In the second quarter of 2025, data center products generated about 42% of Advanced Micro Devices' (NASDAQ:AMD) revenue. Last quarter, they generated 58% -- $6.7 billion of the chipmaker's record $11.5 billion total.

Behind that shift is a simple growth gap. In the second quarter, data center revenue climbed 107% from a year earlier. Everything else AMD sells (client processors, gaming chips and embedded products) grew about 8% combined.

With a gap that wide, the mix shifts every quarter on its own.

My prediction: the segment passes 70% of AMD's revenue at some point in 2027, before the Helios rack ramp is finished. Here's the math, step by step, and what could break it.

Image source: AMD.

A widening spread

The second quarter's 50% companywide growth blended two very different businesses. Data center, home to EPYC server processors and the Instinct graphics processing units (GPUs) behind artificial intelligence (AI) computing, more than doubled over the year, from about $3.2 billion to $6.7 billion. The rest of the company combined for about $4.8 billion. Client revenue, at $3.1 billion, was up 23%, embedded grew 19%, and gaming fell 31%.

Third-quarter guidance widens the gap. Management's guide calls for revenue near $13 billion in the third quarter -- about 41% growth, down from the second quarter's 50%. But chief financial officer Jean Hu said the company expects data center sales to accelerate in the second half of the year. In other words, nearly every incremental dollar in that guide is a data center dollar.

If everything outside data center simply holds near $4.8 billion combined, data center lands around $8.2 billion in the third quarter. That would be about 63% of revenue, five percentage points of mix shift in one quarter.

What does it take to get to 70%?

For the segment to reach 70% of revenue, it has to grow to about 2.3 times the size of everything else AMD sells. Last quarter, it was about 1.4 times that size.

Run those two rates forward a year, with data center slowing from 107% to 90% and the rest still growing about 8%.

By the second quarter of 2027, the segment would be producing roughly $12.8 billion against about $5.2 billion for everything else. That comes to about 71% of revenue. And even a sharper slowdown to about 85% growth still gets there within a year.

Management is aiming higher than my scenario assumes. "Taken together, we now expect data center segment revenue to more than double year-over-year in 2027," CEO Lisa Su said on the company's second-quarter earnings call.

Helios, AMD's rack-scale AI system built on MI400 series chips, is in production, and Su said initial shipments are on track to begin late this quarter, with the ramp building through the fourth quarter and into 2027.

OpenAI has agreed to deploy 6 gigawatts of AMD GPUs, with the first gigawatt of MI450 series chips set to begin deploying later this year. Meta Platforms signed its own 6-gigawatt agreement, with first shipments on the same timeline. And Anthropic plans up to 2 gigawatts, with the first gigawatt beginning in the first half of 2027.

AMD's other businesses could get in the way

The likeliest way this prediction fails isn't a data center stumble -- it's strength everywhere else.

Client revenue grew 23% in the latest quarter, a healthy rate hidden inside that combined 8% figure because gaming fell 31% alongside it. And at about $780 million a quarter, gaming may soon be too small for its declines to keep masking that.

A PC upgrade cycle could push client growth toward 30% while gaming stops falling, lifting the rest of the company to about 20% growth. Hold data center at 90%, and the segment sits near 69% of revenue by mid-2027, just under the line.

Of course, that outcome would be good for AMD. It would likely push the crossover out a quarter or two, still inside 2027.

But a Helios stumble is what breaks the prediction outright. If shipments slip and data center growth gets cut in half to about 50%, the segment could sit around 66% of revenue in mid-2027, and I think 70% waits until 2028.

Ultimately, the spread between 107% and 8% is wide enough that the prediction doesn't need a best-case 2027. It survives a real data center slowdown, and a client revival mostly delays it.

Investors, I'd argue, are already pricing AMD like a data center company. The stock trades at about $474 as of this writing, or around 30 times what AMD is expected to earn in 2027.

The valuation looks reasonable next to 41% guided revenue growth, but a smooth Helios ramp is already baked into the price.

I expect the crossover to come around the middle of 2027, give or take a quarter.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.

Constellation Energy (NASDAQ: CEG) operates the largest U.S. nuclear power portfolio, with over 22 gigawatts of capacity at the end of fiscal 2025. Although Vistra's (NYSE: VST) nuclear portfolio is smaller, with 6,448 megawatts of capacity, its contracted opportunity is substantial. Both companies have been signing long-term deals with technology companies that need reliable electricity for data centers.

Image source: Getty Images

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

But the better stock is not simply the company with more nuclear capacity. Constellation Energy and Vistra trade at roughly 22.4 times and 14.4 times forward one-year earnings, respectively. The significant valuation gap is an important factor in deciding which stock offers the better opportunity today.

Constellation has significant revenue visibility

Constellation Energy has signed a 20-year agreement to supply Microsoft with power from the planned restart of the 835-megawatt Crane Clean Energy Center. The company has also signed a 20-year agreement to supply Meta Platforms with 1,121 megawatts of nuclear power from the Clinton Clean Energy Center. Constellation Energy also signed another 920 megawatts of long-term power purchase agreements for nuclear generation in the second quarter. (ending June 30, 2026).

Management expects base earnings per share to compound at 20% or more annually from 2026 through 2029. However, base earnings represent only about 60% to 70% of total adjusted operating earnings. So investors should not assume total adjusted operating earnings per share (EPS) will grow at the same rate.

Vistra also looks attractive

Vistra's 20-year agreements with Meta Platforms cover 2,609 megawatts, including 433 megawatts of new capacity expected from upgrades at existing plants. Amazon's AWS has also signed a 20-year agreement for up to 1,200 megawatts of power from Vistra's Comanche Peak nuclear plant.

Vistra sees a 2027 adjusted EBITDA opportunity of $7.4 billion to $7.8 billion from its ongoing operations, excluding potential benefits from the pending Cogentrix Energy acquisition and its agreements with Meta Platforms. The company has also reduced its share count by roughly 30% since November 2021, which has helped boost earnings per share even without relying entirely on faster business growth.

Hence, while Constellation Energy deserves a premium, Vistra offers the stronger risk-reward proposition today.

Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Constellation Energy, Meta Platforms, Microsoft, and Vistra. The Motley Fool has a disclosure policy.

The Vanguard Information Technology Index Fund ETF (NYSEMKT: VGT) has crushed the S&P 500 this year, with a 27% return. Some investors think they missed out on the rally when a stock or ETF gains momentum, but that may not be the case for this tech ETF. A closer look at the fund's top holdings indicates that there is more to the strong year-to-date performance than investors may realize.

Image source: Getty Images.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

This tech ETF offers significant exposure to the AI trade

The Vanguard Information Technology Index Fund ETF is filled with chipmakers. Nvidia (NASDAQ: NVDA) is the largest position, making up 17% of the fund's total assets. Broadcom (NASDAQ: AVGO), Micron (NASDAQ: MU), and Advanced Micro Devices (NASDAQ: AMD) hold the top four to six positions in the fund and account for a combined 11% of total assets.

Hyperscalers need these chips for their artificial intelligence infrastructure, and as long as cloud platforms and other businesses perform well thanks to AI, those investments will continue. Nvidia and Broadcom both gave multi-year guidance that implies AI revenue will continue to compound.

The largest positions in the portfolio look poised to deliver exceptional fundamental growth amid the AI boom. It's this type of growth that could help the Vanguard Information Technology Index Fund ETF extend its gains.

It's all tech

The tech sector has historically been one of the best ways to beat the S&P 500 over the long run, and this ETF serves as an excellent example. The tech-focused Vanguard fund has an annualized return of 24.4% over the past decade.

Looking deeper into the fund reveals a major allocation to semiconductors and tech hardware, which together account for more than 60% of total assets, including semiconductor equipment.

It still has some exposure to other tech opportunities, such as e-commerce and online advertising. While these types of investments could beat the S&P 500, artificial intelligence is the hottest opportunity right now.

Grand View Research projects a 30.6% compound annual growth rate (CAGR) for the artificial intelligence industry through 2033. Some companies will grow faster than others as the rising tide of AI lifts many businesses, but chipmakers have been the market leaders. Nvidia, Micron, Broadcom, and Advanced Micro Devices are all posting revenue growth rates far more impressive than the average S&P 500 company, and multi-year deals suggest that it will continue.

The Vanguard Information Technology Index Fund ETF has a long history of beating the market and charges only a 0.09% expense ratio. It doesn't cost much to get a well-diversified portfolio of tech companies that should benefit from continued AI demand.

Marc Guberti has positions in Broadcom. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.

Shares of Tesla (NASDAQ:TSLA) fell 5.92% on Friday, after the company's invite-only Cybercab launch event left investors underwhelmed and federal safety regulators opened an audit query into the new robotaxi. Cathie Wood's ARK Innovation ETF (NYSEMKT:ARKK) slipped 1.06% the same day.

Those two moves are more connected than they look. Not only is Tesla the fund's biggest position, but the second-biggest position, SpaceX (NASDAQ:SPCX), answers to the same CEO. SpaceX fell 1.2% on Friday, too.

Together, the two Elon Musk companies make up about 16% of a fund with 47 holdings.

Image source: Getty Images.

Two stocks, one CEO

ARK publishes the fund's holdings daily, and the file dated Friday, Sept. 4, shows how top-heavy the ARK Innovation ETF is. Tesla sits at 9.62% of assets, and SpaceX sits at 6.28% -- about 16% combined. Stablecoin issuer Circle Internet Group is the No. 3 position at 6.06%, just behind SpaceX. And the top 10 positions account for about half of the fund's $6.6 billion in assets.

Of course, the fund is concentrated at the top generally, not just in Musk's companies. The Musk pairing is different, though. Two positions run by the same person can move on the same news, and owning both doesn't spread the risk the way owning two unrelated companies would.

Zoom out, and the concentration hasn't been an obvious edge lately, either. The fund gained about 15% over the past year, a stretch in which the S&P 500 (SNPINDEX:^GSPC) rose about 19%.

How much of Friday came from Tesla?

Thursday was supposed to be a milestone for Tesla. The company put its two-seat Cybercab robotaxi into service in Austin, Texas.

But the launch event was invite-only, wasn't streamed, and CEO Elon Musk didn't appear. The event also gave no details on pricing, production pace, or deployment plans.

Regulators moved the same day, too. The National Highway Traffic Safety Administration opened an audit query into Tesla's self-certification of the Cybercab (a vehicle with no steering wheel or pedals) as compliant with federal safety standards.

Tesla's stock had climbed 5.4% on Thursday ahead of the event. By Friday's close, it was down 5.92% to about $354, leaving it about 29% below its 52-week high.

For ARK Innovation, the effect was mostly a matter of weight. A position that makes up 9.62% of assets and falls 5.92% takes about 0.6 of a percentage point off the fund by itself. The fund fell 1.06% on Friday. In other words, more than half of the day's decline came from one stock.

And that stock isn't cheap. Tesla trades at about 155 times the earnings it's expected to produce next year, a price that I'd argue assumes products like the Cybercab ramp quickly and smoothly.

SpaceX is even more expensive

The fund's other Musk position has been a public company for less than three months. SpaceX, the satellite internet and rocket company, went public on June 12 at $135 per share in the largest initial public offering on record.

To be fair, the business is growing impressively. Second-quarter revenue came in at $7.8 billion, up 92% year over year from $4.1 billion. The connectivity segment, built around Starlink's satellite internet service, produced $4.3 billion of that, more than the company's other two segments combined. And the growth is accelerating: revenue rose about 15% year over year in the first quarter before the second quarter's surge.

The company isn't close to profitable, though. SpaceX lost $541 million in the second quarter, an improvement from a $1 billion loss a year earlier. But over the first six months of 2026, its net loss widened to $4.8 billion from $1.5 billion.

Shares trade around $148 as of this writing, modestly above their offering price. That puts SpaceX's market value near $2 trillion -- about 64 times sales, measuring a full year of revenue at the second quarter's pace.

Ultimately, a fund with 47 holdings sounds diversified, and in most respects this one is. At the very top, it isn't. About 16% of the fund rides on one CEO's two companies, and both are arguably among the most expensive stocks in the market.

For investors who own ARK Innovation as a spread-out bet on innovation, the pairing at the top may deserve more attention than the fund's 47 holdings suggest.

Daniel Sparks has clients with positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Mark Streams, Executive Vice Chairman of the Board of Directors and the Chief Legal Officer at StubHub Holdings, Inc. (NYSE:STUB), sold ~166,000 shares of Class A Common Stock for ~$1.1 million on September 2 and 3, 2026 according to a recent SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 weighted average sale price ($6.36); post-transaction value based on September 03, 2026 market close ($6.53).

Key questions

• What was the scale of the disposition relative to the insider's total equity?
  The sale of ~166,000 shares represented 12% of the Class A Common Stock held directly by Mark Streams before the transaction.
• At what price levels were the shares executed during this period?
  Execution occurred across multiple transactions at weighted average prices ranging from $6.20 to $6.4350 per share.
• What is the current market value of the remaining direct equity interest?
  The insider retains direct ownership of ~1.2 million shares, which carries a market value of $8.01 million based on the September 3, 2026 valuation price of $6.53.
• How does the insider's residual ownership compare to the total shares outstanding?
  The remaining direct stake represents an ownership interest of 0.35% in the company.

Company Overview

Company Snapshot

• StubHub operates a global ticketing marketplace that facilitates the buying and selling of live event tickets through its StubHub and viagogo brand platforms, generating revenue from transaction fees on ticket sales across concerts, sports, theater, and other live experiences.
• The company operates a commission-based business model, capturing value as an intermediary between ticket buyers and sellers on its digital marketplace, with revenue derived primarily from transaction fees on each ticket sale completed on its platforms.
• StubHub serves individual consumers seeking to purchase or resell tickets to live events, as well as event organizers and venues that utilize the platform to reach secondary market buyers, with a customer base spanning multiple geographies and event categories.

StubHub Holdings operates the world's largest peer-to-peer ticketing marketplace, facilitating billions of dollars in annual ticket transactions across a global customer base of hundreds of millions of users.

The company leverages its dual-brand strategy -- StubHub in North America and viagogo internationally -- to maintain market leadership in the secondary ticket resale market. Despite significant revenue generation, the company is currently navigating profitability challenges as it invests in platform expansion and market penetration.

What this transaction means for investors

StubHub's Executive Vice Chairman and Chief Legal Officer Mark Streams sold a substantial 12% of his directly held company shares on Sept. 2 and Sept. 3. This was a discretionary transaction at a weighted average price of $6.36, which is not far from the stock's 52-week low of $5.74, and well below the initial public offering price of $23.50 per share.

Although he sold a large percentage of his holdings, Streams still retains 1.2 million directly held shares. This significant equity position ensures his continued alignment with shareholder interests. However, a discretionary sale of this size does not instill investor confidence.

StubHub experienced strong sales in the second quarter thanks to the World Cup. It reported record revenue of $573.1 million, which represents excellent 33% year-over-year growth. That said, the stock remained down as costs also increased, resulting in a disappointing net loss attributable to common shareholders of $40,000.

Consequently, Wall Street analysts downgraded the stock, noting a slowdown in StubHub's gross merchandise sales in the second half of 2026, which is at odds with the growth seen by competitors.

Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

After nearly four years of steadily amassing a cash balance of $397 billion, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) is finally putting a measurable amount of that money back to work.

Oh, most of it still remains on the sidelines, undeployed. Specifically, as of the end of the conglomerate's second fiscal quarter, which ended in June, it still had nearly $366 billion in liquidity. That's a reduction of $31 billion in just three months' time, or less than one-tenth of its cash pile.

Still, it's a start.

So where did all that money go? It's not too tough to figure out.

Image source: Getty Images.

Where the money went

The biggest chunk of that $31 billion went toward the purchase of more shares of technology giant Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Berkshire ended Q1 with 54.2 million "A" shares of the company (worth roughly $15.6 billion at the time), plus a handful of "C" shares. Now it owns a bunch more of both, with a collective stake worth nearly $36 billion. That makes Alphabet Berkshire Hathaway's third-biggest holding, right behind American Express.

That's certainly not the only addition Berkshire's current CEO Greg Abel -- with some guidance from Warren Buffett, of course -- made to the company's equity portfolio during the second quarter, though. Although it already owned stakes in both, the company scooped up another 17.5 million shares of Delta Air Lines (NYSE: DAL) to bring its count to 57.3 million, and more than doubled its position in department store chain Macy's (NYSE: M), adding another 4.3 million shares. Those trades would have cost on the order of $1.6 billion and $100 million, respectively.

Expanded positions in homebuilder Lennar (NYSE: LEN) (NYSE: LENB) and The New York Times Company (NYSE: NYT) would have also used up some of Berkshire's cash, although not nearly as much as the $17 billion it shelled out to expand its stake in Alphabet.

Perhaps Abel's most noteworthy use of Berkshire Hathaway's idle cash during Q2, however, wasn't a new pick or adding to an existing one. It's the $4.5 billion used to repurchase outstanding shares of Berkshire itself. That's a dramatic increase from the $235 million spent on the company's own stock in Q1, snapping a six-quarter hiatus in share buybacks.

It's also worth noting that Berkshire Hathaway sold on the order of $3.7 billion in equity holdings during the three months in question, bolstering the conglomerate's quarter-ending cash balance. The remainder of any difference between the sum total of these purchases minus the proceeds of these sales reflects capital spending or net costs incurred by Berkshire's privately owned businesses, such as GEICO Insurance, Clayton Homes, Pilot Travel Centers, and Dairy Queen, just to name a few.

Picky about picks, but also patient

The allocation of this cash deployment is interesting, to be sure. Perhaps more interesting, however, is the fact that Abel is finally doing something with all of that idle capital. Yet, Berkshire's CEO doesn't appear to be in a rush to put it all to work at once. This patience is just as impressive as the conglomerate's stock's long-term price performance.

American Express is an advertising partner of Motley Fool Money. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, American Express, Berkshire Hathaway, Lennar, and The New York Times Co. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

William J. Colombo, a Director at Dick's Sporting Goods (NYSE:DKS), purchased 913 shares of common stock on Sept. 1, 2026, as disclosed in a recent SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 weighted average purchase price ($133.19); post-transaction value based on Sept. 1, 2026, market close ($132.95).

Key questions

• How does this purchase alter the insider's total equity position?
  The acquisition of 913 shares increased total beneficial ownership to 181,838 shares, with the position primarily comprising 181,000 shares held indirectly through a trust and a minor direct holding of 838 shares.
• What is the current market valuation of the total holdings?
  Based on the Sept. 1, 2026, market close of $132.95, the aggregate direct and indirect equity stake is valued at approximately $24.2 million.
• What is the context of the transaction price relative to recent stock performance?
  The shares were acquired at a weighted-average price of $133.19 per share, following a period in which the company saw a 38% decrease in its one-year total return as of Sept. 1, 2026.

Company Overview

Company Snapshot

• Dick's Sporting Goods operates as a comprehensive omni-channel sporting goods retailer, generating revenue through the sale of hardlines, including sporting equipment, fitness equipment, golf equipment, and fishing gear, as well as athletic apparel, footwear, and accessories across its retail network.
• The company operates an integrated retail model combining physical store locations with digital commerce capabilities, enabling customers to shop across multiple channels while maintaining inventory efficiency and fulfillment flexibility.
• Dick's Sporting Goods serves a broad consumer base of athletic enthusiasts, fitness-focused individuals, and sports participants across the United States, positioning itself as a destination retailer for both casual and serious athletes.

Dick's Sporting Goods is a leading omni-channel sporting goods retailer with a substantial market presence across the United States. The company generates approximately $21.1 billion in TTM revenue, demonstrating significant scale within the specialty retail sector. As a diversified sporting goods platform, Dick's maintains competitive advantages through its integrated retail network, comprehensive product assortment spanning equipment and apparel categories, and omni-channel capabilities that address evolving consumer shopping preferences.

What this transaction means for investors

Shareholders of Dick's Sportings Goods have had a rough go of it over thus far in 2026, with the stock price dropping nearly 30%. In comparison, the S&P 500 is up 12.7% over the same period. The struggles faced by the retailer were highlighted in its recent 2026 second-quarter earnings report. In that report, Dick's Sporting Goods reported that Foot Locker, which it acquired in September 2025, saw comparable sales decline by 3.6%. The Foot Locker business, which some were skeptical Dick's Sporting Goods could turn around, appears to be weighing on the overall business, as Dick's Sporting Goods lowered its overall net sales outlook for 2026.

Given the stock's negative price performance and the negative sentiment around the stock, Colombo's purchase is likely welcome news for shareholders. There are plenty of reasons to sell a stock, but typically, an insider buys shares only because they believe the stock price will eventually rise. Purchasing 913 shares indirectly is still a relatively small stake compared to Colombo's overall holdings, but it is at least a signal of confidence. And the bigger picture is that the insider's total holdings are valued at $24.2 million, indicating continued alignment with the company's future success.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Shares of UiPath (NYSE: PATH) sank despite the company reporting solid fiscal second-quarter results and raising its full-year guidance. The stock is now down on the year, as of this writing.

UiPath began as a robotic process automation (RPA) company that lets customers use software bots to perform repetitive, rule-based tasks; however, it has been in the middle of transforming itself in the age of artificial intelligence (AI). Its goal now is to be an orchestration platform that can combine AI with deterministic automation.

Let's dig into the company's quarterly results and prospects to see if this dip is a buying opportunity.

Moving in the right direction

UiPath said its platform that can orchestrate both AI agents and bots was beginning to resonate with customers as it can give them better returns on their investments and that its strong roots in governance and reliability were a competitive advantage. It also believes that being AI model agnostic is an important differentiator. Its AI momentum could be seen in the quarter with 18 of its 20 largest deals including an AI component.

The company has been working to strengthen its go-to-market strategy and said increased deal sizes and expanded customer engagement were evidence this was starting to pay off. However, it noted that customer education was still important, as it looks to bestow the benefits of how combining AI with deterministic automation can help enterprises. The company is also considering offering outcome-based pricing models to increase customer value and adoption. Finally, it continues to add prebuilt vertical and outcome-oriented solutions to help drive growth and be a gateway for its entire solution.

For its fiscal Q2, revenue rose 13% year over year to $410 million, cruising past guidance for revenue of between $395 to $400 million. Its annualized recurring revenue (ARR) rose by 12% year over year to $1.94 billion. Meanwhile, it added $37 million in new ARR in the quarter, up 19% year over year. UiPath's ARR is made up of its annualized invoiced amounts from subscription licenses and maintenance and support obligations, while it excludes invoiced amounts related to perpetual licenses or professional services. The metric is similar to bookings.

Dollar-based net retention came in at 109%, showing that the company is seeing solid growth within its existing customer base. It also had 97% gross retention.

UIPath ended the quarter with 10,350 customers, which was down from 10,550 at the end of Q1 as it continues to see attrition among smaller customers. Customers with $30,000 or more in ARR increased by 6% year over year, and customers with $100,000 or more in ARR increased 10%. Meanwhile, customers with $1 million or more in ARR jumped 21% to 387.

Adjusted earnings per share (EPS) was steady at $0.15. The company generated $31 million in operating cash flow and free cash flow. It ended the quarter with $1.41 billion in cash and marketable securities and no debt.

Looking ahead, UIPath forecast Q3 revenue in the range of $440 million to $445 million, representing growth of 8% at the midpoint. It guided for ARR between $1.992 billion and $1.997 billion.

For the full year, it raised its revenue guidance to a range of $1.789 billion to $1.794 billion from an earlier outlook of $1.776 billion to $1.781 billion. It now expects ARR of $2.065 billion to $2.070 billion versus between $2.058 billion and $2.063 billion previously.

Image source: The Motley Fool

Can the stock rebound?

UiPath continues to have a nice opportunity in front of it, and it appears to be seeing some green shoots from its efforts. However, for the stock to work, it does really need to see growth start to accelerate.

The stock remains relatively cheap, trading at a forward price-to-sales ratio of 4.4 times for a high gross margin, recurring business model. Take out its $1.4 billion in cash and marketable securities, and the stock trades at an enterprise-value -to-forward-sales ratio of just around 3.5.

Given its valuation, I think UiPath remains an interesting, speculative AI stock to own.

Geoffrey Seiler has positions in UiPath. The Motley Fool has positions in and recommends UiPath. The Motley Fool has a disclosure policy.

Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) is off to a strong start in its first year under CEO Greg Abel. Second-quarter operating earnings rose 16% from a year earlier. The stock, near $505 as of this writing, puts the company's market value at about $1.1 trillion.

Whether the next five years look as good is a harder call. Over a stretch that long, the stock should mostly track two numbers -- how fast operating earnings grow, and what multiple of those earnings investors will pay.

And both numbers hinge, arguably more than anything else, on what Abel does with the company's $365 billion of cash and U.S. Treasury bills.

Image source: Getty Images.

Strong growth, and a price to match

Operating earnings are Berkshire's preferred yardstick. The measure leaves out the stock portfolio's gains and losses, which swing reported net income from quarter to quarter and which the company says are usually meaningless in any given period.

On that measure, the company earned about $13 billion during the second quarter. First-half operating earnings totaled $24.3 billion, 17% more than a year earlier.

The growth is a rebound, not a continuation. Operating earnings slipped 6% in 2025, to $44.5 billion, dragged down by weaker insurance results.

This year, growth is broad-based outside insurance. BNSF, the energy business, and the manufacturing, service and retailing group all grew first-half earnings between about 10% and 15% year over year.

Add up the past four reported quarters, and Berkshire has earned about $48 billion of operating earnings, or about $22 for every Class B share. Against a $505 share price, that comes to about 23 times operating earnings -- a premium price, in my view. Investors are paying today for growth that hasn't happened yet.

Greg Abel has started spending the cash

Berkshire's cash and U.S. Treasury bills stood at about $365 billion at midyear, a little less than at the start of the year.

In January, the company closed its $9.4 billion purchase of the chemicals maker OxyChem. In late July, it paid about $6.8 billion in cash for homebuilder Taylor Morrison. And it repurchased about $4.5 billion of its own stock in the second quarter, after buying back almost none in the first. The buyback decision is Abel's now, made in consultation with chairman Warren Buffett.

Berkshire was a net buyer of stocks, too. The cost basis of Berkshire's equity portfolio rose about $21 billion during the first half.

Those uses of cash do different jobs for the five-year math. An acquisition adds operating earnings directly. Stock purchases mostly add just dividend income, since portfolio gains sit outside the operating measure. And buybacks shrink the share count, down about 0.5% through June, so each share gets a bigger piece of the earnings.

Meanwhile, the case for leaving the cash parked may get weaker. After all, Berkshire's insurance investment income fell about 8% in the first half, a decline the company attributed to lower short-term interest rates. The less Treasury bills pay, the more the five-year outcome depends on Abel finding better places for the money.

Where could the stock land?

Assume growth settles at 5% a year, slower than 2026 but better than 2025, and that investors put a lower valuation multiple on a slower Berkshire -- say, 18 times operating earnings. Per-share operating earnings would reach about $29 by mid-2031, and the stock would sit near $525. Five years of almost nothing.

The upside case leans on the cash. If acquisitions and buybacks help operating earnings compound at 10% a year (a pace the company has beaten so far in 2026), and the stock keeps a valuation near 22 times operating earnings, per-share earnings reach about $37. The stock lands a little above $800, about a 10% annual return.

The stock portfolio adds noise to every path. Berkshire's five largest holdings made up 66% of its $324 billion equity portfolio at midyear: Alphabet, American Express, Apple, Bank of America, and Coca-Cola. Of course, a rough stretch for even one or two of those positions could move what investors pay for the whole company. But the portfolio is only about 30% of Berkshire's market value, and its swings don't touch operating earnings at all.

Ultimately, I'd split the difference. Growth near 8% and a valuation of 20 times operating earnings would put the shares around $650 in five years, a mid-single-digit annual return, plus whatever Abel's dealmaking adds on top.

But here's what's interesting about this investment. The downside risk seems low given Berkshire's cash, and there are scenarios that could be far more bullish than we've outlined here if the company deploys its cash into the right assets at the right time. For that reason, I believe Berkshire is a great core holding, even if expectations for the stock are modest. I believe the stock offers meaningful upside potential with low downside risk.

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Daniel Sparks and his clients have positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

You've probably run across recommendations to buy into the Vanguard S&P 500 ETF (NYSEMKT: VOO) plenty of times. Even Warren Buffett has recommended low-fee S&P 500 index funds, citing Vanguard's as a prime example. In his 2013 letter to shareholders, he wrote about his directions to his trustee for his eventual bequest to his wife:

Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions or individuals -- who employ high-fee managers.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Image source: Getty Images.

What would $10,000 grow to in a decade in the S&P 500?

How well can you do with a mere S&P 500 index fund? Let's take a look:

Source: Morningstar.com as of Sept. 3, 2026.

Not bad, right? If you plunked, say, $10,000 into this fund a decade ago, it would be worth $38,212 -- or $41,688, if you'd reinvested dividends along the way.

All this is kind of misleading, though, because you should not be expecting annual gains of 15% or 20% from the S&P 500 every year. The past 15 years have been unusually strong for the stock market. Know that the S&P 500 has averaged annual returns closer to 10% (ignoring inflation) over many decades.

Don't get discouraged about that 10%, though -- because, according to the folks at S&P Dow Jones Indices, over the past 15 years, the S&P 500 index has outperformed a whopping 90% of managed large-cap mutual funds (as of the end of 2025).

What's in the Vanguard S&P 500 ETF?

As you might have guessed, the fund encompasses about 500 stocks. Together, they make up about 80% of the total U.S. stock market's value. So investing in this fund is a lot like investing in the overall American economy. Here are the recent top 10 holdings:

Source: Vanguard.com, as of July 31, 2026.

Should you invest in the Vanguard S&P 500 ETF?

Long-term investors in this fund are likely to do well.

But there are some alternatives worth considering. There are plenty of other solid index funds, for example. There are even some twists on the S&P 500 -- like the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), which invests in the same 500 companies, but weights them equally, not by their market value. This gives each component an equal chance to move the needle.

However you do it, be sure that you're socking away money for your future financial security. Your future self will thank you.

JPMorgan Chase is an advertising partner of Motley Fool Money. Selena Maranjian has positions in Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Taiwan Semiconductor Manufacturing (NYSE:TSM) is already worth about $2.2 trillion, with shares of the chip foundry trading at about $427 as of this writing.

My prediction: The company's market value passes the $3 trillion mark before 2029. To be specific, that means sometime before the end of 2028, about two years and four months away.

That may sound like a bold call. The stock would need to reach about $580 per share, about 21% above its 52-week high of $479.

But the yearly return the milestone requires is more ordinary than it sounds. And it's a fraction of the pace TSMC's business is growing at today.

Image source: TSMC.

TSMC needs about 14% a year to get there

Going from about $2.2 trillion to $3 trillion is a gain of about 35%. Spread over that stretch, it works out to about 14% compounded annually.

For a business growing the way TSMC is right now, that isn't a high bar.

I'm not assuming investors pay more for each dollar of TSMC's earnings than they do today, either. If the stock's price-to-earnings multiple simply holds steady, the share price should track earnings growth over time. In other words, earnings compounding at about 14% a year through 2028 could arguably get the company there on its own.

A 40% year

Highlighting how far ahead of that bar the business is running, TSMC's second-quarter revenue rose 36% year over year to NT$1.27 trillion ($40.2 billion in U.S. dollars), while net income surged 77%. Gross margin was 67.7%, a big step up from 58.6% a year before. And the momentum has carried into the second half of the year. July revenue rose about 45% year over year, putting revenue through the first seven months of 2026 up 37%.

Management expects more of the same. Guidance calls for third-quarter revenue of $44.6 billion to $45.8 billion. Against the year-ago quarter's $33.1 billion, the midpoint represents about 37% growth -- an acceleration from the second quarter's pace in dollar terms.

In July, management also raised its full-year outlook to revenue growth slightly above 40% in U.S. dollar terms.

"Moving into third quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology," said Wendell Huang, TSMC's chief financial officer, in the company's second-quarter earnings release.

The company is spending like it expects the demand to last, too. Management now plans $60 billion to $64 billion of capital spending in 2026, up from its earlier budget, and it announced an additional $100 billion investment in Arizona to build several more leading-edge chip fabs and advanced packaging plants.

What could go wrong?

The main risk is concentration.

High-performance computing accounted for 66% of TSMC's revenue in the second quarter, tying the company's growth closely to the artificial intelligence (AI) build-out. If the biggest spenders on AI infrastructure pull back, growth could slow quickly.

Of course, margins could give back some ground, too. Gross margin guidance of 65% to 67% for the third quarter sits below the 67.7% the company just posted. If profitability drifts lower from here, earnings could grow more slowly than revenue does -- and it's earnings growth, not revenue growth, that has to average about 14%.

But the prediction can absorb a lot of deceleration. Say revenue growth halves to 20% in 2027, then halves again to 10% in 2028.

Even that path compounds at about 15% a year over those two years, still above the requirement, assuming profit margins hold near current guidance and the price-to-earnings multiple stays put. And it leaves out the rest of 2026, when growth is running at about three times that pace.

The scenario I take more seriously, however, is a market that changes its mind. If investors sour on AI infrastructure spending, they could pay less for each dollar of TSMC's earnings even while those earnings keep growing. A compressing price-to-earnings multiple would likely raise the bar on the business -- possibly well past 14% a year.

Ultimately, though, a business guiding for revenue growth slightly above 40% this year clears a 14% hurdle with plenty of room to spare, even if growth fades hard through 2027 and 2028. I expect Taiwan Semiconductor's market value to top $3 trillion before the end of 2028.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ:NVDA) has established itself as the artificial intelligence (AI) chip leader, delivering double- and even triple-digit growth in recent quarters. This is thanks to the company's early presence in the space and its commitment to constant innovation.

Though Nvidia clearly dominates, it isn't alone in this high-growth field, and rivals are also seeing success here. This increasing competition is one risk that investors have kept on their radar screens, with the idea that this market giant may eventually lose some share.

But, in recent times, Nvidia has made key moves to stay ahead. One of these is the development of stand-alone central processing units (CPUs) -- an area where Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) dominate. Nvidia's entry may represent a threat to these players. And now a fresh $12 billion move could represent yet another challenge for Intel and AMD. Did Nvidia just say checkmate to its fellow chip players? Let's find out.

Image source: Getty Images.

Nvidia's leadership

First, let's consider Nvidia's competitive path so far. As mentioned, Nvidia ensured its market position by entering early -- that headstart, along with frequent launches of updated platforms and an expansion of products and services, has maintained the company's market position. Though rivals such as AMD and Intel have launched AI chips and systems and have delivered growth, Nvidia remains significantly ahead.

AMD and Intel, however, are longtime leaders in CPUs, the type of chips found in all computers. In the earliest stages of the AI boom, the CPU didn't play a big role. Instead, chips such as graphics processing units (GPUs) powered tasks like model training. But in the next stages of the boom, the CPU is expected to shine as it fuels the actions of AI agents.

Nvidia, aiming to benefit from this next phase of AI growth, is launching its first stand-alone CPU -- and already forecasts $20 billion in CPU sales this year. The company says it expects to dominate this market too.

This isn't great news for AMD and Intel, and Nvidia's latest move might represent an even bigger challenge. Nvidia this past week announced its plan to buy open-source AI platform Hugging Face for $12.9 billion.

What is Hugging Face?

What exactly is Hugging Face? It's a place where developers, researchers, companies, and tech fans can go to freely access, build, and test AI models. The acquisition, Nvidia's second-largest after the purchase of Groq assets last year, is a wise move for Nvidia as it broadens the company's position in the AI ecosystem and brings it into contact with a wide range of developers who require compute.

Nvidia has pledged to keep Hugging Face neutral, a platform supporting the use of compute from any provider.

"Nvidia compute will not be required to build on or deploy through Hugging Face," chief Jensen Huang wrote in a blog post announcing the deal.

But analysts have speculated that Nvidia software stacks could eventually see better integration than those of others, a point that could work in Nvidia's favor.

So, considering all of this, did Nvidia just say checkmate to AMD and Intel? This latest acquisition isn't the best news for Nvidia's rivals, as it further expands this leader's presence in the AI ecosystem and offers it a certain level of control in yet another area. But it's unlikely Nvidia would take steps that would significantly weigh on rivals -- if developers relying on AMD or Intel compute face difficulties on Hugging Face, they may not stick around. Nvidia must ensure a high-quality user experience for everyone to maintain Hugging Face's usefulness and popularity.

All this means Nvidia didn't exactly say checkmate to AMD and Intel – they may face some headwinds, but I expect growth to continue, as there is plenty of room for more than one player in this space. At the same time, the acquisition of Hugging Face is a fantastic move for Nvidia, further broadening its role in this AI revolution.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia. The Motley Fool has a disclosure policy.

Ahead of Lululemon's (NASDAQ: LULU) fiscal Q2 earnings report, I wrote an article published on Aug. 26 that said the stock looked like a value trap and that the warning from Dick's Sporting Goods would likely spill over and impact it as well. The stock subsequently plunged 17% on Sept. 4, in the session following its earnings report, as the athleisure company reported disappointing results and cut its full-year outlook. The stock has now lost more than half its value this year and nearly three-quarters of its value over the past five years.

Let's dive into the yoga brand's latest results and prospects to see what could come next for the once-high-flying apparel stock.

Troubles continue

Unfortunately for Lululemon, cutting guidance has become commonplace. For the fourth time since last June, it slashed its full-year outlook. It now expects revenue to decline by 7% to 5% to between $10.35 billion and $10.5 billion, down from prior expectations for sales in a range of $11 billion to $11.15 billion. Full-year adjusted EPS is projected to be between $9.48 and $9.73, but that includes a $0.86 tariff refund. Earlier, it guided to adjusted EPS of $10.95 to $11.15 without a tariff refund.

The company's Q2 results were pretty dreadful, and it looks like things are only worsening. Management noted everything from negative social media commentary to weak responses to new product launches to increased competition and brand deterioration.

Overall, the company's Q2 revenue fell 4% year over year to $2.42 billion, missing the $2.46 billion consensus estimate. Adjusted earnings per share (EPS) plunged 34% to $2.01, but were above the $1.79 consensus.

The underlying numbers were even worse. Americas revenue sank 8%, while same-store sales plunged 12%. International revenue rose 4%, but only 2% in constant currencies, while comparable sales in constant currencies slipped 6%.

China had long been a bright spot for Lululemon, but revenue fell 2% in constant currencies while same-store sales dropped 8% excluding foreign currency movements. The company said it was impacted by negative brand sentiment, which shouldn't be surprising given its big PR gaffe in China when, at an important yoga event held on the Great Wall, it inadvertently gave a Chinese actor a Japanese taiko drum to play instead of a Chinese dagu drum. Rest-of-world sales rose 6% in constant currencies, but comparable-store sales on the same basis dropped 6%.

Gross margin decreased by 200 basis points to 60.5%, but it would have been down 360 basis points when excluding the tariff refund.

Inventory was basically flat year over year, and it is doing a decent job of keeping this in check. This is an important metric to monitor for struggling brands, as big increases above sales growth can lead to more markdowns and sales.

Looking ahead, things will start getting worse for the company just as its new CEO takes over. While it is not uncommon to set a low bar when a new CEO or CFO comes on board, the company still projected a pretty meaningful sales decline. It expects Q3 revenue to decline by 10% to 11% to between $2.290 billion and $2.320 billion. Adjusted EPS is expected to fall to between $0.93 and $0.98 for the quarter, versus $2.59 a year ago.

Image source: The Motley Fool

Is the stock a buy on the dip?

While Lululemon stock looks cheap, now trading at a forward price-to-earnings (P/E) ratio of around 9 times this year's and next year's analyst estimates, the stock looks like it is set to fall into the same trap as other once very popular athletic apparel brands like Nike and Under Armour. The brand has lost its luster and faces increased competition, and, quite frankly, from my viewpoint, the athleisure fashion trend is shifting. I was recently eating lunch at Panera, and nearly everyone was wearing jeans. That is not something you would have seen a few years ago.

As such, this is a stock I'd still stay far away from, and it will likely take at least several years for a potential turnaround.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Lululemon Athletica Inc. and Under Armour. The Motley Fool has a disclosure policy.

Michael S. Perry, a Director at Arrowhead Pharmaceuticals (NASDAQ:ARWR), sold 11,600 shares of common stock on Aug. 18, 2026, according to an SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 weighted average sale price ($87.30); post-transaction value based on Aug. 18, 2026, market close ($87.90).

Key questions

• What were the specific execution details of this open-market sale?
  The shares were disposed of in multiple transactions at prices ranging from $87.20 to $87.44, with the reporting person providing full trade data to the company and the SEC upon request.
• How does this transaction impact the insider's total stake in the company?
  By selling 11,600 shares, the director liquidated 9% of his direct holdings. However, he remains a stakeholder with 0.0791% of the company's equity and continues to hold common stock underlying unvested restricted stock units.
• What is the current market valuation context for Arrowhead Pharmaceuticals?
  The Pasadena-based biotechnology company maintains a market capitalization of $12.2 billion, with shares priced at $89.41 as of the Aug. 19, 2026, market close.
• What are the fundamental financial metrics for the firm?
  Arrowhead Pharmaceuticals reported trailing twelve-month revenue of $669.5 million and a net loss of $320 million as it continues to advance a therapeutic pipeline centered on RNA interference technology.

Company Overview

Company Snapshot

• Arrowhead Pharmaceuticals develops innovative biopharmaceutical treatments leveraging RNA interference (RNAi) technology, with a clinical pipeline focused on complex, challenging-to-treat diseases, and generates revenue through therapeutic development and commercialization.
• The company operates as a discovery-stage to clinical-stage biopharmaceutical enterprise, advancing multiple therapeutic candidates through clinical trials to achieve regulatory approval and subsequent commercialization in the United States market.
• Arrowhead targets patients with rare genetic diseases and complex liver conditions, including alpha-1 antitrypsin deficiency, positioning itself in the specialty pharmaceutical and orphan drug markets where unmet medical needs remain substantial.

Arrowhead Pharmaceuticals, founded in 1989 and headquartered in Pasadena, California, represents a clinical-stage biopharmaceutical company with a market capitalization of $12.2 billion and 711 employees. The company's strategic focus on RNAi-based therapeutics provides a differentiated technological platform for addressing genetic and metabolic disorders with limited treatment options. With TTM revenue of $669.5 million and continued investment in its pipeline, Arrowhead demonstrates the capital-intensive nature of biopharmaceutical development. However, the company remains positioned to capture significant value upon successful advancement and commercialization of its clinical candidates.

What this transaction means for investors

Over the last 12 months, the Arrowhead stock price has skyrocketed 217.7%. In comparison, over the same period, the S&P 500 has climbed 18.8%. With that context and the amount of shares sold, this appears to be a routine transaction from Perry. While he did sell 11,600 shares, he still directly holds 111,459 shares, signaling continued confidence in the company. The sale is likely just Perry taking some profits off the table, and not something shareholders should read too much into.

For what's ahead for the company, analysts are bullish, but shareholders may still want to keep their expectations in check. With the stock already climbing over 217.7% over the past year, it will be difficult to keep that pace. According to CNN, all 14 who cover the stock rate it a buy. Among those analysts, the median one-year price target is $109.50, representing a 26.8% gain from the current price of $86.34. The highest price target, $126, would represent a gain of nearly 46%. The lowest price target, $100, still would represent a gain of 15.8%.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Anthropic, the company behind the Claude artificial intelligence (AI) models, plans to publish its initial public offering (IPO) prospectus after Monday's Labor Day holiday, The Information reported late last month. A listing may follow as soon as late September or in October. Amazon (NASDAQ:AMZN) shareholders have a more specific reason than most to open the document when it lands.

On April 20, Anthropic committed to spend "more than $100 billion over the next ten years" with Amazon Web Services (AWS), Amazon's cloud computing segment. That promise is equal to about a fifth of AWS's backlog of contracted work, which reached about $496 billion in June.

In other words, Amazon has already told investors how much one of its biggest cloud customers intends to spend. What no Amazon filing can show is whether the customer's own finances support it. That's what the prospectus is for.

Image source: Getty Images.

The contract is already in Amazon's filings

April's agreement covers up to 5 gigawatts of capacity on Amazon's own silicon -- Graviton processors and Trainium2 through Trainium4 AI chips, with an option on future generations.

Amazon's filings show what a deal that size does to the backlog. AWS's backlog (commitments in customer contracts with original terms longer than one year that haven't yet been recognized as revenue) had grown to about $496 billion by June 30. That was up from about $364 billion in March, and from $195 billion in the middle of 2025 -- growth of 154% year over year, including a $132 billion jump in a single quarter. And the Anthropic deal wasn't alone. The filing also discloses a $100 billion, eight-year expansion of AWS's existing $38 billion commitment from OpenAI, announced a quarter earlier.

Not only is AWS's contracted future far bigger than it was a year ago, but more of it also sits years away from becoming revenue. The weighted-average remaining life of the segment's long-term contracts stretched from 4.0 years to 6.4 years over those 12 months.

One half of the deal is easy to check

Of course, a backlog is signed work, not guaranteed revenue. Amazon says the amount and timing of what it recognizes "will be driven by customer usage and our performance in accordance with contractual obligations."

Amazon's half of that sentence looks strong. In the second quarter of 2026, AWS's revenue rose 37% year over year, to $42.2 billion -- the segment's fastest growth in 18 quarters and a $169 billion annualized pace. Segment operating income rose about 63% year over year to $16.6 billion. And the AI business inside AWS passed a $25 billion annualized revenue pace of its own, growing triple-digit percentages.

The customer's half is the part I can't verify yet. Anthropic is private, and its reported growth is extraordinary. In April, the company said its annualized revenue pace had passed $30 billion, more than triple its level entering the year. And by mid-August, CNBC reported, Anthropic was telling investors the pace had reached $65 billion by the end of July.

Spread evenly, the commitment works out to more than $10 billion a year, or about 6% of AWS's current annual revenue pace. That's arguably affordable if Anthropic's growth holds, and heavy if it doesn't.

And Amazon isn't just supplying the capacity. Its latest quarterly filing shows the company has put another $10 billion into Anthropic this year, with up to $15 billion more available under a financing arrangement tied to compute-delivery milestones. That means Amazon's interest in Anthropic's financial health goes beyond the contract itself.

What does a prospectus settle?

Nearly everything the market knows about Anthropic's finances today is reported, not filed. The company's only filing on record is the confidential draft it submitted to the Securities and Exchange Commission in June.

Its expected market value is a projection. People familiar with the matter told CNBC last month that the company could go public at a valuation of about $2 trillion, about double its private-market value. Its revenue pace is self-reported, and no audited numbers are public.

A prospectus replaces the estimates with audited financial statements: actual revenue, actual profit or losses, and actual cash. Even more useful for Amazon shareholders, it should carry Anthropic's own accounting of its purchase commitments, the other side of the agreements that swelled AWS's backlog.

At about $259 as of this writing, Amazon's stock trades at a forward price-to-earnings ratio of about 24. For a company whose cloud segment just accelerated to 37% growth, I think that's a reasonable price.

But AWS has now disclosed more than $200 billion of multi-year commitments from just two private AI companies, and until those companies file, investors can only judge them by reported figures.

Ultimately, Anthropic's prospectus is the first chance to check one of them. I'll be reading it closely.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Bank of Nova Scotia (NYSE: BNS) is offering investors a nearly 3.5% yield. The average bank's yield is around 2.2%, and the S&P 500 index (SNPINDEX: ^GSPC) has a tiny 1% yield. If you are looking for a high-yield bank stock, Scotiabank, as it is more commonly known, is probably worth a close look. But the real dividend story is about consistency. Here's what you need to know.

Bank of Nova Scotia has shifted gears, but not changed its dividend policy

Recently, Scotiabank made a major change in its business. For a long time, the Canadian bank had skipped the U.S. market, focusing instead on Central and South America. That differentiated it from its large Canadian peers, which had focused on growth in the U.S. Scotiabank's plans didn't work out as well as hoped, so it shifted gears. Now, like its peers, it is increasing its focus on the U.S., with a goal of offering its services from Mexico to Canada. Those three countries are contiguous and important trading partners.

Image source: Getty Images.

What's notable is that Scotiabank has made this shift without resorting to a dividend cut. In fact, the biggest impact that dividend investors felt was a one-year pause in dividend increases. When you look at the company's history, however, that makes total sense. Scotiabank has paid dividends every year since 1833, over 190 years ago. And, unlike many of the largest U.S. banks, it also didn't cut its dividend during the Great Recession.

Scotiabank's efforts to grow in the U.S. market will likely be a net positive, but the real story here isn't about growth. This is a slow-and-steady business that will help you build wealth over time. Dividend reinvestment would allow for powerful compounding, given the above-average yield and incredible dividend history. The real story, then, is consistency, which is powered by the bank's Canadian operations.

Canada's banking system is highly regulated. That has left Scotiabank with a fairly conservative corporate culture and provides it, along with a small number of other large banks, with a protected market position. So its efforts outside of Canada are building atop a strong foundation. That foundation is so strong that Scotiabank was able to materially change its corporate direction without a major impact on the dividend.

When it comes to dividends, slow and steady can be very exciting

Will Bank of Nova Scotia make you rich? Perhaps, but certainly not quickly. This is the type of company you buy and hold for the long term because it has a fundamentally strong business. If you give it long enough, it can be a powerful wealth builder when included in a diversified income portfolio.

Reuben Gregg Brewer has positions in Bank Of Nova Scotia. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.

Applied Digital: Accelerating and Sustained Revenue Curve

Applied Digital (NASDAQ:APLD) primarily generates its revenue by operating centralized digital infrastructure campuses and providing dedicated computing services designed for high-performance workloads across the North American region.

It recently signed an additional facility lease for a new campus and secured supplemental credit financing for ongoing construction, while reporting an operating margin of -45% for the quarter ended May 31, 2026.

IREN: Navigating a Period of Sequential Contractions in Top-Line Revenue

IREN (NASDAQ:IREN) earns the majority of its ongoing revenue by managing vertically integrated data center facilities and actively mining digital assets across its international infrastructure footprint.

While integrating a newly acquired European data center developer and closing the purchase of cloud software provider Mirantis, it recorded an operating margin of -452% for the quarter ended June 30, 2026.

Why Examining Core Revenue Generation Matters for Investors

Revenue serves as a primary starting point for investors to evaluate a corporation's ability to attract paying clients and generate gross business volume before standard operational expenses, local taxes, or daily administrative costs are finally subtracted. For neocloud operations such as Applied Digital and IREN, revenue growth is essential to understanding if their costly artificial intelligence infrastructure buildouts are paying off.

Analyzing the Comparative Quarterly Revenue Trajectories for Applied Digital and IREN

Data source: Company filings. Data as of Sept. 4, 2026.

Foolish Take

When it comes to neocloud providers such as Applied Digital and IREN, understanding revenue trends is essential to investing in these companies. A neocloud's massive, debt-fueled costs to build AI data centers means they must achieve top-line sales growth, or their business could collapse.

That's why it's important to unpack IREN's recent trend of declining quarterly revenue. The company decided to shift away from mining cryptocurrency and focus on the high-growth AI infrastructure market. This caused its crypto sales to fall.

In IREN's 2026 fiscal fourth quarter ended June 30, its crypto mining revenue dropped to $66.7 million compared to $111.2 million in the previous year. That said, its fiscal Q4 AI cloud sales took off, hitting $70.5 million, up from $33.6 million in the year prior. So while overall revenue dropped from fiscal Q3, it's experiencing strong growth in AI. That's the trend investors want to see.

Applied Digital's situation is more straightforward. As a landlord to AI companies, it just needs to sign lease agreements that grant it long-term revenue predictability, while tenants bear the brunt of outfitting data centers with the AI hardware. The skyrocketing sales in its fiscal fourth quarter, ended May 31, demonstrates it is gaining traction in this arena.

Robert Izquierdo has positions in Iren. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Businesses change over time. Sometimes that change can turn a once-risky company into an attractive investment, but only if you can overlook the prior history. Here's why Energy Transfer (NYSE: ET) could be a buy now and why some investors may still prefer to own a lower-yielding peer like Enterprise Products Partners (NYSE: EPD).

Energy Transfer has made "mistakes"

Let's get the bad news out of the way first. Energy Transfer agreed to buy pipeline peer Williams (NYSE: WMB) in 2006. It got cold feet when the energy sector hit a weak patch and worked to scuttle the deal. That was probably the right move for the business, which would have likely needed to load up on debt to get the deal done and/or cut the dividend. However, as part of its effort to get out of the acquisition it had agreed to, the company issued convertible securities that appeared to protect insiders from a dividend cut if the deal had gone through.

Image source: Getty Images.

The deal was called off, so the converts turned out to be a non-issue for dividend investors. However, it was a move that would justifiably leave investors with trust issues. Then, during the 2020 oil downturn that accompanied the coronavirus pandemic, the partnership cut its distribution in half. The goal was to strengthen the balance sheet and reposition the business.

This was, again, likely a good move for the business. However, the problem is that the recession during that period was probably a point when dividend investors were hoping for consistency, not dividend cuts. The distribution is growing again and is above its level prior to the cut. And, perhaps more importantly, the business is on a different trajectory today than it has been historically, with what appears to be a focus on slow and steady growth.

Energy Transfer wants to be a tortoise like Enterprise

At this point, Energy Transfer is looking to grow its distribution by 3% to 5% per year. That's the slow-and-steady pace that investors have come to expect from peer Enterprise Products Partners. The difference is that Enterprise doesn't have the same negative events in its past. In fact, Enterprise has increased its distribution annually for 28 years. Conservative investors will probably be better off with Enterprise.

There's just one niggle here. While Enterprise offers an attractive 5.6% yield, Energy Transfer's yield is an even higher 6.3%. To be fair, Enterprise is a simpler business, noting that Energy Transfer also controls two other publicly traded master limited partnerships. The higher yield isn't just about the history; it requires more time and effort to track Energy Transfer. And Energy Transfer does appear to be a riskier investment than Enterprise.

That said, for investors willing to take on the risk, the reward is roughly 12.5% higher income due to the 0.7 percentage-point difference in yields offered by Enterprise and Energy Transfer. Given the repositioning of Energy Transfer's business, including reduced leverage, that could be enough to entice more aggressive and active income investors.

Energy Transfer is not a slam dunk

The real takeaway here is that Energy Transfer is a far more attractive income investment today than it was in the past. But that past is important to understand because it could leave more conservative investors with trust issues. And, if that's the case, Energy Transfer, despite an attractive yield, may not be the right choice for you. But, if you can forgive those transgressions and believe the MLP has turned into a slow and steady income tortoise, you might want to give it a shot. Just go in with your eyes open and track the business fairly carefully.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

If you are old enough, you remember a time before the internet. And you also remember Yahoo! and America Online being two of the most dominant internet companies early in the internet's development. The stocks were hot way back then, but today, both have basically flamed out and been swallowed up by other companies. Other internet companies became more dominant.

This isn't unusual in the tech sector, and investors piling into artificial intelligence (AI) stocks should keep that in mind. Sure, you could make a big bet on an AI stock that you think has winning tech, like a high-powered chip or a specialized application, or you could go with a picks-and-shovels play like Brookfield Renewable (NYSE: BEP)(NYSE: BEPC). Here's why this clean energy company could be the better bet.

Image source: Getty Images.

AI Investors are being driven by emotion

Right now, artificial intelligence is a hot sector. Too many investors see it as a way to get rich quickly. And that has had pretty predictable consequences. For example, SoundHound (NASDAQ: SOUN) provides AI voice services. That's exciting, but probably not unique enough to build a business around. Still, its stock skyrocketed as investors jumped on the next hot thing. The shares have since plunged back to earth, down 70% from their 2024 peak.

The same could be happening now with Western Digital (NASDAQ: WDC), a maker of data storage devices. Huge demand from the AI build got investors excited about the stock, but that excitement has begun to fade. The stock has fallen roughly 40% from its recent highs. That's actually the second huge drawdown over the last three years. Even AI poster-child Nvidia (NASDAQ: NVDA) has proven to be a highly volatile stock.

NVDA data by YCharts

If you can't stand the AI volatility, go with a picks-and-shovels play

But, there's one thing that AI can't live without: electricity. After all, AI is really just a fancy computer program. Electricity demand is so high right now that there's been a step change. Between 2005 and 2025, U.S. electricity demand increased by 10%. Between 2025 and 2045, U.S. demand is projected to increase 60%. AI is playing a major role in the changing dynamics of electricity. Globally, however, there's also a shift toward cleaner power sources and increasing demand from developing nations. A great way to benefit from AI, clean energy, and broader economic growth is Brookfield Renewable.

Brookfield Renewable owns a globally diversified portfolio of clean energy assets, with exposure to North America, South America, Europe, and Asia. Its power portfolio includes solar, wind, hydroelectric, and storage. It also owns a stake in Westinghouse, a key global supplier to the nuclear power industry. It is a one-stop shop for clean energy exposure, and it is already working with AI-focused companies like Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) to help them build out their AI businesses.

The best part of the story, however, is likely to be Brookfield Renewable's dividend. The yield is currently around 5% for the partnership share class and 4.9% for the corporate share class. The quarterly disbursement has been increased at a roughly 5% annualzed pace over the past decade. Add a 5% dividend to a 5% dividend growth rate, and you get roughly 10%, which is about the return most investors expect from the broader market.

The future is bright for Brookfield Renewable

AI is just part of the electricity story that supports Brookfield Renewable's long-term growth opportunity. Which is actually more exciting than if AI were the only thing this clean energy company had going for it. If you are a dividend investor looking to benefit from AI, forget trying to pick a winner in the volatile AI sector and dig into high-yield Brookfield Renewable. It is already benefiting from AI's intense demand for power, but there's much more opportunity than that.

Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, SoundHound AI, and Western Digital. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

Since the start of 2026, the S&P 500 (SNPINDEX: ^GSPC) has generated total returns, aka price appreciation with dividends reinvested, of around 14% well above historical averages.

However, plenty of stocks have beaten the S&P 500 this year, and not just the hottest names in tech. In fact, there's one stock in particular, one that may not exactly scream "cutting edge," that has crushed it thus far in 2026, with total returns of more than 24%.

The stock? Altria Group (NYSE: MO), America's largest tobacco company and purveyor of popular brands such as Marlboro and Skoal, as well as the nicotine pouch brand On! The question now is whether Altria Group's shares will remain one of the top-performing high yield dividend stocks.

Image source: Getty Images

Altria Group has smoked the S&P 500 in 2026

At the start of 2026, investors were mixed on this Big Tobacco stock. At the time, concerns ran high about Altria's ability to adapt to changing nicotine and tobacco consumption habits. Namely, investors were concerned about the company's falling market share in smokeless tobacco and oral nicotine products.

As these products continue to gain or sustain usage rates, while cigarette smoking rates in the United States keep declining, Altria's future hinges heavily on the company making a successful smokeless transformation, much like its former subsidiary, Philip Morris International, has successfully accomplished.

However, during much of early to mid 2026, these concerns took a back seat. For one, due to better-than-feared quarterly results. Tobacco stocks in general also performed well during this time, on growing confidence in the industry's smokefree pivot, which inspired some institutional investors who had shunned the sector to reenter major stocks in the space.

Trading for as much as $77.06 per share in 2026, Altria tumbled back to the mid-$60s per share in August, on the heels of the company's Q2 2026 earnings release on July 30.

Recent pullback highlights long-term risks

For the quarter, Altria reported just 1.2% net revenue growth, with sales net of exice taxes rising to $5.35 billion. GAAP earnings came in at $1.37 per share, down 2.8% from the prior year's quarter, and falling short of analyst estimates.

Despite declining domestic cigarette usage, Altria has continued to raise earnings and, in turn, its dividend, thanks to cigarette price hikes and growth from its smokeless products. However, price elasticity with cigarettes may only go so far. While demonstrating some success with products like On!, this still pales in comparison to the success of Philip Morris International's Zyn nicotine pouches.

Since August, shares have inched higher, thanks to an announced 4.7% dividend raise and news of a contract manufacturing agreement with Philip Morris International that could help utilize excess production capacity .

Trading for 12 times forward earnings, and with a 6.4% forward dividend yield,Altria still seems cheap. Coupled with its high dividend and strong 2026 performance, it may still seem like a winner. However, this stock could still prove risky for the long-term health of your portfolio. If the company's earnings gambit starts to fail, earnings could take a dive, threatening the stock's Dividend King status and turning this deep-value winner into a yield-and-value trap.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.

Netflix (NASDAQ:NFLX) raised prices on every one of its U.K. plans in the past few days. The ad-supported standard plan took the biggest jump, moving from £5.99 to £7.99 a month (a third more), while the ad-free standard plan went to £13.99 and premium to £20.99. New members pay the new prices right away, and existing members typically get 30 days' notice before the change reaches their bills.

Shares of the streaming giant fell 5.4% on Friday to $78.25, the same day the increase made headlines.

Price increases are nothing new for this company, though. Netflix has been raising prices for 15 years, in markets all over the world, and its annual revenue has grown every single year through all of them.

But that streak is a low bar. The better measure, I'd argue, is what each increase did to the company's revenue growth rate -- and that record is more interesting than the streak itself.

Image source: Netflix.

The increases are coming faster

Netflix last raised U.K. prices in February 2025, when the ad-supported plan went from £4.99 to £5.99 a month. That makes this the second U.K. increase in about 19 months, and it leaves the ad tier costing 60% more than it did at the start of last year.

Netflix raised U.S. prices in March too, its second increase there in about 14 months, taking the standard plan from $17.99 to $19.99 a month.

Notably, the ad-supported tier (the plan built to catch price-sensitive members) is climbing fastest in both markets.

Revenue has grown through every increase

The worst increase Netflix ever made came in July 2011, when the company split its $9.99 streaming-plus-DVD plan into two $7.99 plans. Management acknowledged in its second-quarter 2011 shareholder letter that the change could be "as much as a 60% increase" for members who wanted to keep both services.

Hundreds of thousands of members canceled. Netflix ended the third quarter of 2011 with about 23.8 million U.S. subscribers, down about 805,000 in three months. And still, revenue rose 48% that year, and it grew another 13% in 2012.

The closest the streak has come to breaking was 2022. Netflix had raised U.S. prices that January, taking the standard plan from $13.99 to $15.49, and revenue for the year grew just 6.5% -- the company's slowest year of growth in at least a decade. A subscriber slump and a strong dollar contributed too. Even then, the top line grew. Growth stayed slow in 2023, then reaccelerated: revenue rose about 16% in both 2024 and 2025, reaching $45.2 billion last year, and 2025 opened with another round of U.S. price increases.

In short, no Netflix price increase has ever been followed by a down year of revenue. Where an increase can show up is in the growth rate, and even the clearest case took more than pricing to get there.

Will the ad tier change the pattern?

What's different this time is where the increase lands. Netflix's advertising business is its fastest-growing revenue line (ad revenue topped $1.5 billion in 2025, up more than 150%, and management is aiming to roughly double it this year), and that business depends on the ad-supported plan attracting members. Raising the plan's price by a third may test how much that audience is willing to pay.

The early evidence from the U.S. increase looks fine. In the shareholder letter accompanying its second-quarter results, Netflix said U.S. and Canada revenue grew 10% year over year, with what it described as only a partial quarter of impact from the March increase. The change, in management's words, "has gone well and as expected."

The companywide trend deserves more caution. Second-quarter revenue growth was 13% year over year, and the forecast for the third quarter is 11.7% -- a decelerating path. Full-year revenue guidance sits at $51.0 billion to $51.4 billion, or 13% to 14% growth, down from nearly 16% in 2025.

Meanwhile, engagement is nearly flat, with members watching only 2% more hours in this year's first half than in last year's. In other words, more members, higher prices, and advertising are carrying the growth, not more hours watched.

Ultimately, I expect the streak to survive this increase too. That kind of pricing power, I think, is rare, and Netflix has proved it over and over.

But the stock's valuation arguably already gives the company credit for it. At about $78, the price-to-earnings ratio is about 20 measured against expected 2027 earnings, a level that arguably assumes the pricing power continues.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

If you were fortunate enough to invest $1,000 in Bitcoin (CRYPTO: BTC) a decade ago on Sept. 3, 2016, you would have roughly $126,810 today -- an incredible return that absolutely crushed the market. Take a look at that incredible growth in the chart below:

Data by YCharts.

Note that the calculation excludes trading fees and taxes, and the exact total fluctuates daily with Bitcoin's price. Still, turning four figures into six figures in one decade is a remarkable result by any standard.

Bitcoin's 62% annualized return beat every mainstream asset since 2016

That's putting it lightly. Few things came remotely close to a 12,581% return -- a 62% annual rate -- in that time. Compare Bitcoin's annual rate of return with some other options you would have had in 2016.

Source: YCharts.

Wall Street now holds Bitcoin despite a decade of major crashes

Bitcoin suffered some brutal drawdowns along the way, and most investors jumped ship. It wasn't easy to hold on after a 70% crash while the "smart money" said to stay far away from Bitcoin.

Things have changed. Major institutions across Wall Street now hold Bitcoin. Motley Fool Research tracks major Bitcoin holdings by governments, public companies, and exchange-traded funds.

Image source: Getty Images.

Of course, the flip side of that adoption is that it's highly unlikely we'll see returns in the future that come close to what we saw in the past. Still, I think Bitcoin is a smart addition as a small portion of a well-balanced portfolio.

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Space Exploration Technologies (NASDAQ: SPCX), commonly referred to as SpaceX, got an initial share price bounce when it IPO'd due to enthusiasm about what it might do over the years to come -- such as building orbital data centers. It's also an Elon Musk company, which draws a lot of interest. (Tesla has averaged annual gains of 39% over the past decade.)

You might be wondering whether you should buy shares yourself or just forget about it.

I myself am forgetting about it, but every investor is different, so it's worth learning more and making your own decision. Here are some considerations.

Image source: Getty Images.

Why you might buy SpaceX

Here are reasons for buying:

• Some Wall Street analysts are bullish on it. The stock recently traded around $150 per share (as of Sept. 3), and the average one-year price target from analysts is $222, roughly 48% higher.
• SpaceX is a leader in space launches, and its Starlink leads in satellite communications. Those are areas with plenty of growth potential. It also has an artificial intelligence (AI) platform.
• It's already growing. Its second quarter featured revenue up 92% year over year to $7.8 billion.

Why you might forget SpaceX

Those may be some compelling reasons to buy, but here are some reasons to pass on SpaceX:

• While revenue is up, its bottom line is red, with a second-quarter net loss of $541 million. (That's an improvement from the year-earlier loss of $1 billion.)
• Its valuation is steep. There are no earnings, so there's no price-to-earnings (P/E) ratio. But the price-to-sales ratio is a steep 65, and the forward-looking P/E ratio was recently 194. There's no margin of safety here. If the company fumbles, the stock could fall sharply.
• More than a billion early investors' shares will be "unlocked" in September and October, allowing them to be sold -- which could send shares downward.

Think it through for yourself and do some more research. I'm steering clear based on what I'm seeing.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

If you'd invested $10,000 in shares of Nvidia (NASDAQ: NVDA) a decade ago, your investment would now be worth almost $1.5 million.

Various catalysts have driven the astronomical rise in Nvidia stock over this period. The strong demand for graphics cards used in personal computers (PCs), driven by gaming and cryptocurrency, along with the artificial intelligence (AI)-fueled surge in data center graphics cards, has been instrumental in boosting Nvidia's revenue and earnings in recent years.

Nvidia's robust growth drivers have made it the world's largest company by market cap. Investors, therefore, may be wondering whether this semiconductor bellwether can make them millionaires once again in the long run. Let's see whether Nvidia can replicate its stunning returns over the coming decade and turn $10,000 into a million dollars.

Image source: Getty Images.

A 100x jump in Nvidia stock is unlikely, but that's half the story

Nvidia now has a market cap of $5.5 trillion. The stock will need to jump by 100x from current levels to turn $10,000 into a million, which means its market cap will need to exceed $500 trillion for investors to become millionaires.

That seems absurd, considering that the size of the global economy is poised to hit $150 trillion in 2030, according to Visual Capitalist. The firm notes that the global gross domestic product (GDP) is on track to grow by $25 trillion between 2026 and 2030. Nvidia, therefore, is unlikely to become larger than the global economy in the long run.

In simple words, investing $10,000 in Nvidia right now in the hope that this single investment alone will make you a millionaire is not the right idea. However, buying $10,000 worth of Nvidia's shares as a part of a diversified portfolio could indeed help investors achieve their goal of becoming millionaires over the long run.

Here's why.

Nvidia can become a much bigger company over the next decade

Nvidia has grown significantly over the last decade. The company's annual revenue in fiscal 2017 (which ended in January 2017) was $6.9 billion. Analysts expect Nvidia's revenue to land at $411 billion in fiscal 2027, an increase of almost 60x in a decade.

The good news for Nvidia investors is that it still has a lot of room for growth. Deloitte estimates that the global semiconductor market could be worth $975 billion in 2026, with $500 billion coming from sales of AI chips. Nvidia rival AMD forecasts that sales of AI accelerator chips could hit $1 trillion in 2030. Even better, the overall semiconductor market could be worth $2 trillion in 2036, according to Deloitte, even with moderate growth.

Nvidia is a key player in the global AI chip market with an estimated 80% share. So, the secular growth of the semiconductor market, primarily fueled by AI chips, should ensure healthy long-term growth for Nvidia. Additionally, the emergence of new AI-fueled applications beyond data centers, such as physical AI, and the integration of AI into edge devices, such as PCs, should open additional growth avenues for Nvidia.

The physical AI market, for instance, could be worth $430 billion in 2030 and hit $1.6 trillion in 2040, according to a third-party report. Physical AI refers to the integration of AI into real-world objects, such as machines, robots, and vehicles. The integration of this technology in multiple industries, ranging from healthcare to industrial to defense to space to retail, is poised to drive robust growth in this market over the long run.

Nvidia is already strengthening its position in physical AI. The company noted on its recent earnings call that Amazon will adopt its full physical AI stack to automate its warehouse robots. Noetra, a government-backed Japanese company developing physical AI and industrial robotics applications, will also adopt Nvidia's physical AI tools.

These growth opportunities indicate why analysts expect Nvidia's revenue to increase at a healthy pace even after the strong base it has already achieved.

Data by YCharts

For comparison, Nvidia reported $215.9 billion in revenue in fiscal 2026 (which ended in January this year). The chart above suggests that its top line is on track to increase 4x in just two years. Even better, analysts have been boosting their long-term earnings growth expectations.

Data by YCharts

Assuming Nvidia's earnings indeed increase at an annual pace of 49% for the next five years, its earnings per share will jump to $35 at the end of the forecast period (using fiscal 2026's earnings of $4.77 per share as the base). If Nvidia trades at 21 times earnings at that time, in line with the S&P 500 index's forward earnings multiple, its stock price could jump to $735 in five years.

That's nearly 3.2x Nvidia's current stock price, making it an ideal growth stock for investors looking to build a million-dollar portfolio, especially considering that it trades at an attractive 25 times forward earnings even after its terrific growth and sunny prospects.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, and Nvidia. The Motley Fool has a disclosure policy.

Chevron (NYSE:CVX) just signed a landmark deal to significantly expand its operations in Venezuela. The agreement, which positions the oil giant to double its output over the next five years, is a testament to its patience. "You have to hang in there until all the conditions come together: the technology, the economics, the markets, the politics," stated CEO Mike Wirth in a recent interview with Bloomberg. It stayed long after rivals ExxonMobil (NYSE:XOM) and ConocoPhillips (NYSE:COP) left, putting it in a position to capitalize on this major opportunity to help revitalize Venezuela's oil industry.

Here's a look at how Chevron's patience has proven to be a significant competitive advantage in Venezuela.

Image source: Getty Images.

Staying when things got tough

ExxonMobil and ConocoPhillips both left Venezuela in 2007 after the country nationalized their assets. Both have been seeking restitution, with ConocoPhillips winning an arbitration award of $12 billion that it has been trying to recover for years. The oil companies have been considering a return this year, as they each sent technical teams to evaluate potential investment opportunities. While ExxonMobil CEO Darren Woods called Venezuela "uninvestable" this past January, President Trump recently said that Exxon would be going back into Venezuela.

However, both companies are far behind Chevron, which has maintained operations in the country for over 100 years. That's part of the company's patient strategy in the country. CEO Mike Wirth told Bloomberg: "You have to have some patience and look at this out over time and not become discouraged. Not pick up and leave when things are difficult." By hanging on during the tough times, which included dealing with hyperinflation, power outages, and unstable civil conditions, Chevron was able to pounce when the opportunity came around to participate in the revival of Venezuela's oil industry.

Building on its legacy

Chevron has already been expanding its operations in Venezuela. In April, it consolidated its heavy-oil position in the country through an asset swap with Venezuela's national oil company, Petroleos de Venezuela, S. A. (PDVSA). It received an additional 13.21% working interest in Petroindependencia, increasing its stake in that joint venture (JV) to 49%. Additionally, its Petropiar JV (30% interest) was granted rights to develop the adjacent Ayacucho 8 area in the Orinoco Oil Belt. In exchange, Chevron gave up its interest in two gas licenses and in another non-operated joint venture. This trade enhances Chevron's ability to increase production by 50% by the end of 2028, from its recent rate of 280,000 barrels per day.

Now, Chevron is further building on this legacy position with additional enhancements to its JVs. Its new deal with Venezuela will provide it with more acreage in the Orinoco Belt. Petroindependencia received the rights to develop the adjacent Carabobo-1 and Carabobo-2-South-A areas. Additionally, the deal includes enhanced fiscal, commercial, and legal terms that will support durable, competitive long-term investments in the country. Improved financial terms are something ExxonMobil has been seeking before it would agree to reenter the country.

This increased position and improved terms support Chevron's new plan to invest more than $7 billion over the next five years. That would enable the company to more than double its production to around 600,000 barrels per day. Chevron estimates that its costs will be less than $20 a barrel, positioning it to drive strong earnings growth over the next five years from this investment.

However, while Wirth told Bloomberg that it has "good, high-quality resource positions" in Venezuela, "They're also sometimes not the easiest resource to produce." That's a risk investors should keep an eye on as the oil company ramps up its investment rate in the country. There's also the potential for renewed political risks, both in Venezuela and from future elections in the U.S.

Chevron's patience could pay massive dividends

Chevron's decision to remain in Venezuela during the tough times is paying off. Its existing joint ventures in the country are receiving additional resources, which, together with improved terms, will enable the company to significantly increase production over the next five years. Given its low-cost resources, it could generate meaningful cash flow growth. It now has a huge head start over Exxon and ConocoPhillips, both of which are still evaluating whether to reenter the country. That could benefit the oil stock in the long run, as its low-cost growth in Venezuela could give it the fuel to deliver higher total returns than its rivals over the next few years.

Matt DiLallo has positions in Chevron and ConocoPhillips. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends ConocoPhillips. The Motley Fool has a disclosure policy.

Arista Networks: Steady and Reliable Quarterly Revenue Expansion

Arista Networks (NYSE:ANET) primarily generates its operating income by designing advanced cloud networking solutions, delivering specialized high-performance switching hardware, and providing extensive post-contract technical support to major internet companies and global financial services organizations.

While launching new hardware platforms for data centers and simultaneously expanding its enterprise security portfolio during the summer of 2026, it reported a 45% operating margin for the quarter ended June 30, 2026.

International Business Machines: Highly Volatile and Cyclical Revenue Patterns

International Business Machines (NYSE:IBM) earns a majority of its incoming cash by supplying complex hybrid cloud software ecosystems, developing enterprise server infrastructure, and delivering specialized business transformation consulting services to clients across the globe.

It faced multiple securities fraud investigations regarding its public business deal outlook and completed the acquisition of HRL Laboratories in the summer of 2026 to advance its work in quantum computing. It generated a 15% operating margin for the quarter ended June 30, 2026.

Why Tracking Revenue Matters for Investors

Revenue assists everyday investors understand whether a business is successfully attracting new clients and expanding its broader operational footprint. It serves as a starting point to help investors understand the total amount of money a business brings in before deducting any operational expenses.

Comparing Quarterly Revenue for Arista Networks and International Business Machines

Data source: Company filings. Data as of Sept. 4, 2026.

Foolish Take

The revenue trends for Arista Networks and IBM tell a starkly different story about the trajectories of these businesses benefiting from the massive artificial intelligence tailwind. The former has the advantage as companies rush to build out the data center computing infrastructure required to operate AI systems. This has allowed Arista to experience consistent upward sales growth every quarter, and the trend is poised to continue in Q3, with the company forecasting revenue to hit $3.3 billion.

Meanwhile, IBM has exhibited quarterly revenue volatility. This is a result of its business model, due to a mix of software, hardware, and consulting services. Big Blue's infrastructure segment, which sells mainframes, follows an upgrade cycle, and that division saw a 7% year-over-year Q2 sales decline, suggesting customer upgrades are complete for now. Also, Q2 revenue in its consulting division was flat year over year, as this area is highly variable in terms of customer spending.

IBM cut its 2026 full-year sales forecast as customers shifted spending toward businesses such as Arista, prioritizing AI data center buildouts amid concerns of supply shortages. Its HRL Laboratories acquisition points to the company betting on quantum computers to galvanize future growth. This segment of its business holds the promise of revolutionizing the computing industry.

Robert Izquierdo has positions in Arista Networks and International Business Machines. The Motley Fool has positions in and recommends Arista Networks and International Business Machines. The Motley Fool has a disclosure policy.

Besides the artificial intelligence trade, investors have been obsessed with any macroeconomic news that hits headlines. And it's hard to find a story in recent weeks that captured the market's attention like the U.S surpassing $40 trillion in gross federal debt. By any measure, this is an absolutely mind-boggling number.

The debt balance has expanded by 377% in the past two decades. And it currently represents 123% of the country's total GDP figure. The Congressional Budget Office estimates that it will continue climbing, reaching $64 trillion by 2036.

Investors had better get used to hearing more about the U.S. national debt problem. Here's what this macro trend means for your portfolio in 2026 and beyond.

Image source: Getty Images.

Nothing will change

The U.S. has the world's largest and most advanced economy, driven by dominance in the technology sector. It controls the global reserve currency in the dollar. And it has the most robust and liquid capital markets. These advantageous traits support the argument that the nation can keep borrowing indefinitely.

Of course, this can continue only as long as buyers of Treasuries trust that they will get paid back. So far, this hasn't been an issue. And things that appear unsustainable can go on a lot longer than people anticipate.

It makes sense for the government to embark on stimulative measures during recessions or other adverse shocks. This was precisely what happened during the global financial crisis toward the end of the 2000s, and to help boost the economy when the COVID-19 pandemic hit. The government steps in to keep things running.

What's interesting to see, though, is that the debt burden has kept rising even though the economy is on solid footing. Through the first 10 months of fiscal 2026, the Treasury Department ran a deficit of $1.8 trillion, 10% higher than in the same period last fiscal year. The U.S. spends more on interest payments than it does on national defense.

No matter what politicians say, the government isn't able and willing to cut spending. Just look at the DOGE (Department of Government Efficiency) initiative, which was by any account a failure.

And raising taxes isn't a popular campaign platform, unless politicians want to increase their chances of losing. This means that the debt will keep rising. Furthermore, this supports elevated inflation and interest rates. This will certainly be true relative to the environment we witnessed during much of the 2010s.

Image source: Getty Images.

Own inflation beneficiaries

The investment implications are clear. In this kind of macro backdrop, investors should favor high-quality businesses, particularly those that have pricing power and impressive financials. This isn't necessarily a buy recommendation. But these are companies to dig further into here.

Apple (NASDAQ: AAPL) comes to mind. Its brand resonates strongly with consumers around the globe. Its hardware devices are always in demand, commanding premium prices. And the business is one of the most profitable in the world. On $364 billion in revenue through the first nine months of fiscal 2026, Apple raked in $110 billion in free cash flow.

Another great example is Ferrari (NYSE: RACE). This company doesn't behave like a typical mass-market car manufacturer. Ferrari intentionally caps supply, supporting robust demand and pricing power for its luxury vehicles. And its operating margin was a stellar 31% last quarter.

Investors might not view Visa (NYSE: V) and Mastercard (NYSE: MA) as having pricing power. However, they are certainly beneficiaries of inflation. As consumers are forced to spend more on goods and services, these payment networks are able to process higher volumes, which translates to revenue growth. It also helps that they are incredibly profitable, with net income margins that have averaged more than 45% in the past five years.

These four businesses are set up to continue thriving in the face of mounting U.S. national debt.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Ferrari, Mastercard, and Visa. The Motley Fool has a disclosure policy.

If you were disappointed in your 2026 Social Security cost-of-living adjustment, or COLA, that's understandable. Earlier this year, benefits rose just 2.8%.

Granted, that boost was higher than the 2.5% COLA that came through the year before. But in 2022, 2023, and 2024, Social Security COLAs came to 5.9%, 8.7%, and 3.2%, respectively. So it's easy to see why this year's 2.8% raise just didn't cut it for many retirees.

Image source: Getty Images.

The good news is that current estimates are pointing to a larger Social Security COLA in 2027. But retirees shouldn't necessarily expect that raise to help them maintain their buying power.

The 2027 COLA could disappoint

Current projections are calling for a 2027 Social Security COLA in the 3.4% to 3.6% range. The COLA won't be made official until mid-October, since the Social Security Administration needs to wait on key inflation data from September to run that calculation.

Still, even the low end of that range would be a significant increase over this year's COLA. And many seniors may end up relatively happy with that raise -- at least at first.

But in reality, a 3.4% COLA is likely to fall short. So is a 4.4% COLA or an even larger one, for that matter. In fact, history tells us that pretty much any COLA that comes through in the new year is likely to be a letdown.

Social Security benefits keep losing buying power

The reason next year's COLA is likely to be a disappointment boils down to a flaw in the way those raises are calculated. Social Security COLAs are based on third-quarter changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). But the CPI-W focuses on the spending habits of working people -- not retirees on Social Security.

Due to this mismatch, the Senior Citizens League, an advocacy group, reports that Social Security benefits have lost 13.7% of their buying power over the past 10 years. And the reason is that those annual COLAs have not managed to keep up with real-world inflation.

What this also means is that next year's COLA is likely to let seniors down in the same regard. So if you're banking on a larger raise to improve your financial picture, you may need to come up with a different plan.

That plan could involve moving to an area of the U.S. where your Social Security benefits can go further. It could mean downsizing or getting a part-time job. But either way, you shouldn't expect too much out of next year's COLA, even if the number is significantly higher than the boost your benefits received earlier this year.

The Motley Fool has a disclosure policy.

While there are tons of dividend exchange-traded funds (ETFs) to choose from, there are two broad categories that investors gravitate toward. One type focuses on high-yield dividend stocks, while another major category focuses on stocks that consistently grow their dividends.

Is one preferable to the other? It depends on what you are looking for.

Image source: Getty Images.

Global X SuperDividend US ETF

A high-yield dividend ETF invests in stocks that generate the highest dividend yields. One prime example is the Global X SuperDividend U.S. ETF (NYSEMKT: DIV). This ETF follows the Indxx SuperDividend U.S. Low Volatility Index, which includes the 50 stocks with the highest dividend yields, including real estate investment trusts (REITs). The stocks also must have paid dividends consistently over the last two years. There are also beta screens to ensure lower relative volatility.

The portfolio is equal-weighted, but some of the largest holdings, based on price movements and other factors, are Tsakos Energy Navigation, which has a yield of 4.62%, and CBL & Associates, a REIT with a yield of 4.59%.

Overall, this ETF has an extremely high 12-month distribution yield of 6.55%, paid monthly.

This ETF would be favored by investors, perhaps retirees, who are looking for high dividend income payouts. The trade-off is that long-term returns may be lower, even though the reinvested dividend will boost total return. But still, you are investing in stocks for their high dividends, not their long-term stability and growth.

For example, this ETF has a five-year average annualized return of negative 0.5% and a five-year average total return of 6.4%. Now let's compare that to a dividend growth ETF.

Vanguard Dividend Appreciation ETF

The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) is a good example of a dividend growth ETF, offering a solid contrast to a high-yield dividend ETF like DIV.

The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which focuses on stocks, excluding REITs, with a record of increasing dividends annually. The focus is on annual growth, not high yields, as the top three holdings -- Broadcom, Microsoft, and Apple -- show. These are not what you'd call high-yield stocks.

Broadcom has a dividend yield of just 0.71%, but it has increased it for 15 consecutive years. Microsoft has a yield of 0.73% but has boosted it for 21 straight years. Apple's yield is just 0.33%, but it has increased for 13 consecutive years.

Thus, the 12-month distribution yield for the Vanguard Dividend Appreciation ETF is just 1.48%, which pales in comparison to the Global X ETF.

But the benefit of the Vanguard Dividend Appreciation ETF and other dividend growth ETFs is that they invest in larger, stable, established, well-capitalized companies that increase their dividends year after year.

That typically results in higher long-term returns than high-yield-oriented ETFs. The VIG ETF, for example, has a five-year average annualized total return of 10.2% compared to 6.4% for the Global X SuperDividend US ETF.

Data by YCharts.

Schwab U.S. Dividend Equity ETF

While both DIV and VIG represent opposite ends of the spectrum, some ETFs occupy the middle ground, such as the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD).

This popular ETF tracks the Dow Jones U.S. Dividend 100 Index and includes the highest-yielding stocks with at least 10 consecutive years of dividend payments. They must also meet certain screens to ensure adequate liquidity and solid fundamentals. In addition, the stocks must have grown dividends for at least five years.

Its top three holdings are Merck, Amgen, and Abbott Labs.

The SCHD ETF is really the best of both worlds, as it has an excellent 12-month distribution yield of 3.13% and a strong record of returns. Specifically, it has a five-year average annualized total return of 10%, nearly on par with VIG.

If I had to pick one, it would be the Schwab ETF because it gives you both stable dividend growth and high yields. But if you are looking for just high yields or the potential for higher total returns, then the other two might be options.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories, Amgen, Apple, Broadcom, Merck, Microsoft, and Vanguard Dividend Appreciation ETF. The Motley Fool has a disclosure policy.

Snowflake (NYSE:SNOW) gave investors a lot to like on Wednesday. The data cloud specialist's fiscal 2027 second-quarter report featured a third straight quarter of accelerating growth, with a bigger push from its artificial intelligence (AI) products.

Shares jumped more than 20% in extended trading on the news. As of this writing, they trade at about $338.

Management now expects about $6.07 billion of product revenue in fiscal 2027 (the year ending Jan. 31, 2027), or 36% year-over-year growth. It also lifted its full-year non-GAAP (adjusted) operating margin outlook to 14.5% from 13.5%. That's the second guidance raise this year. Snowflake opened the year forecasting 27% product revenue growth, raised the number in May, and now sits at 36%.

Put another way, the company keeps outgrowing its own forecasts. And that puts a bigger milestone within view -- $8 billion of product revenue in fiscal 2028, the following year.

Image source: Snowflake.

What would it take?

Snowflake's product revenue totaled $4.47 billion in fiscal 2026, up 29%. This year's guidance implies 36% growth on top of that.

Getting from this year's $6.07 billion to $8 billion the year after requires about 32% growth. In other words, Snowflake could decelerate by roughly four percentage points next year and still clear the mark.

The recent trend makes that bar look manageable. Product revenue came in at $1.49 billion for the fiscal second quarter (ended July 31), up 37% year over year, after 30% growth in the fiscal fourth quarter of 2026 and 34% the following quarter. Chief financial officer Brian Robins said the acceleration, the company's third quarter of it in a row, came from strength in the core data platform along with a meaningful pickup in AI revenue.

Retention is holding, RPO growth is cooling

The most important number behind that view, I'd argue, is Snowflake's net revenue retention rate (what existing customers spent over the past year compared with what the same group spent the year before). It came in at 126% for a second straight quarter, up from the 125% the company posted at the end of fiscal 2026. Remaining performance obligations (RPO), the contracted business Snowflake hasn't yet recognized as revenue, stood at $9.00 billion, up 30% year over year. That growth rate, though, is down from 42% at the end of fiscal 2026 and 38% last quarter.

At 126%, customers already on the platform are growing their spending fast enough to supply most of the roughly 32% the prediction needs. New business has to cover the rest.

The AI products are a newer source of support. CoCo, the company's AI coding agent, surpassed 9,100 accounts, up more than 2,000 in three months. Snowflake doesn't break out AI revenue in dollars, so investors can't size the contribution precisely. But the adoption numbers, and a forecast that keeps rising, suggest the spending is sticking.

A 27% year would fall short

The RPO trend is the one to watch. Snowflake runs a consumption model (customers buy capacity up front rather than paying a flat subscription fee, and draw it down as they use its cloud computing platform), so revenue follows actual usage. And slowing RPO growth can be an early sign of where that usage is headed.

If growth reverts to the 27% pace management originally guided for this year, fiscal 2028 product revenue lands around $7.7 billion, and the prediction misses.

Worth noting: Snowflake's first fiscal 2028 forecast, which should arrive when this year wraps up early next year, will probably start below 32%. After all, this year's guidance started at 27% and has been raised twice since.

A conservative opening forecast wouldn't kill the prediction. A sliding retention rate or another leg down in RPO growth would.

Ultimately, I expect Snowflake to clear the $8 billion mark. If retention holds, existing customers get the company most of the way there, and management has made a habit of guiding low and raising later. Sure, RPO growth is cooling, and a consumption business can decelerate quickly when customers pull back. But the prediction has room for that -- growth can come down four points from the full-year guide and still land above $8 billion.

Whether the growth stock is a buy at this price is a separate question. After the post-earnings jump, Snowflake is worth about $116 billion, or about 19 times this year's guided product revenue. That sales multiple arguably prices in a couple of years of strong execution already.

The prediction, though, is about the business, not the stock. And the business looks on track.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Snowflake. The Motley Fool has a disclosure policy.

Cathie Wood of Ark Invest isn't shy about making big and bold predictions. She has famously said she could see Bitcoin reaching as high as $2.4 million per coin by 2030 and Tesla stock hitting $2,600 a share by 2029.

Predictions this ambitious are bound to grab headlines. It's important, however, not to confuse an imaginable outcome with a probable one. Two forecasts from her firm's Big Ideas 2026, the latest iteration of Ark's annual flagship report, illustrate both what I think Ark does well and where its projections can get carried away.

Image source: Getty Images.

Ark stays reasonable about data center spending

The Ark 2026 Big Ideas report forecasts that data center investment will triple to $1.5 trillion by 2030. This is probably one of the most plausible predictions of the bunch. According to The Motley Fool Research, just four companies spent $410.2 billion on data center development in 2025 and $302.8 billion in the first half of 2026. I could very much see data center investment totals top $1.5 trillion annually or even surpass that amount if the AI boom can sustain itself through 2030.

This is a prediction based on real, tangible trends happening right now.

Ark's view on rocket demand may not be launch-worthy

Ark's forecast says there will be a 60x growth in rocket demand, which hinges on the need for cheaper space-based compute. This one I have much more trouble with. That's because it rests on the idea that space-based data centers could become cheaper than their terrestrial counterparts. There are some basic physical constraints that make this hard for me to buy, even if we assume that Space Exploration Technologies drastically reduces the cost of getting things into space.

This prediction, in my view, is based more on vibes than hard data.

To be clear, Wood isn't claiming these are guaranteed outcomes by any means. She certainly acknowledges that each target requires many things to go right. Still, it's clear Wood believes these are very possible outcomes and puts her money where her mouth is. She invests in companies that are working to create these futures or will directly benefit from them.

ARKK's return since 2014 vs. the market

So should you trust these two predictions and the others laid out in Big Ideas 2026? Well, it's worth looking at the past before evaluating Wood's vision of the future. How has Wood actually performed in the market since Ark was founded?

Her flagship fund, Ark Innovation ETF (NYSEMKT: ARKK), has returned 323% since 2014. Not a bad run. That beats out the 303.7% comparable return of the State Street SPDR S&P 500 ETF Trust's (NYSEMKT: SPY) -- an ETF that tracks the S&P 500. The total returns for each work out to 12.8% and 12.3% on an annual basis, respectively.

So it looks like Wood beat the market, but not by much. If you look a little closer, however, you realize that you would have been better off investing in SPY all along. Once you account for management fees and dividend yields, Wood's ARKK returned 12% per year, while SPY returned 13.2% per year.

Take a look at the performance of some of Wood's top funds in recent years. Keep in mind SPY returned 68.1% in this time.

Data source: Google Finance.

The bottom line

Now, obviously, just because most of Ark Invest's funds haven't performed well in recent years doesn't necessarily mean that Wood's predictions are wrong, but it's a good reminder to take them with a grain of salt. Any splashy prediction should be met with skepticism.

For my money, ARK's forecasts are best treated as thought experiments. They highlight important trends and raise assumptions worth testing. But they also lean heavily toward the most optimistic version of the future. That might be useful for imagining what could be possible, but it can distract us from what businesses are actually delivering today and what they can realistically deliver in the next few years.

Johnny Rice has positions in SPDR S&P 500 ETF Trust. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.

AppLovin: Observing the Steady Scaling of Revenue

AppLovin (NASDAQ:APP) primarily generates revenue by offering a specialized digital software suite featuring products like AppDiscovery, which effectively helps mobile application developers market their digital assets globally.

While dealing with multiple law firm inquiries regarding its recent business disclosures, it expanded its advertising tools to all e-commerce merchants and reported an operating margin of 78% for the quarter ended June 30, 2026.

Reddit: A Volatile but Growing Revenue Trajectory Over Time

Reddit (NYSE:RDDT) primarily generates revenue by managing an internet platform where everyday individuals form highly specific digital communities to discuss shared passions, exchange links, and consume multimedia content.

It recently rolled out new automated campaign management tools for advertisers and gained formal inclusion in the S&P 500 index, while reporting an operating margin of 29% for the quarter ended June 30, 2026.

Why Revenue Matters for Investors

Revenue helps everyday investors understand exactly how much gross capital a company successfully captures from its core commercial operations before necessary business expenses are calculated. This metric reveals whether an organization is successfully attracting customers and growing its overall business volume over time.

Comparing the Quarterly Revenue Trends for AppLovin and Reddit

Data source: Company filings. Data as of Sept. 4, 2026.

Foolish Take

Examining the revenue trends for AppLovin and Reddit reveal interesting insights about their businesses. Both depend on digital advertising income to fund their organizations. The ad industry is seasonal, with advertiser spending typically shooting up in the fourth quarter to capture consumers during the key holiday shopping period.

Reddit's sales show this industry trend as its annual income peaks in Q4. Every year, the sales drop in Q1, but display a consistent upward trajectory. This demonstrates the company's ability to capture ad dollars. Key to that success is growth in platform users.

In Q2 of 2026, Reddit's daily active users increased 18% year over year to 130.3 million. This helped it achieve $804.9 million in Q2 sales, which represents the eighth consecutive quarter of more than 60% year-over-year revenue growth.

While Reddit's performance is impressive, AppLovin is perhaps even more so. Until recently, it displayed the typical ad industry Q4 sales spike seen with Reddit. That changed in 2025.

Suddenly, AppLovin's revenue trend showed quarter-over-quarter growth, with Q1 of 2026 exceeding 2025's Q4, which is unusual. This illustrates the company's strength in the mobile advertising arena.

However, AppLovin's stock is down this year, dropping to a 52-week low of $297.50 in August because its sales growth decelerated. Wall Street analysts downgraded the stock as its Q2 revenue of $1.9 billion missed expectations.

Robert Izquierdo has positions in Reddit. The Motley Fool has positions in and recommends Reddit. The Motley Fool has a disclosure policy.

Investing is about more than just picking good stocks and bonds and holding them for the long term. You should also consider the tax implications of the investments you make. The easiest example of this is the bond space, with the dichotomy between corporate and municipal bonds. Corporate bonds are fully taxable, but muni bonds can help you avoid paying taxes on the income they generate.

But there's another level to the issue, because certain retirement accounts also allow you to avoid taxation. Investors in ultra-high-yield mortgage real estate investment trusts (REITs) and business development companies (BDCs) need to pay close attention to where they place these securities. Here's where they probably belong, if you want to minimize your tax hit.

Image source: Getty Images.

You need to pay your taxes, but you don't want to pay too much

The taxes you pay help to pay for all of the government services that you receive. That includes something as simple as having a road to drive your car on, to more complex things like paying your state representatives. For the most part, these are good things, and you should pay your taxes. If you don't, the government will eventually come calling. You don't want that to happen.

That said, the tax code is mind-boggling complex. The simple logic is that if you earn income, you have to pay some tax on that income. That's easy enough if the income you earn comes from a job. It is more complex if the income is generated from investments you own. Dividends, as it were, are not all created equally.

This is particularly important for real estate investment trusts and business development companies. Both of these corporate structures are designed to pass income on to shareholders in a tax-advantaged manner. So long as REITs and BDCs pass at least 90% of their taxable income on to shareholders as dividends, they do not pay corporate income tax. The shareholder pays taxes on that dividend income, which is taxed at the same rate as earned income. There are nuances here, but that's the big picture you need to keep in mind.

What's AGNC's 13% yield doing to your taxes?

AGNC Investment (NASDAQ: AGNC), a well-respected mortgage REIT, has a 13.5% dividend yield as of this writing. Annaly Capital (NYSE: NLY), another mREIT, yields roughly 12.5%. Main Street Capital (NYSE: MAIN), a highly respected BDC, has a yield of 5.5%, which rises to around 7.5% if you include its special dividends. And Ares Capital Management (NASDAQ: ARCC), one of the largest BDCs you can buy, has a yield of 9.5%.

The main reason to own all of these stocks is to maximize the income you generate. But, because they are REITs and BDCs, most of that income will get taxed at your normal tax rate. If you aren't prepared for that, you could be in for a surprise come April 15. There's a solution thanks to the quirks of the tax code.

Roth IRAs and Roth 401(k)s are funded with after-tax money. Because you have already paid taxes on the money in the account, the money you withdraw is tax-free. So, if you buy a BDC or REIT (including mREITs) inside of a Roth IRA or Roth 401(k), you effectively take income that would be taxed at a high rate and turn it into tax-free income.

It matters where you own your stocks for tax purposes

Let's say you own a bank with a 5.5% yield (that's kind of high for a bank right now, but go with it) and you also own Main Street Capital, which has a 5.5% yield (excluding the impact of special dividends). Bank dividends are generally treated as dividend income, which is treated more favorably tax-wise than earned income. Main Street's dividends will be treated as earned income. If you can put one of them in a Roth account, you'll be better off tax-wise if you put Main Street (or any other BDC or REIT) into the Roth.

In truth, this isn't a huge deal for your investment portfolio. It is just a matter of putting certain investments in certain accounts. But if you don't know, it can be a big deal for your taxes. Now that you do know, however, you may want to reconsider your portfolio, strategically placing dividend stocks where their dividends are subject to the most favorable tax treatment. You certainly shouldn't violate any tax laws, but you should use the favorable rules that exist to the fullest possible extent.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ares Capital. The Motley Fool has a disclosure policy.

PayPal (NASDAQ: PYPL) was a potential buyout target, but the two companies interested in acquiring it recently abandoned their plans. In this video, I'll discuss what this means for the stock and what I'm planning to do with my PayPal shares now.

*Stock prices used were the morning prices of Sept. 3, 2026. The video was published on Sept. 6, 2026.

Matt Frankel, CFP® has positions in PayPal and has the following options: long January 2027 $75 calls on PayPal, long January 2027 $95 calls on PayPal, short January 2027 $135 calls on PayPal, and short January 2027 $85 calls on PayPal. The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends the following options: short December 2026 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.

Matthew Frankel is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

It's always good to look for new investment ideas. While investors can look at various sectors, I like to focus on artificial intelligence (AI) stocks. This technology is still in its early stages and can fundamentally change societies. Autonomous vehicles, humanoid robots, drones, and AI chatbots are some of the products and services that can scale rapidly as AI evolves.

That's why the two stocks I am buying in 2027 revolve around that theme. I already have positions in each of these companies and intend to build on them in 2027.

Image source: Getty Images.

1. Iren

Iren (NASDAQ: IREN) is my favorite neocloud stock. Nebius (NASDAQ: NBIS) is also a strong contender and slightly ahead of Iren in revenue recognition, but I do not believe Nebius should have a market cap almost four times Iren's.

The neocloud thesis is straightforward. Hyperscalers need access to compute, and companies like Iren create the data centers that supply hyperscalers with the necessary chips, power, software, and facilities.

Iren wrapped up its fiscal 2026 fourth quarter with $1 billion in operating annual recurring revenue. The company expects to reach $4 billion in annual recurring revenue by the end of 2026. As Iren strategically waits to sign big deals, the value of compute continues to climb. The landmark five-year, $9.7 billion deal with Microsoft comes to $9.7 million per megawatt-year. Iren is now negotiating deals for $25 million per megawatt.

If Iren can eventually realize $25 million per megawatt across its entire 5.8-gigawatt portfolio, it can generate $145 billion in annual recurring revenue, assuming the per-megawatt value doesn't continue to climb.

Some investors are worried about rising capital expenditures, but I don't think it will be that big of a deal. Iren is getting customers to prepay 45% to 55% of each contract, which makes it easier to fund data center builds. The company can also continue GPU financing and borrow against its data centers to ensure no further dilution occurs.

2. Netlist

I like to focus on smaller AI stocks, and Netlist (OTC: NLST) certainly qualifies with a $2 billion market cap. It is developing CXL solutions that can be a major part of AI infrastructure in the future. Netlist also makes a lot of money reselling memory products, but its patent portfolio can yield immediate upside.

The company reached a strategic agreement with Samsung after a lengthy patent infringement legal battle. Samsung must pay an up-front licensing fee of $239 million plus quarterly royalty payments of up to $32.9 million for five years. Netlist also has the right to buy up to $300 million in Samsung memory products each year for five years, guaranteeing chips at a time of intense supply constraints.

The total five-year contract can reach up to $897 million in gross license revenue, including the up-front fee. Almost all of that is pure profit, and Netlist no longer has to spend as much on legal. The company is pursuing similar actions against Micron Technology, which can result in another lucrative agreement, especially after its success with Samsung.

Some investors exited their positions due to a headline about Netlist losing its appeal in a patent case to Micron. While Netlist lost that case, it's completely different from the critical patents that Netlist used to get a deal with Samsung. Micron is still on the hook for $445 million in the patent infringement case that serves as a major catalyst for Netlist shares.

The growth stock plummeted by more than 20% on that news, but the price move was misguided. Losing one patent deal isn't synonymous with losing the critical deals that can force a strategic deal like the one Netlist secured for Samsung.

Marc Guberti has positions in Iren and Netlist. The Motley Fool has positions in and recommends Micron Technology and Microsoft. The Motley Fool has a disclosure policy.

It has been a tough year for NuScale Power (NYSE: SMR). Shares have fallen nearly 40% since 2026. One Wall Street analyst remains unfazed.

In early August, Rinny Singh, an analyst at Bank of America, reiterated her buy rating on SMR stock, setting a share price target of $12, implying roughly 24% upside over the next 12 months.

Why does Singh remain so bullish despite recent share price weakness? Her bull thesis comes down to one key catalyst -- a catalyst that may soon receive some much-needed momentum.

Here's why Rinny Singh remains bullish on NuScale Power stock

Singh's bull thesis on NuScale stock largely comes down to one critical factor: Can NuScale convert its customer pipeline into revenue-generating projects? The biggest mover from this perspective is the company's 6-gigawatt (GW) project with its financing partner, ENTRA1, and utility provider, the Tennessee Valley Authority (TVA).

Right now, NuScale remains the only company in the U.S. with regulatory permission to build a small modular reactor, or SMR. If built, the company's TVA project would be the biggest SMR facility in the world by a large margin.

Here's the catch: TVA still hasn't made any firm financial commitments to the project. The deal will be non-binding until a power-purchase agreement (PPA) is signed, locking the utility into buying power from the future NuScale facility.

In a note to clients earlier this year, Singh conceded that "converting agreements to firm deals has been slower than anticipated." Singh also expressed concern about NuScale's financial position, citing increased cash burn and near-term funding risk.

Image source: Getty Images.

Since that note was published, however, NuScale has significantly improved its capital position. As of last quarter, the company has around $1.9 billion in cash and cash equivalents. This resolves most of Singh's funding concerns, though at the price of shareholder dilution.

A vastly improved balance sheet now let's NuScale focus on executing Singh's most valuable catalyst: converting the non-biding TVA deal into a firm, revenue-generating project. That catalyst would be realized with the signing of a PPA. According to NuScale's management team, a PPA could be in place by the end of 2026.

Last quarter, NuScale's CEO specifically called out "continued advancement on the ENTRA1 and TVA power purchase agreement discussions." NuScale's CFO added that the nuclear company is "hopeful that TVA can come across the line at some point later this year."

If NuScale can secure a PPA for this project, Singh's bull thesis may ultimately look conservative. A PPA not only would provide serious social validation for NuScale's technology and go-to market strategy, but it would also clear up many financing concerns. ENTRA1, NuScale's financing partner, was approved for $25 billion in government funding last year to build large-scale energy projects. Not all of that funding will go to NuScale. But if the TVA deal reaches firm financial commitments this year, expect the market to assign more value to NuScale's future customer pipeline.

Importantly, Singh is not alone in her bullishness. The Wall Street consensus price target for NuScale stock is also around $12 per share. The investment thesis, however, will largely hinge on getting a PPA signed for the 6-gigawatt SMR project with TVA.

Bank of America is an advertising partner of Motley Fool Money. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

September has a bit of a bad rep on Wall Street. The ninth month of the year has historically delivered negative or weaker returns with such consistency that it has even been dubbed "The September Effect."

It's a market anomaly -- an unusual pattern -- but this year it is compounded with real market uncertainty. Among investor concerns: sticky inflation, rising energy prices, hawkish signals from bankers, high yields on U.S. Treasury bonds, a trade war between the U.S. and Canada, an actual war between U.S. and Iran, plus ballooning national debt and continued fears over an AI bubble.

Image source: Getty images.

These are, to be fair, just the negatives, and a complete picture would have to add the positives, such as soaring profits for S&P 500 (SNPINDEX: ^GSPC) companies, steady growth in the U.S. economy, and a stock market that is broadening beyond a few megacap leaders.

There is, however, one persistent concern that goes beyond September's historically weak performance. One of the market's most reliable valuation metrics has been flashing a warning light for months. And, if history is any guide, Wall Street won't like what's coming next.

History might be repeating

To be sure, there's no metric that can tell us what's coming next, no metric, for instance, that can predict a crash or correction. But there is one that is pretty good at comparing today's market with predecessors to measure its valuation. That metric would be the CAPE -- and right now, it's in historically high territory.

Data by YCharts.

The CAPE, also known as the Shiller P/E, averages the S&P 500's last decade of inflation-adjusted earnings. It smooths over one-time events, like recessions or profit surges, to give a clearer picture of how expensive stocks are. Higher CAPEs typically signal that the market could be overvalued, while lower ones mean the opposite.

When you look at the chart, you'll notice three figures. There's the average, which, over 155 years, sits at about 18. Then, there's the highest CAPE ever recorded, 44, which came during the dot-com era. Then there's today's CAPE, roughly 41.

A period with a higher-than-average CAPE reading has historically preceded a period with weaker long-term returns. In extreme cases, the former precedes major market declines, corrections, and outright crashes. The two aren't causally related -- a high CAPE reading doesn't cause a market crash -- but the reading does tell us that stocks look historically expensive and are therefore more vulnerable to whatever triggers the next sell-off.

If history repeats itself, today's bull market could end the same way as the dot-com era's. But history doesn't always repeat -- more accurately it rhymes -- and there's no way of asserting with any certainty that today's market is destined for the same catastrophic ending that popped the dot-com bubble. Even if the market did experience a period of weaker returns, many of today's companies could continue growing their earnings and rewarding investors who stuck with them through the turbulence.

What should investors do?

The important thing is not to overreact. Panicking, trying to time the market, or selling great companies indiscriminately could do more damage than a downturn itself.

In fact, the best thing to do right now is to stay invested in companies you believe in no matter what happens in the larger market. That's easier said than done. Instincts take over when heavy losses are piling up and bad headlines are coming in from every side. You might even think yourself foolish for staying invested -- but history has often rewarded investors willing to look a little foolish in that sense.

Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ:NVDA) closed Friday at $230.36, 2.6% below its 52-week high. Four of its biggest artificial intelligence (AI) chip peers ended the week nowhere near theirs. Advanced Micro Devices (NASDAQ:AMD) sits about 18% below its high, Micron Technology (NASDAQ:MU) about 19%, Broadcom (NASDAQ:AVGO) about 28%, and Marvell Technology (NASDAQ:MRVL) about 32%.

That spread is strange, because one wave of data center spending is paying all five companies. Nvidia expects capital spending by the five biggest hyperscalers (the biggest cloud and internet companies) to land near $800 billion this year and reach $1.3 trillion in 2027.

Do the discounts rank the opportunities? I don't think they do.

Image source: Nvidia.

Nvidia's small discount is earned

Nothing in Nvidia's business has cracked. Revenue in the fiscal second quarter of 2027 (the period ended July 26) was $96.2 billion, up 106% year over year. Growth accelerated from the prior quarter's 85%.

Data center revenue was $89 billion, up 117%. And management guided the fiscal third quarter to $108 billion.

Nvidia's chief financial officer, Colette Kress, told analysts in late August to expect fiscal 2028 revenue growth of about 70% -- a figure that reflects what the company can manufacture, not what customers want.

Shares cost about 15 times analysts' fiscal 2028 earnings estimates. For growth like that, the price still looks reasonable to me.

The two deepest discounts just raised their outlooks

Broadcom reported its fiscal third quarter of 2026 (the period ended Aug. 2) on Wednesday. AI semiconductor revenue reached $16.7 billion, up 221% year over year and 54% from the prior quarter, and management expects $21.7 billion in the current quarter.

Even more, CEO Hock Tan told analysts he is looking to double AI revenue to $115 billion next fiscal year, and in fiscal 2028 to double it again, to $230 billion. Those targets lean on a short list of customers (OpenAI and Anthropic among them) deploying on schedule.

In other words, the group's fastest guided AI growth belongs to its second-deepest discount. Analysts' fiscal 2027 estimates put the stock at about 19 times earnings.

Marvell's discount is the deepest of the four. Its late-August report covered the fiscal second quarter of 2027 (the period ended Aug. 1). Revenue was a record $2.7 billion, up 37% year over year. Data center revenue (now 79% of the total) grew 46%. And CEO Matt Murphy said the company was again raising its revenue outlook for fiscal 2027 and fiscal 2028.

But shares fell about 10% the next day. Management's non-GAAP (adjusted) gross margin forecast implies giving up about a point as lower-margin custom AI chips take a bigger slice of sales. That is a cost-of-winning problem, not a demand problem. Even at a price-to-earnings multiple near 33 on next fiscal year's estimates, a point of gross margin seems like a fair trade for bookings management calls exceptionally robust.

What about AMD and Micron?

AMD's numbers are excellent, too. Revenue rose 50% year over year to $11.5 billion in the second quarter of 2026, and data center revenue more than doubled to $6.7 billion, or 58% of the total. But even 18% below its high, the stock costs about 31 times next year's estimated earnings. That price already counts on a smooth ramp of the company's new Instinct GPUs, just as memory (a big slice of an accelerator's cost) could get more expensive. I'll watch this one from the sidelines.

Micron sits on the other side of that memory bill. Revenue more than quadrupled year over year to $41.5 billion in its fiscal third quarter of 2026 (the period ended May 28), and management's forecast for the fiscal fourth quarter (results due Sept. 30) calls for about $50 billion, with a gross margin around 86%.

Yet Micron's price-to-earnings multiple sits at about 6.5 on next fiscal year's estimates. The market is treating profits like these as a cyclical peak. Memory has always cycled, so I think some of that caution is fair. I'd hold Micron here, without adding to it.

The discounts don't rank the buys

Ultimately, these discounts measure the market's patience, not the companies' earnings paths. Broadcom and Marvell carry the group's two deepest discounts. Both just raised their outlooks anyway.

That mismatch is where I'd put new money: I'd buy Broadcom and Marvell at these prices, and I'd still buy Nvidia near its high. Broadcom and Marvell are priced for problems (deployment schedules at one, a point of gross margin at the other) that look affordable next to the growth they just guided for.

Of course, chip demand moves in cycles, and every discount here could get deeper before it closes. I'd size each position with that in mind.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Marvell Technology, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.

After dipping 5.3% lower in July, shares of SoundHound AI (NASDAQ: SOUN) stock jumped higher last month after the artificial intelligence (AI) company' reported strong Q2 2026 financial results.

According to data provided by S&P Global Market Intelligence, SoundHound AI stock rose 16.8% in August.

Image source: Getty Images.

$61.9 million in Q2 2026 revenue sounded good to SoundHound AI investors

Surpassing the $52.4 million that analysts had anticipated, SoundHound AI reported second-quarter 2026 revenue of $61.9 million, a 45% year-over-year increase. At the bottom of the income statement, the company also exceeded expectations. While analysts estimated SoundHound AI would report an adjusted loss per share of $0.05, the company posted a slimmer $0.02 adjusted loss per share.

Although SoundHound AI is still incurring a net loss, the company is making progress toward profitability. In Q2 2026, it expanded its gross profit margin to 45.1% from 39% during the same period last year.

In the press release addressing the financial results, SoundHound AI interim CFO and co-founder James Hom lauded the success of the company's recently launched OASYS, an AI system that enables customers to build and deploy conversational AI agents to accomplish several tasks, such as handling transactions, tasks, and workflows on behalf of customers and employees, stating, "We are excited by the strong interest we are already seeing with OASYS, which is a testament to the category-defining technology we continue to deliver to the market. Our investment in innovation, combined with our cost discipline, is key as we drive our business toward achieving profitable growth."

In addition to the recent quarter, investors celebrated the company's updated 2026 revenue guidance, which ranges from $230 million to $260 million. Should the company achieve the midpoint of this forecast, it will represent year-over-year sales growth of 45%.

While the market celebrated the company's financial results, some analysts took a more bearish stance on the AI stock -- a factor that contributed to shares giving back some of the gains they had made immediately after the company's Q2 results announcement. Piper Sandler analyst James Fish, for example, cut the price target on SoundHound to $7 from $8, maintaining a neutral rating. Similarly, Gil Luria, a DA Davidson analyst, reduced the firm's price target to $10 from $12.

SoundHound AI stock is hanging on the discount rack

Falling 5.9% so far in September, SoundHound AI stock has given back some of the gains that it logged in August. Couple this with the fact that shares of the AI stock are trading at 13.9 times sales -- a discount to their five-year average P/S multiple of 17.2 --, and it looks like now's a good time to start a position.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool has a disclosure policy.

Building wealth in the stock market isn't about chasing hot trends. It's about owning high-quality businesses that can compound in value and potentially beat the market over long periods.

Amazon (NASDAQ: AMZN) and Visa (NYSE: V) are quality stocks that can help investors do exactly that. Analysts expect both companies to grow earnings at double-digit rates over the next several years. Here's why these growth stocks can deliver superior results for patient investors.

Image source: Getty Images.

1. Amazon

Amazon shares returned 560% over the past 10 years, beating the S&P 500's
251%. The stock has been roughly in line with the index so far in 2026. Even so, analysts expect Amazon's earnings to grow about 20% annually in the years ahead -- a pace that can still support market-beating returns.

Amazon reported 20% year-over-year sales growth last quarter, with two of its largest segments -- online retail and Amazon Web Services (AWS) -- showing accelerating revenue growth.

The cloud market is competitive, with Microsoft right behind Amazon in market share. But Amazon may continue to benefit from its lead. CEO Andy Jassy put it this way: "Customers choose AWS because we offer the broadest capabilities. They want their AI inference to reside near their other applications and data, and more of it resides in AWS than anywhere else."

AWS revenue grew 37% year over year in the second quarter to $42 billion, with a 39% operating margin. Jassy believes AWS could potentially reach $1 trillion in annual revenue. At today's margin, that could mean roughly $400 billion in operating profit from AWS alone.

Demand for cloud services continues to outpace data center capacity, which means Amazon can convert every dollar of new investment in data centers into revenue very quickly. Even with aggressive expansion, Jassy expects demand to outweigh supply through 2027, and he described demand for 2028 as "striking" on the Q2 earnings call.

AWS has a contracted backlog of $496 billion, growing at a triple-digit rate. If AWS approaches $1 trillion in annual revenue within a decade or so, Amazon's $2.8 trillion market cap leaves plenty of room for upside.

2. Visa

Shares of Visa climbed 366% over the last 10 years, outperforming the market, and it still operates one of the dominant payment networks with a long runway for growth.

Visa operates like a tollbooth on global payments. It doesn't issue credit cards or take on that credit risk. Instead, it runs the network that authorizes, clears, and settles transactions. It shares a virtual duopoly with Mastercard, allowing the company to earn an extraordinarily high profit margin of 50%.

Even with uneven consumer spending pressures from inflation and gas prices, Visa's payment volume rose 10% year over year in the second quarter, while revenue climbed 14% to $11.6 billion. Total volume topped $4 trillion for the first time in a single quarter.

One of Visa's biggest opportunities is in value-added services, such as fraud protection and software running on top of its network. Revenue from these services rose 34% year over year in constant currency last quarter. This growth reflects the strength of Visa's competitive position, as most of this revenue is tied to transactions, cards, and accounts already running on Visa's payment rails.

A sluggish economy can weigh on consumer spending and slow growth. Still, over the long term, Visa's revenue will likely continue to grow at double-digit rates, with earnings growing slightly faster. The opportunity ahead is still substantial, with more than $20 trillion in consumer spending still paid with cash, checks, and other non-card methods.

At 28 times forward earnings, Visa is trading within its historical range. The stock should compound with earnings over the long term -- a setup that can still produce market-beating performance.

John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Mastercard, Microsoft, and Visa. The Motley Fool has a disclosure policy.

September has arrived. This means that investors need to prepare themselves for what's historically at least been the worst calendar month of the year for stocks.

Since 1928, the S&P 500 (SNPINDEX: ^GSPC) has fallen by an average of 1.1% during September. Historically, the index has produced positive results just 44.5% of the time.

Given the current backdrop of high inflation, a war in Iran, a mixed labor market, and possible rate hikes from the Fed, it would be easy for investors to think that the S&P 500 could pull back once again -- and to unload shares in advance.

History suggests, however, that this could be the wrong move.

Image source: Getty Images.

September's reputation only tells part of the story

There's no obvious fundamental reason why stocks should fall simply because the calendar enters a new month. More importantly, even a bad month is usually just a minor inconvenience for investors with long-term time horizons.

Consider that the S&P 500 has experienced dozens of corrections, bear markets, recessions, wars, financial crises, and other economic setbacks over the past century. Yet every time the S&P 500 has come back to eventually establish a new all-time high. Over that time, it's still been able to produce around a 10% average annual return.

Trying to avoid September's historical weakness creates other problems:

• September has still been positive nearly half of the time. That means investors could very well miss out on gains.
• Market timing requires investors to be right twice, once when they sell and once when they buy again. Get one of those two wrong, and you'll probably end up worse off.

That can be costly. Fidelity calculated that $10,000 invested in the S&P 500 at the beginning of 1988 would have grown to roughly $616,000 by the end of 2025. But missing only the five best trading days would have reduced the ending value all the way down to $380,000.

That's a difference of nearly a quarter-million dollars!

Here's what I'd do

Instead of trying to predict whether the S&P 500 will be up or down in September, I'd maintain my long-term perspective and keep up with monthly purchase schedules via 401(k) plans or other accounts. Here's the logic:

• If stock prices keep rising, you participate in the gains.
• If stock prices fall, automatic investing plans allow you to buy shares at discounted prices.

That's why keeping a long-term perspective and ignoring short-term volatility is so important. There will inevitably be more bad months, more corrections, and even a few more bear markets. Long-term investors don't necessarily need to try to avoid them. They simply need to maintain the discipline to ride them out and even take advantage of them.

David Dierking has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

With a total return of 57% over the last three years, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) has been a boon for income-focused investors who value stability and diversification. Those who already own the fund should probably hold on to it for those two reasons.

That said, no investment exists in a vacuum. And potential new investors have a lot of other options to choose from. Let's dig deeper into the pros and cons of SCHD to decide what the next five years might have in store.

Dividends are your best friend

According to research from S&P Global, dividends accounted for a whopping 31% of the S&P 500's total return since 1926, making them a vital part of any long-term investment strategy. This might sound surprising considering blue chip stock yields tend to be relatively small. But these payouts benefit from compounding as they are reinvested into more shares that continue growing and paying more dividends.

And while returning cash directly to investors creates more tax exposure than other strategies like stock buybacks, investors can mitigate the impact by using a tax-advantaged account (such as a Roth IRA). Furthermore, the new cash can be invested in different assets to boost portfolio diversification.

SCHD provides a solid foundation for a dividend investing strategy. The fund aims to track the total return of the Dow Jones U.S. Dividend 100 index, which is a collection of high-yielding companies with a track record of consistent payouts. Most of the portfolio is weighted toward consistently profitable parts of the U.S. economy, like healthcare and consumer goods, including household names like Coca-Cola, Merck, and Home Depot.

The size of the index gives it built-in diversification, while its screening based on financial stability metrics helps minimize volatility. But the main point is the dividend. Right now, SCHD offers a yield of 2.99%, and its payout has grown at an annual rate of 7.53% over the last five years.

Image source: Getty Images.

What will the next five years have in store?

SCHD's portfolio companies are so mature and diversified across many industries that investors should expect them to track with the health of the overall U.S. economy. Essentially, if gross domestic product continues to grow and consumers continue to spend, the companies of the Dividend 100 Index will continue to enjoy the incremental earnings growth that allows them to expand and increase their dividend payouts.

But the long-term outlook isn't all peaches and cream. With a portfolio weighting of just 8.2% to technology companies, SCHD will not capture the full benefit of megatrends like generative AI, which has helped the Nasdaq-100 deliver a total return of 92% over the last five years (SCHD returned a comparably modest 57%). That said, there could be a silver lining to the situation.

While AI-related companies are booming right now, there is no guarantee that this will always be the case -- especially as concerns about spiraling data center spending and Chinese competition mount. SCHD gives more safety-focused investors a way to earn a good return while minimizing their exposure to a potential bubble that could hurt tech-heavy indexes.

Is SCHD a buy?

The Schwab U.S. Dividend Equity ETF looks like a strong buy for investors who are willing to forgo a little growth potential in favor of stability and compounding income. Over the next five years, it looks likely to maintain its track record of capital appreciation and dividend payout growth.

That said, the Trump administration remains a wildcard for anyone looking to buy U.S. stocks right now. And a combination of hard-to-predict trade policy, rising bond yields, and inflation could persuade some investors to sit on the sidelines until lower prices potentially become available.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot, Merck, and S&P Global. The Motley Fool has a disclosure policy.

Boring investing strategies aren't always bad. While some people look for hidden opportunities that no one is considering, the best investments may be hidden in plain sight.

That's why my boring prediction is that AI stocks will continue to rally. These stocks aren't exactly the greatest-kept secrets. Nvidia (NASDAQ: NVDA) has grown into the world's most valuable publicly traded company in recent years. More investors are also looking toward smaller AI stocks instead of just relying on chipmakers, which is the same approach I have used for my portfolio.

It may be boring to hear yet another person advocate for AI stocks, but the technology's evolution and upcoming catalysts suggest that this approach is still solid.

Image source: Getty Images.

Nvidia and Broadcom offered multiyear forecasts

AI investors should carefully monitor Nvidia and Broadcom (NASDAQ: AVGO) when assessing how far the AI rally can go. This has been true for years. While I have been bullish about AI stocks for years, their recent results have increased my resolve.

Broadcom reported 86% year-over-year revenue growth in its fiscal 2026 third quarter. Revenue for its AI semiconductor segment was up by 221% and made up more than half of total sales.

However, the bigger news came in the chipmaker's earnings call. Broadcom told investors that it expects its AI chip revenue to double to $115 billion in its fiscal 2027, and then to double yet again to $230 billion in its fiscal 2028.

It's rare for a company to give revenue guidance two years in advance, and this outlook points to continued parabolic growth. It's not just Broadcom. Nvidia said it anticipates 70% year-over-year revenue growth in its fiscal 2028, and cited supply chain issues as a factor limiting growth to that level. If the shortages of components are less of an issue than expected, Nvidia anticipates a level of demand that would result in a higher growth rate.

Hyperscalers are reaping massive rewards for their AI investments

The money that is going toward AI data centers is producing tangible growth for the largest developers of that infrastructure. Hyperscalers like Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) have produced tremendous results from their respective cloud platforms.

Amazon Web Services' growth has reignited, and it just had its best quarter in more than four years. Microsoft is sitting on a $678 billion backlog for its Azure cloud platform, and Google Cloud delivered 82% year-over-year revenue growth in the second quarter.

When announcing Alphabet's first quarter results, CEO Sundar Pichai told investors that the company's "AI investments and full stack approach are lighting up every part of the business."

That quote truly captures the returns AI investments have produced for the leading tech companies. It suggests that hyperscalers will continue to ramp up their capital investments, and Nvidia's and Broadcom's multiyear guidance supports that thesis.

It's not just chipmakers and hyperscalers

I believe that to find the most exciting AI investment opportunities requires investors to look beyond chipmakers and hyperscalers. Their earnings reports offer a good idea of where the AI industry is heading. If chips continue to fly off the shelves and cloud backlogs continue to grow, AI spending and demand will continue to climb.

However, that's not where I'm looking for investment opportunities. I prefer to find smaller companies that are responsible for different parts of AI infrastructure. For instance, each GPU requires memory chips. All of those chips also have to go inside data centers that have the necessary power, liquid cooling, and other components.

The deeper you go down this rabbit hole, the higher the returns you can potentially find. Neoclouds like Nebius (NASDAQ: NBIS) and Iren (NASDAQ: IREN) have my attention since they provide necessary compute capacity and power to hyperscalers.

Investors will continue to hear that artificial intelligence presents some of the best opportunities right now. It may sound boring since it has been the main headline on Wall Street for multiple years, but sometimes, the best opportunities are the most obvious ones.

Marc Guberti has positions in Broadcom and Iren. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, is ready to explore the cosmos. At least that's what CEO Elon Musk wants investors to understand.

"The mission is to make life multiplanetary, to extend consciousness beyond Earth and understand the universe," Musk explained in August. "For me, being a spacefaring civilization is the most interesting thing we could possibly do for the future."

Here's the catch: SpaceX won't be establishing a multiplanetary civilization anytime soon. Before it pursues those goals in earnest, it will need to execute on two key growth pillars that will grant SpaceX the funding and mandate to move beyond Earth and its immediate surroundings.

Image source: Getty Images.

These two catalysts will give SpaceX a leg up in the space race

SpaceX's revenue nearly doubled year over year last quarter, surprising analysts. The company, however, still posted a net loss of $541 million. The company's only segment to generate an operating profit was its Starlink satellite network.

With heavy capital expenditures expected for years to come, Starlink should prove critical to SpaceX's ability to scale its space-based endeavors. Not only is the segment a testament to SpaceX's ability to launch an innovative business model at a profit, but those profits will also prove crucial for SpaceX's self-funding capabilities, especially if market conditions take a turn for the worse.

Perhaps even more important to SpaceX's space ambitions is the successful scaling of its AI business. According to the company's IPO prospectus, AI represents $26.5 trillion of the company's $28.5 trillion total addressable market. Under the guise of scaling its AI business, SpaceX will be able to invest heavily in rocket launches, orbital data centers, increased satellite coverage, and potentially a colony on the moon.

SpaceX could win the space race not because it's myopically focused on scaling its space exploration capabilities; rather, Musk has the company positioned to succeed by using other business opportunities -- namely, Starlink and AI -- to justify scaling more speculative space ventures to investors.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

"Magnificent Seven" stocks like Microsoft and Amazon may still trade at or near all-time highs, but you may want to diversify your megacap positions. The "Mag Seven" may have surged thanks to the artificial intelligence (AI) boom, but their future success hinges heavily on AI spending.

There's nothing wrong with being bullish on the AI megatrend, but consider spreading your wagers elsewhere, to other high-growth opportunities. Take, for instance, another trend that isn't slowing down: the digitalization of payments. With this trend, one stock in particular fits the bill: Mastercard (NYSE: MA).

Image source: Getty Images.

Portrait of a payments tollbooth

Mastercard may be synonymous with credit cards, but neither Mastercard nor its competitor Visa (NYSE: V) issues payment cards. Banks issue the cards but use the companies' respective payment networks to operate them.

In other words, payment stocks like Mastercard don't carry consumer credit risk like bank stocks. Think of Mastercard and similar names as the midstream names among financial stocks: middlemen that collect a small fee on every card swipe or digital payment transaction processed through their networks.

Given the steadiness of this revenue stream and the fact that payment companies like this one built out their networks long ago, a considerable amount of this revenue flows straight to the bottom line. Take, for instance, Mastercard's fiscal results during the quarter ending June 30, 2026.

For the quarter, Mastercard reported $4.4 billion in net income, on $9.3 billion in net revenue. That's a net margin of over 47%. Better yet, alongside strong revenue streams, low capital intensity, and high margins, Mastercard has yet another feather in its cap: the prospect of further double-digit revenue and earnings growth in the years ahead.

Mastercard's growth edge

So I'm sure you're thinking: Why Mastercard over Visa? Why not both? Both valid questions. With both stocks trading at around 25 times forward earnings, competing in the same industry, and sporting similar forward dividend yields, I agree it seems odd to choose one over the other. That said, in terms of growth, many signs point to Mastercard having the edge.

Last quarter, when Mastercard reported 14% and 22% revenue and earnings per share (EPS) growth, respectively, Visa reported similar revenue growth, but EPS growth of just 10%. Even as Visa reported slightly stronger numbers on metrics such as cross-border volume growth and total payment volume growth, the long-term earnings growth forecast favors Mastercard.

While analyst forecasts call for Mastercard's EPS to grow 52% between 2026 and 2029, similar forecasts for Visa call for 46.2% EPS growth. That said, much as there's risk and uncertainty to the AI hyperscaler bull case, the digitalization-of-payments trend does not guarantee smooth sailing ahead for either.

Trading at a high earnings multiple, shares could experience a sharp pullback if future growth fails to meet or beat expectations. Events like a global economic slowdown could serve as a headwind. Visa shares also entail similar strengths and risks, but with growth potential serving as a tiebreaker, consider Mastercard the stronger long-term buy today.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Mastercard, Microsoft, and Visa. The Motley Fool has a disclosure policy.

It's easy to think of your 401(k) match as yours as soon as it shows up in your account, but if you're a recent hire, that might not be true. Most 401(k) plans have vesting schedules that dictate when you're allowed to keep your employer-matched funds if you leave the company.

Quitting before you're fully vested can cost you some or all of your employer match. Here's a closer look at how vesting schedules work and how to know if you're fully vested in your plan.

Image source: Getty Images.

How 401(k) vesting schedules work

Each company sets its own rules regarding 401(k) vesting schedules, but they're limited by what the government allows. You'll have to check with your employer to see what its rules are.

There are two main types of vesting schedules: cliff and graded. Cliff vesting schedules require you to work for the company for a certain number of years (three maximum) before you're allowed to keep any of your employer match if you leave the company. Graded vesting schedules gradually release your employer match to you over time. For example, you might get to keep 20% after one year, 40% after two years, and so on. Graded vesting schedules can stretch out over six years.

If you've worked for your employer for at least six years, you should be fully vested in its plan. If you've worked there for a shorter time, check with your employer to learn when you will become fully vested in the plan.

What to do if you're not fully vested in your 401(k) plan

Not being fully vested in your 401(k) isn't a big deal unless you plan to leave the company soon. If you're close to being fully vested, you may prefer to stick it out at your job for a bit longer so you can hold on to all of the employer-matched funds you've earned over the years.

When that's not an option, weigh what you're losing by forfeiting some of your match against what you'll gain by switching to a new position. If the salary increase for your new job is substantial, that might be worth forfeiting a few thousand dollars of your 401(k) match. That choice is up to you.

When you take your new position, make sure to inquire about your new company's vesting schedule and whether there's any waiting period before you're able to start participating in the 401(k) plan. If there is, you may need to save in an IRA in the meantime.

Once you're ready to participate in the new plan, check how much you need to contribute to get your full match, then divide that amount by the number of pay periods in the year. Do your best to claim the entire match whenever possible.

The Motley Fool has a disclosure policy.

When AI-enhanced security company BigBear.ai (NYSE: BBAI) reported earnings at the end of July, investors seemed pleased. Shares rose 18% over the next two weeks.

But unfortunately for BigBear.ai investors, it didn't last. Since then, the company's stock price has tumbled 11.8%. On Tuesday, they plunged below the $3/share milestone. Further declines could be coming.

Is BigBear.ai's stock now in danger of having to perform a reverse split? Here's what investors should know.

Image source: Getty Images.

BigBear.ai's earnings weren't great

Enthusiastic investors eagerly bid up BigBear.ai's share price after the company's Q2 earnings report on July 30. That report featured some wins, but left a lot of issues unresolved.

Quarterly revenue of $36.7 million was up 13% year-over-year (YOY), and gross margins also improved from 25% to 32.8% on a YOY basis. That means BigBear.ai is not only making more money, but sending more of the money it makes to the bottom line.

The company also managed to cut its net losses significantly, from $228.6 million in the prior-year quarter to just $25.7 million this year.

BigBear.ai CEO Kevin McAleenan also reaffirmed full-year revenue guidance and touted more than 20 new contracts as a basis for optimism.

The problem for the AI company is that it burned $68.6 million in cash during the quarter, its share count keeps increasing, and while Q2 and trailing twelve-month (TTM) revenue were up from 2025, both are still down from 2024, 2023, and 2022.

In spite of that, a reverse split seems unlikely. Here's why.

Image source: Getty Images.

Why BigBear.ai stock probably won't reverse split

Although the stock now trades for less than $3/share, the threshold for maintaining its listing on the New York Stock Exchange (NYSE) is just $1/share, and BigBear.ai shares are still well above that level.

BigBear.ai's share price has briefly dropped below $3/share twice since 2025 without a reverse split: in July, it hit $2.59/share before rebounding, and in April 2025, it dropped to $2.39/share before soaring to $9.78/share later that year. Management is likely hoping for another such turnaround.

Speaking of management, because reverse splits are often used by troubled companies to maintain their listing on an exchange, company leaders usually try to avoid them. If BigBear.ai announced a reverse split, it might signal that management was worried about shares dropping below the $1 threshold. That could quickly become a self-fulfilling prophecy as nervous investors fled the stock.

Unless BigBear.ai's share price drops below $2/share, investors probably don't have to worry about a reverse split. But this is still a stock that shareholders should keep an eye on. Its price is already volatile, and a single canceled contract or unfavorable news report could have an outsize impact.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) is moving beyond selling GPUs by helping build the infrastructure that its clients could depend on for decades. Just one AI factory project, for example, creates an intriguing possibility: long-lived facilities that can be upgraded with new generations of Nvidia technology, potentially extending demand far beyond a single chip cycle.

Stock prices used were the market prices of Aug. 21, 2026. The video was published on Sept. 4, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Ford Motor Company's (NYSE: F) shares have been in the fast lane. Over the past 12 months, they have climbed 21% (as of Sept. 3). Surprisingly, this performance is ahead of four of the "Magnificent Seven" stocks, high-powered companies sitting in the middle of impactful technological trends.

Investors aren't used to this automotive stock putting up strong returns. In the past five years, Ford's share price increased by just 9%. But can the business do a better job at rewarding its investors over the coming half-decade?

Here's where I believe Ford stock will be in five years.

Image source: The Motley Fool.

Things will stay the same

At a high level, Ford's operations aren't going to change much going forward. Known for its pickup trucks and SUVs, the company will remain a leading player in this segment of the automotive industry. Its Ford Blue segment will remain the most important financial driver. This division reported revenue of $26.1 billion in the second quarter, representing 54% of the company's total.

There's also the Ford Pro segment, which sells vehicles, software, and services to commercial and government clients. It's more profitable than traditional car sales and offers greater growth potential. Perhaps most importantly, it brings in a recurring revenue stream from subscriptions.

The company's bulls will point to the recent announcement of the Ford energy segment. This division plans to sell battery storage systems to commercial and industrial customers. Given the substantial demand for these solutions, driven by the data center boom, the business is positioning itself at the center of a notable growth trend.

The good news is that this move leverages assets from the restructured electric vehicle (EV) operations. In December last year, Ford announced a significant $19.5 billion special charge to pull back its EV investments due to softer-than-expected demand. It's now hoping to monetize these capabilities with the energy segment.

The bad news is that Ford energy, no matter how much excitement it adds to the Ford story, isn't likely to move the financial needle much. According to Morgan Stanley, Ford Energy is projected to bring in $550 million (at the midpoint) in operating income once it reaches full scale. This represents a trivial 5% of the $10.5 billion in adjusted operating income that the overall business is expected to report in 2026.

Ford isn't set up to post market-beating returns

Ford's operations aren't going to change. Therefore, investors shouldn't expect the business to suddenly become a market-beating investment opportunity. The company isn't set up to produce outsize returns.

First off, the mass-market auto industry isn't supportive of strong growth. In the U.S., the same number of passenger cars were sold in the month of July compared to 40 years ago, making it a very mature market.

Ford's demand can also be highly cyclical. New cars are typically the second-largest purchase consumers make in their lives. When the economy is down, people will delay buying a vehicle. Ford's already razor-thin profit margins add financial risk when macro forces shift.

And the capital expenditures are meaningful. Ford must continually invest additional resources in the business just to maintain its position in the industry. The reward for this is minimal growth.

Investors can find the best opportunities in the compounding machines. These companies can consistently grow their revenues and profits at healthy rates over the long term. They possess durable competitive strengths. And they don't experience much cyclicality.

Ford will never be in this category. In five years, I think the best-case scenario is that the stock appreciates by 50%, which is admittedly a low-probability outcome. Because shares trade at a forward price-to-earnings ratio of just 7.4, upside can come from multiple expansion. Of course, improving market sentiment is not a sure thing.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.