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Globe and Mail
3 days ago
- Business
- Globe and Mail
3 Stocks Set to Ride the Artificial Intelligence (AI) Wave to New Heights
Artificial intelligence (AI) is this decade's most prominent investing theme so far. As AI-powered applications took the world by storm, Wall Street fell in love with AI stocks. With the AI wave far from cresting, three Motley Fool contributors take a closer look at three of their favorite AI stocks: Amazon (NASDAQ: AMZN), Qualcomm (NASDAQ: QCOM), and Nvidia (NASDAQ: NVDA). 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 » Amazon's cloud leadership makes the stock a no-brainer for the AI wave Justin Pope (Amazon): Artificial intelligence will change the game for Amazon, a company that's already wildly successful by any measure. Amazon Web Services, or AWS for short, is the world's leading cloud platform, with a 30% share of the global cloud infrastructure market. AWS generated more than 58% of the company's total operating income over the past four quarters, but only 17% of total net revenue. Many artificial intelligence (AI) applications, which are software at their core, will run on cloud computing platforms. Amazon and other cloud companies continually invested billions of dollars to build data centers to expand their cloud capacity to accommodate all this demand. Research from Goldman Sachs estimates that AI will drive sustained cloud growth, boosting global cloud computing revenue at a 22% annualized pace, to $2 trillion by 2030. It seems likely that AWS, which grew revenue by 17% year over year in the first quarter, will sustain healthy growth for the foreseeable future as long as AI momentum continues. Amazon is building out an AI ecosystem on AWS, including Bedrock, a platform for developing generative AI applications such as virtual agents. Amazon's market leadership should help it upsell its cloud customers and retain them on AWS for their AI needs. Analysts estimate Amazon will grow earnings by an average of 17% annually over the long term. I think those are fair growth expectations given Amazon's AI opportunities, as well as its continued growth potential in e-commerce, digital advertising, streaming, and Prime subscription service. It makes the stock a buy at its current price-to-earnings ratio of 33, a reasonable valuation for such a growing, world-class company. Low-cost AI could stoke demand for this company's products Will Healy (Qualcomm): Admittedly, investors may not necessarily think of Qualcomm when looking at stocks that will take AI to new heights. Its longtime client, Apple, appears poised to stop using its smartphone chipsets in the iPhone. Additionally, Qualcomm's ties to China could put pressure on the stock should U.S.-China relations continue to deteriorate. Nonetheless, DeepSeek's breakthrough dramatically lowered the cost of developing AI models. Qualcomm's chipset business, which made up 64% of the company's revenue in the first half of fiscal 2025 (ended March 30), relies on an AI-driven upgrade cycle that presumably benefits from low-cost AI. Moreover, Qualcomm applied its technical capabilities to the automotive and Internet of Things (IoT) industries in recent years. Over the last year, these segments grew revenue by 60% and 31%, respectively, and such successes are likely to put a brighter spotlight on its AI. Qualcomm may have already begun to benefit. It generated $22.6 billion in revenue in the first two quarters of fiscal 2025, 17% higher than year-ago levels. Costs and expenses grew 13% over the same period, and thanks to lower investment income and higher income taxes, the $6 billion in net income increased by 18% over the last year. When considering that growth, one must also assume Qualcomm stock prices in its challenges. It sells at a P/E ratio of 15, even after bouncing off the 52-week lows reached in early April. Low valuations are not necessarily a reason to buy a stock. However, considering Qualcomm's potential to transform parts of the AI industry, investors may want to buy this semiconductor stock while it is still inexpensive. Jake Lerch (Nvidia): When it comes to AI stocks, it's impossible to ignore Nvidia. Simply put, Nvidia remains the king of AI stocks. Since January 2020, Nvidia shares gained more than 2,200% -- meaning a $5,000 investment made on Jan. 1, 2020, would now be worth nearly $120,000. Yet, even after this magnificent run, Nvidia is showing no signs of slowing down. Indeed, the company just notched another fantastic quarterly report (for the three months ending on April 30, 2025), beating expectations for both revenue and earnings. Highlights included: Revenue of $44.1 billion, up 69% from a year earlier. Net income of $18.8 billion, up 26% year over year. Share repurchases totaling $14.1 billion during the quarter. While the report was a stunning success for the company, there was one fly in the ointment: Nvidia's gross margin fell from 78% to 61% over the last year. However, management attributed most of the drop to a write-off due to export restrictions to China. In effect, Nvidia's AI chips are so powerful that the U.S. government restricted their delivery to geopolitical rivals like China. Consequently, Nvidia couldn't deliver products that were earmarked for sale to the Chinese market and was forced to write off the inventory this quarter. Going forward, management noted that gross margin should rebound back into the 70% to 75% range later this year. At any rate, Nvidia continues to show why it is riding the AI wave as well as -- if not better than -- any other company. Its AI chips remain the go-to product for AI developers. Demand remains strong, and the company continues to deliver the red-hot growth that has powered its stock to an eye-popping market cap of more than $3 trillion. For investors looking for an AI stock with staying power, Nvidia is a name to consider. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, 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 Nvidia 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%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 May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Amazon and Nvidia. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in Qualcomm. The Motley Fool has positions in and recommends Amazon, Apple, Goldman Sachs Group, Nvidia, and Qualcomm. The Motley Fool has a disclosure policy.
Yahoo
4 days ago
- Business
- Yahoo
1 Thing Investors Must Know Before Buying the 52% Dip on UnitedHealth Group
The problems at UnitedHealth Group are piling up, including alleged criminal activity. The stock could face government intervention in a worst-case scenario. UnitedHealth Group probably won't revisit highs anytime soon. 10 stocks we like better than UnitedHealth Group › Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Justin Pope has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. 1 Thing Investors Must Know Before Buying the 52% Dip on UnitedHealth Group was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
04-05-2025
- Business
- Globe and Mail
3 Top Technology Stocks to Buy in May
April wasn't an enjoyable month for investors. The stock market became a roller coaster, marked by stomach-churning volatility with prices plummeting one day and soaring the next. While the Nasdaq Composite bounced off its recent lows, there are still a handful of hot deals on top-tier technology stocks. Three Fools got together to identify which names investors should focus on in May. 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 » Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), The Trade Desk (NASDAQ: TTD), and CrowdStrike Holdings (NASDAQ: CRWD) stood out from the crowd. Here is what makes each stock a table-pounding buy. Alphabet continues to deliver where it counts Justin Pope (Alphabet): Google's parent company is working through some adversity. The technology behemoth lost two antitrust lawsuits, and investors fear that the increasing popularity of artificial intelligence-powered chatbots, such as ChatGPT, could erode Google's search engine dominance. As a result, Alphabet stock declined by 23% from its high. If you were looking for reasons to buy the dip on Alphabet, recent first-quarter 2025 earnings gave you several. Start with Google Search, which grew advertising revenue by 10% year over year. There's no doubt that AI is becoming increasingly prevalent. But remember, Alphabet is integrating its own AI into Search, including AI Overviews, which now has over 1.5 billion monthly active users. Next is Google Cloud, core to the company's AI plans. Google Cloud revenue increased 28% year over year, and its profitability is soaring. Google Cloud's operating income surpassed $2.1 billion in Q1, compared to just $900 million in the same quarter a year ago. Management also noted that it continues to struggle keeping up with demand, which bodes well for cloud growth. Lastly, there's the impressive progress of Waymo, Alphabet's self-driving ride-hailing business. Waymo is performing over 250,000 weekly paid rides, up fivefold from just a year ago. I'd bet most investors think of Tesla first when they think about self-driving vehicles, yet Waymo, not Tesla, currently has a functioning service. All this comes wrapped in a business that analysts estimate will grow earnings by an average of 16% annually over the long term, and that trades at a price-to-earnings ratio of under 18. I'm struggling to see a better mix of quality, growth, and value than what Alphabet offers today. May could bring a new beginning for this digital ad stock Will Healy (The Trade Desk): My choice for stocks to buy in May is The Trade Desk. The Trade Desk has attracted interest for its ability to manage digital ad campaigns. Since it is not an advertiser like one of its prominent competitors, Google parent Alphabet, it holds a competitive advantage by not having an implicit bias for one platform. It has leveraged artificial intelligence (AI) through Kokai, which can analyze vast amounts of data to optimize ad slot selection and timing. That allows marketers to maximize returns on their ad campaigns. Still, despite those strengths, The Trade Desk may seem like the last tech stock one would want to buy at first glance. That's because it was the worst-performing tech stock in the S&P 500 in Q1 2025, even surpassing Tesla's decline in percentage terms. Investors appeared to lose confidence in the stock when it reported its fourth-quarter 2024 results, missing its own revenue number. This occurred after dozens of quarters of topping such forecasts, leading to the stock losing one-third of its value in a single trading session. Additionally, its Q1 revenue forecast of $575 million would mean a 17% yearly revenue growth rate, pointing to a slowdown that could further dampen enthusiasm for the stock. In comparison, revenue grew by 22% in Q4 despite the miss, and by 26% in 2024. Nonetheless, when it reports its Q1 results on May 8, it's likely to return to its past track record of beating its estimates, rather than falling short. That could help rebuild investor confidence in this stock. Moreover, its stock has fallen by over 60% since December. As a result, its price-to-earnings ratio has dropped to 68, its lowest level since 2019 and down from an earnings multiple above 225 in December. That's a compelling motivation to overlook the slowdown in revenue growth. Finally, Alphabet is under increasing fire since a district court ruled that it holds a digital advertising monopoly. That opportunity could be a chance for The Trade Desk to widen its competitive moat, a factor that could easily boost the company's stock price. CrowdStrike has been a safe haven for tech investors this year Jake Lerch (CrowdStrike Holdings): My choice is CrowdStrike Holdings. With so much uncertainty in the market, it's essential to identify stocks that are continuing to show strength. That's one of the reasons I like CrowdStrike. The company, which develops AI-powered cybersecurity solutions, is more or less immune to two of the biggest questions plaguing the stock market right now. The first is trade and tariffs, which are creating an overhang for companies that rely on international trade. Only one-third of CrowdStrike's revenue comes from international markets. More to the point, the company generates revenue by selling subscriptions to its security modules. As a result, it's unlikely that CrowdStrike will face much effect from the ongoing trade negotiations. Second, there are growing fears that data center spending could slow down. That's weighed on the large cloud service providers (like Microsoft, Amazon, and Alphabet) and the companies that rely on selling materials for data centers (like Nvidia). However, CrowdStrike doesn't fall into either of those two categories. It provides cybersecurity for organizations, and there's no sign that cybersecurity spending will be dropping off any time soon. CrowdStrike averaged 40% revenue growth over the last three years. While that figure has now dropped to 25% in its most recent quarter (for the three months ending on Jan. 31, 2025), it's still a rapid pace. Cybersecurity remains a must-have service at just about every organization -- no one wants to see their data or systems compromised. As a result, I think CrowdStrike will continue to outperform in a market that's still trying to find its footing in 2025. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, 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 Alphabet 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 $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $701,781!* Now, it's worth noting Stock Advisor 's total average return is906% — a market-crushing outperformance compared to164%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 April 28, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet, Amazon, CrowdStrike, Nvidia, Tesla, and The Trade Desk. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in CrowdStrike and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, CrowdStrike, Microsoft, Nvidia, Tesla, and The Trade Desk. 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.
Yahoo
28-04-2025
- Business
- Yahoo
3 Beaten-Down Tech Stocks That Should Recover Despite Tariffs
In recent weeks, worries about tariffs imposed by the U.S. government have weighed on the technology sector. In a world that relies heavily on chips made in places like Taiwan and hardware manufactured in countries such as China, the state of the industry has become uncertain, and many tech stocks have fallen as a result. Nonetheless, the parts of the industry less reliant on hardware are typically less affected by such levies, and this should create an opportunity for investors once the negative sentiment abates. Knowing this, three analysts from The Motley Fool have recommended stocks tied to the tech sector that will help investors sidestep tariff-related worries. 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 » Jake Lerch (Meta Platforms): My choice is Meta Platforms (NASDAQ: META). After an amazing start to the year, Meta Platforms stock has come crashing back to Earth as market volatility took off. It's hard to believe, but Meta is now down almost 30% from its all-time high and is down about 11% year to date. Yet, for the long-term investor, this roller coaster ride is simply a bump in the road for a company that continues to grow by leaps and bounds. Granted, the company could experience a setback when it reports earnings on April 30, but if history is any guide, that's unlikely to occur. Over the last five years, Meta has delivered an average quarterly earnings surprise of 12%; the company's quarterly revenue surprise has averaged 2%. In other words, Meta's management is in the habit of underpromising and overdelivering. What's more, those earnings and revenue surprises aren't simply some rounding error or outliers. Over that same span of five years, Meta has more than doubled its revenue from $75 billion to $165 billion. The company's net income has nearly tripled -- from $21 billion to $62 billion. These fantastic fundamentals are thanks to Meta's asset-light business model, which delivers massive profits and free cash flow from the company's enormous user base. Even more importantly, given current events, Meta isn't the sort of business one would expect to suffer in a trade war. Since about 97% of the company's revenue is derived from advertising, tariffs would appear to have little impact. At any rate, long-term investors should focus on the big picture: Meta is a solid business with exceptional fundamentals. It's a stock worth considering here on the dip. Justin Pope (The Trade Desk): Shares of The Trade Desk (NASDAQ: TTD) have gotten pummeled since the company's underwhelming Q4 earnings, a rare miss for a company that has consistently performed well for years. Fortunately, this is unlikely to be a long-term issue. The company's independent adtech software enables customers to purchase ad inventory, target ads to their ideal audience, and analyze their campaigns. The company's Q4 woes were primarily due to disruptions as it transitioned customers to a new artificial intelligence-powered technology platform; therefore, CEO Jeff Green was adamant on the earnings call that it was a temporary setback. The big picture here is that digital advertising is a rapidly growing market, and The Trade Desk has enjoyed steady, profitable growth by providing brands with an alternative to closed ecosystems, such as Meta Platforms and Alphabet. Brands spent $12 billion on The Trade Desk in 2024, a small sliver of a $900 billion-plus market. It underscores the long runway ahead for the company. The stock is down a whopping 64% from its high, its steepest decline yet as a public company. The good news is that the drop has repriced the stock at a compelling valuation--shares now trade at an enterprise value-to-revenue ratio of just 9.3, its lowest since about 2018. Tariffs have spooked the stock market, but it's likely a non-issue for The Trade Desk, which generated 87% of its 2024 gross billings in the United States. Plus, China's internet space is infamously isolated from Western countries. Overall, I believe the stock has a good chance of delivering strong returns over the long term, especially at these current prices. CEO Jeff Green is one of the industry's pioneers and outlined 15 ways the company is capitalizing on the growth trends in digital advertising in the Q4 call. The market punished the stock for its Q4 results, but The Trade Desk still grew revenue by 26% in 2024. The Trade Desk remains a leading adtech stock, and the cream always rises to the top eventually. Will Healy (MercadoLibre): As tariff concerns worsen, a company heavily reliant on Mexico may seem like the last place investors should look to avoid tariffs. However, that only applies to Mexican companies tied to the U.S. Other than one fulfillment center that imports U.S. goods into Mexico, that's primarily not the case with the stock I chose, MercadoLibre (NASDAQ: MELI). MercadoLibre is a tech conglomerate engaged in e-commerce, fintech, and logistics. These businesses work separately and together to serve customers in 18 Latin American countries, with Brazil, Mexico, and Argentina driving most of the company's revenue. MercadoLibre has prospered despite the region's challenges and, sometimes, because of them. It was a first mover in Latin American e-commerce, making it harder for Amazon and other foreign-based market entrants to compete. To reach cash-based customers, it created Mercado Pago to help these customers buy online. It was so successful that it opened its services to customers who were not buying from MercadoLibre. Likewise, it created Mercado Envios to bring shipping and fulfillment services to online sellers. Like Mercado Pago, this company has also found success in serving customers separately from its e-commerce site. Separately and together, MercadoLibre's businesses generated $20.8 billion in revenue in 2024, a 38% increase from year-ago levels. In comparison, operating expenses rose 29%, and the company held the line on other types of expenses. That allowed the company to earn $1.9 billion in net income, 94% more than it did in 2023. Furthermore, despite tariff concerns, the stock has risen over the last year and recovered some of its losses from a recent bear market sell-off. Consequently, it is now down by approximately 10% from its highs as a result. Finally, even though it has maintained a high P/E ratio for some years, the earnings multiple has fallen significantly. Hence, at a 56 P/E ratio, MercadoLibre should be an attractive option for investors wanting to avoid tariff-related pressures. Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms 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 $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $680,390!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 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. Jake Lerch has positions in Alphabet, Amazon, MercadoLibre, and The Trade Desk. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in MercadoLibre and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, MercadoLibre, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy. 3 Beaten-Down Tech Stocks That Should Recover Despite Tariffs was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Tuning Out the Market Volatility: 3 AI Stocks Poised to Win Big Over the Coming Decade
Increased volatility is beginning to sway the stock market. Uncertainty over economic policy and geopolitical tensions has cooled the broader market. The S&P 500 briefly dipped into a correction, while the more technology-heavy Nasdaq Composite remains about 12% off its highs. In 2023 and 2024, the market had a relatively smooth upward ride, but dips and even extended downturns do occur from time to time and are healthy. When stocks go straight up, market bubbles form, and it can be extra painful for the market and the economy when they eventually burst. The key to winning in the stock market is to zoom out and think about the years (not months) ahead. Artificial intelligence (AI) is here to stay, and there will be big winners who generate outsized returns over the next decade. Three Motley Fool contributors were asked to put their heads together and write about potential AI winners that investors should hone in on. They landed on Meta Platforms (NASDAQ: META), Qualcomm (NASDAQ: QCOM), and Amazon (NASDAQ: AMZN). Here are the pitches for each. Justin Pope (Meta Platforms): Social media giant Meta Platforms started 2025 with a bang, but the market's recent pullback essentially wiped out all those gains. Here is why investors should be giddy about the opportunity to buy this dip. The company has leaned hard into AI. Meta's AI model, Llama, is among many competitors, including OpenAI's ChatGPT. However, while most companies tried to monetize their AI models early on, Meta open-sourced Llama, making it free and readily available to developers. The result? Meta recently announced that Llama had surpassed a billion global downloads. This gives Llama an inside track to market share, and I suspect that, eventually, AI models will consolidate, and unpopular models will fade away. As a market leader, Meta can begin monetizing Llama more significantly. In other words, it used the same playbook as its social media apps: Focus on capturing the market first, and you can make more money later. In the meantime, Meta is aggressively investing in building data centers and resources to capture its AI opportunities. Management noted on Meta's fourth-quarter earnings call that it plans to spend $60 billion to $65 billion on capital investments this year, primarily AI. Fortunately, the company's core business (ads sold through social media) is thriving. Meta's apps (Facebook, Instagram, WhatsApp, Threads) grew to 3.35 billion daily active users in Q4, and its price per ad rose 10% in 2024 versus 2023. Meta's advertising business can continue carrying water while the company allocates immense resources to AI, a luxury few companies have. Analysts estimate that Meta will grow earnings by an average of 17% annually over the long term. The stock has dipped approximately 18% from its high, bringing the price-to-earnings (P/E) ratio down to about 25. That's an appealing valuation, given Meta's growth prospects and potential leadership in AI as Llama becomes the foundation for AI applications worldwide. Will Healy (Qualcomm): After more than four years of range-bound trading, it could finally be Qualcomm's time over the next decade. The smartphone chipset maker prospered early in the decade amid a spike in semiconductor demand and a 5G upgrade cycle. However, the stock's performance began to stagnate as the upgrade cycle ran its course and demand fell. Qualcomm attempted to spark a new upgrade cycle by releasing its AI-enabled Snapdragon 3 Gen 8 mobile processor. That move has been partially successful. Revenue growth has come in at double-digit levels in the last three quarters but has not matched the 32% revenue increase reported in fiscal 2022 (ended Sept. 25, 2022). Still, that could soon change. Thanks to DeepSeek's breakthrough, organizations can run AI models at much lower costs. That development could stoke further demand for smartphone chipsets, which still comprise 65% of Qualcomm's overall revenue. Moreover, Qualcomm continues to prepare for the day when smartphone demand falls. It has also pivoted into the Internet of Things (IoT) and developing processors for mobile PCs. Nonetheless, its biggest splash could come from its move into automotive. Its automotive segment focuses on using its technology to create safe, intelligent, and connected vehicles. Although this segment claimed only 8% of Qualcomm's revenue in fiscal Q1, the 61% revenue increase indicates it could become a major player in the connected and autonomous vehicle markets. Admittedly, investors may have hoped for more profit growth when the $3.2 billion it earned in fiscal Q1 grew by only 15%. However, at a P/E ratio of 17, the stock is a bargain compared to other leading-edge semiconductor stocks. As demand for AI-enabled smartphones rises and the autonomous vehicle industry takes off, it could spark the next bull market in Qualcomm stock. Jake Lerch (Amazon): When looking at extended time horizons, like 10 years from now, it's important to contextualize where the world stands and where it is headed. In that respect, the world remains in the very early innings regarding AI. Generative AI products like ChatGPT and Midjourney broke through to the mainstream just over two years ago. Yet, it's taken more time for large-scale organizations to mobilize for the AI revolution. That offers an opportunity for companies likely to reap the benefits as enterprises ramp up their own use of AI. As the world's leading cloud services provider, Amazon is well-positioned to capitalize on the growth of AI. The company is investing $100 billion to bolster Amazon Web Services (AWS) to retain its place as the premier choice within the cloud market. What's more, the company has several other AI initiatives in progress, including: Trainium: Amazon's proprietary AI chips used for training and deploying AI models. Anthropic: An AI start-up that Amazon has funded to the tune of $8 billion. Perhaps even more importantly, the company can also leverage AI internally to drive efficiencies within its enormous e-commerce network. For example, Amazon already uses AI in several ways, which could be expanded over the next decade. Right now, the company uses AI to: Improve product recommendations on search pages. Manage inventory on its distribution network and at fulfillment centers. Optimize shipping routes for package delivery. Provide customer service through chatbots. Direct over 750,000 robots used extensively in the company's fulfillment centers. As the AI revolution rolls on, Amazon should not only bring in new business thanks to its AI innovations but also utilize AI to become more efficient, driving up its own profit margin. And that's why investors would be wise to stick with Amazon stock for the long term. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $305,226!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,382!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $517,876!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 18, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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. Jake Lerch has positions in Amazon. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in Qualcomm. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Qualcomm. The Motley Fool has a disclosure policy. Tuning Out the Market Volatility: 3 AI Stocks Poised to Win Big Over the Coming Decade was originally published by The Motley Fool Sign in to access your portfolio
