Latest news with #WillHealy
Yahoo
01-06-2025
- Business
- Yahoo
3 Stocks Set to Ride the Artificial Intelligence (AI) Wave to New Heights
Amazon's most profitable business unit will benefit from the immense growth of AI. Qualcomm positioned itself to lead the way in AI-driven smartphones. Nvidia's latest quarterly report showed why the stock remains an AI powerhouse. 10 stocks we like better than Nvidia › 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). (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. 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. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 is 979% — a market-crushing outperformance compared to 171% 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 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. 3 Stocks Set to Ride the Artificial Intelligence (AI) Wave to New Heights 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
Yahoo
19-05-2025
- Business
- Yahoo
3 Tech Stocks Destined to Drive Wealth Now and for Years to Come
Amazon's advertising business alone generated over $56 billion in revenue last year. The current success of AI is not possible without Taiwan Semiconductor. The market is overly pessimistic on Alphabet (Google). These 10 stocks could mint the next wave of millionaires › Investors can often simplify their investment choices by buying stock in established, wealth-building companies. Such stocks tend to offer investors more safety, and this approach is especially beneficial when a stock has not approached the end of its high-growth years. Fortunately, the market offers numerous stocks that fit this description, and many of them have achieved their growth through success in artificial intelligence (AI). With that, three analysts from The Motley Fool have recommended stocks that fit such a description. These large-cap stocks have not only stayed at the top of industries they helped transform but have also focused on plans that can keep them on a growth trajectory for years to come. Jake Lerch (Amazon): My choice is Amazon (NASDAQ: AMZN). When I think about which stocks have the potential to drive wealth over the long term, I look for companies with multiple pathways to success. In other words, diversification is key. Amazon, with its multiple business segments, is a perfect candidate. Obviously, the company is most well-known for its sprawling e-commerce empire, but there's far more to Amazon than just online sales. The Amazon Web Services (AWS) unit is the world's largest cloud services provider. That segment now generates over $100 billion in revenue annually and is poised to grow even larger as AI drives further data center spending by organizations around the globe. Moreover, Amazon also has a lucrative advertising business that generated over $56 billion in annual revenue in 2024. That's nothing to sneeze at, and it makes Amazon one of the largest players in the rapidly growing field of digital advertising. Finally, some areas currently generate comparatively little revenue but have big potential going forward. Here, I'm thinking about Amazon's robotics and AI businesses. The company already utilizes nearly 1 million robots supporting its warehouse and logistics operations. As the company scales up its use of robots, Amazon should realize increased profits as its margins expand. What's more, the company is surely learning lessons from its vast fleet of robots, which could make Amazon a leader in AI-powered robotics. In the future, Amazon could parlay this expertise into another lucrative business segment, serving organizations that lack their own fleet of AI robotics by loaning or selling robots trained to perform any variety of tasks. To sum up, Amazon's stable of diverse business segments is one of its greatest assets. Investors looking for a long-term buy-and-hold candidate shouldn't overlook Amazon stock. Will Healy (Taiwan Semiconductor): When it comes to stocks driving the AI revolution, some believe the most critical of these stocks is Taiwan Semiconductor (NYSE: TSM), or TSMC. The Taiwan-based semiconductor giant jumped to a technical lead in the last decade as more chip design companies turned to outside fabs. Grand View Research forecasts a compound annual growth rate (CAGR) of 8% for the semiconductor industry through 2030. That includes a 29% CAGR in the AI chip market, a benefit likely to accrue to TSMC. With that, it has become a favored fab for companies such as Apple, Nvidia, and Qualcomm. So advanced is its technology that Intel, which manufactures most of its own chips, had to turn to TSMC for its most advanced manufacturing. Unsurprisingly, its market share in the foundry business has risen to 67% as of the end of 2024. Additionally, it is not resting on its laurels. The company plans to spend approximately $40 billion in capital expenditures (capex) in 2025 as it seeks to add capacity to meet the insatiable demand for advanced chips. This includes plans to build additional fabs in Arizona, diversifying its manufacturing away from its politically contentious home base in Taiwan. Due to the heavy chip demand, TSMC generated almost $26 billion in revenue in the first quarter of 2025, a 42% yearly increase. That led to comprehensive income of nearly $12 billion in Q1, rising 47% over the same period as its operating expenses grew more slowly than revenue. Furthermore, TSMC's rapid growth appears all the more appealing as its stock trades at a 25 price-to-earnings (P/E) ratio. While geopolitical tension may have pressured the stock, it is arguably at a low valuation, considering TSMC's rapid revenue growth. Such conditions should serve investors well, especially as advanced chip production charges ahead. Justin Pope (Alphabet): Technology giant Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Google's parent company, seems like a no-brainer to buy and hold for the long term. ChatGPT is garnering much attention, as some fear it will make Google's lucrative search engine obsolete with its ability to gather, summarize, and present information to queries. Despite ChatGPT racking up 5.1 billion web and mobile visits last month alone, Alphabet reported 10% year-over-year growth in Google Search ad revenue in Q1 2025. It's always wise to monitor potential threats, but Google Search is still doing just fine. Investors focusing too much on Google Search risk missing all the other great things happening at Alphabet: The company released Gemini 2.5, its latest AI model. There are over 1.5 billion monthly users of AI overviews in search results. Alphabet surpassed 270 million paid subscriptions (e.g., YouTube, Google One). Google Cloud's revenue grew by 28% and operating income by over 140% in Q1 2025. Waymo is performing over 250,000 weekly autonomous rides, up fivefold compared to a year ago. Ad revenue from Search has long been Alphabet's cash cow, but over time, other aspects of the company could offset any deterioration due to AI competitors, and then some. Analysts estimate Alphabet will grow its earnings by an average of 14.9% annually over the long term, down from over 17% a year ago. In other words, lower expectations mean the market believes growth will slow. But Alphabet's current share price values the stock at a P/E ratio of under 19, a bargain for a global technology leader, even at this slower growth rate. It seems the market has grown overly pessimistic toward Alphabet at this point. That could be a fantastic opportunity that pays off for long-term investors over the coming years. 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 $351,127!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,106!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $642,582!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of May 12, 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, and Nvidia. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in Intel and Qualcomm. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy. 3 Tech Stocks Destined to Drive Wealth Now and for Years to Come was originally published by The Motley Fool
Yahoo
12-05-2025
- Business
- Yahoo
Stock Splits Revisited: Here's How 3 High-Profile Stocks Have Performed Since Their Splits.
Nvidia has grown revenue, net income, and earnings per share around 35% over the last year. Markets have cheered Broadcom's first-ever stock split. Investors should blame a steep valuation for Palo Alto Networks' post-split slide. These 10 stocks could mint the next wave of millionaires › Few things stoke more investor interest than a stock split. While they don't alter any of a stock's fundamentals like revenue, net income, or free cash flow, splits can create buzz around a stock, bolstering existing momentum or reviving its appeal among the investment community. Yet, there is no sure thing when it comes to the stock market, and not all stocks that undergo a split see big returns. Here, three Motley Fool contributors will review how three high-profile stocks have performed since their most recent splits: Broadcom (NASDAQ: AVGO), Palo Alto Networks (NASDAQ: PANW), and Nvidia (NASDAQ: NVDA). (Nvidia): It's been nearly a year since Nvidia completed its most recent stock split on June 10, 2024. On that date, the company split its shares 10-for-1, granting each existing shareholder 10 shares for every one share they had owned prior to the split. Since then, Nvidia's stock has essentially moved sideways. However, there have been significant ups and downs. The stock has fallen by as much as 22% at its lowest point (a few weeks ago in early April 2025). It's also experienced a few big rallies, most notably during the last few months of 2024, when shares were up by as much as 24%. Yet, there is a lesson to be gleaned from this meandering price action: Stock prices and fundamentals don't always move in lockstep. Indeed, Nvidia's fundamentals have soared compared to one year ago: Revenue has increased by 36% Net income is up 37% Diluted earnings per share (EPS) have grown by 38% In short, the company is posting excellent results, highlighting Nvidia's predominant role within the booming artificial intelligence (AI) sector. Thanks to those fantastic EPS figures, Nvidia stock now trades at a price-to-earnings (P/E) multiple of 40x. While that's still high for the average stock, it's one of the lowest multiples for Nvidia over the last five years. In fact, the average P/E ratio for the stock over that five-year period is around 80x. So, while Nvidia's stock performance since its most recent stock split might appear to be more of a fizzle than a sizzle, remember, fundamentals tell the true story of a company's performance. On that front, Nvidia remains a solid performer. Will Healy (Broadcom): Another stock to benefit significantly from AI is Broadcom. The semiconductor and software giant became a leader in AI as it applied that technology to hardware and applications that serve businesses. In June 2024, AI-driven gains had taken Broadcom to a pre-split price of around $1,500 per share. That prompted the company to announce its first-ever stock split, splitting its shares on a 10-for-1 basis. When that split occurred on July 15, 2024, the split and the rising stock price led to a price of $169.89 per share. As of this writing, it has made gains of approximately 18% in the 10 months since the split. Despite that increase, the path higher was not smooth. It peaked in early February at an intraday high of $251.88 per share. However, it got caught in a generalized sell-off in AI stocks and lost as much as 45% of its value over the next two months. Fortunately for Broadcom bulls, the stock has trended higher since that time and is now approximately 20% off its 52-week high, leaving it in a bear market. The gains are likely not done yet. Admittedly, the P/E ratio of 97 implies that it is a pricey stock. Nonetheless, a deeper look at its valuation places its forward P/E at 30, which appears inexpensive for a top AI stock, particularly with its growth likely to continue. Analysts forecast that profits will grow by 36% this year. The 2026 prediction calls for 19% earnings growth. While the slowing growth rate could delay the recovery of Broadcom stock in the near term, the falling valuation should bode well for its long-term bull case post-split. Justin Pope (Palo Alto Networks): Cybersecurity is one of the hottest growth themes in the technology sector. Palo Alto Networks, a standout for its firewall security, surged 181% between the start of 2023 and when management announced a 2-for-1 stock split on Nov. 20, 2024. The stock price was approaching $400 at that time. Stock splits lower share prices by increasing the total share count. Splits can make a stock easier to buy or sell for individual investors or employees who may want to cash out shares they've earned. Importantly, the share count increases proportionately, so the valuation, measured by the price-to-earnings ratio, price-to-sales ratio, or any other metric you choose, doesn't change. Still, investors tend to applaud stock splits. Unfortunately, Palo Alto Networks hasn't performed very well following the split. The stock is down by approximately 7% since it began trading at its split-adjusted share price on Dec. 16, 2024. Companies tend to conduct stock splits when things are going well, so why has the stock languished? For starters, the market has become increasingly volatile in recent months amid geopolitical conflicts, recession worries, and a trade war between the United States and China. Plus, Palo Alto Networks had become quite expensive following its nearly two-year run into the end of last year. Shares still trade at a hefty 58 times 2025 earnings estimates, which isn't exactly a bargain for a business that analysts estimate will grow earnings by an average of 19% annually over the long term. Patient investors should do well over the next five-plus years if the company can sustain double-digit growth, but overpaying for stocks can stunt short-term returns. The take-home message? Stock splits should never be the sole reason an investor buys a stock. 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 $302,503!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,640!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $614,911!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of May 5, 2025 Jake Lerch has positions in Nvidia. Justin Pope has no position in any of the stocks mentioned. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom and Palo Alto Networks. The Motley Fool has a disclosure policy. Stock Splits Revisited: Here's How 3 High-Profile Stocks Have Performed Since Their Splits. was originally published by The Motley Fool Sign in to access your portfolio
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
04-05-2025
- Business
- Yahoo
3 Top Technology Stocks to Buy in May
Alphabet's core and emerging business units are thriving. The Trade Desk trades at its lowest valuation since 2019. Cybersecurity remains a top priority for many organizations. 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. Continue » 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): 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. 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. 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. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 is 906% — a market-crushing outperformance compared to 164% 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 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. 3 Top Technology Stocks to Buy in May was originally published by The Motley Fool
