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UnitedHealth: Down 50%, Is the Dividend Still Safe?

UnitedHealth: Down 50%, Is the Dividend Still Safe?

UnitedHealth Group (NYSE: UNH) faces a series of unprecedented challenges, from leadership crises to federal investigations, leading to a significant stock decline. Is this the end of its dominance?
*Stock prices used were the market prices of July 8, 2025. The video was published on July 12, 2025.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Should you invest $1,000 in UnitedHealth Group right now?
Before you buy stock in UnitedHealth Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!*
Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 7, 2025
Rick Orford has positions in UnitedHealth Group. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.
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Prediction: This Will Be The Next $4 Trillion-Dollar Stock
Prediction: This Will Be The Next $4 Trillion-Dollar Stock

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  • Globe and Mail

Prediction: This Will Be The Next $4 Trillion-Dollar Stock

Key Points Microsoft is the second-largest company by market cap, behind Nvidia. The cloud computing leader is well positioned to be the next $4 trillion stock. Microsoft could continue to perform well long after it reaches $4 trillion. 10 stocks we like better than Microsoft › Nvidia (NASDAQ: NVDA) has been firing on all cylinders over the past two years, and the company just added one more accomplishment to its long list of medals: The chipmaker became the first stock to hit the $4 trillion mark. It now sits as the most valuable company in the world, but others are close behind. Other corporations will eventually reach that valuation too, perhaps even sooner than many think. And the stock most likely to get to $4 trillion next is Microsoft (NASDAQ: MSFT). Read on to find out why. Why Microsoft has the clear edge Most of the members of the " Magnificent Seven" have market caps above $1 trillion, but some are much closer to the $4 trillion mark than others. The two largest companies behind Nvidia are Apple, valued at $3.16 trillion, and Microsoft, at $3.72 trillion. The others are much further behind. And while there's the possibility that they will soar while these two drop, assuming they all perform relatively similarly in the next few months, Microsoft will get there first simply because it's the closest. However, Microsoft has an excellent chance of performing better than, at the very least, its closest competitor, Apple. The iPhone maker has been hit hard this year due to the current U.S. administration's trade policies. The Trump administration aims to bring manufacturing back to the United States, which poses a challenge for Apple, as the company outsources most of its manufacturing to countries such as China, a favorite target of Trump's aggressive tariffs, and other Asian nations. Trump recently doubled down on his threat of aggressive tariffs. Additionally, Apple has fallen behind Microsoft and its tech peers in the artificial intelligence (AI) race. While I think Apple could still perform well over the long run, the company's short-term prospects don't look attractive. What about Microsoft? The tech leader delivered excellent results during its latest update, which covered the third quarter of its fiscal year 2025, ending on March 31. Microsoft's cloud computing and AI businesses are booming. It has been gaining ground on Amazon in the competitive cloud field. Further, the company's latest update provided strong guidance, indicating a growing demand for its services, despite a somewhat shaky macroeconomic environment. The smart money is on Microsoft outperforming Apple in the next few months. Amazon, Alphabet, and Meta Platforms are also performing well, but with market caps of $2.36 trillion, $2.15 trillion, and $1.82 trillion, they are too far behind to make serious runs at the $4 trillion mark before Microsoft. For all these reasons, Microsoft seems by far the most likely to join Nvidia in the $4 trillion single-company (for now) club next. To $4 trillion and beyond $4 trillion isn't a finish line. Once Microsoft reaches that point -- whenever that may be -- there will still be plenty of upside left for the company afterward. In fact, here is another prediction: Microsoft will reach a $10 trillion valuation within the next decade. From its current levels, that would require a compound annual growth rate of at least 10.4%. That's no easy feat, but Microsoft can pull it off as the company continues to make headway within its two biggest sources of growth: AI and cloud computing. While the company is already generating significant sales from these businesses, this is likely still the early stages of these industries' growth stories. According to Andy Jassy, CEO of Amazon, more than 85% of IT spending still occurs on-premises. Meanwhile, AI applications reached a new level a little less than three years ago with the launch of ChatGPT by OpenAI, a Microsoft-backed company. Both technologies enable businesses across all industries to reduce costs and increase efficiency. Companies that don't use cloud computing or AI services might, eventually, become like modern businesses that don't use computers: They hardly exist. That could be the scale of the revolution investors are witnessing, and Microsoft is one of the leaders driving it. Though competition will continue to intensify, the tech giant has a strong competitive edge due to switching costs. Plus, it has already proven it can perform well despite competitive pressure from Alphabet and Amazon. Microsoft's long-term prospects look attractive thanks to this duo of massive growth drivers. Investors shouldn't buy the stock because it could soon reach $4 trillion. They should purchase it because it will likely continue performing well long after that. Should you invest $1,000 in Microsoft right now? Before you buy stock in Microsoft, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Amazon, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

As a Former Professional Short-Seller, I Would Never Short Palantir Stock. Here's Why.
As a Former Professional Short-Seller, I Would Never Short Palantir Stock. Here's Why.

Globe and Mail

time2 hours ago

  • Globe and Mail

As a Former Professional Short-Seller, I Would Never Short Palantir Stock. Here's Why.

Key Points There is no denying that Palantir has a high valuation. However, as a former professional short-seller, I learned to never short a stock on valuation alone. Meanwhile, the opportunity in front of Palantir is so large that the company still has strong upside over the long term. 10 stocks we like better than Palantir Technologies › For several years, I worked as an equity analyst at a long-short hedge fund, with around $600 million in assets under management. While our long book would be larger than our short book, we would be short many more stocks than we would be long in. Typically, we might hold around 15 core long positions, while we could be short more than 70 stocks. The reason for this was quite simple. On the long side, we typically had a more concentrated portfolio in highly researched names that we had high conviction in. However, shorting individual stocks is inherently riskier, so we would keep individual positions small. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Since stocks can technically go up indefinitely, you can lose much more than you can make. Meanwhile, if a short goes against you and the stock price goes up, the position size becomes larger, not smaller. This can lead to margin calls, which typically leads to short-sellers being forced to buy back the stock they shorted at a loss. So why short-sell at all? For one, it's a market hedge. But more importantly, most stocks actually do underperform. According to a JP Morgan Asset Management study, between 1980 and 2020, 40% of stocks in the Russell 3000 index -- which consists of the 3,000 largest U.S. traded stocks -- suffered catastrophic losses of 70% or more from which they never recovered. Meanwhile, 42% of the stocks in the index had negative returns during this period. In addition, two-thirds of stocks underperformed the index. However, one lesson I learned when looking for stocks to short is never to short on valuation alone. Palantir and its high valuation If there was ever a candidate to short solely on valuation, it would be Palantir Technologies (NASDAQ: PLTR). After all, the stock trades at an astonishing 82.5 forward price-to-sales (P/S) multiple. Note that this is sales, not earnings. However, valuation is not a reason to short a good company without a near-term downward catalyst. The reason for this can be summed up by an old Wall Street adage that is attributed to the British economist John Maynard Keynes: "The market can stay irrational longer than you can stay solvent." In the context of short-selling, this basically means that a stock can carry high valuation for a very long time, much longer than a short-seller can continue to hold a position. So, while Palantir's valuation may look extreme, the same could have also been said when it traded at 30 times sales or 60 times sales. After all, at the height of software-as-a-service (SaaS) valuations a few years ago, the average SaaS stock only got up to around a 20 times P/S multiple with over 30% revenue growth. Meanwhile, the company has been executing strongly. Its revenue growth has accelerated each of the past seven quarters and grew 39% in the first quarter. While high valuations can make a stock more vulnerable to any missteps or disappointments around quarterly earnings, Palantir right now has been firing on all cylinders. O.K., but would you buy the stock? Whether to buy Palantir stock is a trickier question to answer, but there is reason to believe that the company could eventually grow to become one of the largest in the world. It started out as a data-gathering and analytics company primarily for the U.S. government, where its technology could be used to discover complex patterns, enabling the government to help track terrorists. But with the advent of artificial intelligence (AI), it has become a major player in the commercial space. Instead of looking to build a better AI model, Palantir set out to make AI more actionable through its data gathering and analytical capabilities. Its Artificial Intelligence Platform (AIP) gathers data from a variety of different sources and then connects the data to its real-world counterparts. This essentially turns AIP into an operating system where customers use AI models to find solutions to real-world problems. Today, AIP is being used across an array of industries for remarkably diverse tasks. These include monitoring for sepsis at hospitals, helping a homebuilder streamline its land-development bidding process, and improving the logistics and supply chain of a cereal maker. The U.S. government uses its technology for mission-critical tasks, including on the battlefield. And even NATO recently signed a big deal with the company. The breadth of uses for AIP and Palantir's technology is extraordinary and is the reason the company has the potential to grow into one of the biggest in the world. As such, while I would prefer to buy the stock on a dip given its valuation, I think it has a very good opportunity to be a huge long-term winner. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025

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