on Sept. 26. They’ve risen a bit since then, but it’s fair to ask whether the company’s stock price slump is here to stay.

Here’s why investors shouldn’t worry about the recent slump, even if the stock continues to be volatile.

Image source: Getty Images.

It’s a hard-knock life

Startups often experience big swings in share price, and Oklo is one of the “start-uppiest” start-ups you’ll find in the nuclear energy space.

Founded in 2013 by two MIT graduate students, Oklo went public via a merger with one of artificial intelligence (AI) guru Sam Altman’s special purpose acquisition companies (SPACs) in May 2024. It has big plans for a small modular nuclear reactor (SMR), but it hasn’t actually built even a working prototype of one, let alone made money from one. So it’s a very speculative stock, and not a good choice for risk-averse investors.

Given all the question marks surrounding Oklo’s potential as an investment, it’s unsurprising that the stock has seen some big swings in valuation, including the recent dip.

Betting on the tech

In addition to being a start-up operating in a relatively new and untested technology sector, Oklo’s proposed SMR differs from the “standard” SMR design.

Oklo is building a sodium-cooled “fast reactor” SMR, which is a niche type of reactor, even for the SMR space. Full-size fast reactors have been shown to be more efficient than the traditional water-cooled reactors used in most nuclear plants, and Oklo believes that these benefits could carry over to the SMR versions. In theory, they could be powered using spent fuel from existing reactors instead of fresh enriched uranium fuel, which would be an added benefit.

But none of this has yet been borne out under real-world conditions. Until it is, expect more volatility.

Small news, big impact

One reason these factors are likely to cause such wild swings in Oklo’s stock is that there’s not a lot to go on as far as company valuation. It’s too early for traditional valuation metrics like price-to-sales or price-to-earnings ratios. There’s not a lot the company can report about operational progress yet. That means minor news reports and rumors are all investors have to go on in many cases. As speculators pile in and out of the stock based on these tidbits of information, the share price swings wildly.

Take, for example, the news that Oklo held a groundbreaking ceremony for its first-ever Aurora Powerhouse SMR in mid-September. News reports about that groundbreaking caused the stock to abruptly skyrocket. But the groundbreaking was hardly a secret: The company had been saying for months it was expected to occur in the third quarter of 2025 (which it did). It had completed site characterization in May and selected a builder in July. The project is part of a government program with a proposed end date of July 2026. Anyone could have predicted that a groundbreaking was imminent. But news that it happened sent the stock soaring:

Similarly, the drop in share price since the groundbreaking is likely caused by investors taking profits after a massive stock run-up. The important thing to remember is that there seems to be plenty of upside for Oklo’s stock from here, if it can actually deliver on its technology. If you’re a risk-tolerant investor looking for a nuclear energy stock that could soar, it may be a good time to consider buying the dip.

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

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

Image source: Getty Images.

One of Buffett’s favorites

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

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

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

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

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

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

Amazon stock still looks like a great long-term play

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

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

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

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

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

Does Warren Buffett need help selecting stocks? Of course not. He’s done a really good job of doing it all on his own for decades.

Sure, the legendary investor would likely insist that he’s a “business picker” rather than a stock picker. Buffett would also probably point out that he has farmed out some of the decision-making to his two investment managers, Todd Combs and Ted Weschler, for quite a while.

But let’s suppose that Buffett asked me to give him a hand choosing one stock to buy for Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) portfolio. If that wild scenario happened today, which stock would I recommend? I think I’d go with The Home Depot (HD -0.04%).

Image source: The Home Depot.

Why Home Depot would make a great Buffett stock

I view Home Depot as a great Buffett stock in part because it once was a Buffett stock. He initiated a position in the home improvement giant 20 years ago but eventually sold all of Berkshire’s stake in the second quarter of 2009.

Buffett might wish he had held onto those shares in retrospect. Over the 14 years since he exited Berkshire’s position in Home Depot, the stock has skyrocketed roughly 1,570%. That’s more than double the gain delivered by Berkshire Hathaway itself. The Home Depot’s total return, including reinvesting dividends, since Buffett bailed on the stock in 2009 is around 2,370%.

The Oracle of Omaha would probably like Home Depot’s solid operating margin of 13.1%. I suspect that he would absolutely love the company’s return on invested capital (ROIC) of around 31.2%.

We don’t have to worry about Buffett not liking Home Depot’s business. It’s certainly one that he understands. Buffett has even recently bought stocks that benefit from some of the same trends as Home Depot — homebuilders D.R. Horton (NYSE: DHI) and both share classes of Lennar (NYSE: LEN) (NYSE: LEN.B).

The median age of U.S. homes has increased quite a bit since Buffett last owned Home Depot. It stood at 41 years in 2023, according to the American Community Survey. Aging homes bode well for demand for home improvement products and supplies over the coming years.

The fly in the ointment

Is Home Depot the perfect Buffett stock? I wouldn’t go that far. There is one fly in the ointment.

Like many stocks these days, Home Depot has a relatively high valuation. Its trailing 12-month price-to-earnings (P/E) ratio and its forward P/E are close to 26. Buffett learned from the father of value investing, Benjamin Graham. Would he balk at paying such a premium for Home Depot? Maybe, but maybe not.

Berkshire bought 12 stocks in Q2. Several of them were bargains that you’d expect Buffett to like. However, two had forward earnings multiples that have been consistently higher than Home Depot’s all year: Heico (NYSE: HEI), which currently trades at a sky-high 66.8 times forward earnings estimates, and Pool Corp. (NASDAQ: POOL), which has a forward P/E of 28.7.

HD PE Ratio (Forward) data by YCharts

Perhaps Heico and Pool are part of the portfolio managed by Combs and Wexler. However, Buffett hasn’t been afraid of paying more for quality in the past when he’s been confident about a company’s long-term earnings growth prospects.

Is Home Depot a good pick for every investor?

I selected Home Depot because it was a stock I thought would fit well with Buffett’s investing style. Is this stock a good pick for every investor? Probably not.

I suspect that a purist value investor (which I don’t think describes Buffett, by the way) would prefer to quickly move past Home Depot for the reasons already discussed. The home improvement retailer’s dividend yield of 2.3% might not be juicy enough for some income investors. And growth-oriented investors can certainly find stocks that are more likely to deliver stronger earnings growth than Home Depot.

And even though Home Depot is the stock I’d pick for Buffett, I don’t personally own it. I like the stock, but I like others more. And, unlike Buffett, I’m not sitting atop a cash stockpile of $344 billion.

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

– John D. Rockefeller

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

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

Getting back to its higher-margin roots

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

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

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

CNI Free Cash Flow data by YCharts.

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

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

A snack and beverage juggernaut

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

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

Image source: Getty Images.

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

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

Are the stocks buys?

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

The AI market is booming. Bain projects the total addressable market for AI hardware and software will grow 40%-55% annually, reaching $780 billion to $990 billion by 2027.

This growth is enabling companies that provide AI tools, such as chips for data centers, to benefit as demand surges for infrastructure supporting AI applications. Nvidia (NVDA -0.77%) and Broadcom (AVGO -0.00%) stand out as early leaders of the AI megatrend. They’re turning into cash-flow machines. Both are producing such an abundance of cash that they’re returning most of their growing windfalls to shareholders.

Image source: Nvidia.

1. An AI-powered cash-flow machine

Nvidia pioneered GPU-accelerated computing, a technology that leverages specialized semiconductors and algorithms to enhance the speed of compute-intensive operations within applications. This advanced technology is crucial for supporting innovations like AI and robotics. Unsurprisingly, AI-focused tech companies have been snapping up Nvidia’s AI semiconductors to turn data centers into supercomputers.

The semiconductor company generated $46.7 billion of revenue in its recently completed fiscal 2026 second quarter. That was up 6% from the first quarter and 56% from the year-ago period. The bulk of those sales were to data center customers ($41.1 billion).

Nvidia’s AI semiconductor platform has become a cash-printing machine. During the first half of its 2026 fiscal year, the company generated nearly $43 billion in cash from operations — up from almost $30 billion during the year-ago period. Of that cash, Nvidia returned $24.3 billion to investors via dividends and share repurchases. Despite this massive cash return, the company still had nearly $57 billion in cash on its balance sheet at the end of the period.

Nvidia plans to keep returning cash to investors. With only $14.7 billion remaining on its buyback authorization at the end of the second quarter, Nvidia’s board in late August added another $60 billion for share repurchases.

Meanwhile, there’s more AI-powered growth ahead for Nvidia. The company’s Blackwell platform is becoming the gold standard in AI. Blackwell data center sales surged 17% sequentially in the second quarter and should continue growing briskly in the future as more companies adopt this technology.

2. The AI-powered accelerator

Broadcom has also been cashing in on the AI race. The infrastructure software and semiconductor company reported a 22% year-over-year increase in its revenue in its fiscal third quarter of 2025, pushing it to a record $16 billion. AI revenue growth accelerated in the period, surging 63% to $5.2 billion.

The company generated nearly $7.2 billion in cash from operations during the period. The capital-light business spent only $142 million on capital expenses, enabling it to produce over $7 billion in free cash flow, representing an impressive 44% of its revenue. Free cash flow has surged 47% over the past year.

Broadcom returned $2.8 billion of that cash to investors via dividends. The company previously increased its dividend by 11% for this fiscal year, marking its 14th consecutive year of dividend increases since initiating the payout in fiscal 2011. The semiconductor company also authorized a $10 billion share repurchase program earlier this year, $4.2 billion of which it bought back in its fiscal second quarter. Even with those robust cash returns, Broadcom ended its fiscal third quarter with nearly $11 billion of cash on its balance sheet.

The company’s robust cash flow should continue growing. Broadcom expects its AI semiconductor revenue to accelerate to $6.2 billion in its fiscal fourth quarter, pushing its total revenue up to $17.4 billion in the period. That should further boost its free cash flow, providing Broadcom with more funds to return to shareholders. The semiconductor giant will likely give its investors another sizable raise later this year when it announces its annual dividend increase, and extend its growth streak to 15 years in a row.

Cashing in on the AI megatrend

Surging global investment in AI semiconductors is transforming Nvidia and Broadcom into cash-flow machines. Their ability to convert massive AI-driven revenue into cash is allowing them to return more money to investors through dividends and buybacks. With their cash printing presses unlikely to slow down anytime soon, they’re potentially compelling investment opportunities for those seeking companies cashing in on the AI megatrend.

Real estate investing can be a great way to make some passive income. You have lots of options, including purchasing a rental property, investing in a real estate partnership, or buying a real estate investment trust (REIT). Each one has its benefits and drawbacks.

REITs can be a great choice because they enable you to build a diversified real estate portfolio that produces lots of steady passive income. For example, you could collect nearly $250 of dividend income each month by investing $50,000 into these three top monthly dividend-paying REITs:

Data source: Google Finance and author’s calculations. Note: Dividend yield as of Oct. 1, 2025.

Another great thing about REITs is their accessibility — you don’t have to invest much to get started and can easily buy and sell shares in your brokerage account. So, don’t fret if you don’t have $50,000 to invest in REITs right now. You can start by investing a small amount each month and gradually build your passive income portfolio. Here’s why these REITs are excellent choices for those seeking to build passive income from real estate.

Realty Income

Realty Income has a simple mission: It aims to provide its investors with dependable monthly dividend income that steadily rises. The REIT has certainly delivered on its mission over the years.

The landlord has raised its monthly dividend payment 132 times since its public market listing in 1994. It has delivered 112 consecutive quarterly increases and raised its payment at least once each year for more than three decades, growing it at a 4.2% compound annual rate during that period.

Realty Income backs its high-yielding monthly dividend with a high-quality real estate portfolio. It owns retail, industrial, gaming, and other properties secured by long-term net leases with many of the world’s leading companies. Those leases provide it with very stable rental income, 75% of which it pays out in dividends. Realty Income retains the rest to invest in additional income-producing properties that grow its income and dividend.

Healthpeak Properties

Healthpeak Properties is new to paying monthly dividends, having switched from a quarterly schedule earlier this year. The REIT owns a diversified portfolio of healthcare-related properties, including medical office buildings, laboratories, and senior housing. It leases these properties to healthcare systems, biopharma companies, and physicians’ groups under long-term leases that feature annual escalation clauses.

The healthcare REIT had maintained its dividend payment at a steady rate over the past few years, allowing its growing rental income to steadily reduce its dividend payout ratio, which is now down to 75%. With its financial profile now healthier, Healthpeak has begun increasing its dividend, providing its investors with a 2% raise earlier this year.

Healthpeak should be able to continue growing its dividend in the future. Rental escalation clauses should boost its income by around 3% per year. Meanwhile, the REIT has growing financial flexibility to invest in additional income-producing healthcare properties.

EPR Properties

EPR Properties invests in experiential real estate, including movie theaters, eat-and-play venues, wellness properties, and attractions. It leases these properties back to operating companies, primarily under long-term net leases.

The REIT pays out around 70% of its cash flow in dividends each year, retaining the rest to invest in additional income-producing experiential properties. It currently plans to invest between $200 million and $300 million each year. It acquires properties and invests in experiential build-to-suit development and redevelopment projects. EPR has already committed to investing $109 million into projects it expects to fund over the next 18 months.

This investment range can support a low- to mid-single-digit annual growth rate in its cash flow per share. That should support a similar growth rate in its dividend payment. EPR is on track to grow its cash flow per share by around 4.3% this year and has already increased its monthly dividend payment by 3.5% this year.

Ideal REITs to own for passive income

If you want to start building passive income, consider adding Realty Income, Healthpeak Properties, and EPR Properties to your portfolio. Their growing real estate assets and history of steadily rising monthly dividends make them compelling options for anyone seeking dependable and increasing passive income. Investing in these REITs can help you take the first step toward securing your financial future.

At the time of this writing, the S&P 500 (^GSPC 0.34%) is less than 1% off its all-time high and up 73% since the start of 2023. Artificial intelligence (AI) and investor appetite for risk have contributed to the torrid gains, making the market relatively expensive.

You may have seen headlines saying that the S&P 500 is overvalued compared to its historical averages. Or that red-hot growth stocks have run up too fast. But that doesn’t tell the full story.

Three simple valuation metrics — earnings, trailing price-to-earnings ratio, and forward price-to-earnings ratio — explain what’s going on with the market’s valuation. Here’s why they matter, why the S&P 500 isn’t as expensive as it seems, and what that means for your investment portfolio.

Image source: Getty Images.

This growth-driven market commands a premium price

The S&P 500 is an index featuring the 500 largest companies in the U.S. by market cap. The more valuable a company, the greater its influence on the index through its stock price. So a $4.5 trillion-plus company like Nvidia has more than 10 times the influence as a $400 billion company like Home Depot. But that also means Nvidia has 10 times the impact on S&P 500 earnings.

Just like individual companies, the S&P 500 has an earnings per share (EPS) metric. This is just an average of the earnings of each company adjusted for weight in the index. So again, Nvidia’s earnings will have 10-plus times the impact as Home Depot’s.

Ten particularly influential growth stocks, known as the “Ten Titans,” now make up 39% of the S&P 500. But many of these companies are being valued for where they will be several years from now rather than where they are today. Meaning that their price-to-earnings ratios (P/E) and forward P/E ratios are elevated, thereby bloating the valuation of the S&P 500.

According to data from FactSet, the forward P/E of the S&P 500 is 22.5, compared to a five-year average of 19.9 and a 10-year average of 18.6. Based on forward earnings projections for the next year, which tend to favor growth stocks, the S&P 500 is 13.1% pricier than its five-year average and 21% more expensive than its 10-year average. Even if companies live up to expectations, their stock prices may not go up in the near term simply because these results may already be priced in.

Valuation matters less for investors with a long-term time horizon. If the S&P 500 goes nowhere for a year or two but earnings keep growing, the narrative will flip, and the index will look cheap. So the five- or 10-year return could still be solid, reinforcing the importance of approaching the stock market with a long-term time horizon rather than trying to make a quick buck.

S&P 500 gains can be misleading

Using P/E ratios and forward P/E ratios compared to historical averages only tells part of the story. Those two metrics alone may suggest that all stocks are expensive, but that’s not the case.

Data by YCharts.

As mentioned before, the S&P 500 is up 73% since the start of 2023, but the S&P 500 Equal Weight Index has returned just 33.3% — a nearly 40 percentage point difference. Instead of weighting by market cap, the S&P 500 equal-weight gives all S&P 500 components the same influence on the index. Nvidia moves the S&P 500 equal-weight index the same as any other company does.

When the S&P 500 outperforms its 500 equal-weighted index, it means that megacap companies are doing better than companies with smaller market caps. When the equal-weighted index outperforms, it means the megacap names are dragging down the index.

Since the start of 2023, megacap companies have drastically outperformed smaller S&P 500 names. Over the last decade, the S&P 500 rose 253.1% while the equal-weight jumped 161.6%. It would have been especially difficult for an individual investor to keep pace or outperform the S&P 500 during this period without significant exposure to megacap growth stocks.

Buying the S&P 500 for the right reasons

The biggest takeaway from these metrics is that the S&P 500 is expensive because a handful of growth stocks are driving its returns. But that doesn’t mean that all S&P 500 stocks are pricey. In fact, that’s hardly the case.

Many consumer discretionary and consumer staples companies have dirt cheap valuations due to pullbacks in spending. Even pockets of the tech sector are beaten down, namely in the application software industry, due to concerns of AI disruption for software-as-a-service business models.

Investors looking for stocks at a better value may not want to buy the S&P 500 at an all-time high. Or at least have it make up a smaller percentage of their portfolios. Whereas folks who believe that the Ten Titans will keep driving market gains may argue that the S&P 500 can grow into its lofty valuation because these companies are extremely well run, have tons of growth potential, high margins, and exceptional balance sheets.

In sum, the S&P 500 is no longer a balanced index, but rather a growth index. And that means investors should only consider buying it if its composition and valuation suit their risk tolerance.

Identifying growing companies with ample room for expansion is how you spot tomorrow’s winners. The key is to maintain a long-term perspective because the whims of market sentiment in the short term will always try to trick you into selling your shares too early.

As long as the business continues to execute and grow, you’ll be on the path to building wealth. Let’s look at two companies that are still in the early stages of their long-term growth and can help you build wealth for retirement.

Image source: Getty Images.

1. Dutch Bros

One way to identify promising wealth builders is to look at emerging brands that are resonating with a new generation of consumers. Dutch Bros (BROS -1.59%) has tailored its marketing strategy around winning over Gen Z, and it’s driving impressive growth for this specialty beverage chain.

Dutch Bros was founded in 1992, so it’s not an unproven business concept. In fact, it’s outperforming industry leader Starbucks. Dutch Bros’ same-shop sales grew 6% year over year in the most recent quarter, while Starbucks continues to struggle with declining comparable sales.

Dutch Bros’ menu is centered around coffee, but also includes a flavorful range of soda, smoothies, and other drinks. It uses clever marketing tactics to build a loyal following. For example, the company ran a limited-time promotion in May where customers received matching friendship bracelets for purchasing at least two drinks.

Giving away free items has resonated with a younger crowd and made this brand stand out in a competitive market. Its success building a loyal customer base can be seen through its loyalty program, which drove 72% of systemwide transactions in the second quarter.

Dutch Bros ended the last quarter with 1,043 shops across 19 states, but management believes it can reach 7,000 over the long term. Investors should be rewarded as it continues to expand, since the company is already turning a profit of $89 million on $1.4 billion of revenue on a trailing-12-month basis. This margin will continue to grow as the business scales, driving robust earnings growth to support market-beating shareholder returns.

2. Shopify

Starting a business has never been easier than it is today thanks to Shopify (SHOP 1.66%). With a relatively affordable subscription, business owners can quickly set up an online storefront to connect with shoppers worldwide. The affordability, ease of use, and powerful suite of tools have built a solid competitive moat around Shopify that should ensure many years of growth for shareholders.

Subscription revenue grew 16% year over year in the second quarter, reaching $656 million. However, its merchant solutions business grew 36% year over year, and this is where Shopify’s business model shines. Merchant solutions revenue includes payment processing, capital lending, and shipping services. This comprised 75% of Shopify’s total revenue.

This means that Shopify has built its business model around the success of its customers. If merchants are not successful growing their business, Shopify won’t grow either. This incentivizes management to innovate not just to boost its own bottom line, but the bottom line of the businesses that pay for a Shopify subscription.

Shopify is also expanding beyond e-commerce with its point-of-sale offering. Shopify Point of Sale saw its gross merchandise volume increase by 29% year over year in Q2. It was recently recognized as a leader in point-of-sale software by IDC. This ultimately positions Shopify to compete in the $28 trillion global retail market, according to Statista.

Shopify can grow for a long time. Investors expect the company to capitalize on this massive addressable market, as the stock currently trades at 100 times this year’s consensus earnings estimate. The stock is closing in on a new all-time high and should deliver superior compounding returns for years to come.

Tech remains the market’s growth engine, and artificial intelligence (AI) is the theme driving the biggest dollars. With third-quarter earnings season beginning and enterprises locking in 2026 IT budgets, October is a crucial month for separating hype from execution. Investors want to see which companies can turn AI enthusiasm into lasting revenue streams and which have the balance sheets to weather volatility.

Three standouts look well positioned: Nvidia (NVDA 2.54%), the dominant force in AI chips powering data centers worldwide; Microsoft (MSFT 0.63%), the cloud and productivity leader weaving AI into every layer of enterprise software; and Advanced Micro Devices (AMD 0.31%), the challenger carving out share in the fast-growing accelerator market.

Image source: Getty Images.

Each offers a different way to invest in the next wave of technology adoption. Read on to find out more about these three dominant tech giants.

Riding the AI infrastructure wave

Nvidia remains the leading force in AI infrastructure, and its Q2 fiscal 2026 results underscore that dominance. The company reported $46.7 billion in revenue, up 56% year over year, with data center revenue reaching $41.1 billion, also up 56%.

In the same quarter, Nvidia benefited from a $180 million release of previously reserved H20 inventory, reflecting adjustments to past allocations. Over the first half of fiscal 2026, Nvidia returned $24.3 billion to shareholders through buybacks and dividends, demonstrating that even a high-growth company can deliver capital returns.

Momentum still looks strong. Nvidia’s ability to integrate hardware and software, plus its relationships with hyperscalers, provide a structural advantage that’s hard to replicate. As enterprises finalize 2026 budgets this October, any upward surprises in guidance — especially regarding next-generation architectures — could fuel further upside.

That said, risks remain: U.S. export controls, particularly on H20 chips, create uncertainty; inventory adjustments have already been part of recent quarters; and rivalry from AMD or cloud providers developing custom AI chips may erode margins over time.

The AI-infused cloud anchor

Microsoft offers one of the safest ways to invest in AI transformation. In Q4 fiscal 2025 (ended June 30, 2025), the company posted $76.4 billion in revenue, up 18% year over year, and net income of $27.2 billion. Across the full year, revenue reached $281.7 billion, growing 15%. Azure and other cloud services within the Intelligent Cloud segment grew 39%, showing strong AI-driven demand.

October is a key month because many enterprises finalize budgets for the next year. Microsoft’s Azure with AI integration is positioned to capture cloud and infrastructure spending. The breadth of Microsoft’s portfolio — spanning cloud, operating systems, productivity, and enterprise services — helps buffer volatility in any one area.

Embedding AI features across Office, Teams, and Dynamics further gives Microsoft the ability to monetize AI broadly, rather than focusing on a single niche. That said, expectations are steep: Any softness in cloud growth or regulatory scrutiny could significantly impact the stock.

A challenger with upside

AMD offers the contrarian play in AI chips. The company posted record Q2 2025 revenue of $7.7 billion with gross margins around 40%. On a non-GAAP basis, operating income hit $897 million with net income of $781 million. While these numbers pale next to Nvidia’s, that’s exactly the point: AMD trades at a fraction of Nvidia’s valuation despite pushing deeper into AI and data center accelerators.

As AMD’s strategy bears fruit, the market upside could be significant. Record Q2 revenue shows demand is real, not hype. If export restrictions ease or new products like the MI400 series gain traction, AMD could rerate as a legitimate infrastructure competitor. The company offers outsized return potential for positive surprises. But challenges remain: Margin pressure from write-downs, dependency on China regulatory clarity, and intense competition in AI accelerators all pose risks.

Three approaches to the AI boom

These three stocks represent the full spectrum of tech investing: Nvidia for pure AI dominance, Microsoft for diversified safety, and AMD for challenger upside. As Q3 earnings approach and 2026 budgets crystallize, October will reveal which companies can sustain their momentum.

The AI boom isn’t ending, but the easy gains are behind us. Winners from here will be those executing on real revenue, not just riding sentiment.

The stock market as a whole is starting to look expensive. The S&P 500, Nasdaq, Dow Jones Industrial Average, and many other key benchmark indices are within a few percentage points of all-time highs, and all look historically expensive by several valuation metrics, including average P/E ratios, price-to-book multiples, and more.

However, there are still some excellent long-term opportunities to be found, and that’s especially true when it comes to high-yield stocks. With interest rates still at a historically high level, dividend stocks can be a bright spot in the market where it’s still possible to find reasonable valuations for investments to buy and hold for the long haul.

With that in mind, here are two high-paying dividend stocks in particular that could be excellent investments right now if you’re a patient investor looking for great income and total returns.

Image source: Getty Images.

The best overall high-dividend stock in the market?

I’ve called Realty Income (O 0.39%) my favorite overall dividend stock in the market, and as one of the largest positions in my own portfolio, I’ve put my money where my mouth (or keyboard) is.

If you aren’t familiar with it, Realty Income is a real estate investment trust, or REIT (pronounced ‘reet’), and it invests in single-tenant properties. About three-fourths of its tenants are retail in nature, and it also has industrial, agricultural, and gaming properties. Its retail tenants are hand-picked for their recession resistance and/or their lack of vulnerability to e-commerce. Plus, tenants sign long-term leases with gradual rent increases built in, and agree to pay insurance, taxes, and most maintenance costs.

This model allows Realty Income to generate excellent total returns over the long run, and with less overall volatility than the S&P 500. And the proof is in the performance. Although Realty Income has underperformed (as would be expected) during rising-rate environments, since its 1994 IPO it has produced 13.5% annualized total returns for investors, well ahead of the S&P 500, and it has raised its dividend for the past 112 consecutive quarters.

Realty Income has rebounded nicely from its recent lows but still trades for about 25% below its all-time high. It has a 5.4% dividend yield and pays in monthly installments (Fun fact: Realty Income has a trademark on the phrase ‘The Monthly Dividend Company.’). In a nutshell, Realty Income offers a rare combination of a high yield, market-beating total return potential, and safety.

Excellent long-term tailwinds

Another REIT, Prologis (PLD 0.24%) is another high-dividend stock to put on your radar. One of the largest REITs in the world, Prologis is the leading logistics real estate company, owning warehouses, distribution centers, and other properties all around the world. For example, if you’ve ever seen one of those massive Amazon (AMZN -1.09%) distribution centers, that’s an example of the type of property Prologis owns.

The company owns a staggering 1.3 billion square feet of leasable space, and nearly 3% of the world’s entire GDP flows through Prologis’ properties each year.

Recent results have been strong, after a period of weakening demand resulting from overbuilding during the pandemic years. In the most recent quarter, Prologis reported core funds from operations (Core FFO-the real estate equivalent of ‘earnings’) growth of 9% year-over-year, and management reported a strong pipeline of leasing activity and plenty of customers ready to grow.

The long-term tailwinds should be more than enough to give Prologis plenty of opportunities to grow. The global e-commerce market (which fuels much of the demand for logistics properties) is expected to more than double in size by 2030, according to Grand View Research. And the data center industry, which Prologis recently entered, is expected to grow just as fast.

Buy with the long term in mind

Both of these stocks are real estate investment trusts, or REITs, and these are an especially rate-sensitive group. As a result, if the Federal Reserve ends up pumping the brakes on further rate cuts, or if inflation unexpectedly picks up, it’s possible for these two stocks to be rather volatile in the short term.

Investment in computing infrastructure to support artificial intelligence (AI) is reshaping the cloud computing market, and Oracle (ORCL -0.32%) might be the best cloud stock to bet on. Its focus on offering the greatest customer flexibility and processing speeds for AI applications is driving accelerating growth that could send the stock higher.

Image source: Getty Images.

World-class AI companies are choosing Oracle

Oracle’s cloud infrastructure (OCI) segment posted a revenue increase of 55% year over year last quarter, up from 52% in the previous quarter. Oracle signed deals with multiple tech giants, including ChatGPT’s OpenAI, sending its remaining performance obligations up 359% year over year to $455 billion.

These results show demand for AI training, inference, and data analytics is accelerating, and Oracle is in pole position. It has become the go-to cloud provider for AI workloads. Oracle’s customers can run its cloud services on other platforms from Amazon, Google, and Microsoft, providing the utmost flexibility.

The spike in remaining performance obligations shows Oracle’s ability to scale rapidly. Leading AI companies are choosing Oracle to train their AI models due to its ability to build large data centers that are faster and more cost-efficient than any of its competitors.

Analysts expect Oracle’s earnings to grow 15% annually in the coming years, but these estimates have been trending up. Management expects its cloud infrastructure business to reach $144 billion in revenue in four years, up from $18 billion this year. This should support more gains for Oracle investors.