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.

The hottest IPO of the year hasn't even been formally announced yet (sorry, Space Exploration Technologies).

It's the impending IPO of artificial intelligence (AI) company Anthropic, which makes the Claude large language model (LLM), along with its coding counterpart, Claude Code, and numerous other AI agents and models.

Anthropic submitted a confidential draft S-1 prospectus registration with the Securities and Exchange Commission (SEC) in June, but rumors are swirling that the IPO could come as early as next month.

That means individual investors can't buy shares of Anthropic just yet. However, there's another way for investors to own a piece of Anthropic before its IPO. They just need to buy stock in a public company that owns a stake in Anthropic.

Here are two magnificent stocks that already own a large chunk of Anthropic, which should benefit their shareholders.

Image source: Getty Images.

Amazon's big bet

Many tech companies, including Microsoft and Nvidia, have taken stakes in Anthropic. Perhaps the biggest potential winner from its Anthropic investment is tech giant Amazon (NASDAQ: AMZN).

Amazon is much more than an e-commerce company. In fact, its fastest-growing business segment is its Amazon Web Services (AWS) cloud computing arm, which saw 37% revenue growth in the most recent quarter, thanks to customers spending money on AI applications.

The tech giant made an early $8 billion investment in Anthropic, which was valued at over $74 billion as of the first quarter. Then, in April, it poured another $5 billion into Anthropic along with the promise of another $20 billion to come, provided Anthropic reaches "certain commercial milestones."

Given Anthropic's April valuation of $380 billion, Amazon's total stake in Anthropic was likely worth about one-quarter of the value of the company at the time. However, that value skyrocketed to $965 billion in a Series H round of funding shortly thereafter. Anthropic's value will probably increase further after it goes public, with a likely post-IPO market cap of over $1 trillion.

The dollar value of its investment isn't the only thing Amazon is getting from Anthropic. The AI company announced it would spend more than $100 billion on AWS over the next decade. That includes a commitment to run its LLMs on Amazon's custom Trainium AI chips.

Image source: The Motley Fool.

Alphabet's major stake

Another major Anthropic investor is Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), which committed "up to $40 billion" in Anthropic investments in April. Similar to Amazon, that $40 billion consisted of a $10 billion upfront investment, followed by an additional $30 billion that's contingent on Anthropic reaching certain performance milestones.

Like Amazon, Alphabet also made more than $3 billion in early investments in Anthropic, and it's now looking to reap the rewards of that early investment.

Google's revenue has also been juiced in recent quarters by AI services on its Google Cloud Platform (GCP). Google Cloud revenue increased 82% to $24.8 billion in its most recent quarter, which management attributed largely to "an increase in GCP across enterprise AI Solutions and enterprise AI Infrastructure."

So it shouldn't surprise anyone that Alphabet apparently received $200 billion in commitments from Anthropic in support of GCP.

Stakeholders are already benefiting

While the general public can't do anything but wait breathlessly for Anthropic shares to start trading post-IPO, Alphabet and Amazon shareholders are already benefiting from Anthropic's success.

Alphabet's second-quarter net income of $112.1 billion was the largest quarterly profit in company history, up 298% year over year. But that was mostly due to $98 billion in "other income," which the company explained was "primarily the result of net unrealized gains on our equity securities." In other words, it was thanks to the company's investments, including its stake in Anthropic.

Amazon was even more specific about the source of its $53.4 billion in Q2 "non-operating pre-tax other income," stating it was "primarily from our investments in Anthropic."

So if investors don't want to wait for Anthropic's IPO, buying shares of Alphabet or Amazon will get them exposure to Anthropic stakes that are already paying off for their owners.

John Bromels has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

If there's one thing Elon Musk understands, it's the value of showmanship.

From setting audacious goals to making spectacular business predictions to launching a sports car into space, Musk's charisma has been one of his biggest assets. It's a big reason he's been able to lead two of his businesses to trillion-plus-dollar market valuations.

But yesterday's Tesla (NASDAQ:TSLA) Cybercab launch in Austin was, by all accounts, devoid of showmanship. It was invitation-only. There was no livestream. There was no press release about it on Tesla's website. Even Musk himself didn't bother to attend (although he did post prerecorded videos about the Cybercab on X).

It's almost as though he had an inkling of what was in store.

Here's how a much-anticipated product launch turned into a stock downturn, a federal probe, and an uncertain future for Tesla shareholders in less than 24 hours.

Image source: The Motley Fool

The event turned a Tesla stock rally into a rout

The Cybercab event in Austin was supposed to show off an updated version of its robotaxi, a gold-toned two-seater with butterfly doors and no steering wheel or pedals.

Investors and Tesla fans were clearly expecting big things. Shares were up 5.4% on Thursday in anticipation of the launch, while millions of fans were reportedly waiting on X for a livestream that never materialized.

Tesla analysts certainly weren't impressed. Analysts from Wells Fargo published a note saying the event was underwhelming and that the Austin robotaxi service faced "early execution issues." Meanwhile, RBC Capital Markets analysts released their own note complaining about "limited new incremental disclosure" about unclear details of the upgraded Cybercab, including "key outstanding questions around pricing, production cadence, and regulatory approvals."

But the worst was yet to come.

NHTSA opens an audit into the Cybercab

Adding to the newly launched vehicle's problems, the National Highway Traffic Safety Administration (NHTSA) announced this morning that it was opening an "enforcement action" called an Audit Query (AQ) into Tesla's Cybercab self-certification.

Basically, for the Cybercab to begin commercial operations, which have now begun in a "geofenced" area of Austin, Tesla needed to certify to NHTSA that the vehicles complied with all Federal Motor Vehicle Safety Standards (FMVSS). Self-certification is the standard process for U.S. automakers.

However, the FMVSS – which wasn't created for autonomous vehicles – require cars to have safety features like brake pedals and rearview mirrors that aren't present in the Cybercab.

Image source: Tesla.

In its investigation summary, NHTSA noted:

"Tesla notified the Agency that it certified those Cybercab vehicles as compliant with all applicable [FMVSS] ... The vehicles lack permanently attached, conventional manual controls, such as a brake pedal, gas pedal, steering wheel, and mirrors. NHTSA is opening this AQ to examine the process and technical data on which Tesla relied when certifying the Cybercab and related issues. Among other things, NHTSA will consider the extent to which Tesla's certification depended on determinations that certain FMVSS are inapplicable to the Cybercab."

Potential delays and further share declines

The Cybercab's regulatory woes are reminiscent of what happened to Amazon's(NASDAQ:AMZN) self-driving subsidiary Zoox, which received its own NHTSA AQ in 2023 after self-certifying its own robotaxi for testing.

The investigation upended Zoox's path to commercialization. It didn't receive an exemption allowing it to charge customers for rides until this July: more than three years later.

Investors have already waited almost two years since the Cybercab's unveiling. They may not be willing to wait three more years for commercial operations to begin.

Now, Tesla's AQ won't necessarily take as long as Zoox's, but at this point, there's no way to tell when we might see full Cybercab service begin in Austin, let alone nationwide.

Given all this, it's unsurprising that shares plunged 6% today, finishing slightly below Wednesday's close. All told, the event was a slight net negative for Tesla's stock, which is down 21.4% so far this year.

What Tesla investors should watch out for

Despite Tesla's big share price moves yesterday and today, the business remains pretty much the same as it was on Wednesday. It's an electric-vehicle company planning to launch a robotaxi service and a line of humanoid robots. But right now, those are still only plans. And no amount of showmanship can bring those plans to fruition.

Tesla investors should take this incident as a reminder of how much the stock can move based on headlines and hype. They should look past all that to the underlying business when deciding whether to buy or sell.

John Bromels has positions in Amazon and Tesla. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.

The market just seems to keep going up, up, up. The S&P 500 (SNPINDEX: ^GSPC) has risen by 11.5% so far this year. That's on top of a 16.4% gain last year, the 23.3% gain in 2024, and the 24.2% gain in 2023. But investors are getting nervous that it may not last.

According to the American Institute of Individual Investors' weekly sentiment survey, 44.4% of individual investors expect the market to fall over the next six months. That's much higher than the historical average of 31.5%.

There's another major warning signal for investors that has only occurred twice before. Both times, it preceded a huge market crash. Here's what to know.

Image source: Getty Images.

A perfect track record so far

The sign is the Shiller CAPE ratio, which was developed in 1988 by economist Robert Shiller to calculate a price-to-earnings ratio for the entire S&P 500. CAPE stands for "cyclically adjusted price-to-earnings." Shiller went on to retroactively compute the ratio back to 1871.

During that time, the CAPE ratio has only gone above 30 twice. The first time was the late 1920s, when it peaked at 32.56, just before the Great Depression. The second time was in the late 1990s, when it peaked at 44.2 just before the dot-com bust of 2000.

Currently, the CAPE ratio is at 41.2. It climbed above 30 in 2017, and has been moving higher ever since, punctuated only by small dips in 2020, 2022, and 2025.

Here's what investors should -- and shouldn't -- do, given this news.

Image source: Getty Images.

Don't panic

Of course, when you read that a rare warning sign with a perfect track record of preceding a major stock market crash has been triggered, it's hard not to panic. But history shows that's the wrong move.

First of all, nobody knows exactly when a market crash will occur, even when conditions seem ripe for one. In 1929, the CAPE ratio surpassed 30, less than three months before the stock market crash. In the lead-up to the dot-com bust, it surpassed 30 in mid-1997, and continued to rise for more than two years until the crash began in early 2000.

The CAPE ratio stayed below 30 between 2002 and late 2017, nearly nine years ago. If you'd pulled your money out of the market when it first happened, you would have missed out on returns of about 190%.

In fact, research by The Motley Fool has shown that even after a crash has begun, it's almost always better to keep your money invested than to pull it out. That's because if you pull your money out after a crash has begun, you're selling your stocks at a discount, and if you wait to buy back in, you're likely missing out on some gains. Stock prices are considered "leading economic indicators," meaning they often recover before a recession or other crisis has fully abated.

The best thing for investors to do right now is to recognize that a crash may be coming, so they don't get surprised and act rashly if one occurs.

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.

When recently IPO'd Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, released its first quarterly earnings report, there wasn't much in it that was unexpected.

Revenue grew. Net loss shrank. Capital expenditures in the AI business skyrocketed. Ho hum. But buried in the report were a pair of numbers that made me do a double-take. I had to check to make sure I read them correctly.

These two numbers could actually be a game changer for SpaceX's profitability. Here's what they are and why they're important.

Image source: Getty Images.

Buried on page 5

SpaceX highlighted its biggest, boldest numbers on page 1 of its report, boasting about its $14.1 billion in contracted Cloud Services Agreements sales, and its $6 billion in multi-year government Starshield contracts.

But on page 5 -- literally halfway through the 10-page report -- these two numbers caught my eye: 12.0 and $66.

12.0 is the number of subscribers, in millions, for SpaceX's Starlink satellite broadband and wireless network, which offers communications access to people around the globe who aren't served by traditional cellular towers or internet cable networks.

That's actually a sizable 16.5% jump from the 10.3 million Starlink subscribers that SpaceX reported in the first quarter, and it's double the 6 million Starlink subscribers that SpaceX reported in the second quarter of 2025.

The other number -- $66 -- is where it really gets interesting.

Image source: The Motley Fool.

Holding steady

$66 is the monthly average revenue per user (ARPU) of those 12 million Starlink subscribers. That's unchanged from Q1 ... which is a big surprise.

In Q2 2025, Starlink's monthly ARPU was $85 for its 6 million subscribers. When that shrank to $66 for 10.3 million subscribers in Q1, most analysts assumed that Starlink's ARPU would continue steadily shrinking as it expanded into less profitable markets, likely at a similar rate. Instead, Starlink was able to add 1.7 million net new subscribers without margin shrinkage. That's huge.

Starlink is currently SpaceX's only profitable segment, and it's essentially offsetting all the losses from the rocket launch segment and some of the losses from the AI segment. However, if Starlink can continue to grow its subscriber base while mostly maintaining its current ARPU, the company could become profitable much earlier than most analysts -- including me -- anticipated.

That said, one quarter doesn't make a trend. It's always a good idea to wait for multiple quarterly reports before buying shares of a recent IPO.

It's possible this quarter is just a blip, and Starlink's ARPU will continue to shrink in the third quarter. Or SpaceX's AI losses might accelerate faster than anticipated. With just one official quarterly report to go on, there's no way to tell.

But if this trend continues in Q3, I might have to rethink my conclusion that SpaceX is wildly overvalued.

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.

Open-source AI platform Hugging Face is in the news for the second time in as many weeks. But this time, it's good news.

Last week, it was because OpenAI released new details about the security incident in which OpenAI's agentic bots "broke containment," gained unauthorized access to Hugging Face's servers, and took over parts of its system.

This morning, Nvidia (NASDAQ:NVDA) CEO Jensen Huang announced a different kind of takeover of Hugging Face. But he's not using agentic AI: he's using good old-fashioned money to buy the company.

Here's why Nvidia has agreed to pay nearly $13 billion for Hugging Face, and the impact the acquisition might have on Nvidia's stock.

Nvidia CEO Jensen Huang. Image source: Nvidia Corporation.

What Hugging Face really does

Most people only know about Hugging Face from news reports of the OpenAI security breach. But Hugging Face is more than just a random website that got hacked.

Hugging Face is an open-source repository for tools related to AI and machine learning. It's often likened to GitHub, the primary online repository and platform for computer code.

Hugging Face hosts pre-trained, task-specific AI models, AI training data sets, cloud-based AI testing environments, and libraries of code for AI-related tasks.

And this isn't a tiny community. As Huang pointed out in his blog post announcing the deal, "More than 18 million developers, researchers and creators use Hugging Face to share more than 3 million models, 500,000 datasets and 1 million applications. More than 200,000 companies use the platform to discover, evaluate, customize and deploy AI."

Image source: The Motley Fool.

Why did Nvidia buy Hugging Face?

Nvidia has been interested in buying Hugging Face for a while. Hugging Face reportedly turned down Nvidia's $500 million investment offer late last year, which would have valued the company at $7 billion.

But the company generates just $150 million in annual revenue, making a $13 billion valuation – well, $12,930,300,000, to be exact – very rich indeed. Why would Nvidia be willing to pay so much for such a modest business?

Right now, Nvidia dominates the AI chip market, and it's not even close. But closed-source AI labs -- including OpenAI, Anthropic, and Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google -- have been trying to develop their own AI chips, either on their own or in partnership with other companies like Amazon (NASDAQ:AMZN).

Nvidia seems likely to continue to dominate the top-of-the-line chip market. But as AI computing becomes more widespread, the market for "not-the-best-but-good-enough" AI chips is expected to grow, and Nvidia can't afford to lose out on chip sales if the closed labs develop their own proprietary chips optimized for their AI models.

A thriving open-source AI model community would, by definition, be chip-agnostic. That would allow Nvidia to retain a larger market share even if closed-source models move away from Nvidia's technology. That's one reason Nvidia has been investing heavily in building its own open-source AI models.

How will it affect Nvidia's stock?

Nvidia brought in $96.2 billion in sales in its most recent quarter, so the amount of revenue to be gained from this acquisition is practically a rounding error for the company. Instead, it's about maintaining dominance of the fast-growing AI ecosystem.

Jensen Huang has been very smart in recent years about establishing partnerships with companies across the AI usage spectrum. Nvidia provides these partners with access to its chips, hardware, and software, helping to ensure the next generation of AI models and infrastructure are designed to Nvidia's specifications.

This acquisition is another forward-looking move by the Nvidia CEO, showing he's thinking not just about next quarter's results but about Nvidia's long-term dominance.

It's also possible that Nvidia has seen the massive revenue gains posted in recent quarters by cloud providers like Amazon Web Services (AWS) and Google Cloud Platform and is regretting its decision to scale back its own DGX Cloud business.

Hugging Face's existing cloud-based developer tools could help Nvidia reestablish itself in the cloud services market. And that's no small potatoes! Google reported $24.8 billion in Google Cloud revenue in the most recent quarter.

So while this might seem like a minor acquisition for Nvidia in terms of numbers, it's likely to have an outsize impact on Nvidia's long-term performance. It bolsters the thesis that Nvidia is a long-term buy.

John Bromels has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.

Over the past year, Nvidia (NASDAQ: NVDA) shareholders have had to take the good with the bad. For the last five consecutive quarters, the company has reported blowout quarterly results. That's good. But Nvidia's stock price has dropped immediately following each announcement. That's bad.

Luckily, it hasn't kept shares from growing by 25% over the past year, handily beating the S&P 500 (up 18%). But it has been frustrating for investors to see the company's valuation metrics keep dropping as its revenue and profits keep climbing.

But I think that Nvidia's share price will continue to rise over the next four years.

Right now, a single share of Nvidia is trading at $220.70. That means you could buy five shares today for $1,104.

Here's what I think those five shares would be worth in 2030.

Image source: Nvidia Corporation.

How I made my prediction

Nvidia's trailing price-to-sales (P/S) ratio of 17.8 is well below the five-year average of 25.4, and the company's forward P/S ratio is at an even lower 13 (lower is better).

If Nvidia's shares had a P/S ratio of 25.4 today, they'd be trading at $315.46/share. Just FYI, the company's P/E ratio experienced a huge spike in 2023 that skews the average, which is why I'm using the P/S ratio for these calculations.

I believe that once it becomes clear that the AI spending boom isn't fizzling out anytime soon, Nvidia's valuation will move closer to its historical average.

Meanwhile, Nvidia CEO Jensen Huang believes that the company's revenue will jump 70% in fiscal 2028, with further gains in future years. If he's right, a 70% increase in sales at a P/S ratio of 25.4 would put the share price at $536.28 per share by 2028. That's about double its current price!

There could be further gains between 2028 and 2030. But to account for potential setbacks and continuing fears of an AI bubble, I'm going to use that price and predict that five Nvidia shares will be worth at least $2,681.41 by 2030.

John Bromels has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

"This time is different," explained Nvidia (NASDAQ: NVDA) CEO Jensen Huang in a recent interview, in response to concerns about a pending artificial intelligence (AI) downturn.

And after Huang announced blowout quarterly numbers on Wednesday, it looked for a hot second as if things really were different. On Thursday, it seemed as if investors were finally rewarding the tech giant for its incredible outperformance, rather than sending shares lower, which is what happened after each of Nvidia's last four consecutive blowout earnings reports.

Unfortunately, it didn't last. By the end of the day on Friday, Nvidia's shares had fallen 5.5%. That leaves them barely above their pre-earnings close.

Why can't Nvidia seem to catch a break from the market? And is Huang right that things are about to change in a big way for Nvidia, and for AI in general? Here's what investors need to know.

Image source: Nvidia Corporation.

Nvidia's incredible quarter

Nvidia really couldn't have done much better in its second quarter. Revenue more than doubled from the prior year to $96.2 billion, beating expectations. Adjusted earnings per share jumped 120% year over year to $2.22, also well above the anticipated $2.09.

Adjusted net income came in at $54 billion. That's a year-over-year increase of $29.2 billion, which -- as my colleague Jeremy Bowman pointed out on Wednesday -- is roughly equal to Apple's entire Q2 net income. In other words, Nvidia added an Apple's worth of profitability to its results in one year.

But the biggest news, which seemed to have pushed the stock higher after the report was released, was the company's projection of 70% revenue growth in 2027, smashing analysts' forecast of 44%. Nvidia's shares opened 6% higher on Thursday, and surged to an intraday high of $230.39 -- a 9.9% gain.

The fact that Nvidia's stock has already given up almost all of its post-earnings gains shows how skeptical investors are of continued AI investment. So, why does Jensen Huang think this time is different for Nvidia?

Is it really all that "different"?

One of the most dangerous phrases in investing is "this time is different." Research shows that investors often overestimate the impact of a potentially disruptive technology on an industry and underestimate how long it will take for new technologies to deliver significant returns on investment.

But Huang thinks we are now hitting an inflection point in AI technology that will change how computing functions, causing a major upheaval in the demand cycle.

"This time is different because this is not demand-driven. This time is different because it's not seasonal," he explained. "This is industrially driven, meaning the fundamental technology of computers is changing."

Image source: Getty Images.

Huang believes that while computer infrastructure upgrades have previously been cyclical -- largely consisting of swapping out aging hardware for newer models of the same type -- AI represents a fundamental shift in how computers function. It will require systemwide upgrades and exponentially more infrastructure to handle the massive computer workloads AI requires.

If he's correct -- and Nvidia's results have borne out his thesis so far -- Nvidia looks incredibly undervalued at its current price, and investors may kick themselves for selling the stock after the last five earnings reports instead of buying more.

John Bromels has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.

The war in Iran, now more than six months old, had seen a lull in fighting since late July. But that all changed over the weekend as the U.S. launched its first known military strikes on the country in a month.

Over the weekend, the U.S. struck two rocket launchers on Iran's Larak Island in the Strait of Hormuz. The U.S. claimed that Iran was planning to use the launchers to launch sea mines into the Strait.

In response, Iran fired missiles at U.S. bases in Jordan. Jordanian officials said that their air defense systems successfully intercepted and destroyed all eight of the missiles.

Image source: Getty Images.

The rekindling of hostilities caused oil prices to rise by 2%, sending benchmark Brent Crude above $90/barrel again. The war has caused maritime traffic through the Strait of Hormuz to drop to nearly non-existent levels. Only an average of 5 ships a day have been traversing the Strait in August, down from more than 130 per day before the war.

As the war has pushed global oil prices higher, it has also affected the stock prices of the world's largest integrated oil and gas companies, including Shell (NYSE:SHEL), Chevron (NYSE:CVX), and ExxonMobil (NYSE:XOM). Here's how this latest reescalation is likely to affect Shell's stock compared to its peers.

What will be the impact on Shell's stock?

Over the course of the conflict, global oil prices have fluctuated wildly, rising from about $70/barrel at the beginning of the war to $114/barrel in early May.

When the two sides seem to be on the verge of a breakthrough, as when the U.S. and Iran signed a ceasefire in mid-June, the price has sharply declined. When hostilities flare up again, the price rises.

The stock prices of all five global oil majors, including Shell, Chevron, ExxonMobil, British BP PLC (NYSE:BP), and French TotalEnergies SE (NYSE:TTE), have largely moved in tandem with crude oil prices, surging when oil prices rise and dropping when they fall.

Earlier in the year, that meant all of the oil majors were outperforming the S&P 500, but even at the current high prices, the S&P 500 is outperforming all of them since the war began:

SHEL data by YCharts

Shell has been one of the worst-performing oil majors during the conflict, if only by a fraction of a percentage point. Unlike some of the other oil majors, it has Middle East assets affected by the war, specifically a co-ownership stake in the Pearl Gas-to-Liquids (GTL) plant in Ras Laffan.

On March 18, the plant was struck by an Iranian attack, with one of the two production trains damaged. Shell expects repairs to the damaged train to take about another six months.

Image source: Getty Images.

Shell's natural gas production fell in the second quarter, but was more than offset by higher realized natural gas prices. Further strikes in the region would likely contribute to even higher natural gas prices. Along with higher oil prices, this would likely temporarily boost Shell's bottom line and its share price.

As we saw in June, any oil stock price boost caused by higher oil prices has so far been temporary as well. This latest surge in oil prices, if it continues, could push Shell's stock higher and allow it to outperform the S&P 500. But whether such outperformance would last is a much less certain proposition.

John Bromels has positions in BP. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.

Electric vehicles (EVs) have had a rough ride over the last two years in the U.S., with major carmakers like Ford and Honda curtailing EV production, or even canceling some EV models outright.

That stands in sharp contrast to the rest of the world, particularly China, where EV carmakers – juiced by government incentives and an opportunity to seize market share from dominant U.S. and European brands – are flourishing after years of early stage struggles.

One Chinese EV maker, Nio (NYSE:NIO), has been hit particularly hard over the last five years. But its upcoming earnings report could send the stock soaring.

Here's why Nio's upcoming earnings report could be a game changer for its shareholders.

Image source: The Motley Fool.

How Nio is different

Although battery-powered electric vehicles (BEVs) are cheaper to operate and maintain than gasoline or hybrid vehicles, there are two important metrics on which they aren't yet competitive with their fossil-fuel-powered brethren: cost and refueling time.

BEVs generally cost thousands of dollars more than comparable gas-powered vehicles or hybrids, and powering them to a full charge, even at a high-powered DC fast-charging station, takes 20 to 60 minutes, far longer than filling up at a gas station.

Nio has come up with a unique solution for these problems. Instead of including the batteries in the purchase price of a Nio vehicle, Nio allows buyers to subscribe to a "Battery-as-a-Service" feature for a monthly fee.

Image source: Getty Images.

Paying the fee allows drivers to visit a special Nio "battery swap" station where they swap their depleted battery array for a fully charged one. The process takes only a few minutes, comparable to the time it takes to fill a gas tank.

This system allows Nio to advertise a lower sticker price for its vehicles and lock in a recurring revenue stream from the battery-swap service.

The only problem for Nio is that, for the battery swap service to be a viable option, it needs to build and maintain a network of battery swap stations, which entails high upfront costs.

Why Nio's earnings report is critical

Nio's shares bottomed out at $3.14/share in early 2025. After it posted a quarterly net profit for the first time, the stock jumped to $6.87/share in April, but has since fallen back to $4.38/share, down 93% from its all-time high.

Despite the decline in its share price, Nio's trailing twelve-month (TTM) revenue has skyrocketed this year to $14.3 billion.

That's because Nio's vehicle deliveries have been soaring. As of July 31, Nio had delivered 227,057 vehicles, a 68% increase from July 2025.

But revenue growth has never been a problem for Nio. Profitability has. Nio's TTM net losses had been moving in the wrong direction for almost a decade, hitting a low point of -$3.4 billion in Q3 2025.

Since then, the company has seen remarkable improvement in its bottom line. It even managed to squeak out a net profit of $17.1 million in Q4 2025, only to post a net loss again in Q1 2026.

That single quarter of net profit immediately caused a 20% jump in the company's stock price. Over the next several weeks, it continued to climb to a 45.6% gain. But the return to a net loss in Q1 had the exact opposite effect: an immediate plunge in share price, followed by months of declines.

If Nio's management announces a net profit in its Q2 earnings report on Tuesday, investors should expect the stock to immediately pop, just like it did in Q4.

John Bromels has positions in Ford Motor Company and Nio. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Investors are getting nervous, and it's easy to see why.

A number of bear market indicators are flashing red right now. According to the Buffett Indicator, named for legendary investor Warren Buffett of Berkshire Hathaway, the market is historically overvalued.

Meanwhile, the American Association of Individual Investors reports that 44.4% of individual investors are expecting a bear market in the next six months, far more than the 32.9% predicting a bull market. That's a 4.5 percentage point jump in the bear-predicting cohort in the past week alone.

But even if a bear market arrives tomorrow -- and, remember, there's no way to know exactly when a bear market's coming -- history has some good news for investors.

Every bear market in U.S. history has had one trait in common. Here's what it is and how you can use it to your advantage.

Image source: Getty Images.

Bear markets are shorter than bull markets

A bear market is defined as a drop of more than 20% in a broad-market index such as the S&P 500, which is the one that's most commonly used to gauge the health of the U.S. market. But even the worst bear markets in U.S. history -- from the steepest (the Great Recession's 56.8% decline) to the longest (the 31-month bear that followed the bursting of the dot-com bubble) -- have been followed by an even longer bull market. And it's often a much, much longer one.

The record-long bear market that followed the dot-com crash, for example, lasted (from peak to trough) 31 months from March 2000 through September 2002. But it was followed by a 60-month (5-year) bull market that lasted until October 2007.

Then we had the Great Recession's 17-month bear market, which lasted until March 2009. That was followed by the longest bull market in history, which lasted almost 11 years until the one-month COVID-19 bear market of February 2020.

In other words, since the S&P 500 was created in 1957, the stock market has been in a bull market most of the time. We've only had about 12 total years of bear markets compared to about 57 total years of bullish reign.

Bull market gains crush bear market losses

By definition, every one of those bull markets has returned more than the preceding bear market lost.

The great news for investors is that bull markets usually return at least double what the preceding bear market lost. Of the 13 bull markets since the S&P 500 was created, only one (1966-1968) has returned less than 1.9x the preceding bear market's losses.

But sometimes the returns are much, much higher. The 1982-1987 bull market, for example, returned 9x the losses of the preceding 1980-1982 bear market. The 1990-2000 bull market returned a jaw-dropping 21x the 1990 bear market's losses!

So, the good news for investors is that if we do find ourselves in a bear market, history says it's likely to be relatively short-lived. History also says that investors who kept their money invested in the S&P 500 during a bear market have always gone on to recoup all their losses and usually notch substantial gains once the bear market ends.

John Bromels has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

It's no Berkshire Hathaway -- at least not yet. But Nvidia (NASDAQ: NVDA) has for some years been taking a page out of the Warren Buffett playbook and investing some of its considerable cash hoard in the stock market.

Today, the company has $63.4 billion invested in stocks, representing a big chunk of its overall cash position of $80.6 billion. And according to a newly released Securities and Exchange Commission filing, that portfolio includes a major new stake in Elon Musk's Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX.

Here's why this is a bold move for Nvidia and one big reason why CEO Jensen Huang likes the company so much.

Nvidia CEO Jensen Huang. Image source: Nvidia.

Nvidia's portfolio is growing fast

At the end of March, Nvidia reported just $18.4 billion in stock holdings. More than half of the total was in the form of a $9.5 billion stake in rival chipmaker Intel. That means, in just one quarter, its portfolio of investments in public companies grew by $45 billion, or about 250%, even as the S&P 500 (SNPINDEX: ^GSPC) grew by just 14.9%. How is that possible?

Well, for one thing, Intel's stock took off, rising by 216.4% during Q2. That grew Nvidia's stake from $9.5 billion to a jaw-dropping $30 billion, and accounted for nearly half of the increase.

The other half was thanks to its $21 billion stake in SpaceX. Nvidia bought 122.7 million shares of the space launch and AI company. Together with a $4.5 billion increase in Nvidia's Nebius holdings, Nvidia put $25.5 billion in new money into its holdings, which accounted for about half of the portfolio's value increase.

That means 75% of Nvidia's portfolio is now concentrated in just two stocks: Intel (44.2% of the portfolio's value) and SpaceX (30.9%). Its other six holdings each represent single-digit percentages. Clearly, the Intel stake has paid off handsomely. SpaceX, on the other hand, is now trading at about $139 per share -- just above the $135 IPO price, and below its first trading price of $150 per share.

Why would Nvidia make such a big investment in a company widely thought to be overvalued?

Image source: The Motley Fool.

Huang and Musk's mutual admiration

Both Nvidia CEO Jensen Huang and SpaceX CEO Elon Musk have been highly complimentary of one another in the past.

On SpaceX's most recent earnings call, Musk sang the praises of Nvidia's products:

Going forward, we've decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. So, we're exclusive to Nvidia.

For his part, Huang has also heaped praise on SpaceX's Grok chatbot and Tesla's vehicles, calling them "world-class" and referring to Musk as an "extraordinary engineer." In describing how Musk retains large amounts of information across multiple disciplines in his head, Huang even called Musk "the ultimate GPU."

Huang has also expressed gratitude for Musk's early support of Nvidia's first AI-focused system, the DGX-1. "When I announced DGX-1, nobody in the world wanted it," he told podcast host Joe Rogan, "Except for Elon."

Given that Nvidia is now the world's primary provider of AI computer infrastructure, it's no wonder that Huang is happy to repay Musk's confidence in kind by green-lighting a major SpaceX stake.

John Bromels has positions in Berkshire Hathaway and Nvidia. The Motley Fool has positions in and recommends Berkshire Hathaway, Intel, and Nvidia. The Motley Fool has a disclosure policy.

In early 2025, shares of memory chipmaker Micron Technology (NASDAQ: MU) were trading at about $65 per share. Nobody could have predicted they'd be trading above $1,000 per share by mid-2026.

But a number of factors, including a stumble by rival chipmaker Samsung (OTC: SSNLF), rapidly increasing demand for artificial intelligence memory chips, and limited global manufacturing capacity, sent Micron's revenue, profits, and share price stratospheric.

In June, the stock topped out at $1,214 per share before dropping 39%. It's now trading around $930. But I think it's going to break its own share price record by the end of the year. Here's why I'm predicting a $1,300 share price for Micron before the end of 2026.

Image source: Micron.

The growth is still accelerating

Micron's quarterly revenue increased 346% year over year (YOY) in its most recently reported quarter, and its net income was up a jaw-dropping 1,400%, but that doesn't tell the whole story.

Looking at Micron's recent quarterly results shows how rapidly that growth is accelerating:

Data source: Micron Technology quarterly earnings reports.

Even though the latest quarter-over-quarter increases are slightly lower in percentage terms, they are much higher in absolute dollars. Over the last six months, Micron has more than tripled its revenue and more than quintupled its profits.

That's an amazing short-term growth story that's still unfolding.

Micron is taking a leaf from Nvidia's playbook

Nvidia (NASDAQ: NVDA) has almost certainly been the biggest beneficiary of the AI spending boom. But CEO Jensen Huang hasn't been content to merely sell his company's chips at a premium price and count his money. Instead, Huang has embarked on a series of partnerships with smaller companies, incentivizing them to build their AI tools using Nvidia's products.

Huang has surmised that once a company builds its own hardware or software framework using Nvidia's AI infrastructure and platform specifications, it would be very difficult to switch to a different ecosystem. This turns what could have been a one-time customer into a longtime partner (and customer). In the short term, the reward for the smaller companies is access to Nvidia's top-of-the-line but hard-to-acquire products.

With memory in high demand, Micron is inking long-term purchasing deals with its major customers that lock in price floors. That allows Micron to begin responsibly increasing production capacity at a lower risk.

And how do customers feel about that? Well, Tesla CEO Elon Musk actually thanked Micron on Tesla's earnings call for cutting a long-term memory chip deal. "We really appreciate Micron making room for Tesla in the years to come and giving us actually a very significant allocation on reasonable terms given the pretty insane pricing of memory these days," he said.

When one of your big customers admits that product pricing is out of control and still thanks you for supplying them, it's a sign of success. Micron's stock looks set to soar above $1,300 per share this year, a jump of at least 40% from recent closing prices.

John Bromels has positions in Micron Technology, Nvidia, and Tesla. The Motley Fool has positions in and recommends Micron Technology, Nvidia, and Tesla. The Motley Fool has a disclosure policy.

Over the weekend, trade talks between U.S. and Canadian negotiators collapsed. President Donald Trump immediately slapped 50% tariffs on a wide range of Canadian products, including Canadian whiskey and hockey sticks.

Canadian Prime Minister Mark Carney said that Canada would match Trump's tariffs "dollar for dollar." In response, Trump further escalated the trade war by doubling tariffs on imported automobiles and auto parts from Canada to 50%.

Unsurprisingly, the S&P 500 (SNPINDEX: ^GSPC) opened lower on Monday. The trade war comes at a fragile time for the market: More investors are bearish than bullish, according to data from the American Association of Individual Investors.

If the trade war continues to escalate, it could easily trigger a market downturn or even a major crash. But if that happens, how should stock market investors react? Well, history shows that during a downturn, there's one thing investors should do to succeed over the long term.

President Donald Trump and Canadian Prime Minister Mark Carney on May 6, 2025. Image source: Official White House Photo by Gabriel B Kotico.

Here's what history says to do first

It may sound counterintuitive, but history says the first thing investors should do in the event of a market crash is:

Nothing.

You read that right. The temptation is to react quickly, getting out of the market before it falls even further. But making rash moves like this has historically set investors up to fail.

Selling stocks after a crash has already begun often means selling them at a loss. Even investors who move quickly will be selling at a sub-optimal price.

Instead of panic-selling, an investor should take a deep breath and do nothing. At least at first.

Image source: Getty Images.

Why it's historically been the best thing to do

An investor who sells their stocks when they're down 25% can pat themselves on the back if the stocks eventually go down 50%, but that satisfaction may be short-lived.

Usually, an investor who panic-sells during a crash waits before getting back in. If the crash ushers in a recession, they may wait until the recession is over.

But research from The Motley Fool shows that the stock market usually starts making big gains before the end of a recession. Investors who kept their money in stocks during recessions almost always had better long-term returns than investors who pulled their money out.

For example, take a look at the COVID-19 crash of 2020: If you'd bought an S&P 500 index fund on Jan. 23, you'd have lost almost one-third of your money just two months later:

Data by YCharts.

But if you stayed the course and kept your money in the market, look how well you would have done since:

Data by YCharts.

Investors who kept their money in the market and bought more stocks at post-crash prices were the ones who walked away with the biggest long-term gains. That's especially true for short-lived dips like the COVID-19 crash and the "Liberation Day" crash of 2025.

Of course, there's no way to predict when a crash will occur or how long a bear market or a recession might go on once it begins. But history shows that staying invested in a diversified stock portfolio is the best way for an investor to succeed in the long term, crash or no crash.

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.

With primary season drawing to a close, the midterm elections are heating up in earnest. And one big issue has emerged as a flashpoint in races for government offices across the country: data centers.

According to reporting from Politico, politicians such as Pennsylvania Gov. Josh Shapiro, Texas Gov. Greg Abbott, and Ohio Sen. Jon Husted are finding themselves in hot water over their past support for bringing data centers to their states. Their opponents see this as an opportunity to hammer them for an unpopular stance.

Meanwhile, communities across the country have been successfully pressuring local lawmakers and zoning boards to outlaw future data centers and even revoke data center permits that have already been approved. The backlash is expected to result in big headaches for developers and big delays in the nationwide data center build-out.

Will these delays and cancellations cause problems for Nvidia (NASDAQ: NVDA), the biggest beneficiary of data center spending? Could the backlash get so big that it will torpedo Nvidia's stock price? Here's what investors need to know.

Image source: Nvidia.

Data centers are crucial to Nvidia's revenue growth

In its most recent 10-Q filing, Nvidia admits, "The availability of data centers, energy, and capital to support the buildout of NVIDIA AI infrastructure by our customers and partners is crucial, and any shortage of these and other necessary resources could impact our future revenue and financial performance." That doesn't sound too promising.

But Nvidia makes a crucial distinction in its 10-Q. When discussing the risk presented by delays in data center construction, it says, "Customers may delay adopting new architectures if their data center infrastructure is not ready, which could affect the timing of our revenue [emphasis mine]."

Nvidia isn't saying that the amount of revenue it makes would be affected, only the timing of said revenue. And there's a big reason Nvidia isn't worried about whether that revenue will come in.

Image source: Nvidia.

Demand for Nvidia's chips is far outstripping supply

Nvidia's numbers say it all.

The company had $500 billion in AI chip bookings for 2025 and 2026 combined. Nvidia CFO Colette Kress confirmed that the number is even higher now that full-year orders for Nvidia's latest Rubin chips have arrived.

Meanwhile, CEO Jensen Huang has stated that Nvidia has a backlog of at least $1 trillion through 2027. With that kind of demand, Nvidia would likely have enough wiggle room to weather dozens or even hundreds of delayed data center projects, simply shifting its sales to backlogged projects that haven't been affected.

Of course, any data center seeking a building permit now wouldn't be able to begin its operations for years, even if the permit were approved. It would need to be sited, built, connected to utilities, and inspected before procuring any Nvidia chips or server infrastructure. That gives Nvidia extra insulation from the current political backlash.

In short, Nvidia investors shouldn't be worried about the data center backlash. Nvidia looks ready to weather the current political storm just fine.

John Bromels has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Shares of cybersecurity titan CrowdStrike (NASDAQ:CRWD) have already had an amazing 2026. They began the year at about $117/share and briefly surpassed a record $225/share earlier this month. They're now trading around $186/share, which is still a 59% gain year-to-date.

All that growth has pushed the company's valuation up to an astonishing 151x forward earnings. That's so high that some investors are questioning whether CrowdStrike's shares can go any higher, even if it reports blowout Q2 results in tomorrow's earnings report.

But looking at the state of the cybersecurity industry and CrowdStrike's recent performance, it seems clear that the stock could, in fact, soar after its upcoming earnings report. Here's why.

Image source: The Motley Fool.

What CrowdStrike looks like heading into earnings

There's no company quite like CrowdStrike. Its cloud-native Falcon platform uses machine learning to proactively detect potential cybersecurity threats and to provide endpoint, identity, and data security.

Endpoint security – protecting devices such as laptops and mobile devices that connect to the internet – is a particularly important focus for the company and its customers. Studies estimate that as many as 90% of successful cyberattacks originate at endpoint devices.

CrowdStrike's offerings keep getting more popular. In Q1, its revenue grew by 26% year over year (YOY) to $1.39 billion. The company increased its Q2 revenue guidance to $1.44 billion, up from $1.36 billion, and its non-GAAP earnings per share (EPS) estimate to a range of $1.16 to $1.17/share, up from $1.06 to $1.07/share.

Can CrowdStrike's stock really go any higher?

To answer that question, let's look at what just happened to CrowdStrike's fellow cybersecurity company, Fortinet (NASDAQ:FTNT).

In May, Fortinet reported strong Q1 results, with both product revenue and non-GAAP earnings up 41% YOY. Better yet, the company raised its full-year revenue guidance from a midpoint of $7.6 billion to $7.8 billion, and increased its midpoint EPS guidance from $2.97/share to $3.13/share.

Fortinet's shares immediately jumped nearly 30% after the announcement. They continued to rise over the next few months, and were up 70% on the eve of the company's Q2 earnings report in late July.

Many investors thought the big run-up in Fortinet's share price meant there was little further upside for the stock. That's a lot like CrowdStrike's current situation.

But Fortinet shattered expectations, hiking full-year guidance again to an $8.1 billion revenue midpoint and an EPS midpoint of $3.44/share. The stock shot up another 9.8% in response.

Fortinet's valuation is still much lower than CrowdStrike's, but its post-earnings bump shows that a recent run-up in share price doesn't necessarily prevent a stock from making further gains.

Is CrowdStrike's Q2 likely to impress?

There's no way to tell how good (or bad) CrowdStrike's Q2 results will be until they're announced tomorrow after market close. But other industry players like Fortinet, Zscaler (NASDAQ:ZS), and Palo Alto Networks (NASDAQ:PANW) have seen double-digit YOY revenue growth so far this year, and that trend seems likely to apply to CrowdStrike.

Cybersecurity is front and center after recent high-profile incidents, including a series of cyberattacks on U.S. public water systems and multiple reports of agentic AI models performing successful "jailbreaks," escaping their sandbox environments and hacking into other organizations' online systems in the real world.

Image source: Getty Images.

These incidents, plus the ongoing war in Iran, have highlighted the importance of strong cybersecurity, so it's no surprise that cybersecurity companies are seeing an uptick in demand. CrowdStrike's Q2 report is likely to follow this trend.

The only question is whether it will be enough to satisfy investors who have already bid CrowdStrike's share price up into the stratosphere. But given CrowdStrike's existing clout and its primary niche – endpoint security, where many of the recent cyberattacks have focused – it could very easily beat these already-lofty expectations and send the stock soaring further.

John Bromels has positions in CrowdStrike, Palo Alto Networks, and Zscaler. The Motley Fool has positions in and recommends CrowdStrike, Fortinet, and Zscaler. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

Eight dollars.

That's how much richer you'd be today if you'd bought eight shares of Elon Musk's Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, at its IPO price of $135 per share. Because even after soaring to over $225 a share and tumbling to under $105 per share, the stock is now trading at $136, just $1 more than its IPO price. If you'd bought eight shares, you'd have made $8 in just over three months.

But if you missed the IPO, you might be wondering whether now's a good time to buy those eight shares. Right now, they'd cost a total of about $1,088.

Here's what $1,088 of SpaceX stock could be worth by 2030.

Image source: Getty Images.

Nobody can agree on what SpaceX is worth right now

On Thursday, analyst Markus Leistner of Germany's DZ Bank initiated coverage of SpaceX, and he didn't like what he saw.

While Leistner thinks SpaceX has a compelling market opportunity ahead, he cheekily flagged the rocket and satellite company's "crash risk in the valuation orbit." Specifically, he's skeptical of the company's estimate that its market opportunity is worth more than $28 trillion, which he believes is far too optimistic.

Instead, Leistner assigned SpaceX a $100-per-share valuation, suggesting that eight shares should be worth $800 instead of $1,088. That number prices in the substantial risk that SpaceX's long-term market opportunities won't justify the company's massive upfront capital expenditures.

But what if SpaceX manages to succeed beyond anyone's wildest expectations? What could the eight shares be worth then?

The mega-bull and mega-bear cases for SpaceX

According to Barron's, the bull case for SpaceX is that the company roughly doubles its sales every year, from $44 billion this year to more than $760 billion in 2030. But that type of astronomical growth would require SpaceX to deploy about $800 billion in capital spending between now and 2030. That would probably require SpaceX to take on hundreds of billions of dollars in debt and issue more stock, diluting current shareholder value.

Still, analysts at Oppenheimer have assigned a $250-per-share valuation to SpaceX stock, citing its vertically integrated AI stack and its potential to make additional acquisitions. A $250 share price would make eight SpaceX shares worth a nice, round $2,000.

Of course, if SpaceX starts posting triple-digit revenue growth and snapping up valuable AI companies, it's likely investors will bid up shares well beyond what Oppenheimer analysts consider a fair value, meaning those eight shares could be worth $2,500 or more.

Of course, both of these scenarios could be wrong. My own analysis suggests SpaceX should be valued more like communications company T-Mobile US, at about $200 billion or $250 billion, which would roughly equate to $38 per share, or $300 for eight shares. However, even under this extremely bearish scenario, the stock is likely to remain overvalued, so a $70 share price ($560 for eight shares) is the absolute minimum I'd expect to see.

Your $1,088 investment in SpaceX today will likely be worth somewhere between $560 and $2,500 by 2030. That wide variation in price points to volatility for the next few years.

John Bromels has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.

The market left Microsoft (NASDAQ: MSFT) for dead earlier this year.

In June, shares of the tech giant were trading down 30% from their all-time highs, and over the last three years, the stock's performance has lagged the S&P 500, which has grown 76.4% to Microsoft's 53%.

But that could be changing. After a stellar earnings report, Microsoft's stock popped. And analysts at J.P. Morgan think there's more growth in store, raising their 2027 price target for Microsoft's stock from $550 per share to $625 per share. That's a 30% premium to its current price of about $480.

Could Microsoft's share really double in value, reaching $960 per share by 2030?

Yes, it could, for 2 big reasons.

Image source: Getty Images.

Reason No. 1: Microsoft is competitive where it counts, and on the sidelines where it doesn't

Artificial intelligence (AI) hyperscalers like Microsoft, Amazon (NASDAQ: AMZN), and Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) have been criticized for excessive AI spending. Much of that spending has been on data center infrastructure to support AI computing, but the companies have also been developing AI tools that make use of that infrastructure.

For all three companies, these include agentic AI features that can be used by developers working on their respective cloud computing platforms. These three platforms (Microsoft's Azure, Amazon's AWS, and Alphabet's Google Cloud) are in direct competition with one another, and Azure has long been in the No. 2 slot. However, all three platforms are seeing revenue and net income soar, which the companies attribute to the introduction of AI features.

In the most recent quarter, revenue from Azure and Microsoft's other cloud services increased 43% year over year. It's a good sign that Azure is posting massive growth despite stiff competition. If it can sustain that growth rate over the medium term, its Azure revenue in 2030 would be nearly 6 times what it was in 2025.

Meanwhile, Alphabet's Google Gemini chatbot is locked in fierce competition with Anthropic's Claude and OpenAI's ChatGPT. All three companies are devoting significant resources to the continuous improvement of their models. But Microsoft doesn't have to worry about that particular arms race. It owns a stake in Anthropic -- and just recorded a $3.2 billion gain from that investment in its last quarter -- but it doesn't need to spend big on a chatbot with an uncertain ROI.

Image source: Getty Images.

Reason No. 2: Copilot could be a game-changing innovation ... and it works

Microsoft's AI assistant Copilot is integrated into Microsoft 365 applications like Word, Excel, and PowerPoint. Right now, Copilot doesn't really have any competition. Google has a product called Gemini Spark that can theoretically perform agentic tasks in Google Workspace apps like Google Docs and Google Sheets, but I've never been able to get it to work.

Last week, for example, I successfully and seamlessly used Copilot to create and animate multiple objects in a PowerPoint slide show. It took about three minutes to perform a task that would have taken me half an hour using other programs. This week, I tried giving the same prompt to Gemini Spark. Instead of creating the animation, Spark created a 10-slide Google Slides deck containing step-by-step instructions on how to create the animation. One slide featured the instruction, "Click the button to simulate the transition between Slide 1 and Slide 2," alongside a button that literally did nothing. Fail!

According to SQ Magazine, Microsoft 365 has nearly 345 million paid subscribers worldwide. In Microsoft's latest quarterly earnings release, CEO Satya Nadella revealed that Copilot has reached over 30 million paid seats, about 9% of users. It's plausible that number could double or even triple as Microsoft 365 users start to recognize the value of Copilot's time-saving features. That would translate to at least tens of billions of dollars in annual revenue, all of which stays with the company instead of going to third parties, helping Microsoft's AI investment to pay for itself.

Why the numbers add up

J.P. Morgan analyst Samik Chatterjee believes that demand for Microsoft Copilot could bring in as much as $41 billion in additional revenue all on its own, even without factoring in revenue from sales of AI credits. He also expects Azure's revenue growth to accelerate while margins stabilize, supporting further earnings growth. Meanwhile, Microsoft appears to be keeping its AI spend in check, which was a big reason the stock shot upward after its latest earnings report.

All these factors indicate that Microsoft's stock could easily double by 2030. That said, there's still a lot of uncertainty around the AI market's trajectory. But even if Microsoft doesn't quite eke out a double, its solid AI offerings and strong competitive position make it likely to be a long-term winner.

JPMorgan Chase is an advertising partner of Motley Fool Money. John Bromels has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, JPMorgan Chase, and Microsoft. The Motley Fool has a disclosure policy.

Shares of electric vertical takeoff and landing (eVTOL) company Joby Aviation (NYSE: JOBY) have slipped from a high of $20/share last year to just $7.58 a share today.

That's a drop of 62%: one of the steepest in the eVTOL industry. It's even worse than rival Archer Aviation's (NYSE: ACHR) 58% slide from its all-time high.

Could Joby be in danger of having to issue a reverse stock split, and soon? Here's what we know.

Image source: Joby Aviation.

Stock splits are often good signs...

In a "normal" stock split, a company swaps one existing share of stock for multiple new shares. This increases the number of outstanding shares, but reduces the value of each share accordingly.

The most common type of forward stock split is a 2-for-1 split, in which every existing share is replaced with two new shares. If the existing shares trade for $100 each, the two new shares would each trade at $50, so an investor holding 10 existing shares (a $1,000 value) ends up with 20 new shares, still worth $1,000.

According to a 2019 study by Pomona College economics professor Gary Smith, stock splits usually have positive effects on shareholder returns. But, he found, that isn't because they made the share price more affordable. "The more compelling argument," Smith concluded, "is that corporate stock splits signal a board's confidence in their company's prospects."

...but reverse stock splits are seen as bad omens

In a reverse stock split, the opposite happens.

Image source: Getty Images.

Instead of exchanging multiple new shares for a single existing share, a company exchanges a single new share for multiple existing shares. So, if a company with a $100 share price were to do a 1-for-2 reverse split, an investor holding 10 existing shares (a $1,000 value) would end up with 5 new shares, each worth $200 (still a $1,000 value).

Often, troubled companies use reverse stock splits to prevent their stock prices from falling below a certain threshold. For example, companies listed on the New York Stock Exchange (NYSE) are required to have share prices above $1 per share. A company with a share price of $1.50 might do a 1-for-4 reverse split to raise its stock price to $6 per share, well above the $1-per-share minimum.

Is Joby likely to do a reverse split?

Even though Joby's stock has fallen sharply from its highs, a reverse stock split doesn't seem likely for the company right now.

Joby trades on the NYSE. Its current stock price of about $7.58 per share is nowhere near that $1-per-share minimum threshold. In addition, the company's shares have traded much lower in the past, hitting just $3.18/share in late 2022 and $4.54 per share in mid-2024, without a reverse split.

Plus, Joby's management is trying to project confidence that the company's best days are just around the corner, with Founder/CEO JoeBen Bevirt citing "meaningful progress on certification, partnerships, infrastructure, and commercial readiness" in the most recent earnings release. A reverse split would undermine that confidence.

All this makes a reverse split by Joby very unlikely anytime soon.

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.

Playing "how low can you go?" is fun at a limbo contest but not in the stock market. But that's what shares of electric vertical takeoff and landing (eVTOL) company Archer Aviation (NYSE: ACHR) have been doing over the past year. They've tumbled from a high of over $13 per share to just $6.31per share today.

While that 53.5% decline isn't quite as steep as rival Joby Aviation's (NYSE: JOBY) 62.5% share price plunge, it's still one of the worst performances in the aviation industry.

That kind of stock price drop has sometimes prompted companies to reverse-split their stocks. Could such a reverse split be in the cards for Archer? Here's what investors should know.

Image source: Archer Aviation.

Why companies perform reverse splits

In a regular stock split, a company exchanges multiple new shares for a single existing share, thereby substantially lowering the per-share price of the stock. This kind of move is often used when management thinks its share price has gone up so far that it may be getting too expensive for small-dollar investors to consider buying. Stock splits are often seen as a good thing -- a sign that management is confident in the stock's further growth prospects.

But in a reverse stock split, the company exchanges a single new share for multiple existing shares. This often happens when a company's share price has experienced a dramatic drop.

Image source: Getty Images.

Reverse stock splits are often the best way for a troubled company to avoid being delisted by a stock exchange. The New York Stock Exchange (NYSE), for example, requires companies to maintain an average share price above $1 for 30 consecutive trading days. A NYSE company with a share price that has fallen to $1.25 per share might be concerned about its ability to stay above that threshold and could issue, say, a 1-for-10 reverse split, which would exchange 10 of the existing $1.25 shares for one new share worth $12.50, keeping the stock price solidly above the delisting threshold.

But investors are aware of this, and that's given reverse splits a bad reputation, so companies are usually hesitant to use them unless they have to do so.

Is a reverse split likely for Archer?

Even though Archer's share price has fallen into the single digits, its price of $6.31 per share is well above the $1 per share minimum to remain listed on the NYSE, so it doesn't need to issue a reverse split to stay listed there. And although it's worth a lot less than it was last year, the company is still valued at $4.9 billion, which is a premium price for an early-stage company like Archer.

Archer just signed a definitive agreement with Boeing (NYSE: BA) to acquire its Wisk Aero eVTOL subsidiary, as well as its SkyGrid and Insitu subsidiaries, which focus on autonomous flight. It's also been eagerly awaiting commercial approval for its Midnight eVTOL from the Federal Aviation Administration (FAA). Reverse splitting the stock would likely call that confidence into question and erode investor confidence.

Because of all of these factors, a reverse split of Archer Aviation stock is very unlikely to occur in the near term.

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

Despite fears by economists and consumers that the U.S. economy is on the brink of a recession, the stock market has been booming for years. And this election season, every politician wants to tell you that this boom is happening only because of their policies, and not because of policies favored by their opponent.

Since President Donald Trump's reelection on Nov. 5, 2024, the S&P 500 (SNPINDEX: ^GSPC) has risen 33.5%, a better-than-average return. And that's in spite of a number of (mercifully brief) pullbacks following the "Liberation Day" tariff announcements and the onset of the war with Iran.

But as the midterm elections draw nearer, smart shareholders are wondering how the results could impact their holdings. Here's what investors should do to prepare their portfolios for the midterms and their aftermath.

Image source: Official White House Photo by Molly Riley.

Midterm madness

Even though the stock market has done well over the last two years, it would be a mistake to assume that its outperformance guarantees a particular electoral outcome in November.

During the four years of Trump's first term, for example, the S&P 500 generated an overall return of 81.3%. That was its fourth-best performance during any four-year presidential term since 1980 (Bill Clinton's two terms and Barack Obama's first term occupy the top three slots). But that didn't translate to electoral victory for Trump in 2020. Neither did Clinton's nor Obama's strong first-term markets keep their parties from losing seats in their first-term midterm elections.

In other words, investors shouldn't try to adjust their portfolios for any particular electoral outcome in November. Instead, they should optimize them for success regardless of the results.

The real impact

The market hates uncertainty, so as we get within 60 days of the election, if it starts to look as if one party has a lopsided advantage in most races, markets will likely remain fairly stable. If polling seems inconclusive, investors should expect stock volatility. More volatility is likely if control of the House or Senate remains in limbo due to delayed or contested results.

Such volatility is likely to be temporary. But it likely won't have a major impact on the big drivers of the S&P 500's recent outperformance: rising corporate profits, strong business investment (particularly in artificial intelligence), and steady consumer spending. Payrolls seem to be rebounding from their 2025 lows, and layoffs remain low. Although inflation remains a persistent concern for consumers and businesses alike, it doesn't seem to have dampened spending by either group.

Ultimately, the stock market has succeeded in spite of tariffs and the rising energy prices caused by the Iran war. Those conditions are now the status quo. If that status quo changes as a result of the midterm elections, it would likely lead to fewer tariffs and lower energy prices, rather than vice versa.

In other words, the likeliest post-midterm scenario is a continuation of current growth conditions. That means the best strategy for investors right now is to stay the course.

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.

It's hard to know what to think about Space Exploration Technologies (NASDAQ: SPCX), aka SpaceX.

First, it had its IPO in June at $135 a share, though it opened its first day of trading at $150. Then, the next few days, it soared to over $225 a share. After that, it plunged to just $108 a share. Now it's back at around $144 a share -- above its IPO price, but still below where it opened. With all these shifts in momentum, it's hard to predict where it might be trading at the end of this year, let alone three to five years down the line.

Investors should be thinking about their stocks as long-term investments, not fixating on day-to-day price moves. So, is SpaceX likely to be a millionaire-maker stock for buy-and-hold investors who pick up shares in now?

Image source: Getty Images.

Growth at a price

SpaceX is almost certain to grow its top line. The big questions are, how much and how fast?

Its Starlink service is growing by leaps and bounds, signing up 1.7 million net new subscribers in the second quarter alone. Its flagship rocket launch service is growing, too... but its expenses are growing nearly as rapidly as its revenue.

The problem for SpaceX is that even if it manages to grow its revenue really fast -- much faster than it ever has, and much faster than anyone not named Elon Musk seems to think is even possible -- its top line would still only be a fraction of what companies with similar market caps take in. And those companies already have positive net incomes. SpaceX would also need to transition from a money-losing operation into a massively profitable one.

Data source: YCharts. TTM = trailing 12-month.

If that significant and profitable growth doesn't materialize, will investors stick around? They might. Tesla (NASDAQ: TSLA) investors certainly stuck around through multiple rounds of broken promises from Musk to ultimately triumph when his vision of an independent electric car company became a reality.

But Tesla didn't get a trillion-dollar valuation until it already had a $50 billion revenue stream and positive net income. SpaceX has the valuation without the revenue or the profitability. Should we expect the stock to grow as the business does? Or are years worth of hoped-for growth already baked into the share price?

Ultimately, it seems unlikely that investors will want to keep their money tied up in SpaceX stock just so they can wait for it to grow into its current valuation, when there are plenty of fast-growing companies with existing revenue lines that are less richly valued. That doesn't bode well for the stock over the long term. While Musk still might pull off another triumph, SpaceX seems unlikely to be a millionaire-maker stock anytime soon.

John Bromels has positions in Meta Platforms, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has positions in and recommends Broadcom, Meta Platforms, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.

Sometimes it's good to be the hot new stock in an industry ripe for disruption. And that's exactly what Oklo (NYSE: OKLO) was when it went public in May 2024 through a SPAC (special purpose acquisition company) merger. The small modular reactor (SMR) company had a compelling plan focused on artificial intelligence (AI), support from AI guru Sam Altman, and an incoming nuclear-friendly presidential administration.

But one problem with being the hot new stock is that you eventually become the not-so-new stock, leaving room for another company to assume that role.

That's exactly what happened in April when X-Energy (NASDAQ: XE) went public. This new SMR company has a compelling AI-focused plan, support from AI hyperscaler Amazon (NASDAQ: AMZN), and a nuclear-friendly presidential administration. Wait a minute... this sounds familiar!

So, which of these next-generation nuclear stocks looks like a better buy?

Image source: Getty Images.

How they're different

SMR company NuScale Energy (NYSE: SMR) is developing an SMR that's essentially a smaller version of the standard water-cooled system found in almost all existing U.S. nuclear power plants. But Oklo and X-Energy's SMR designs differ from NuScale's in fundamental ways.

Oklo's Aurora Powerhouse design is based on a small-scale fast reactor cooled by liquid sodium instead of water. Because liquid sodium has a very high boiling point, the system can operate at higher temperatures and lower pressures than a water-cooled reactor, which in theory makes it more efficient. The "fast" part of the "fast reactor" maintains fission without slowing down neutrons, allowing the reactor to be fueled with spent fuel from existing reactors.

X-Energy's XE-100 SMR is a high-temperature reactor cooled by pressurized helium gas, which is then pumped into a separate water loop to heat the water into steam and power steam turbines. As an inert element, helium provides extra insurance that no radiation is transferred into the water system. If the XE-100's core temperatures rise, its design uses the inherent physics of matter expansion and neutron interaction to slow the reaction rate without human intervention, providing an additional safety measure against a meltdown.

How they're similar

Perhaps the biggest similarity between Oklo's and X-Energy's designs is that neither has been built yet. While each company has received some preliminary support from the U.S. Department of Energy (DOE) under the Trump administration, neither reactor design has been approved for commercial deployment by the U.S. Nuclear Regulatory Commission (NRC).

Oklo is currently building its first Aurora Powerhouse on the grounds of the DOE's Idaho National Laboratory. It expects to bring that reactor to criticality around Q1 2027. Meanwhile, X-Energy has partnered with the DOE and Dow Chemical (NYSE: DOW) to build the first four XE-100 reactors at a Dow facility in Texas and use them for both power generation and industrial steam production. However, the regulatory review of its application is ongoing, so construction isn't likely to begin until at least Q1 2027.

Both companies also have nuclear fuel businesses that they expect to contribute to their bottom lines. X-Energy will manufacture a type of ceramic-coated pelleted uranium fuel called TRISO, which is safer to use than standard uranium fuel, while Oklo has several fuel operations in the works, including working with surplus plutonium from government sources, recycling nuclear fuel, and creating nuclear isotopes for industrial and healthcare use.

The better buy

Because both companies are pre-commercial, their current financials tell us little about how their respective businesses will perform once they receive commercial approval from the NRC. And that's even assuming they do ultimately receive such approval, which isn't guaranteed. A critical design flaw could manifest in one or both designs, scuttling that company's ambitions and sinking its stock. Nobody, not even risk-tolerant investors, should invest money in either company that they can't afford to lose.

Even if both companies' plans proceed smoothly, investors buying in now are signing up for a long wait. That said, because Oklo appears to be a bit further along in its process, it looks like the better buy of these two highly speculative companies.

John Bromels has positions in Amazon, Dow, and Oklo. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

I know, I know: Nvidia (NASDAQ: NVDA) is already the largest company in the world, with a current market cap of $5.4 trillion. If its stock rises to about $250 per share, it would make Nvidia the first $6 trillion company in history.

To put that in perspective, at $6 trillion, Nvidia would be worth more than Amazon, Meta Platforms, Tesla, and Netflix combined.

But given how much Nvidia's revenue and earnings have grown, and how much CEO Jensen Huang has done to ensure the company's long-term dominance, it's actually kind of amazing that the company isn't already trading at $250 per share ... or more.

Here's the simple math that explains why I'm predicting a $6 trillion market cap for Nvidia by the end of the year.

Image source: Nvidia.

All about value

Over the last three years, Nvidia's revenue, profits, and share price have all soared, but its valuation has actually dropped. Its price-to-earnings (P/E) ratio, which stood at about 100 times trailing earnings three years ago, has now dropped to 34. Its price-to-sales (P/S) ratio, which was at about 35 times sales, has tumbled to 22 over the same time frame.

And that's just on a trailing basis. If we look at the company's projections for revenue and net income, Nvidia is currently trading at 25 times forward earnings and a mere 14 times sales. Both its trailing and forward P/E ratios are much lower than those of less-successful chipmakers Intel and Advanced Micro Devices, and are even lower than Apple's.

In Nvidia's most recent quarter, revenue was up 85% year over year, and net income was up 211%, beating expectations. The spending boom in artificial intelligence (AI) shows no signs of slowing. Although Nvidia's share price is up just 22.5% over the past year, investors should soon realize how much of a bargain Nvidia is at its current price.

That's why I'm predicting we'll see Nvidia's stock hit $250 per share and a total market cap of $6 trillion before the end of December.

John Bromels has positions in Amazon, Apple, Meta Platforms, Netflix, Nvidia, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Apple, Intel, Meta Platforms, Netflix, Nvidia, and Tesla. The Motley Fool has a disclosure policy.

The stock market has been on a winning streak for almost four straight years. The S&P 500 hit a low of 3,577 on Oct. 12, 2022. Since then, it's more than doubled to around 7,750 today. The tech-heavy Nasdaq Composite has performed even better, up 155% during the same time period.

But all bull markets come to an end eventually. In fact, three of the most ominous warning signs that preceded the biggest market crashes in history have been flashing red for months. Here's why history says a market crash might be in store for us, and how investors should react.

Image source: Getty Images.

1. Sky-high valuations

Three of the biggest market crashes in history -- the 1929 crash that started the Great Depression, the early 2000s dot-com crash, and the Great Recession crash of 2008-2009 -- were preceded by skyrocketing market valuations. When those valuations were suddenly exposed as unsustainable, the market tumbled.

One easy way to measure the valuation of the market as a whole is to use the so-called "Buffett indicator," named after legendary investor Warren Buffett of Berkshire Hathaway. This is the ratio of the total U.S. stock market value to gross domestic product (GDP), and Buffett himself once called it "the best single measure of where valuations stand at any given moment."

The Buffett indicator has only been above 100% three times in recent history: It reached almost 150% in 2000, right before the dot-com crash, and it went above 100% right before the Great Recession.

The third time? Right now. The Buffett indicator currently sits above 200%, indicating that the stock market as a whole is severely overvalued.

2. High debt levels

Just before the 1929 crash, the number of stocks purchased on margin -- that is, with borrowed money -- rose to an all-time high.

Before the Great Recession, consumer debt levels soared as real estate investors took out subprime mortgages on houses they intended to "flip" for a quick profit. The nation's total household debt level in the third quarter of 2008 -- right before the stock-market crash -- had hit a record $12.7 trillion. When the housing market collapsed, borrowers couldn't repay their loans, resulting in an economic catastrophe.

In the first quarter of this year (the most recent quarter for which data is available), household debt hit a record $18.8 trillion. Meanwhile, the private credit industry is also facing rising defaults.

3. A bursting bubble

In all three historical cases, the actual catalyst for the stock-market crash was the bursting of a bubble. In 2008, it was the housing bubble; in 2000, it was the dot-com bubble; in 1929, rampant speculation and margin buying had essentially turned the entire stock market into a bubble. Of course, the thing about a market bubble is that you don't find out it's a bubble until it pops.

Image source: Getty Images.

Currently, there's a lot of concern that the high level of artificial intelligence (AI) spending driving the market to new heights is a bubble about to burst. Indeed, the Shiller CAPE (cyclically adjusted price-to-earnings) ratio, which measures the valuation of the S&P 500, has risen above 30, which it has only done twice before; once was just before the stock market crash in 1929, and the other was just before the bursting of the dot-com bubble in the late 1990s. It's currently at 41, the second-highest valuation on record.

What should investors do?

When so many warning signs are flashing bright red, it's tempting to pull all your money out of the market and hide it under your mattress. But history shows that investors who keep their money in the stock market during a recession fare much better.

That's because in most cases, according to research by The Motley Fool, the stock market at least partially recovers before the recession ends. So investors who wait for the economy to improve miss out on some of those gains.

Even if they know the warning signs, nobody can predict exactly when a crash will occur. For example, many people were convinced that a major crash would occur in 2020 due to the COVID-19 pandemic. But while stocks did drop by about 28% in the short term, they rebounded within three months and rose an additional 52% by the end of 2021. Investors who sold at the onset of the pandemic missed out.

While you should be aware of short-term warning signs of a crash, it is usually wiser to stay in the market to maximize your odds of achieving the best long-term financial returns.

John Bromels has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

After hovering just below $200 per share for the first three months of the year, Nvidia's (NASDAQ: NVDA) stock price surged past that level in May. Now, $200 is starting to look more like a floor for the chipmaker's share price as opposed to a ceiling.

But Nvidia's management clearly likes to keep its shares affordable. The company has regularly conducted stock splits, including two in the last five years alone. With the stock price up more than 80% since the last split, could another split be coming this year? Here's what we know.

Image source: Nvidia.

Two by two

Nvidia has split its stock six times since 2000. But those splits haven't come at regular intervals. Instead, they've come in pairs.

The first two splits were just 15 months apart, in June 2000 and September 2001. Then, there was a big gap before the next ones, which were just 17 months apart in April 2006 and September 2007. After a 14-year gap, we got a split in July 2021, followed by another in June 2024. So history suggests we should have a much longer wait for the next split.

That's doubly true since the 2024 split was a doozy. Instead of a standard 2-for-1 split -- in which each stockholder receives two new shares for every one old share they hold, with the new shares worth half of the old share price -- the 2024 split was 10-for-1, which increased the number of outstanding shares tenfold but also cut the stock price from about about $1,200 to about $120.

Because most brokerages now offer investors the option of purchasing fractional shares, a high stock price isn't necessarily a barrier to stock ownership for individual investors. Considering that Nvidia's shares were well above $1,000 before management split them two years ago, another split this year seems unlikely unless the company's share price goes stratospheric.

John Bromels has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

If you ever have to deliver bad news to someone, it's almost always a good idea to signal in advance that bad news is coming.

This can be as simple as starting with "I'm afraid I have some bad news for you..." or adopting a serious tone of voice or facial expression. These cues help the listener to emotionally prepare themselves for what's coming.

The Federal Reserve used to do something similar with monetary policy, offering forward guidance on what to expect at its next Federal Open Market Committee (FOMC) meeting, where benchmark interest rates are set. But new Fed Chair Kevin Warsh has rejected that practice, refusing to offer any indications at all about where interest rates might be heading.

Here's why that should worry markets and investors.

Federal Reserve Chair Kevin Warsh. Image source: Federal Reserve.

Brace yourself

Markets hate uncertainty, and many of the biggest one-day market moves in history have been prompted by FOMC meetings. But big one-day sell-offs are a shock to unprepared markets and can trigger cascading aftershocks.

Past Fed chairs, including Warsh's immediate predecessor, Jerome Powell, used forward guidance and carefully crafted language to signal the direction markets could expect interest rates to move at future meetings. That forward guidance helped give markets time to prepare for upcoming rate hikes. It could also help to mute the market's reaction to an unexpected decision by allowing the Fed to signal that a desired outcome might occur soon.

But Warsh believes this kind of signaling has two big drawbacks.

Why Warsh won't provide guidance

First, Warsh thinks that when the Fed offers clues about its likely next move, it interferes with the market's efficiency. He recently explained: "I think financial markets perform best when they react to incoming data. I think the financial markets work less efficiently when they ask [the] question: 'How will the Federal Reserve react?'" In other words, Warsh believes that forward guidance substitutes the Fed's interpretation of economic data for the data itself.

Second, Warsh believes that the Fed may feel compelled to honor its forward guidance to avoid upsetting markets, even if newer data conflicts with that guidance. Warsh claims such concerns don't hamstring his FOMC. "I think my colleagues ... understand the world is changing quite quickly," he said. "And they [won't] feel bound by [their current predictions] six weeks from now or six days from now in the event that their circumstances change."

What's likely to happen

While Warsh's objections are logical, they ignore a simple fact: Even if the Fed offers no guidance, the markets aren't going to stop trying to guess its next move.

For example, after Warsh's most recent press conference, where he offered no clues about how the Fed might act to curb inflation, bond markets interpreted his silence as meaning the Fed wouldn't take any action at all. That triggered a steep bond sell-off that spilled over into the stock market, sending the Dow Jones Industrial Average (DJINDICES: ^DJI) down 840 points.

That 840-point drop could be nothing compared to the impact on the S&P 500 if the markets expect a rate cut but get a rate increase, or vice versa. Investors should be prepared for increased market volatility around FOMC meetings as long as Warsh maintains this new policy.

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.

The artificial intelligence (AI) market was looking very shaky two months ago.

On May 14, after a record run-up in share price, Nvidia (NASDAQ: NVDA) stock had surpassed $235/share, giving the company a $5.7 trillion market cap. Then investors began to worry that the AI boom had gotten too far ahead of reality. Over the next few weeks, AI shares took a beating, with Nvidia's dropping 15%, and AI hyperscalers Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) each plunging 11%. (Not to brag, but I called it.)

That's when Nvidia CEO Jensen Huang gave a piece of jaw-dropping advice to AI investors. Two months later, has his advice paid off?

Nvidia CEO Jensen Huang. Image source: Nvidia Corporation.

Huang's advice

Huang was in Seoul for a series of business meetings, including one in which he finalized a partnership with South Korean memory chipmaker SK Hynix to design next-generation AI memory chips.

Between meetings, the Nvidia CEO spoke to reporters, and he didn't mince words. Here's what he said about the AI boom: "We're at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount. Everybody should be very excited."

In other words, Huang believed June 8 was a big opportunity to "buy the dip" in Nvidia and other AI stocks. Was he right?

Was he ever!

Read to the end

Indeed, if investors had taken Huang's advice and gone "all in" on Nvidia's stock on June 8, they would now be beating the market... barely. Nvidia's shares are up 5.1% since June 8, while the S&P 500 has only advanced by 4.3%, giving Huang a 0.8% lead. But that's not the whole story.

If you'd interpreted Huang's comments more broadly to refer to the entire AI industry and had instead purchased a basket of AI stocks that included equal parts Nvidia, Google, Amazon, and hyperscaler Microsoft (NASDAQ: MSFT), you'd really be doing well. Microsoft stock is up 18.5% since June 8, while Amazon's has risen 11.1%, largely on the strength of their recent earnings reports. Only Alphabet has lagged the market, and is actually down 0.5% from June 8. However, your four-stock "AI basket" would have produced returns of 8.5%, about double the S&P 500's gain during the same period.

Of course, those would be the gains if you sold those stocks right now. But Huang wasn't talking about a two-month AI boom. He's looking years into the future and declaring that the recent, massive spending on AI is just the tip of the iceberg. He's predicting solid long-term gains for AI companies over years, not months.

Selling your AI stocks now while they're beating the market is certainly tempting. But if you believe Jensen Huang knows what he's talking about -- and I certainly do!-- holding on to those stocks for the long term is your best move.

John Bromels has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

A lot of industries have underperformed over the past year, but the nuclear industry has been absolutely clobbered.

Despite a friendly presidential administration and growing concerns about electricity supply, nuclear stocks have notched some of the worst performances in the market. And next-generation nuclear stocks have been among the hardest hit. But that could be about to change.

Image source: Getty Images.

Let's check out five of the worst performers in the nuclear industry and see if they look like buys at these lower prices.

Standard Nuclear, down 44.3%

The youngest company on the list is also the best performer (if you can even call a 44.3% drop from its IPO price the "best").

Standard Nuclear (NYSE: STDN) made its Nasdaq debut less than a month ago, and its share price quickly plunged. Even so, the start-up is still valued at $1.4 billion, which seems high for a company that only brought in $593,802 in revenue in Q1.

The company currently operates the only U.S. manufacturing facility capable of producing TRISO nuclear fuel at an industrial scale. TRISO fuel consists of encapsulate poppy seed-sized uranium kernels, which are heat-resistant and meltdown-proof. Standard Nuclear plans to supply small modular reactor (SMR) companies with TRISO fuel, but in order for it to grow into its valuation, it needs the SMR industry to take off.

X-Energy, down 48.4%

TRISO fuel is also key to the fortunes of the second-youngest company on our list, X-Energy (NASDAQ: XE), which had its IPO in April. The $7.5 billion company is currently developing a nuclear fuel campus in Oak Ridge, Tennessee, to manufacture its patented version of TRISO fuel, called TRISO-X.

X-Energy has also designed a high-temperature gas-cooled SMR called the Xe-100, which it believes is simpler, safer, and more efficient than other types of SMRs. X-Energy is partnering with chemical company Dow (NYSE: DOW) to build a four-reactor nuclear plant at a Dow facility in Texas. However, the regulatory review of its application is ongoing, so it likely can't even begin construction until Q1 2027.

Nano Nuclear, down 67.9%

Another company developing a high-temperature gas-cooled reactor is Nano Nuclear Energy (NASDAQ: NNE), but its Kronos reactor is actually a modular microreactor (MMR), which is smaller than an SMR. It plans to submit a construction permit in the coming months to build an MMR on the campus of the University of Illinois, which it hopes to begin by mid- to late 2027.

Now that it's dropped 67.9% from its all-time high, Nano Nuclear is the smallest of these companies by market cap, at just $946.9 million.

Oklo, down 75.1%, and NuScale, down 82.2%

Oklo (NYSE: OKLO) and NuScale Power (NYSE: SMR) -- valued at $7.5 billion and $3.1 billion, respectively -- are actively building their first SMRs. NuScale has received design approval for its light-water SMR from U.S. regulators, with 12 modules already in production and plans to deploy six of them through a partnership with the Tennessee Valley Authority (TVA). Meanwhile, Oklo is building its prototype Aurora Powerhouse with a sodium-cooled fast SMR at the Idaho National Laboratory under Department of Energy authorization.

What you've probably noticed is that none of these SMRs or MMRs have actually been deployed. Most of them aren't even under construction yet! That's one big reason why the industry's share prices have plunged: while the science may be sound and the designs promising, there's no way to tell if a next-gen reactor will work as planned until someone actually builds it and turns it on for the first time. And that will take months or, in some cases, years.

Given the uncertainty around any new technology and the inherent risk of investing in a pre-commercial or early-stage company, all of these companies' valuations still look too high, and only extremely risk-tolerant investors should even consider buying in. That said, the valuations are looking a lot more reasonable now than they did a few months ago. But until the SMR and MMR deployments actually begin -- likely at least a year from now -- these stocks will have limited upside. They may also have to issue additional shares to keep afloat in the interim, diluting the positions of existing investors.

Nuclear investors should probably hold off on buying any of these until we're much closer to actual deployments.

John Bromels has positions in Dow and Oklo. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

Well, that was fast. When legendary investor Warren Buffett stepped down as CEO of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) on Dec. 31, many wondered whether his handpicked successor, Greg Abel, would play it safe for a quarter or two or jump right in with a bold move to differentiate himself from his predecessor.

Turns out Abel made not just one bold move, but 15 once he was in the CEO's chair. In just his first quarter as CEO, he sold 15 positions that Buffett initiated in their entirety, including some 15-year holdings. He also opened new positions in some stocks that weren't on anyone's radar.

Here's what Abel's moves should tell Berkshire shareholders about the company's future.

Image source: The Motley Fool.

Swing for the fences

Abel's 15 sells include some of Berkshire's biggest winners, such as Visa (NYSE: V) and Mastercard (NYSE: MA), as well as its stake in artificial intelligence hyperscaler Amazon (NASDAQ: AMZN). They also include some recent bets that haven't paid off for the company. like residential pool equipment supplier Pool Corp. (NASDAQ: POOL), liquor company Diageo (NYSE: DEO), and pizza chain Domino's Pizza (NASDAQ: DPZ).

This selling spree sends a clear message that Abel won't hesitate to divest positions -- winners or losers -- for which he doesn't anticipate a market-beating return. But it's too early to call this a trend. We'll have to wait a couple of weeks to see whether his second quarter as CEO features similar big moves to his first.

One thing that does seem clear is that he's not really concerned about dividend income.

Dividends vs. cash

Although Buffett never paid a dividend to Berkshire shareholders, he loved owning dividend-paying stocks. "I do believe in dividends in a great many situations, including many of the ones at companies in which we own stock," he said in 2008. Famously, Buffett's position in Coca-Cola (NYSE: KO) now pays Berkshire more in dividends every two years (~$1.7 billion) than Buffett spent on his entire position in the stock (~$1.3 billion).

But some of the stocks Abel dumped were high-dividend-yielders, including Lamar Advertising (NASDAQ: LAMR), Diageo, and Pool, which currently yield 4%, 3.8%, and 2.5%, respectively. By far Abel's biggest buy was Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which pays only a 0.2% dividend, and his second-biggest buy was Delta Air Lines (NYSE: DAL), which yields only 1%.

Image source: Getty Images.

Berkshire's cash position also increased in Q1, from $373.3 billion at the start of the quarter to $397.4 billion at the end, suggesting that Abel is more interested in building up cash right now than in earning a return on that cash in the form of a dividend.

Maybe Abel and Buffett have some big plans for all that cash they've been hoarding. Or maybe they're just concerned about an overvalued market. Either way, investors should expect Abel to chart his own course for the company moving forward.

John Bromels has positions in Alphabet, Amazon, Berkshire Hathaway, Coca-Cola, Diageo Plc, Domino's Pizza, and Mastercard. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, Domino's Pizza, Mastercard, Pool, and Visa. The Motley Fool recommends Delta Air Lines and Diageo Plc. The Motley Fool has a disclosure policy.

Although it got buried in yesterday’s earnings news from Space Exploration Technologies (NASDAQ:SPCX), or SpaceX, CEO Elon Musk just made a huge announcement about his “Starmind” plan to launch a new network of orbital AI data centers. And he’s teaming up with Nvidia (NASDAQ:NVDA) to make it happen.

According to an announcement on SpaceX’s social media site X, SpaceX and Nvidia are working together to design the “compute payload” for Starmind AI1, the first in an orbiting network of satellites that will run AI workloads in outer space.

Here’s what we know about the partnership and what it means for investors.

Image source: The Motley Fool

Different by design

One of the biggest expenses for a data center is electricity. SpaceX’s goal for its orbiting Starmind AI data centers is to maximize power efficiency, thereby lowering compute costs.

Because solar energy is more abundant in space than on the Earth’s surface, solar panels on satellites that can be adjusted to face the sun are theoretically more efficient than terrestrial solar panels.

Meanwhile, 30% to 40% of a terrestrial data center’s power is devoted to running massive cooling systems that prevent the servers from overheating as they process the tremendous amount of data that AI requires. Because outer space is usually incredibly cold, keeping an orbital computer from overheating would theoretically require no electricity at all.

This is all theoretical, though: although the vacuum of space is cold, you can’t just put your entire computer into that vacuum or it will freeze. And while sunlight is stronger in space, even a large orbital solar panel can only produce a fraction of the electricity of a solar farm. Plus, in space there’s no gravity, no air supply, and no technician who can replace a burnt-out fuse. Starmind will need to take all these factors into account.

Who better to help than Nvidia?

Exclusively Nvidia

According to SpaceX’s announcement, the first Starmind satellite will feature Nvidia’s top-of-the-line Vera CPUs and Rubin GPUs, as well as its Vera Rubin NVL72 rackscale system.

On the Q2 earnings call, Musk explained why Nvidia was the logical choice:

“Going forward, we've decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. We're exclusive to Nvidia.”

“We think the design of the NVL72 VR computer is a much better design than, say, having a standard rack-style design. We expect to actually deploy this on the ground as well as in orbit, because we think it's going to be a radical simplification of the normal NVL72 rack. It will cost less. It'll be more effective. If we're going to put it in space, why not put it on the ground? I think that's going to be pretty cool.”

At press time, SpaceX’s Starmind website still said, “We are AI chip vendor agnostic. Our system architecture supports compute modules from any provider,” suggesting that Musk’s decision to go “exclusively” with Nvidia architecture is a recent one.

Nvidia, for its part, hasn’t made any official comment regarding the scope of its participation.

A grain of salt

So, how long will it be before SpaceX’s Starmind satellite fleet is operational?

According to Musk, not long at all. “With respect to the Starmind AI satellite, which will be essentially an optimized Vera Rubin NVL72 computer, this is not some sort of far future distant thing,” he said on SpaceX’s earnings call. “We expect to start launching this next year.”

SpaceX CEO Elon Musk. Image source: The White House.

Of course, Musk is notorious for repeatedly setting ambitious deadlines and missing them, so this timeline should be considered aspirational. SpaceX has applied to the Federal Communications Commission with a proposal to build a “megaconstellation” of up to 1 million Starmind satellites. That would be about 100 times larger than SpaceX’s current Starlink satellite fleet, which has taken the company 7 years to deploy.

In other words, while it’s good that Nvidia appears to be involved in the design process, it will probably be years before the project comes online, and even longer before it can give a significant boost to SpaceX’s bottom line.

Investors probably shouldn’t factor this into their near-term thesis for SpaceX’s stock.

John Bromels has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

We all know that President Trump's policies have had an outsize impact on American life. Perhaps more than any president before him, Trump has also had an impact on the stock market. From his eponymous Trump Media & Technology Group (NASDAQ: DJT) to the "Liberation Day" market aftermath in April 2025, there's no denying that Trump has been able to move the performance of specific stocks and entire markets.

Naturally, savvy traders want to cash in on these market effects. Enter the so-called "Trump Trade," in which investors bought stocks and ETFs that stood to benefit from Trump's stated policies of cutting housing regulations, upping defense spending, and reshoring manufacturing to the U.S.

One of those traders was Ned Davis Research, which assembled a basket of Trump Trade exchange-traded funds (ETFs) it dubbed the "Trump Trade Index." Unfortunately for Ned Davis and other Trump Trade investors, things haven't gone according to plan this year. Here's why not, and whether investors should worry.

President Donald J. Trump delivers remarks at the General Motors Proving Ground in Milford, Michigan, on Monday, July 27, 2026. Image source: Official White House Photo by Daniel Torok.

A sharp reversal

Early in the year, it looked as though the Trump Trade strategy was paying off in spades.

On March 1, many of the Trump Trade Index's component ETFs were up sharply for the year. The Global X Defense Tech ETF (NYSEMKT: SHLD) was up 15.5%, the Global X Uranium ETF (NYSEMKT: URA) was up 27.2%, and the VanEck Rare Earth and Strategic Metals ETF (NYSEMKT: REMX) was up a jaw-dropping 35.1%.

The success of these funds was even more remarkable, considering the S&P 500 (SNPINDEX: ^GSPC) had risen only 0.5% during that time.

But as the war in Iran has dragged on and tariffs have remained in force, the Trump Trade Index components have suffered. The index is now down 16% since May, according to Ned Davis Research, and many of its component ETFs are in negative territory for the year, with the Global X Defense Tech ETF down 0.9%, the Global X Uranium ETF down 4.5%, and the VanEck Rare Earth and Strategic Metals ETF down 8.7%.

Even Trump-focused ETFs like the Point Bridge America First ETF (NYSEMKT: MAGA), which is up 10.6% for the year, are lagging the S&P 500, which has gained 11% so far in 2026.

Image source: Getty Images.

Unintended consequences

Although Trump's policy positions toward the key Trump Trade sectors of homebuilding, defense, and manufacturing haven't changed, his actions have produced unintended consequences that have been problematic for those very sectors.

For example, the tariffs and the Iran war have pushed inflation higher, which has caused interest rates to remain high. High interest rates have slowed down the housing market, which has impacted homebuilding. Meanwhile, overall economic uncertainty has affected the broader economy, and these issues aren't showing signs of going away anytime soon.

Even if a president comes to office planning to boost a particular sector of the economy, those plans don't always come to fruition. The best strategy for long-term wealth building is usually to spread your investments across high-quality businesses across multiple sectors, rather than focusing narrowly on a few industries that might get left in the dust.

Investors who are still pursuing the Trump Trade strategy may want to branch out to other sectors to preserve their nest egg.

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.

Both ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) reported massive windfall profits in Q2, due in part to surging oil and fuel prices caused by the war in Iran. Wall Street has certainly been appreciative, bidding up shares of both stocks by more than 25% since the beginning of the year.

But one person doesn’t seem happy about all the money these oil companies are raking in: President Donald Trump.

“[G]et your consumer (retail) Oil Prices DOWN, NOW!” demanded Trump in a Truth Social post earlier today.

Speaking to reporters at the White House, Trump asserted multiple times that both companies “made too much money” last quarter. Here’s why Trump is “not happy” with ExxonMobil and Chevron, and what it means for investors.

Image source: Official White House Photo by Molly Riley.

Big bucks

Trump suggested that one of the companies “made 12 times what they made the year before." But while both companies did rake in a combined $26.5 billion in profits during the quarter, it wasn’t quite that big a windfall.

On Friday, ExxonMobil reported Q2 revenue of $116 billion, a 42% increase from $81.5 billion in Q2 2025. Bottom-line profits came in at $14.5 billion, more than double the $7.1 billion the company reported in Q2 of 2025. Production volumes were roughly flat at 4.6 million barrels per day, indicating that higher oil prices played a significant role in the company’s success.

The same day, Chevron also reported big year-over-year (YoY) gains in revenue and profits. The company brought in $70.1 billion in revenue, up 56% YoY. However, it generated $12.1 billion in profits, a 385% YoY gain. Worldwide, Chevron pumped 20% more oil and gas than in the prior-year quarter, producing 4 million barrels per day.

So, in all cases, Chevron made less than ExxonMobil on an absolute basis, but experienced a bigger YoY percentage gain. But none of those gains were anything close to the president's claim of 1,200%.

Price gouging?

Trump said of ExxonMobil and Chevron, “They’re making too much money, OK? Based on a shortage, they’re making too much money. I don’t like it. ... They ought to give some of that back to the public. And they better cut the retail price: the consumer price. ... You’re surprised I’m saying it? I’ll say it loud and clear: I’m not happy about it.”

So, is this just due to price gouging of U.S. drivers by these companies? In a word, no. At least, not intentionally.

ExxonMobil and Chevron both own U.S. refineries and gas stations. Theoretically, they could charge their customers less for gasoline than it costs to refine it, but it’s not that simple. Plenty of the crude oil the two companies drill never even reaches the U.S.: it goes to overseas customers under long-term contracts that the companies can’t just walk away from.

Similarly, both companies rely on an interconnected domestic network of wells, pipelines, terminals, and refineries to convert crude oil into U.S. gasoline. Because so many companies are involved and connected in so many ways, no single company can arbitrarily raise or lower its prices without disrupting the entire domestic supply chain.

What can Trump do?

Although President Trump likely can’t force companies to lower their prices, there is something he can do to try to get them down. He even mentioned it in today’s statement to reporters.

Because the ongoing war in Iran was the cause of the big windfall profits for ExxonMobil and Chevron, Trump said, “You know, you’re going to see oil – when we’re finished with Iran – you’re gonna see the prices drop through the floor.”

So, all Trump needs to do is bring the war to a swift conclusion in a way that opens the Strait of Hormuz. Then the global oil supply will rebound, and oil prices will almost certainly come down. So will U.S. gasoline prices, and the revenue and profits of U.S. oil companies.

But this, unfortunately, may be easier said than done. Until then, investors can expect big profits for big oil and big frustration for everyone else.

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

It's been nearly two months since Elon Musk's Space Exploration Technologies Corp. (NASDAQ: SPCX), commonly known as SpaceX, went public. Despite an initial surge in interest (and share price), the stock has badly underperformed the market. Shares of SpaceX stock are down more than 51% from their highs.

However, two other high-tech stocks made their market debuts around the same time as SpaceX, and they've actually fared just as badly.

Here's why SpaceX, despite being down 51%, managed to outperform recent nuclear IPO X-Energy (NASDAQ: XE) (down almost 55%) and is only doing a bit worse than Standard Nuclear (NYSE: STDN) (down 45.5%). Let's also look at which stock is likeliest to recover.

Image source: Getty Images.

Times are tough all over

SpaceX is outperforming most of the small modular reactor (SMR) nuclear industry.

SMR stocks had a fantastic 2025. They soared to massive valuations thanks to President Donald Trump's new nuclear-friendly policies. But new ideas -- especially those involving radioactive material -- take time to implement. Even with the Trump administration's Department of Energy (DOE) prioritizing the deployment of new reactors, most SMR companies aren't even in the prototype testing phase for their revolutionary reactor designs.

Shares of SMR companies Nano Nuclear Energy (NASDAQ: NNE), Oklo (NYSE: OKLO), and NuScale Power (NYSE: SMR) are down 74%, 80%, and 85%, respectively, from their early October highs. The more recent nuclear IPOs have fared much better, with X-Energy down "only" 54.7% and Standard Nuclear down "just" 45.3%.

So, are the recent IPOs better buys?

The new shiny stock

It's possible that the new IPOs simply haven't had as much time to drop as the more established stocks. If we measure all these stocks' performances from SpaceX's IPO date of June 12, SpaceX actually goes from being the best performer to almost the worst.

All of these stocks are dependent on the success of an emerging industry -- routine spaceflight, SMR-based power plants, orbital AI data centers -- that will take time to develop. Success will be measured in years, not weeks, and it's definitely not a guarantee.

That makes it tough to pick a potential winner. All of these stocks seem overpriced given how speculative they are. Plus, it's not usually a good idea to buy a recent IPO until it releases at least a few quarters' worth of earnings reports to inform your thesis. Risk-averse investors should steer clear of them all.

But if I had to buy one of these new IPOs, I'd probably go with Standard Nuclear.

Its current market cap of $1.2 billion seems the least overpriced, given its proposed business model of enriching nuclear fuels for SMR companies. Management claims $245 million in (mostly unfunded) backlog and a (non-binding) deal with Oklo to provide fuel, as well as $124.9 million in cash on the balance sheet. Plus, it's been working with the DOE on various projects, including the well-funded Prometheus project.

That said, the smartest move for investors right now is probably just to wait.

John Bromels has positions in Oklo. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

Shares of Novo Nordisk (NYSE:NVO) dropped 9.4% today after the Danish drugmaker announced that its experimental heart drug ziltivekimab failed a critical Stage 3 clinical trial. The trial, nicknamed “Zeus,” was the first of three late-stage trials for ziltivekimab to announce results; two other trials, named “Hermes” and “Artemis,” are expected to conclude in the first half of 2027.

But is today’s drop a buying opportunity? Here’s what investors need to know.

Image source: Getty Images.

Results but no benefits

Ziltivekimab is a once-monthly injection that inhibits the interleukin-6 (IL-6) protein. When it binds to its receptors, IL-6 can trigger chronic inflammation and the release of C-reactive protein from the liver.

The Zeus trial was a double-blind, placebo-controlled trial that tested 6,300 people with atherosclerotic cardiovascular disease (ASCVD), chronic kidney disease (CKD), and inflammation. They received a once-monthly shot of ziltivekimab to see if it would reduce their risk of major adverse cardiovascular events (MACE) like heart attacks and strokes.

The study found that ziltivekimab was effective in lowering levels of free IL-6 and C-reactive protein in patients' bloodstreams, indicating success in reducing inflammation. Unfortunately, those reductions didn’t translate into a lowered risk of MACE in the target population. Worse, because inflammation is the body’s response to infections, a higher proportion of people treated with ziltivekimab experienced serious infections compared with those who received a placebo. However, no difference in mortality was observed.

The two ongoing ziltivekimab trials, Hermes and Artemis, are similarly structured, except that instead of testing ziltivekimab in people with ASCVD, CKD, and inflammation, the company is testing it in people with heart failure (Hermes) and those who have experienced an acute heart attack (Artemis).

Image source: Novo Nordisk.

The fallout

According to the company, the failure won’t affect Novo Nordisk’s adjusted operating profit outlook for 2026, although the company will incur a non-cash impairment charge in Q3. The loss is mostly in potential future income.

Given the success of Novo Nordisk’s semaglutide injections, Ozempic and Wegovy, you might not expect a trial of an experimental cardiovascular drug to have such an outsize impact on the stock.

Investors had been hoping that ziltivekimab would expand the company’s reach beyond diabetes and weight-loss drugs. The clinical trial failure is a big letdown because the lack of a MACE reduction among patients in the Zeus trial suggests such a reduction may be less likely in the Hermes and Artemis trial populations as well.

Whether to buy the dip

Although today’s share price drop was big, it didn’t come close to the company’s back-to-back 17% share price declines in February.

The first of those came after management issued a bleak 2026 outlook that predicted drops in revenue and operating profit of up to 13% for the year, and the second came after Novo Nordisk’s next-generation obesity drug, CagriSema, underperformed Eli Lilly’s (NYSE:LLY) rival treatment, tirzepatide, in a head-to-head trial.

That said, the market for GLP-1 obesity treatments is massive and growing quickly, reaching an expected $120 billion by 2030. In fact, Novo Nordisk upped its full-year guidance in May on the back of strong Wegovy sales in Q1.

While it’s preferable for a drugmaker to have multiple blockbuster drugs in its arsenal, Novo Nordisk still has plenty of growth opportunities from semaglutide alone. The company’s shares are currently trading at a price-to-earnings ratio of just 11, near its all-time low.

For those who have been waiting to buy into the GLP-1 treatment market, now looks like an excellent opportunity to do so.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool has a disclosure policy.

Space start-up AST SpaceMobile (NASDAQ:ASTS) has announced Aug. 5 as the date of its next launch and satellite deployment. The announcement comes just days after Elon Musk’s rival satellite company Space Exploration Technologies Corp. (NASDAQ:SPCX), or SpaceX, deployed new satellites of its own.

It’s the latest move in a new “space race”: the race to build a low-earth-orbit satellite network for broadband and cellular access. Right now, SpaceX’s Starlink has a big lead, which is why the upcoming launch is key to AST SpaceMobile’s business... and its stock price.

Here’s why Aug. 5 could make or break AST SpaceMobile.

Image source: The Motley Fool.

A new frontier

Satellite communication is nothing new. The first “passive relay” communications satellite broadcast a Christmas message from President Eisenhower for 35 days after its launch on Dec. 18, 1958. Telstar, the first active communications satellite, was launched by AT&T (NYSE:T) in 1962 and enabled the first transatlantic television broadcast.

Since then, communications satellites have been transmitting TV broadcasts, phone and video calls, and internet access around the world. Satellite communications are especially important for people living in rural or remote locations that aren't served by traditional cable networks or cellular towers.

SpaceX’s Starlink service is currently the undisputed leader in providing satellite broadband and cellular service. It boasts 10.3 million subscribers across 164 countries, and a fleet of more than 9,600 satellites. Meanwhile, AST SpaceMobile currently has 9 satellites in orbit (yes, you read that right: nine).

So, why are we even talking about this company?

Image source: Getty Images.

A different model

Comparing AST SpaceMobile to SpaceX is a little bit like comparing apples and oranges. But three big differences matter most for investors.

First, unlike Starlink, which directly provides broadband service to paying subscribers, AST SpaceMobile sells its services to mobile network operators like AT&T and Verizon Communications (NYSE:VZ). The carriers offer satellite coverage as an add-on to their subscribers, and typically split the revenue 50/50 with AST SpaceMobile. So, they’re more of a “range extender,” allowing carriers to extend their coverage into rural areas rather than providing full global coverage.

Second, AST SpaceMobile’s BlueBird satellites are much larger than Starlink’s. They use a unique design that allows them to “unfold” their 693-square-foot arrays (about the size of two school buses) in space, making them the largest commercial arrays ever deployed in low Earth orbit. Because of BlueBird’s larger size, the company believes it only needs to deploy 45 to 60 satellites to offer continuous coverage in high-priority markets. The Aug. 5 launch would deploy three BlueBird satellites (11, 12, and 13).

Third, AST SpaceMobile is a pure-play satellite operator, as opposed to a service provider, an AI company, and a launch company. That worked against the company in April, when Blue Origin -- the launch provider for BlueBird 7 -- deployed the satellite into an orbit too low, resulting in its loss. So AST SpaceMobile used SpaceX’s Falcon 9 to successfully launch BlueBird 8, 9, and 10 on June 17, and will use it again for the planned Aug. 5 launch.

Why the launch matters

AST SpaceMobile hoped to have those 45-60 BlueBird satellites in orbit by the end of 2026. That seems like an unattainable timeline. Even if it successfully launches a set of three satellites every month for the rest of the year, it would have only 24 total in orbit. Over the next few years, the company hopes to increase that to 248 satellites, so it has a lot of catching up to do.

SpaceX’s recent Starship launch successfully deployed 20 Starlink satellites into low Earth orbit, thanks to the rocket’s massive payload capacity. If Starship becomes commercially viable, it could ferry more BlueBird satellites into orbit at a time, but it’s unclear when – or if – Starship will begin commercial operations.

With AST SpaceMobile’s shares down 56.4% from their highs, the company needs to put its plans into action without further delays. The Aug. 5 launch will either be a big step forward or a big step back for the company and its long-term ambitions.

John Bromels has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

We've been lucky over the past 17 years.

Since the subprime mortgage crisis bottomed out the stock market in March 2009, the U.S. stock market has experienced an unprecedented bull market streak, with only a handful of mostly brief bear market sessions.

Next time, though, we might not be so lucky. It took the S&P 500 (SNPINDEX: ^GSPC) much longer to recover from the Great Recession and the dot-com bubble than from the COVID-19 crash or the 2022 bear market. The next bear market could be a rough one.

If a bear market does materialize in 2026, history says this one investment is the safest place to park your money. However, it comes with a big asterisk that investors should know about.

Image source: Getty Images.

A safer ride in troubled markets

When the entire market is in free fall, even the safest investments will probably decline in value. But one investment has historically outperformed during the worst bear markets: the Vanguard High Dividend Yield Index Fund ETF (NYSEMKT: VYM).

Dividend-paying companies tend to be larger and more stable than average, and they usually keep paying their dividends during bear markets. So their stocks tend to fare better than those of smaller growth companies. The Vanguard High Dividend Yield Index Fund also offers built-in diversification to protect your investment even if one or more of its component companies don't fare so well.

At the beginning of the Great Recession, for example, between Jan. 1, 2008, and Jan. 1, 2009, the Vanguard High Dividend Yield Index Fund ETF dropped 31.9%, compared with the S&P 500's 37% drop. By the end of the Great Recession on June 1, 2009, it was still 0.5 percentage points ahead of the S&P 500.

During the 2022 bear market, the difference was even starker. The Vanguard High Dividend Yield Index Fund ETF finished 2022 down just 0.5%, handily beating the S&P 500's drop of 18.1%.

The flip side

Although the Vanguard High Dividend Yield Index Fund ETF tends to outperform during recessions and bear markets, the reverse is unfortunately also true. It tends to underperform during bull markets. For example, if we look at overall performance over the last five years, starting before the 2022 recession began, the ETF's performance is less than 2 percentage points behind the S&P 500's.

But if we look only at performance from January 2023, the Vanguard High Dividend Yield Index Fund ETF is up only 65.5%, compared to the S&P 500's 102.8% gain. Similar performance gaps appear over most long-term stretches. Because the U.S. stock market is more often in a bull market than a bear market, for a long-term investor, a fund that outperforms during bull markets -- like the Vanguard 500 Index Fund ETF (NYSEMKT: VOO) -- will generally give you a better long-term return.

If what you're looking for is safety during a bear market, history shows that the Vanguard High Dividend Yield Index Fund ETF is a top choice.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard High Dividend Yield ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

The Personal Consumption Expenditures (PCE) Price Index is the gold standard for measuring inflation, according to the U.S. Federal Reserve. “That’s our number; we’re sticking with it,” said Fed Chair Kevin Warsh at yesterday’s press conference.

Then today, the June 2026 PCE Price Index was released, showing a decrease in PCE prices for the first time in six years. You'd think that'd be cause for celebration.

Not so fast. That decrease, unfortunately, comes with a huge asterisk. Here’s why we shouldn’t get excited about June’s PCE, but instead should get worried about what it means for inflation in the coming months.

Image source: Getty Images.

Why it’s down

Over the last decade, monthly declines in PCE have been extremely rare. The last time we saw one was at the start of the COVID-19 pandemic. PCE fell 0.3% in March 2020 and 0.4% in April 2020.

There have only been three other monthly PCE declines since 2016. All three were tiny 0.1% drops: in January 2019, March 2017, and February 2016. During the previous ten years, however, monthly PCE drops were more common. 2008, 2012, and 2015 each had three monthly PCE drops, and 2013 and 2014 each had two.

However, the cause of almost all of these small monthly declines was the same: a large drop in gasoline prices.

Image source: Getty Images.

The largest monthly decline in PCE in the last 20 years was in November 2008. That 1.2% drop was fueled (no pun intended) by a 28.7% drop in the prices of “gasoline and other energy goods” (nearly all of which are other hydrocarbon fuels). The biggest drop of the 2010s, a 0.5% drop in January 2015, was caused by a 15.2% decline in gasoline prices.

On June 17 of this year, President Trump signed a memorandum of understanding (MOU) to end the Iran war, which briefly reopened the Strait of Hormuz, sending oil prices – and subsequently, fuel prices – lower. The 9.2% decrease in gasoline prices more than offset increases in the prices of recreational goods, food, and beverages to lower the PCE by 0.1%

But here’s why that’s not such good news.

It’s only temporary

The 9.2% drop in fuel prices resulted in just a 0.1% drop in PCE in June, but it didn’t even come close to offsetting the gasoline price increases from prior months.

Gasoline was up 20.9% in March, 5.5% in April, and 6.5% in May. That translated to PCE increases of 0.7%, 0.4%, and 0.5% in those three months. Even if you factor in June’s 0.1% drop, PCE inflation is higher this year than it was at this time last year.

And those gas prices have already risen again with the collapse of the ceasefire, the re-closing of the Strait of Hormuz, and the resumption of the U.S. bombing campaign against Iran.

Benchmark Brent Crude oil spent the second half of June trading below $80/barrel. In July, it shot back up again to more than $100/barrel, and is currently trading at about $89/barrel.

That means July’s PCE will likely follow the same pattern as March, April, and May: a big jump in gasoline prices overwhelms all other categories to push the PCE higher again.

What it means for investors

Excluding food and energy, June’s PCE posted a very modest 0.1% gain, the lowest so far this year. But for most consumers, food and energy – which here includes electric and gas utility services – make up a big chunk of their nondiscretionary spending.

In other words, Thursday’s PCE report doesn’t make a September interest rate hike any less likely, nor does it signal an end to the high inflation we’ve been seeing. It’s just a temporary blip that’s probably already over.

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.

If the first half of 2026 were a horse race between chipmaker Nvidia (NASDAQ: NVDA) and Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), it would have been one of the most exciting six months in sports.

Alphabet took an early lead, but its Q4 2025 earnings release sent shares down, ceding the lead to Nvidia. Then the same thing happened to Nvidia after its earnings release a month later. Then it was neck and neck until Alphabet's blowout Q1 earnings report boosted its stock price by 10%, allowing it to finish the first half up 14.3% to Nvidia's 7.4%.

But I'm predicting the second half of the year will belong to Nvidia over Alphabet. Here's why.

Image source: The Motley Fool.

Spend money to make money

As one of the so-called "hyperscalers" -- the companies spending massive amounts on artificial intelligence (AI) infrastructure, including data centers -- Alphabet is spending heavily on AI. And by "heavily," we're talking tens of billions of dollars per quarter. In the first half of 2026, total capital expenditures roughly doubled from the prior year to a total of $80.6 billion, primarily due to the AI build-out. All that spending resulted in the first quarter of negative free cash flow since the company went public in 2004.

And Alphabet's not done by any stretch. The company raised its estimate for total 2026 capital expenditures to a midpoint of $200 billion, up from its previous midpoint of $185 billion.

Investors are starting to get nervous about the ever-increasing AI spending, wondering whether the eventual payoff will be worth the expense. But all that spending by Google and other hyperscalers has been great for Nvidia, which posted its highest-ever quarterly free cash flow of $48.6 billion in Q2.

With the hyperscalers showing no signs of slowing down their spending, the second half of 2026 looks great for Nvidia's stock, which should easily outperform Alphabet's.

John Bromels has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.

“You’ve heard this before, but we will deliver price stability.”

That was Federal Reserve Chair Kevin Warsh’s message after today’s Federal Open Markets Committee meeting, at which the committee voted 9-3 in favor of keeping the federal funds target interest rate unchanged at 3.5% to 3.75%.

In fact, Warsh used the word “deliver” more than a dozen times in his remarks. “We will deliver the 2% inflation target,” he said in response to a reporter’s question. “We’re going to deliver on the responsibility that Congress gave us,” he responded to another.

But then, in just 3 devastating words, he summed up what we’re all probably thinking in response to the Fed’s promises that it will “deliver” an end to high inflation:

“Deliver it, already!”

Federal Reserve Chair Kevin Warsh. Image source: Federal Reserve.

Inflation rate, meet interest rate

Raising interest rates is the primary tool the Fed uses to lower inflation.

The Fed’s official “target” annual inflation rate is 2%. That means an item costing $100 today would ideally cost $102 a year from now. 2% inflation is high enough to guard against deflation, but low enough not to dampen economic activity.

But the actual U.S. inflation rate has been above the Fed’s 2% target since March 2021. The lowest it’s gotten in the last five years is 2.3% in April 2025. It was 4.2% in May and 3.6% in June.

The Fed sharply raised interest rates in 2022 and 2023 to combat high post-pandemic inflation. When inflation fell below 3% in September 2024, it began lowering them again to their current range of 3.5% to 3.75%.

Raising interest rates can also slow economic growth, but 88% of Americans agree that inflation is a serious problem right now, according to a recent Quinnipiac poll.

So why isn’t the Fed acting?

Impatience vs. inaction

Reuters reporter Ann Saphir asked Warsh this very question at Wednesday’s press conference, “You’ve said, repeatedly, you have ‘no tolerance’ for inflation, and yet we are seeing above-target inflation repeatedly for five years, and through your term so far,” she said. “And, sure, you have no magic wand, but you have not taken action ... so, could you explain what you mean by ‘no tolerance for inflation,’ and what you plan to do about it?”

“Ann, I hear from you what I hear more broadly from households and businesses: impatience,” responded Warsh. And that’s when he gave his succinct 3-word summary: “Deliver it, already!”

But he went on to explain that the Fed was not, in fact, going to deliver it, already.

Image source: Getty Images.

Instead, he argued that the problem predated his eight-and-a-half-week tenure, while high inflation has been ongoing for 63 months. “This is not an excuse,” he said. “This is a fact.”

“We are on the job. We will deliver,” he continued, without committing to a time frame, a course of action, or a specific trigger that would prompt the Fed to act.

All talk?

Unlike some previous Fed chairs, Warsh doesn’t offer guidance about potential future interest rate changes. Instead, he wants markets to look at economic indicators and reach their own conclusions about how to act, rather than acting based on the Fed's interpretation of that same data. So it’s not surprising he didn’t directly answer the question.

The lack of action isn’t due to inertia, according to Warsh. “FOMC meetings produce policy decisions,” he said. “But just as important is candid discussion of the big things that matter most.”

Obviously, we expect the Fed chair and the Open Markets Committee to carefully deliberate before making market-shaking decisions. But candid discussion only takes you so far. At some point, action is required.

The takeaway

What’s devastating for consumers and businesses struggling with rampant inflation is that the Fed chair clearly hears and understands the call for action on inflation – “Deliver it, already!” – and not only isn’t he delivering, but he won’t explain why not.

The S&P 500, after initially rising on news of the lack of a rate hike, tumbled 1.5% after bond yields shot up over inflation concerns.

That said, with three of the 12 FOMC members voting to raise interest rates today, a September interest rate hike just got more likely. How likely, though, is anyone’s guess.

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.

After the market closed on Wednesday, tech giant and AI hyperscaler Microsoft (NASDAQ:MSFT) reported better-than-expected Q4 2026 earnings for the period ending June 30.

Revenue and operating income were both up 18% year-over-year (YoY) to $90 billion and $40.6 billion, respectively. Revenue beat the consensus expectation of $87.6 billion.

Given this impressive performance, is Microsoft’s stock a buy?

Image source: Getty Images.

A big beat with a small asterisk

Although revenue and operating income both rose, it was the marquee earnings per share (EPS) number that really smashed expectations, coming in at an adjusted $4.74/share, compared to the consensus of $4.24/share, a 31% improvement over the prior-year quarter.

However, $0.27/share of those earnings was attributable to special items, including a $3.2 billion gain from the company’s investment in the AI company Anthropic. Still, even if we strip out those items, Microsoft’s EPS would be $4.47/share, up 15.8% YoY and still beating the consensus.

In general, as Microsoft CFO Amy Hood put it, it was “a strong quarter to close out the fiscal year.”

But there were a few particularly noteworthy items that deserve special attention from investors.

Cloud comes in clutch

Microsoft’s cloud computing platform Azure has long been the second-most-used cloud computing platform in the world, behind Amazon’s (NASDAQ:AMZN) AWS but ahead of Alphabet’s (NASDAQ:GOOGL) Google Cloud Services. In recent quarters, Google Cloud Services has seen explosive growth in both revenue and profits, which the company attributes to its implementation of AI. AWS has also reported higher top- and bottom-line growth among users using its AI features.

That trend applied to Microsoft as well, with revenue from Azure and other cloud services increasing 43% YoY. Although Microsoft didn’t break out the actual dollar amount, the overall Intelligent Cloud segment, which includes Azure, saw revenue increase 32% to $39.3 billion.

Holding the line on spending

Shares of Microsoft rival Alphabet took a hit after its recent Q2 earnings call, in which it increased its capital expenditures (capex) forecast for the year, largely due to increased spending on AI infrastructure. The Google parent’s capex was already up significantly from the prior year, and investors were starting to question whether the ultimate payoff would justify the massive upfront expense.

Meta Platforms (NASDAQ:META) encountered a similar situation as it narrowed its 2026 capex guidance toward the higher end of its previously announced range, causing its shares to take a post-earnings hit as well.

But Microsoft bucked the trend. True, its quarterly capex of $35.8 billion was more than double the year-ago quarter’s capex of $17.1 billion. But the company announced it was keeping its forecast for total calendar year 2026 capex unchanged at $175 billion following an accounting change. Investors rewarded the stock by sending shares up 8% in after-hours trading.

Even with that 8% increase, Microsoft shares are still down more than 15% over the past year, underperforming the S&P 500 and cloud rivals Alphabet and Amazon. Meanwhile, its forward price-to-earnings ratio has dropped from 30 to a more reasonable 20.

With Azure showing impressive revenue growth and management keeping a lid on AI spending (at least for now), Microsoft looks like a buy.

John Bromels has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Oil prices have surged back above $90/barrel after Iran launched a surprise attack on U.S. forces in the Middle East on Wednesday morning. Further increases were expected as President Trump vowed to retaliate against Iran for the ballistic missile attack on a U.S. military base in Jordan.

“We’ll be hitting them hard. They’re going to get a beating,” Trump told Fox News in an interview.

Benchmark Brent Crude futures, which briefly topped $100/barrel last week following the collapse of the U.S.-Iran ceasefire, had been falling in recent days as the U.S. paused its bombing campaign to reassess its strategy. On Tuesday, they hit a two-week low of $84.09.

Here’s what the renewed hostilities mean for the stock market, and oil stocks in particular.

Image source: Getty Images.

Diverging pathways

Since the start of the war in Iran on Feb. 28, the S&P 500 and oil prices have moved in opposite directions, with the S&P 500 declining through February and March as oil prices rose. The index hit its lowest point for the year in late March, just before Brent Crude spot prices peaked above $125/barrel in early April.

As oil prices trended downward from April to June, the S&P 500 rallied to new all-time highs, but the recent spikes in oil prices have knocked it down 2.6%.

In general, the stock prices of U.S. oil companies like Chevron (NYSE:CVX) and Devon Energy (NYSE:DVN) have tracked oil prices rather than the broader market. They’ve moved up as oil prices have risen and down as those prices declined. That makes sense, because most of their operations aren’t located in areas directly affected by the war or the closure of the Strait of Hormuz. They benefit from the higher global oil prices without being hurt by supply constraints.

While this latest spike is likely to continue the trend of oil company stocks rising with oil prices, it could have a very different impact several weeks from now, for one important reason.

The Fed keeps rates steady... for now

While oil prices, stock prices, and oil stock prices have reacted to the Iran war in predictable ways for the last six months, this particular escalation in violence came mere hours before the Federal Reserve’s July Open Markets Committee meeting, at which benchmark interest rates are set.

Federal Reserve Chair Kevin Warsh. Image Source: Federal Reserve.

The Fed ultimately left interest rates unchanged. But the 9-3 vote wasn’t unanimous, and several Fed governors have recently raised concerns about the ongoing conflict’s impact on inflation, with Cleveland Fed president Beth Hammack writing in a LinkedIn post, “Inflation is too high.” Meanwhile, Federal Reserve Vice Chair Philip Jefferson told the Stanford Institute for Policy Research that he would consider raising rates if “actual inflation does not start to cool down soon.”

If the war in Iran continues to regularly inflate the price of oil above $90/barrel through the Fed’s next Open Markets Committee meeting in mid-September, it makes an interest rate hike much more likely. An interest rate hike is likely to negatively affect all stocks, including oil stocks, regardless of oil prices.

So while today’s oil price spike is likely to give a short-term boost to oil stocks, sustained high prices from a prolonged war are the last thing that energy investors should be hoping for.

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

On pretty much every Tesla (NASDAQ: TSLA) earnings call, CEO Elon Musk thanks Tesla employees for their hard work. He often expresses gratitude to Tesla's customers for their support as well. What he doesn't usually do is thank other companies.

But on Tesla's Q2 earnings call last week, Musk went out of his way to thank Micron Technology (NASDAQ: MU) not once but twice!

Here's why Musk is expressing gratitude to the memory chipmaker and why it's great news both for Tesla and Micron shareholders.

Image source: The White House.

Doubly expensive, or more

We're in the middle of a global memory chip shortage.

Random-access memory (RAM) is necessary to keep data actively available to a processor for computation. In most computers, this is handled by a type of memory chip called dynamic random access memory (DRAM). DRAM is cheap to produce and can hold a lot of data.

But artificial intelligence (AI) compute is so complex that it requires more than a single DRAM wafer. Luckily, high-bandwidth memory (HBM), which consists of several DRAM chips stacked on top of each other, delivers incredible similar data retrieval speed and a much higher capacity. Micron Technology is one of only three major global providers of DRAM and HBM. The other two are South Korean: tech giant Samsung and SK Hynix (NASDAQ: SKHY), which recently debuted on the Nasdaq.

These companies have devoted almost all of their memory chip fabrication capacity to churning out DRAM and HBM for AI operations, and demand is still outstripping supply, so they've raised their prices across the board. According to Counterpoint Research, memory and storage prices have quadrupled over the past nine months. That's caused prices to go up for anything that uses memory chips, including smartphones, laptops, and cars.

Doubly thankful

Musk went out of his way to sing Micron's praises in response to a question about supply chains for the company's Optimus humanoid robots. Andrew Percoco of Morgan Stanley asked Musk about "some of the dialogue you've had with potentially some external suppliers."

In response, Musk name-checked Samsung, Taiwan Semiconductor Manufacturing, and Panasonic for increasing production of semiconductors and battery cells, but after Tesla's VP of Supply Chain Karn Budhiraj talked about Samsung's commitment to future projects, Musk jumped back in with his first note of thanks to Micron:

I'd actually also like to thank Micron for giving us memory allocation. They've got to make some very tough decisions on memory allocation. We really appreciate Micron making room for Tesla in the years to come and giving us actually a very significant allocation on reasonable terms given the pretty insane pricing of memory these days.

Over 20 minutes later, near the end of the call, William Stein of Truist Securities asked Musk about hardware upgrades. In response, Musk talked about the AI chip upgrade cycle, finishing with:

I think things are going really well on the chip front. Yeah. Again, I'd like to thank TSMC and Samsung, and Micron for their support.

Image source: Micron Technology.

Doubly surprising

What's doubly surprising about Musk's double thanks is that a lot of people have been blasting Micron instead of thanking them. Notably, Apple CEO Tim Cook blamed "the memory guys ... passing along huge price increases" for a sweeping 20% price increase on Apple's products.

Micron Chief Business Officer Sumit Sadana has defended his company's pricing. When memory prices collapsed in 2023, he noted in a recent interview, big customers showed no mercy, negotiating ultra-low prices that pushed Micron's gross margin into negative territory. This prevented memory suppliers from investing in capacity increases that would have come online by now. Current investments in memory fabrication facilities aren't expected to come online for at least another year.

However, the fact that Micron has been collaboratively working with Tesla on pricing, to the point that Elon Musk is going out of his way to thank the memory supplier twice in one earnings call for its "reasonable terms," suggests that Micron is prioritizing long-term business stability over short-term windfall profits.

In any high-tech industry, product reliability and quality are just as important as price. By building relationships with Musk and others now, instead of just squeezing them dry, Micron improves its odds of avoiding a catastrophe down the line when memory capacity inevitably increases and prices fall. That's great news for Tesla and Micron investors everywhere.

John Bromels has positions in Apple, Micron Technology, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has positions in and recommends Apple, Micron Technology, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

When Elon Musk's Space Exploration Technologies (NASDAQ: SPCX) -- commonly known as SpaceX -- priced its IPO at $135 per share, many said it was too expensive. And when it climbed to more than $200/share within a week, they said it was way too expensive.

But now SpaceX's stock has fallen more than 40% from its high and is trading at about $116 per share as I write this, 13.2% below its IPO price. Is this a sign of more losses to come or a buying opportunity? Here's what investors need to know.

Image source: Getty Images.

What goes up...

SpaceX's business is built on getting things into space. In 2025, the world sent 3,194 metric tons of stuff into orbit, and SpaceX's flagship rocket launch business carried more than 80% of it.

Currently, the company is preparing its massive Starship megarocket for commercial use. Starship's huge 220,000-pound payload capacity would dramatically lower the cost of putting things into orbit and would almost certainly increase SpaceX's already dominant market share.

Meanwhile, the only profitable part of SpaceX's business, Starlink, has successfully built a vast network of nearly 10,000 communications satellites that provide broadband and mobile services to 10.3 million subscribers across 164 countries, mostly in hard-to-reach areas. This is expected to be the primary driver of profits for the foreseeable future.

The company estimates that these two businesses together only have a total addressable market of about $2 trillion: less than the company's market cap at its peak. Growth is clearly a major part of the valuation here. So, how's that going?

...must come down

In short, not well. SpaceX estimates an eventual $26.5 trillion market for its AI applications, but right now it primarily just sells compute to other companies. Google's parent company, Alphabet, for example, is renting compute capacity from SpaceX for $920 million per month.

That's a good start, but SpaceX's primary argument is that it can launch data centers into space, where it expects to lower compute costs thanks to the higher concentration of solar energy. But that plan can't get off the ground (literally) until Starship comes online. And SpaceX has now failed to launch its (apparently unlucky) 13th Starship test flight twice but intends to try again on Thursday.

Another delay or an unsuccessful launch would almost certainly send the stock lower. And even if this test flight is successful, many more tests and certifications remain before Starship reaches commercial viability.

Additionally, over the next year, various lockups of insider shares will expire, and up to 1 billion additional shares could be awarded through options, settlements, and the like. If and when those shares hit the market, they'll exert downward pressure on the stock. Downward pressure, without any obvious near-term growth catalysts, is a recipe for further share price declines.

Smart investors should probably wait to buy SpaceX shares, as they're likely to continue moving lower in the near term.

John Bromels has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

On Thursday, nuclear start-up Oklo (NYSE:OKLO) announced some welcome news. The company received “startup authorization” from the U.S. Department of Energy (DoE) for its Groves Reactor in Texas under the Reactor Pilot Program (RPP).

According to the company, the authorization “allows Oklo to load nuclear fuel, conduct startup testing, and proceed toward first criticality.”

It’s a big step forward for Oklo and one that is likely to have a major impact on the company’s regulatory future. Here’s what this authorization means for Oklo and why it’s a bigger deal than it seems for Oklo investors.

Image source: The Motley Fool.

Slower than molasses

In the world of nuclear regulations, safety is the biggest priority. That makes sense given the massive destructive potential of even a small nuclear reactor. Speed, on the other hand, isn’t a priority.

If anything, that’s an understatement. Obtaining commercial certification from the U.S. Nuclear Regulatory Commission (NRC) for a new reactor design takes years or even decades.

Oklo knows this better than anyone: the company began the regulatory journey for its novel sodium-cooled fast reactor SMR with the NRC in November 2016, almost ten years ago. It finally was able to submit its combined license application for the Aurora Powerhouse design in March 2020. And it’s still anybody’s guess when it might be awarded a commercial license.

The company has completed three of the five steps of its DoE RPP regulatory review for construction and operation, while an NRC audit is in progress. Once the audit is completed, the company can formally request a commercial license. It will undergo further NRC review before receiving approval... assuming neither the audit nor the review turns up any material issues that need to be corrected.

A breakneck pace

This painfully slow process is one of the reasons the U.S. hasn’t begun construction of a new nuclear power plant since 1976, and why only two existing plants have added new reactors since 1993.

The Trump Administration aimed to change that with the RPP, which was enacted by executive order in 2025 to speed up the deployment of nuclear reactors in the U.S. The RPP instructs the NRC to create an expedited pathway to approve reactors that have been safely tested by the DoE, with a deadline of 18 months to evaluate and approve new construction and operation licenses.

The RPP allowed the Groves Reactor project to move forward at unprecedented speed. The time from groundbreaking to receiving start-up authorization was just over 10 months, which included construction, hiring, fuel and equipment procurement, and the DoE authorization process.

Even Oklo CEO Jacob DeWitte seemed surprised by the breakneck pace. "This facility marks the fastest time that we are aware of to go from greenfield to substantial completion for a full-scale, privately funded and sited reactor in history,” he said in a press release.

But the important part was what he said next: “And this experience is fully translatable to future commercial deployments.” Here’s why that should be music to shareholders’ ears.

The hidden benefit

The Groves Reactor isn’t a nuclear power plant, nor does it feature Oklo’s unique sodium-cooled fast reactor SMRs. It’s a water-cooled test reactor designed to use low-enriched uranium for the production of isotopes, like those used in radiation therapy for cancer.

Currently, most radioactive isotopes used in the U.S. are produced overseas. The Groves Reactor is part of an effort to increase domestic production.

But Oklo’s primary goal is to build SMRs for power generation. The Aurora Powerhouse uses a different reactor design and fuel, and serves a different purpose. So, how does this move Oklo towards that goal?

Well, in the world of nuclear authorizations, repeating yourself is a good thing. Through the RPP, certain portions of DoE approval are expected to directly transfer to the NRC approval process, expediting the review time frame.

Image source: Getty Images.

The takeaway

Because Groves is a commercial-scale facility, Oklo notes it can “repeat the experience with demonstrated experience in siting, building, commissioning, and operating its commercial reactors in the future.”

The company also believes that the “repeatable approach to engineering, construction, commissioning, operations, and regulatory authorization ... helps reduce execution risk and accelerate future deployments across all of Oklo’s business units.”

If the process for the Aurora Powerhouse moves forward as quickly as the Groves process, Oklo could find itself months or even years ahead of schedule on its ultimate plan.

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

It was a big day for nuclear power in the U.S. as the Trump Administration unveiled the recipients of 278 research projects being funded through the Department of Energy’s (DoE) Genesis Mission on Wednesday.

The Prometheus project, which leverages artificial intelligence (AI) for nuclear development, was a big winner, receiving a Phase II award of $60 million over three years. It’s one of the biggest investments in decades in cutting-edge nuclear technologies.

The major partners of Project Prometheus include four of the DoE’s 17 National Laboratories: Idaho, Oak Ridge, Argonne, and Sandia. Major research universities, including North Carolina State and Penn State, are also involved.

But perhaps the biggest winners are the nuclear companies chosen to participate in the project, and their investors. Here’s who’s been chosen, and what it means for their shareholders.

Image Source: Official White House Photo by Molly Riley

The heavyweights

The biggest partners in Prometheus are the two companies leading the initiative with the Idaho National Laboratory, Nvidia (NASDAQ:NVDA), and Amazon’s (NASDAQ:AMZN) Amazon Web Services (AWS). AI hyperscaler Microsoft (NASDAQ:MSFT) is also on board as a partner.

But the nuclear companies taking part include X-Energy (NASDAQ:XE), which has signed on as a Tier 1 partner with board of directors representation, committing $10 million in financial support as well as the use of its Xe-100 high-temperature, gas-cooled small modular reactor (SMR), tri-structural isotopic TRISO-X particle fuel designs, and other design and fabrication data.

X-Energy believes that participation in the Prometheus project will “accelerate licensing, manufacturing, construction, and operation across a growing commercial project portfolio.”

Although it’s not a Tier 1 partner, start-up Oklo (NYSE:OKLO), which is focused on designing and building a sodium-cooled fast reactor SMR called the Aurora Powerhouse, is also a Prometheus partner. The company is working on a strategic partnership project to integrate the Prometheus AI platform into its own Multiphysics design and analysis infrastructure. The integration is expected to streamline engineering workflows and support the development of Pluto, Oklo’s reactor system designed for plutonium fuels.

Start-up nuclear fuel company Standard Nuclear (NYSE:STDN) is also a Prometheus partner, and advertises itself as “the only U.S. company with industrial-scale TRISO manufacturing facilities to date.”

Nonpublic nuclear companies like TerraPower, Westinghouse Electric, and Aalo Atomics are also involved as partners.

It’s worth noting that this Prometheus AI project is unrelated to the “Prometheus AI supercluster,” a computing system that Meta Platforms (NASDAQ:META) is building in Ohio in partnership with Vistra Corp. (NYSE:VST), Oklo, and TerraPower. That facility, a one-gigawatt data center, is scheduled to come online sometime this year. It’s also unrelated to Jeff Bezos’ AI design and engineering start-up Prometheus.

Image source: Getty Images.

What it means for investors

Once again, Oklo ends up a winner with the DoE, after having been a participant in numerous prior DoE initiatives, including the Reactor Pilot Program through which it’s constructing its first Aurora Powerhouse at the Idaho National Laboratory.

Oklo’s current approval strategy is to work with the DoE on advancing projects and then apply the lessons learned to future NRC licensing requests. That strategy appears to be paying off, and will hopefully bear fruit when the company is ready to apply to the NRC for a commercial license for its Aurora Powerhouse design.

X-Energy, which just had its IPO in April, probably benefits most from the prestige and exposure it receives as a Tier 1 partner on the project. The company already has a fuel fabrication license from the NRC for its TRISO-X fuel. It also has numerous reactor projects in various stages of development in the U.S. and the United Kingdom that need regulatory approval. While Prometheus participation isn’t a direct step towards those approvals, partnering with the DoE in the meantime certainly can’t hurt.

The much smaller Standard Nuclear is even younger, having just IPOed last week. It has a market capitalization of just $1.4 billion compared to Oklo’s $7.6 billion and X-Energy’s $6.5 billion. It already has approval to receive high-assay low-enriched uranium (HALEU) feedstock and to produce TRISO fuel. Being part of this project allows the small start-up to work with industry heavyweights and deepen its credibility with the DoE and other government bodies.

Meanwhile, SMR start-up NuScale (NYSE:SMR) didn’t make the list… again. This shouldn’t be a surprise to investors, as the company hasn’t received any DoE support since 2019.

In other words, all three companies should benefit to some degree, but with nuclear stocks having fallen out of favor in the past year, it will take more than project participation to turn their fortunes around.

John Bromels has positions in Amazon, Meta Platforms, Microsoft, Nvidia, and Oklo. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, Nvidia, and Vistra. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.

By most metrics, Nvidia (NASDAQ: NVDA) looks like a screaming buy right now. Its stock is down by 12% from its high, but its price-to-earnings (P/E) ratio is at a five-year low. Its price-to-free-cash-flow ratio is near a five-year low. And both metrics are substantially lower than those of other companies that have benefited from the AI spending boom such as Broadcom and Vertiv.

But worries are intensifying on Wall Street that AI spending at current rates may not be sustainable. So, is Nvidia a buy at today's levels, or should investors wait for a better opportunity?

Image source: Nvidia.

More than just AI

Nvidia is benefiting from the boom in AI data center construction by hyperscalers like Microsoft and Amazon. But while Nvidia's top-of-the-line graphics processing units (GPUs) and other digital infrastructure products are currently being primarily used for AI, at their core, they're just incredibly powerful pieces of computer hardware.

In other words, even if AI spending were to dry up tomorrow -- which is incredibly unlikely -- Nvidia's products would still be in demand.

Nvidia stockholders have seen this story play out before. In the early 2010s, the power of Nvidia's GPUs as tools for cryptocurrency mining became apparent. GPU prices skyrocketed in 2013 as miners of Bitcoin and other proof-of-work cryptocurrencies snapped up the devices. Between 2013 and 2018, Nvidia's shares soared by2,260%. But by the end of 2018, the GPU cryptomining trend had ebbed, and Nvidia's stock fell by more than 50% from its peak.

Those who held on to their Nvidia shares were smart: The stock was surging again within two years, first from the pandemic-era consumer electronics spending boom and then due to the arrival of the AI megatrend.

Data suggests that we're not even close to the top of the AI spending curve, and Nvidia's products are likely to remain in high demand for years to come.

And even if the AI trend proves shorter-lived than expected, Nvidia's top-tier product lineup is almost certain to be in high demand for quantum computing or whatever the next big thing is.

Therefore, Nvidia looks like a buy right now.

John Bromels has positions in Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Amazon, Bitcoin, Broadcom, Microsoft, Nvidia, and Vertiv. The Motley Fool has a disclosure policy.

The GLP-1 market has been hot for a long time, but things are even more heated behind the scenes. Danish healthcare company Novo Nordisk (NYSE:NVO) and massive U.S. drugmaker Eli Lilly (NYSE:LLY) have been battling for supremacy in the massive U.S. GLP-1 market.

And as of Tuesday morning, the feud has officially landed in the courtroom, as Novo Nordisk announced it had filed a lawsuit against its rival in federal court.

Novo, the maker of GLP-1s Ozempic and Wegovy, claims that Eli Lilly’s ads for its competing GLP-1 brands, Mounjaro and Zepbound, rely on “deceptive advertising” that has caused “widespread confusion” in the marketplace.

The lawsuit demands that Lilly pull its “misleading comparative advertising across all platforms,” along with other demands.

Here’s what else the lawsuit is alleging and how it’s likely to impact both stocks.

Image source: Novo Nordisk.

Bitter rivals

Both Novo and Lilly are fighting tooth and nail to dominate the massive (and lucrative) U.S. GLP-1 market.

Novo Nordisk – which specializes in diabetes care – released its GLP-1 semaglutide in the U.S. under the Ozempic brand name in 2018 as a diabetes treatment. When it proved effective for weight loss, Novo began selling it as a weight-loss treatment under the Wegovy brand in 2021.

Meanwhile, Eli Lilly was developing a different GLP-1, tirzepatide, which it released as a type 2 diabetes treatment, Mounjaro, in 2022, and as a weight-loss treatment, Zepbound, in 2023.

Both companies’ stocks soared between 2018 and 2024 as the blockbuster potential of these weight-loss drugs became apparent. But in December 2024, a head-to-head clinical trial dubbed “SURMOUNT-5” showed that Lilly’s Zepbound provided superior weight loss to Novo’s Wegovy.

Since then, Lilly’s stock has risen 42.7% while Novo’s has dropped 53.8%. But the new lawsuit is putting that Surmount-5 head-to-head trial back in the spotlight.

“A nationwide pattern of deceptive advertising”

Among other issues, Novo is objecting to Lilly’s use of data from the 2024 SURMOUNT-5 trial in its current advertising.

The SURMOUNT-5 trial found that patients taking a 10 mg or 15 mg dose of Zepbound lost an average of 20.2% of their body weight (about 50 pounds) after 72 weeks, while those taking a 1.7 mg or 2.4 mg dose of Wegovy only lost an average of 13.7% of their body weight (about 33 pounds) during the same time frame. The Wegovy doses were much smaller than the Zepbound doses because those were the maximum approved by the FDA at the time.

But this March, the FDA approved a 7.2 mg dose of Wegovy: three times higher than the 2.4 mg dose studied in the SURMOUNT-5 trial. In clinical tests, this higher dose of Wegovy resulted in average weight loss of 19% (about 47 pounds) after 72 weeks: practically identical to Zepbound’s SURMOUNT-5 performance.

Novo Nordisk calls this failure to account for the newer, higher dosage of Wegovy “a nationwide pattern of deceptive advertising which confuses consumers by using outdated studies.”

Eli Lilly, for its part, released a statement that it stands “firmly behind our advertising” and that it believes a head-to-head clinical trial is the “gold standard for comparing medicines.” The SURMOUNT-5 trial is the only study to date that has directly compared Wegovy and Zepbound.

Image source: The Motley Fool.

What it means for investors

The U.S. GLP-1 market is expected to reach $100 billion by 2030, and Novo Nordisk and Eli Lilly are fiercely battling for supremacy.

Novo is asking the U.S. District Court for New Jersey – where it filed its suit – to issue a permanent injunction against the ads, order Lilly to issue corrective advertising, and award unspecified monetary damages.

I’m not an attorney, and there are still plenty of unclear details here, so I can’t predict the outcome. But given that the head-to-head comparison in Lilly’s ads was accurate until March, the potential monetary impact is likely minimal, especially considering Lilly has brought in $10.4 billion in free cash flow over the last 12 months.

Now, if the court rules that Lilly can no longer claim in future ads that Zepbound is more effective than Wegovy, that would be a win for Novo. With its huge resources, Eli Lilly would surely come up with an effective alternative ad campaign. But it might help Novo start to change the perception that Zepbound is the superior weight loss drug.

On the whole, though, this is unlikely to have a material impact on either stock.

John Bromels has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool has a disclosure policy.

Domino's Pizza (NASDAQ: DPZ) reported Q2 earnings before the market opened on Monday, and it was a mixed bag for the world's largest pizza chain.
The company beat on revenue, which grew 4.3% year over year to $1.194 billion, slightly topping analysts' forecasts of $1.18 billion.

But the company's earnings per share (EPS) came in at $4.07, missing the analysts' consensus estimate of $4.11, yet handily beating the prior-year quarter's EPS of just $3.81, for a growth rate of $0.26/share, or 6.8%.

But the biggest news for Domino's investors was its unchanged forecast for the year, which still called for low-single-digit same-store sales growth in both U.S. and international locations.

Despite the lackluster report, shares finished up 3.1% over Friday's close, as big premarket gains on news of the revenue beat were trimmed in the opening hours of trading.

But is Domino's Pizza a buy after this report? Here's what investors need to know.

Image source: The Motley Fool.

Times are tough all over

It's a challenging macroeconomic environment for Domino's.

On the one hand, consumers are being squeezed by inflation and a tepid job market, and are looking for ways to stretch their limited budgets. And with prices going up across the restaurant industry, including at many fast food chains, a large pizza remains one of the most economical ways to feed a family of four. That was borne out by the company's order count growth in both delivery and carryout during the quarter. CEO Russell Weiner cited "millions of new customers" who the company hopes will become repeat customers and drive further growth.

On the other hand, eating out -- even when you're eating something as affordable as pizza -- is still a discretionary purchase. Domino's isn't just competing against other quick-service restaurants but also against the more affordable option of cooking at home. That, too, appears to be borne out in the company's numbers, with U.S. year-over-year same-store sales growth of 0.1% representing the lowest since Q1 2025. With international same-store sales growth actually declining by 0.1%, it was the worst overall same-store sales growth picture in three years.

Cash-strapped consumers appear to be looking for bargains and discounts, which is likely to continue to impact the company's margins moving forward.

Image source: Getty Images.

Rising costs

Domino's itself is getting pinched by the same economic factors affecting its customer base, including inflation and tariffs. Tomato prices, for example, hit record highs in April, according to the Consumer Price Index. And although they eased somewhat in May, they were still 20% more expensive in June than they were a year ago. Even though restaurants pay less for produce than retail consumers, rising costs for tomatoes and other ingredients either need to be passed along to consumers or weigh on the restaurant's bottom line.

At least for now, it appears as though Domino's has been successful in managing these increased costs. Supply chain revenue was up 6.5% on a 2.2% increase in "food-basket pricing," which indicates the company has passed moderate ingredient cost increases on to its franchisees. Cost of sales, however, still rose 4.7% over the prior year, to $716.2 million.

However, the company still predicts lackluster growth in the low single digits to persist throughout the year, as the macroeconomic outlook remains stagnant.

Is it a buy?

Although Domino's seems to be weathering a rough economic environment well, its shares are down 29.4% for the year, reflecting investor pessimism.

From a value standpoint, that gives the company a price-to-earnings ratio of 19, easily the lowest it's been in a decade. At the same time, the company's dividend yield has risen to 2.3%. The company is likely to return to growth once the economy improves, but it may take some time.

Value investors who can be patient and wait out this rough patch will likely find the current share price a compelling entry point for this stalwart business. But in the near term, outperformance seems unlikely.

John Bromels has positions in Domino's Pizza. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.