This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In typical fashion, shares of Tesla (NASDAQ: TSLA) have exhibited extreme levels of volatility, swerving between lanes of pessimism and optimism. But through its wild ups and downs, the top purveyor of electric vehicles (EVs) has performed well in 2025. Shares are up 22% this year (as of Dec. 22), and they trade near record levels.   

The automotive disruptor is in the early innings of some huge projects that could reshape its entire financial picture. But there are strong arguments on both the bull and bear sides of the debate here. So, should you buy this EV stock before 2026? 

Tesla is working on innovations that could provide a long-term financial boost

Autonomous driving technology is the project that investors are most focused on. Tesla has a history of overpromising and under delivering -- not only on the capabilities of its full self-driving (FSD) technology, but also on the timeline of when features will be launched.

The business took a step forward in June, when its robotaxi ride-hailing service started in Austin, Texas, even though it was in a very limited and restricted capacity. Tesla's robotaxis are also in the San Francisco Bay Area, and there are plans to enter a handful of new cities in 2026.

Elon Musk said on the second-quarter 2023 earnings call that its robotaxi service could have "quasi-infinite" demand. Obviously, the total addressable market is huge, as people all over the world need to get from point A to point B.

Tesla believes that as costs come down and safety improves, most people won't need to buy their own cars anymore. And that could bring high-margin revenue from its FSD software on a global level, both from a dedicated company-owned robotaxi fleet and from customers who choose to let their EVs be used in the ride-hailing service.

The company is also focused on expanding production of its humanoid robot, known as Optimus. The goal is to boost the annualized output to 1 million of these by the end of next year. Besides handling certain tasks in factory settings, these machines can have consumer applications.

Again, Musk isn't shy when it comes to his forecast; he believes that robotics will one day represent 80% of his company's market value.

The market is exuberant over this struggling car company

The EV company has never traded in line with its automotive peers. The stock has a price-to-earnings ratio (P/E) of 329. Detroit automakers Ford Motor Company and General Motors trade at P/E multiples of 12 and 17, respectively. And supercar luxury brand Ferrari can be purchased at a P/E of 38. So Tesla is on another planet.

The market's excitement shows just how convinced investors are that Musk's company will make good on its promises, namely that its FSD software and its robots can drive unprecedented financial success at some point down the road This could happen, but no one has any idea when.

At the current valuation, Tesla isn't a smart buying opportunity before the calendar turns to 2026. Investors would be paying a nosebleed P/E for a struggling business. Automotive revenue gains have disappointed, and profit margins have been dwindling.

There are notable headwinds getting in the way. The EV market is more crowded these days, making it harder for Tesla to stand out. In the U.S., the end of the $7,500 tax credit for EVs can also definitely pressure demand, forcing consumers to think if paying up for one is worth it.

The market for Tesla's vehicles has exhibited slower growth recently than industry experts had hoped for. Perhaps we're past the phase of early adopters rapidly buying EVs, a group that was easy to sell to. The next chapter of growth could be more difficult to come by since it can be challenging to convince certain consumers to make the switch from gas-powered or hybrid vehicles when the experience or the economics aren't as compelling.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Ferrari and General Motors. The Motley Fool Australia has recommended Ferrari. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Ten years ago, Apple (NASDAQ: AAPL) carried a market cap of $591 billion. At the time, it was the most valuable business in the world. What's impressive is that even coming off a massive starting base, this company has continued to grow. It now sports a market cap of more than $4 trillion (as of Dec. 20).

This means that long-term shareholders have benefited. If you'd invested $1,000 in this consumer discretionary stock 10 years ago, here's how much you'd have today. 

Apple has been crushing the market

A $1,000 starting sum to buy Apple shares in December 2015 would be worth $11,450 right now. This translates to a total return of 1,040%. That gain includes the dividend, which is a small payout today at $0.26 per quarter. However, the dividend has increased by 100% in the past 10 years.

The S&P 500's total return during the same time period of 305% comes up well short of Apple's.

Financial results and valuation drive the stock

Between fiscal 2015 and fiscal 2025 (ended Sept. 27), Apple's revenue soared 78%, as it sold more of its popular hardware devices and saw its services segment grow rapidly. Net income rose 110% over that time. But valuation expansion was the biggest tailwind for the stock.

Looking out at the next decade, Apple's more muted growth prospects mean that investors shouldn't expect past returns to repeat.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has had an unbelievable year. And investors should have zero complaints. As of Dec. 12, shares have climbed 63% in 2025. There is some serious positive momentum working in the company's favor.

After such a monumental gain and a $3.7 trillion market cap, should you invest $1,000 in this top tech stock right now? 

Alphabet's valuation looks reasonable

Investors would be wise to consider adding this dominant internet business to their portfolios. Valuation is one of the main reasons why. Shares currently trade at a forward price-to-earnings ratio of 28, a multiple that is justified given Alphabet's economic moat, history of innovation, and huge free cash flow.

The stock will continue winning

The stock has crushed the S&P 500 index in the past five years. And it's poised to keep this streak going between now and 2030.

That confidence stems from Alphabet's ability to find new avenues to make money. The company is planning to introduce ads to its extremely popular Gemini app next year, which has 650 million monthly active users. This is a smart way for the business to monetize its user base that opts to use the free service instead of a paid tier.

Alphabet generated $74 billion of ad revenue in the third quarter, a figure that should continue marching higher and lifting profits in the process.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) might be one of the more difficult stocks to own comfortably due to the amount of volatility there has been in its share price, but it has been a huge winner for some investors over the years. Its successful phases have made it into one of the world's most valuable companies, with a market cap of close to $1.5 trillion.

The electric vehicle (EV) maker's stock is up by around 105% in the past five years, and it's within reach of the all-time high it touched last December. Should investors buy Tesla while it's below $500? 

Imagine a completely different future

The bullish view of Tesla is that it is transforming into a software, robotics, and artificial intelligence enterprise. This is precisely how CEO Elon Musk wants investors to think about the business. 

Tesla has long-term optionality with its robotaxi operations, which are currently carrying paying passengers in Austin and the San Francisco Bay Area in a controlled capacity, with more cities to come. The objective here is to get that business going in a lot more markets -- not only in the U.S., but internationally as well. The premise assumes that as demand and usage pick up, costs as a share of revenues would come down. The best outcome would be for Tesla to generate a colossal amount of recurring, high-margin revenue from driverless cars.

Humanoid robots might be an even bigger opportunity -- Musk estimates that business could help Tesla reach a market cap of $25 trillion. It appears that there could be a market for these devices among commercial clients that would use them in factory settings. There might also be demand from consumer households.

In short, a decade from now, Tesla might look totally different from how the company looks today. However, when looking strictly at its current situation, it's not easy to always be optimistic. Tesla's revenue growth has slowed dramatically due to a combination of intensifying competition, higher interest rates, and a public backlash among some consumers over Musk's forays into politics. Profits have been under pressure, too: Its Q3 2025 operating margin of 5.8% was down sharply from the 10.8% margin it produced in the prior-year period.

Is Tesla stock overvalued or undervalued?

It can be difficult for investors to effectively gauge the valuations of a company like Tesla. Based on traditional metrics, like its price-to-sales ratio of 17 or the price-to-earnings ratio of 304, the stock is ridiculously overvalued. One would only expect investors to buy shares of a company trading at such lofty premiums if it were putting up remarkable financial performances, delivering monster growth and significant profits. Yet Tesla hasn't been operating at a high level recently.

Viewed in this light, the shares are extremely expensive. But of course, Tesla is a story stock. The market's actions today are defined by narratives, which can clearly have huge impacts on share prices. Tesla and Musk get so much attention for their innovativeness and forward-thinking that it makes sense that many investors are believers.

If Tesla's self-driving vehicles and robots prove successful in a reasonable time frame, then the stock's current valuation might very well end up looking like a bargain in retrospect. Earnings could grow substantially, lifting the stock up.

Whether it will achieve that favorable outcome, though, is far from clear. Tesla will need to execute in a near-flawless fashion, and not just from the technological and manufacturing perspectives. It will need cooperation from regulators and legislators. And there's no certainty that its future products will see the type of customer adoption that the bulls predict.

Moreover, a critic could argue that Tesla's current valuation essentially prices in a great deal of the optimistic forecast for success. Only investors who are able and willing to take on a lot of risk in their portfolios should even consider buying this EV stock now. While there is a chance that the investment could be a profitable one over the longer term, it's impossible to accurately assess. Risk-averse investors would be better off avoiding Tesla at these levels.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon (NASDAQ: AMZN) started out as an online bookseller. But these days, it has evolved into a thriving tech titan with a presence in many industries. The business is massive, sporting a market cap of $2.4 trillion.

The stock's long-term returns are magnificent. But they're not as impressive on a shorter time frame. If you bought $100 worth of Amazon shares five years ago, here's how much you'd have today.

Amazon lags the S&P 500

In the past five years, this stock has generated a return of only 43% (as of Nov. 19). This means that a $100 investment would be worth $143 today.

This gain pales in comparison to the 100% total return of the S&P 500 index. It's worth pointing out, though, that Amazon shares skyrocketed 77% in the 12 months before (from mid-November 2019 to mid-November 2020), as it benefited from a quick recovery following the COVID-19 dip.

Nonetheless, it might be surprising to see the stock underperforming the broader index on a trailing-five-year basis.

Should you buy Amazon stock?

Amazon looks to continue its winning ways. Its revenue keeps growing, with net income rising at a much faster clip in the third quarter (ended Sept. 30). It's a leader when it comes to artificial intelligence. And the business possesses numerous durable competitive advantages that support its dominant position.

Investors should consider buying the stock right now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix continues to dominate the streaming landscape

Market expectations are high

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) continues to prove that it's a top performer. In the last 12 months (as of Oct. 17), the streaming disruptor's shares have jumped 74%. At the same time, the S&P 500 has produced a total return of 16%. Netflix has even drastically outperformed Bitcoin, the world's leading cryptocurrency.

Where will this dominant streaming stock be in one year?

Netflix has tremendous momentum on its side

Despite a feeling of general economic uncertainty over the past couple of years, Netflix continues to prove that it's an outstanding business that has tremendous momentum on its side. The company received a boost during the pandemic, then experienced a temporary slowdown. It's back to registering strong growth and operating at a very high level.

Management stopped reporting subscriber numbers last year. At the end of 2024, the company had nearly 302 million members. Since revenue increased by 14% through the first six months of 2025 on a year-over-year basis, the membership count has likely continued to expand. And there is potential for further growth over the long term.

Globally, Netflix is "less than 50% penetrated into connected households," Chief Financial Officer Spencer Neumann said in January on the 2024 fourth-quarter earnings call. Wall Street analysts believe that it will post 16% revenue growth in 2025, followed by a 13% gain in 2026.

Now that the company has reached a huge scale, its profitability has been impressive. Operating margin in the second quarter was a robust 34%. This is an improvement of 7 percentage points from the operating margin in the second quarter of 2024. Because the company has big fixed costs on content creation and licensing, its bottom line can rise faster than its revenue base once it reaches a certain size.

Netflix also collects billions of dollars of free cash flow (FCF) annually, which the leadership team uses to repurchase shares. It's easy to be optimistic that FCF will increase meaningfully in the years ahead.

Investors should have total confidence that Netflix will have more subscribers and generate higher revenue and profits a year from now. While fundamental success depends on a favorable economy, the company should do well barring a severe recession that forces households to drastically cut their spending.

One key variable matters most to stock prices in the short term

Long-term investing success comes from finding high-quality businesses and owning them for many years. With that being said, there aren't many investors who would argue with the fact that Netflix is a phenomenal company. It's a category creator, having led the streaming industry to take attention away from traditional cable TV by leveraging the internet to serve video content. The brand is strong, and the business has massive scale.

The streaming stock's historical performance speaks for itself. In the past 20 years, shares have skyrocketed 29,090%. Investors who got in early have generated incredible wealth.

As mentioned, the company continues to perform at a high level from a fundamental perspective. This means that Netflix should be on every investor's watchlist as a potential portfolio addition.

To be clear, though, the stock doesn't look to be a very good buying opportunity right now. The market is asking investors to pay a price-to-earnings ratio of 51. Starting from a high valuation like this doesn't bode well for the stock price over the next 12 months since market sentiment has the biggest impact over such a short period.

If Netflix were trading at a much cheaper valuation, which might indicate softer market expectations, then there would be upside in the near term. However, this isn't the case. And it makes me believe that the stock could lag the overall market between now and the middle of October 2026.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Netflix. The Motley Fool Australia has positions in and has recommended Bitcoin. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) has been, without a doubt, one of the best investments of the past couple of decades. Since October 2005, shares have soared 29,100% (as of Oct. 17). Had investors bought just $3,500 worth of the streaming stock at that time, they'd have $1 million today. That's a wonderful outcome.

Today, Netflix dominates the industry. It ended last year with 302 million subscribers. And the business carries a huge market cap of $510 billion. If you bought this stock today, though, could it help you become a millionaire?

Netflix still has a bright future

At its current scale, it's a reasonable assumption that Netflix won't put up the same monster growth that it did in the past. For an extended period of time, the company faced minimal direct competition in the streaming market. It provided a much better experience than traditional cable TV, which helped it expand rapidly. Consequently, members and revenue skyrocketed, as Netflix propelled the cord-cutting trend. Investors who got in early on this disruptor were clearly rewarded.

These days, the competition is fierce, as other streamers try to capture viewer attention. Netflix is no longer the only game in town. Major media and entertainment companies have created rival streaming services that are finding different levels of success. This just means that Netflix must continue operating at a high level to stay ahead of the pack.

However, this doesn't necessarily mean the future isn't bright. In fact, Netflix should still have lots of success going forward. It's still growing at a solid clip. Through the first six months of 2025, sales were up 14% year over year. While the U.S. and Canada reach maturity, Netflix can lean on international markets to drive more growth, particularly in the Asia-Pacific region and Latin America. The company's ability to create localized content that has global appeal certainly plays to its advantage.

It's also encouraging to see the leadership team continue to evolve the corporate strategy. What was unthinkable even half a decade ago is now the new normal. For example, Netflix has cracked down on password sharing, extracting more value from its viewers in the process.

What's more, the business now offers an ad-supported subscription tier. It's all about giving consumers choice. This option can bring in price-sensitive members, which can expand Netflix's total addressable market. So far, this has been a huge success, with ad revenue expected to double in 2025.

Netflix has also gotten into live events, something that co-founder and former CEO Reed Hastings said before it wouldn't do. People can watch NFL games on Christmas Day, as well as boxing and wrestling matches.

The leadership team remains optimistic about the opportunity ahead. Co-CEO Greg Peters said that there are "hundreds of millions" of more people to still sign up. This positive outlook means Netflix will be generating more revenue and more free cash flow far into the future.

What is the stock's true potential?

Netflix is clearly a great business. And its dominance of the streaming landscape isn't going to change anytime soon. This means the company should be on every investor's watch list.

The first question to consider is whether or not this stock is a smart buy today. Netflix shares trade at a price-to-earnings ratio of 51. This is an expensive valuation, to be sure. The bulls will argue that Netflix is deserving of a high P/E multiple simply because of how successful it has been from a fundamental perspective.

But I view the stock as being priced to perfection, with zero margin of safety for prospective investors. Therefore, I don't think Netflix is a smart buying opportunity right now. And given the stage of its life cycle that it's in, I have confidence that it isn't a millionaire-maker going forward.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

When it comes to stocks benefiting from the artificial intelligence (AI) revolution going on in the global economy, Nvidia (NASDAQ: NVDA) has been the biggest winner thus far. The business sells powerful graphics processing units (GPUs) that have been incredibly popular among customers looking to expand AI training and inference, and manage other high-computing workloads.

Demand for the company's products has been spectacular, and that has fueled demand for the stock, which has driven its price higher by 1,300% in the past five years (as of Oct. 9). Given the monster gains already attained, should you buy Nvidia shares right now?

Nvidia's stock trades at a reasonable valuation

It might be crazy to believe that a stock that has climbed so much in such a short period of time still has upside. But this is the case with Nvidia.

That's because the valuation is far from being demanding. Shares trade at a forward price-to-earnings ratio of 30 (as of Oct. 9). The multiple's 35% premium to the S&P 500 is totally justified given how dominant the company has become.

The poster child of the AI boom

In recent years, Nvidia's revenue and profits have rocketed higher, thanks to the gargantuan sums of capital that are being invested to build out AI infrastructure. And analysts' forecasts strongly suggest the capital spending isn't going to slow down anytime soon.

It doesn't matter which company introduces the best AI-powered products and services and becomes the winner during this tech shift. Nvidia is already well-positioned as the leading AI pick-and-shovel opportunity. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Considering that it's such a dominant and innovative tech business, it's a bit surprising that Apple (NASDAQ: AAPL) so far hasn't been much of a leader in the artificial intelligence (AI) race. That is reflected in the share price, which has risen by just 3% so far in 2025. Investors desperately want some positive news from the management team.

We won't have to wait long for a fresh update. Apple is set to report results for its fiscal 2025 fourth quarter (which ended Sept. 27) on Oct. 30. Should you buy this "Magnificent Seven" stock before then?

Apple shares still look expensive

At a price-to-earnings ratio of 38.9, Apple shares trade at a rich valuation. This stock doesn't seem like a smart buy today, especially given the company's lack of progress in AI. It also doesn't help that Apple's growth has decelerated over the past three years.

If Apple were to report results and guidance that came in well ahead of Wall Street analysts' estimates, then there's a high likelihood shares would jump in response. However, it's anyone's guess whether this will happen. Correctly forecasting both a company's numbers and the market's reaction to them is an impossible task to perform consistently.

Investors who are considering buying Apple should not feel urgency to get in before Oct. 30. Instead, any decision about a stock purchase should be made based on at least a five-year time horizon for holding the shares. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The calendar quarter just ended. And with the start of October here, companies are getting ready to provide investors with a fresh set of financials, giving the market valuable insights into their operations. Netflix (NASDAQ: NFLX) is usually early to report its numbers, with its earnings call scheduled later in the month of October.

Netflix continues to have a lot of momentum on its side. And it has been a wildly successful investment in the past. Should you buy this top streaming stock before its Q3 earnings update is revealed on Oct. 21?

Beating Wall Street estimates

Netflix shares have crushed the market in the past. Over the last decade, shares have soared nearly 1,000% (as of Oct. 2). The gains have continued recently, as the stock is up 30% in 2025 (at the time of this writing).

It's usual that for shares to perform so well, the underlying business reports financial results that come up well ahead of expectations. This is precisely what Netflix has done. When the company reported Q1 and Q2 results, it beat Wall Street estimates on both the top and bottom lines.

And for the three-month period that ended Sept. 30, the sell-side analyst community expects Netflix to report revenue of $11.5 billion and diluted earnings per share (EPS) of $6.95. These projections are roughly in line with what Netflix's leadership team is forecasting. Executives think sales and diluted EPS will grow 17.3% and 27.2%, respectively, in the third quarter.

If the company outperforms, there is a very strong likelihood that the stock will pop. Even better, a favorable outlook for Q4 to wrap up the year would certainly drive even more bullish fever. Should this happen, it would be a smart move to buy shares today.

Always focus on the long term

Regardless of the view you have on Netflix's third quarter financials, no one has any idea how the market will react. In the short term, sentiment is the biggest factor moving share prices. And there's no way to accurately predict what the market's mood will be at any given point in time.

While it can certainly be exciting to make an investment decision based on an upcoming event, with the goal of generating a quick profit, investors should really be thinking about this situation with a long-term time horizon. In other words, only look to buy Netflix shares with a perspective that's fixed on the next five or 10 years. This will force you to consider the factors that are most important, which are the fundamentals of the business.

Based on Netflix's ongoing success, investors can confidently say that the company will likely have more subscribers, as well as higher revenue and earnings, in the future. That's a very encouraging perspective to have. And it's not a wild assumption, especially with proven pricing power, the impressive adoption of the ad-supported tier, strong free cash flow generation, and a fruitful entry into live events.

However, the market has lofty expectations, as shown by the valuation. Shares currently trade at a price-to-earnings (P/E) ratio of 49.5, which is certainly expensive any way you look at it. Of course, a clear argument can be made that Netflix is deserving of such a high P/E multiple. It has a large and engaged global audience, massive scale to invest in fresh content, a powerful brand name, and robust financial performance. It's hard to be pessimistic, even though a reasonable perspective is that returns going forward might disappoint.

In my view, the stock is too rich to put new capital to work. However, if investors have a desire to own the best companies in the world, then I can understand why buying shares today is the move. Just make sure you're making a decision that's based on looking well beyond the Oct. 21 financial update. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Alphabet's current valuation looks attractive.
• The business is a leader in artificial intelligence.
• This is a high-quality company with a wide moat and strong profits.

Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) ascent to becoming a $3 trillion behemoth has undoubtedly made many long-term investors rich in the past couple of decades. The gains aren't letting up; shares have surged 45% just in the past three months (as of Sept. 26).

This top tech stock now trades at an all-time high. Here's one reason why you should still buy Alphabet shares with $10,000 in 2025.

Don't overthink it

Investors shouldn't overthink the situation. The market is presenting investors with the opportunity to buy one of the world's elite businesses at a reasonable valuation. The stock currently trades at a forward price-to-earnings ratio of 23.3. For comparison's sake, this is slightly more expensive than the S&P 500 index's multiple of 21.8.

Alphabet's best qualities

Alphabet is a high-quality company, so the premium to the overall market is more than justified.

It has a leadership position in the artificial intelligence (AI) race. Alphabet is involved in AI research, while also developing its own AI chips, operating a thriving cloud computing platform that serves AI tools and services, and running insanely popular AI-powered user-facing apps.

The business has a wide economic moat, underscored by network effects and its ability to collect and leverage data. And it's incredibly profitable, posting a stellar operating margin of 32% in the second quarter (ended June 30).

Investors should seriously consider buying $10,000 worth of Alphabet stock in 2025. It should be a lucrative bet over the next five years. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Tesla’s long-term growth trajectory has been a key factor driving the stock higher.
• Investors believe that Tesla’s future will be all about autonomous driving and robotics.
• Even though shares trade well below their peak, they look very expensive at current levels.

Companies that challenge the status quo can reap huge rewards. This is precisely what Tesla (NASDAQ: TSLA) has done. In an effort to drive the world toward sustainable energy, the business has developed a fleet of popular high-performance electric vehicles (EVs). Consequently, Tesla has disrupted the global auto market.

Shareholders have gained tremendously, despite a volatile ride. If you'd invested $500 in this EV stock five years ago, here's how much you'd have today.

Buying what Musk is selling

Tesla has registered monster growth throughout its history. This key factor is what has propelled the stock to new heights. Shares have accelerated 185% higher in the past five years (as of Sept. 10). This would've turned a $500 starting sum into $1,424 today. This is despite the fact that the stock currently trades 28% below its peak from December 2024.

Anyone who follows the business knows that the market buys what founder and CEO Elon Musk is selling. Yes, Tesla sells well-designed and tech-forward EVs. Based on the stock's incredible performance, however, investors are convinced that the company will one day find huge success with autonomous driving and robotics. This could boost Tesla's finances.

Tesla: Back to reality

Introducing a global robotaxi fleet or selling lots of humanoid robots to customers is far from a certainty, though. But Tesla shares, which trade at a nosebleed price-to-earnings ratio of 201, reflect flawless execution in the years ahead. It's safe to say that the stock is overvalued.

And this is at a time when the company is struggling mightily. Revenue is down. In August, Tesla's market share of new EV sales in the U.S. was the lowest since 2017. And margins are taking a hit.

Investors can't complain about the trailing-five-year return. However, the next five years might not be so kind. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Nvidia's incredible growth is largely the result of robust demand for its data center GPUs.
• The business has been the best way for investors to gain exposure to the growing interest in all things AI-related.
• A valid argument can be made that the stock still presents a good buying opportunity.

Nvidia (NASDAQ: NVDA) has quickly ascended up the ranks to become the world's most valuable enterprise today. It sports a monster market cap of more than $4.32 trillion (as of Sept. 11). The company is valued at $600 billion more than second-place Microsoft.

Long-time Nvidia shareholders feel like they've hit the jackpot. If you'd invested $10,000 in this top artificial intelligence (AI) stock five years ago, here's how much you'd have today. 

Demand is through the roof

This is one of the best-performing stocks on the planet. In the past five years, shares have catapulted 1,340% higher. Had you been smart enough to invest $10,000 in Nvidia in September 2020, you'd have a jaw-dropping $144,080 today. That's an incredible gain in a relatively short time.

The company has been thriving as its customers build out the technical infrastructure needed to develop AI models. Demand for Nvidia's data center graphics processing units is insatiable. Revenue increased 12-fold between the second quarter of fiscal 2021 and fiscal 2026's Q2 (which ended July 27). Consensus analyst estimates forecast a 35% compound annual growth rate between fiscal 2025 and fiscal 2028.

Is Nvidia a smart buy now?

After such an impressive gain in recent years, it might be crazy to think that Nvidia still presents investors with a smart buying opportunity. However, that just might be the case today, even though the stock is just 3% below its record high.

Shares trade at a forward price-to-earnings ratio of 39.6. This looks totally reasonable when you consider the fact that Nvidia's net income increased at an annualized pace of 112% in the past five years. By being the dominant pick-and-shovel provider during the AI revolution, Nvidia is experiencing unbelievable success. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Apple's steep valuation and low growth prospects are reasons investors should avoid the stock.
• The possibility of higher corporate and capital gains taxes in the future might have driven Buffett’s selling moves.
• Greg Abel, Berkshire’s next CEO, has monster cash reserves to build his own investing legacy.

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) first purchased shares in Apple (NASDAQ: AAPL) more than nine years ago in the first quarter of 2016. Warren Buffett, who oversees capital allocation decisions for the conglomerate, realized that Apple was a powerful and durable consumer brand. That investment has worked out quite well, as the "Magnificent Seven" stock is up 766% since the start of 2016 (as of Aug. 26).

However, the Oracle of Omaha has seemingly become less bullish. Since Q4 2023, Berkshire has sold 635 million shares of Apple, with sales happening in five of the past seven quarters. Just in this year's Q2, 20 million shares were divested. The current Apple stake is valued at $64 billion, representing 21.4% of Berkshire's portfolio.

Apple remains the largest single position for the Buffett-led business, as it owns 280 million shares of the tech giant. But what's the deal with these recent moves?

Apple isn't a no-brainer opportunity

One possible reason for the significant reduction in the Apple position could come down to the simple fact that this is no longer a home run investment opportunity. When Berkshire first started buying shares nearly a decade ago, Apple shares traded at a much cheaper valuation. This is no longer the case, with the stock selling for a price-to-earnings (P/E) ratio of 34.6, well above its trailing five- and 10-year averages.

Of course, this is one of the world's greatest businesses. As a result, it's easy to argue that Apple deserves that valuation. However, Buffett probably doesn't see the potential to achieve strong returns from this point forward.

Apple's growth has slowed. To be fair, it did register a 9.6% year-over-year revenue gain in Q3 (ended June 28). But that pace isn't sustainable. Apple's sales were up just 13.4% from the same period exactly three years ago. It's difficult to expand meaningfully from such a high revenue base, while also selling hardware devices that are already widely adopted.

Anticipating potential tax changes

Buffett has been a leader in the business and investing worlds for decades. Because of this, and demonstrated by his incredible success, he's perhaps in tune with the landscape more than anyone else. The Apple share sales could have something to do with the Oracle of Omaha's view that changes will come to tax policy in the future.

It's hard to predict how different presidential administrations will alter the tax code. Buffett might be on to something, though. The U.S. federal debt sits at an alarming $36 trillion, as it has soared since the Great Recession. And the government operates with huge fiscal deficits. There is really no end in sight to this trend.

It makes sense to believe that taxes could be increased to fund the government. The current corporate tax rate is 21%. On a historical basis, this is extremely low. Additionally, the capital gains tax could also rise in the future.

Taking sizable profits off the table before Uncle Sam potentially demands more money looks like a smart move on Buffett's part.

Getting ready for Greg Abel

Berkshire has been a net seller of stocks. As someone who prioritizes investing with a margin of safety in his decision-making process, Buffett might not only be concerned about Apple's P/E multiple but also the valuation of the overall market. This could explain Berkshire's monster $344 billion cash position.

Buffett is set to retire as CEO at the end of this year. He could be making these moves to give his successor, Greg Abel, more financial firepower to play with. Apple is arguably the Oracle of Omaha's best investment decision. Now he wants Abel to build his own legacy.

It might be a good idea for Apple shareholders to think deeply about the reasons Berkshire and Buffett have been selling Apple. Perhaps it's a good time to follow these moves. 

 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Berkshire Hathaway. The Motley Fool Australia has recommended Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• With a market cap measured in the trillions, this internet business is well-known.

• This company is involved in all phases of AI, with a presence in research, infrastructure, platforms, and products and services.

• Shares trade at a below-market multiple, which presents investors with a buying opportunity.

By now, investors should be convinced that artificial intelligence (AI) isn't going away. Whether you believe we're in an AI-driven bubble is a different question. However, the underlying technology will have big implications for our economy and society.

From a portfolio perspective, it's time to consider ways to gain exposure to the AI boom, with huge returns potentially on tap. Luckily, investors don't need to look far. Here's one already-dominant AI stock that's ready for a bull run.

Is this the best AI stock on the market?

In the past quarter (Q2 2025, ended June 30), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) collected $96 billion in revenue. What's more, this supreme internet firm sports a colossal market cap of $2.4 trillion. The company hardly keeps a low profile. However, Alphabet truly stands out because it's essentially an all-inclusive AI play.

The business is developing its own chips, called Tensor Processing Units, which power training and inference of AI models. Alphabet has the base infrastructure layer covered, an area that investors are certainly familiar with. Nvidia dominates this industry, but progress on this front should benefit Alphabet because it's a big Nvidia customer.

The next level up is the platform. Alphabet is among the leaders here, with its Google Cloud Platform (GCP), which posted impressive 32% year-over-year revenue growth in Q2 with an operating margin of 21%. GCP allows its customers to develop their own AI applications. "Nearly all Gen AI unicorns use Google Cloud," CEO Sundar Pichai said.

Finally, Alphabet has various internet properties that connect directly with hundreds of millions and even billions of users. Think of Gmail, Maps, YouTube, Android, or Chrome, to name just five. All of these are already using Gemini. With AI capabilities continuing to improve the user experience, these products and services will only get better with time.

With a presence at the infrastructure, platform, and end-user levels, as well as a research lab in DeepMind, Alphabet might be the best AI enterprise out there. This statement could be a shock to some, considering how much fear there has been about the threat AI poses to Google Search, the crown jewel segment. There's nothing to worry about at this point. Search's revenue jumped 12% in the latest quarter. And according to the management team, AI Mode has more than 100 million monthly active users in the U.S. and India, where it's currently available.

Why now?

Artificial intelligence is very much in the DNA of Alphabet's operations. Even though that seems obvious, the market isn't giving the company the respect it deserves. Shares trade at a price-to-earnings ratio of 21.3. This makes Alphabet the cheapest of the "Magnificent Seven" stocks. And shares trade at a 16% discount to the overall S&P 500. This just doesn't seem warranted.

The market is likely still concerned about ongoing regulatory uncertainty. Most notably, the Department of Justice ruled that Google has an illegal monopoly in online search. It's unknown how things will play out.

Plus, investors might still be worried about AI's ultimate impact on Alphabet. For what it's worth, OpenAI's ChatGPT is estimated to have hundreds of millions of users. That's a massive figure that can't be overlooked. And it underscores just how important it is for Alphabet to keep user attention on its internet properties.

According to Wall Street consensus analyst estimates, Alphabet's revenue and earnings per share are expected to increase at compound annual rates of 11.6% and 14.3%, respectively, between 2024 and 2027. That's a very encouraging outlook that when coupled with the potential for valuation upside, makes this a top AI stock that's ready for a bull run. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Nvidia. The Motley Fool Australia has recommended Alphabet and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• With billions of users across its very popular internet platforms, this business has developed durable competitive advantages.

• The management team is fully focused on AI, with growing financial investments supporting this strategy.

• Investors will be pleased to know that shares trade at a below-market valuation multiple.

The best investors know that high-quality companies should be owned for the long haul. That typically means it's a smart idea to have a time horizon that spans several years, as opposed to trying to figure out what to do with your money over the next few weeks or months. A long-term outlook allows compounding to work its magic, which helps generate wealth.

With that perspective in mind, investors can look at historical winners to find potential future opportunities. Here's one monster stock investors should buy and hold for the next five years. Its shares have climbed a jaw-dropping 499% just in the past decade (as of Aug. 15).

Dominating the internet

The stock investors should buy and hold for five years is Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). This dominant internet enterprise owns Google Search, YouTube, Waymo, Chrome, Android, Google Cloud, and many other properties. It has billions of users and raked in $96 billion in revenue in the second quarter.

Thanks to all of its popular products and services, Alphabet has multiple sustainable competitive advantages that make up its wide economic moat. It's able to collect vast amounts of data that help improve the quality of its offerings. Network effects underpin platforms like Search and YouTube, with more users and usage leading to a better experience over time. And the Google brand is extremely powerful.

There are cost advantages at play. For instance, Google Cloud is able to leverage its investments in expensive infrastructure as it scales up revenue, leading to improving profitability. And this segment benefits from switching costs, as customers develop workflows and integrations that make it difficult to leave.

AI at the forefront

Alphabet is already a leader in artificial intelligence (AI). While investors still seem worried about AI's impact on the search business, it's worth mentioning that the AI Overviews feature now has 2 billion monthly active users. This search capability is also monetizing at the same rate as traditional search. The business also develops its own AI models under the Gemini name. And it makes its own AI chips called Tensor Processing Units.

Alphabet can only invest aggressively in AI initiatives because of its financial strength. Other companies wish they were so fortunate. Last quarter, the business generated $28 billion in net income, translating to a net margin of 29%. And as of June 30, Alphabet had $95 billion of cash, cash equivalents, and marketable securities on the balance sheet, substantially more than the $24 billion of long-term debt it carried.

This allows the leadership team to spend like there's no tomorrow. Alphabet now plans to have $85 billion in capital expenditures this year, up from a prior target of $75 billion just three months ago. That figure is expected to increase in 2026.

Past and future winner

Just in the last five years, shares of Alphabet are up 174%. That gain was propelled by diluted earnings per share (EPS) that soared between Q2 2020 and Q2 2025. While I don't believe investors should expect a similar share price gain between now and 2030, this still looks like a great buying opportunity.

The stock trades at a price-to-earnings ratio of 22. Not only does this multiple make Alphabet the cheapest of all the "Magnificent Seven" positions, but it's also a meaningful discount to the overall S&P 500 index. I think the company should be able to post double-digit EPS growth for the foreseeable future, with added upside from a valuation perspective.

Investors shouldn't hesitate to scoop up shares of Alphabet today. It wouldn't be surprising to see this monster stock double over the next five years.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Netflix’s double-digit revenue growth is set to continue in the years ahead, according to consensus estimates.

• Thanks to its massive scale, the business is producing robust free cash flow.

• The current valuation reveals the market’s enthusiasm toward Netflix.

Netflix (NASDAQ: NFLX) continues to operate momentum on its side. Through the first seven months of 2025, shares of this global entertainment giant have climbed 30%, continuing an impressive streak of market-thumping returns.

The top streaming stock is taking a breather, as it's down 13% from its peak (as of July 31). Some investors might be taking profits off the table after the company's incredible run. Are Netflix shares a buy, sell, or hold in 2025?

Netflix's double-digit growth continues

Even though macro uncertainty rules the economic narrative these days, Netflix remains in solid shape. Through the first six months of 2025, the company's revenue totaled $21.6 billion, representing a 14.2% jump from the same period last year. The leadership team raised guidance, as it now sees sales coming in between $44.8 billion and $45.2 billion for the full year.

As of Dec. 31, 2024, Netflix had 302 million subscribers. Management stopped reporting quarterly subscriber numbers this year. However, new customers are still part of the story. "Year-over-year revenue growth was primarily a function of more members, higher subscription pricing, and increased ad revenue," the Q2 2025 shareholder letter reads.

Looking ahead, investors have reasons to be optimistic. "We still got hundreds of millions of folks to sign up. And from a revenue perspective, we're about 6% of consumer spend and ad revenue in the countries we serve in the areas that we serve," co-CEO Greg Peters said during the Q1 2025 earnings call.

Growth will undoubtedly slow, but this commentary is encouraging. And according to Wall Street consensus analyst estimates, revenue will increase at a compound annual rate of 13.1% between 2024 and 2027. It wouldn't be surprising to see Netflix keep posting double-digit revenue gains.

Generating robust profits

It has been remarkable watching Netflix's journey to dominating the streaming landscape. The business has certainly proved the skeptics wrong. These naysayers believed that Netflix would never be able to report consistent and growing profits, mainly because of how much money it was required to spend on content every year.

Netflix kept growing, adding subscribers and revenue, and now has reached a massive scale that has bolstered its income statement. The company's operating margin went from 7.3% in 2014 to 26.7% in 2024. This highlights the benefit of having large, fixed costs at a time when sales have expanded rapidly. Netflix can maintain its powerful competitive position because it has so many subscribers who bring in revenue and allow the company to keep spending on content and marketing efforts.

In 2025, the leadership team expects Netflix to produce $8 billion to $8.5 billion in free cash flow. That would represent a 19.6% year-over-year increase (at the midpoint). This underscores just how lucrative the business model has become.

Here's what investors should do

Netflix has crushed the market in 2025. And in the past 12 months, the stock is up 86%. To be fair, the company is reporting phenomenal financial results that highlight just how much demand there is for the streaming platform. What's more, the profits aren't too shabby.

But I believe Netflix shares have gotten ahead of themselves. As of July 31, they trade at a price-to-earnings (P/E) ratio of 49.4. This multiple alone has soared 147% just in the past three years, as the market's optimism about the company has become strikingly clear.

In my view, the stock is overvalued today. Between now and 2030, I wouldn't be shocked to see the P/E ratio contract. I don't think investors should buy shares. In fact, the best thing might be to take some profits off the table. But if you remain bullish, consider holding. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) is without a doubt a top-performing stock. In the past decade, it has returned an impressive 1,760%, crushing the market along the way. 

But this popular electric vehicle (EV) stock hasn't taken investors on a smooth ride. As of July 23, shares trade 31% below their peak from December 2024. The market clearly isn't happy with how the business has been performing, with slower growth and declining profitability the new normal.

Nonetheless, the stock is a historical winner. So, should you buy Tesla right now?

Latest trends paint a disappointing picture

During the three-month period that ended June 30 (second-quarter 2025), Tesla disappointed investors with financial metrics that came in below Wall Street expectations. Revenue declined 12% year over year to $22.5 billion, while adjusted earnings per share dipped 23% to $0.40. The stock was down more than 4% in the after hours.

The top line was negatively affected by falling EV deliveries. What's more, average selling prices have been under pressure. The damage that founder and CEO Elon Musk caused to Tesla's brand is also playing a role when it comes to demand. Competition isn't making things easier, which reinforces the need for Tesla to introduce cheaper options to target a wider customer base and boost sales figures.

Investors did get some good news on this front. "We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025," the shareholder presentation reads. This development is especially timely given the elimination of the $7,500 federal EV tax credit that will happen on Sept. 30.

Tesla's fate rests on autonomous driving

As of this writing on July 23, Tesla shares trade at a price-to-earnings (P/E) ratio of 183. That nosebleed valuation isn't a new development, as this company always seems to sell for a steep multiple. For comparison's sake, Tesla's P/E ratio is more than seven times more expensive than the S&P 500 index. And it's more than three times higher than luxury carmaker Ferrari, which reported a superb operating margin of 30.3% in the first quarter.

Tesla is a story stock, as investors are always believing in Elon Musk's grand vision. Based on the valuation, which is not even remotely rooted in the reality of the business today, the market sees Tesla succeeding with its goal of launching a global robo-taxi platform. Musk thinks this service could see "quasi-infinite" demand.

However, nothing is certain. After years of delays, Tesla finally launched a small robo-taxi test in Austin, Texas in June. There are plans to enter other cities before the end of the year. In fact, Musk went so far as to say that "we will probably have autonomous ride-hailing in probably half the population of the U.S. by the end of the year."

But regulatory hurdles remain, as well as technical challenges. So, investors should temper their expectations. It's also worth highlighting how far Tesla is behind Alphabet's Waymo, which reached 250,000 trips per week domestically in April and offers the service in five U.S. cities, with Miami and Washington, D.C. on the way.

There's no denying that Tesla is one of the most innovative and disruptive companies the world has seen. Its progress thus far in artificial intelligence and robotics proves this, not to mention how the business completely spurred the advancement of EVs to more customers worldwide.

But what Tesla will look like five or 10 years down the road is anyone's guess. It could look the same as it does today, or it could be running a thriving robo-taxi service that rakes in monster profits. Based on the current valuation, though, the downside risk is substantial. Investors might want to think twice before buying the stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Tesla stock a buy now? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Ferrari. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The ongoing excitement around artificial intelligence (AI) has helped drive the stock market higher in recent years. Industry analysts, executives, and even investors are starting to believe that this technology could provide a major lift to the economy in the long run. So, it's best to have exposure to this trend in your portfolio.

There hasn't been a better way to play the rise of AI than owning Nvidia (NASDAQ: NVDA). The stock has rocketed 1,530% higher just in the past five years (as of July 23) as it continues to register unbelievable growth. The business now carries a market cap of $4.1 trillion, making it the most valuable company on Earth.

But where will Nvidia be in five years? Investors should think about the situation holistically.

Demand continues to be strong

No company wants to get left behind in the AI race. This is particularly true when it comes to training AI models and building related apps. All of this requires substantial computational power. This need for power has supported sales growth for Nvidia.

The company sells powerful graphics processing units (GPUs) that help run data centers. This segment alone raked in $39.1 billion in revenue in the first quarter of 2026 (ended April 27), a 73% year-over-year jump representing 89% of Nvidia's total revenue.

While it's not realistic to expect Nvidia to grow to the sky, Wall Street remains optimistic. The consensus analyst forecast calls for the company's revenue to increase at a compound annual rate of 31.5% between fiscal 2025 and fiscal 2028. According to a UN Trade and Development report, the global market for AI will be valued at $4.8 trillion in 2033 compared to just $189 billion in 2023, which leaves plenty of upside for Nvidia in the years ahead.

That demand is driving incredible profitability. In the past five years, Nvidia's operating margin has averaged a fantastic 40%. Competition could bring this down over time, as it can result in pricing pressure with supply catching up to the insatiable demand. But Nvidia's leading position in the industry, coupled with the success of its CUDA software platform, make it the envy of its peers.

What if AI is a bust?

There has certainly been a lot of hype surrounding AI. Some believe the technology will completely alter our economy, disrupt industries, and force many people out of work as AI begins to automate and replace jobs. And GDP will supposedly get a boost along the way.

That could happen. However, a more reasonable outlook makes the most sense. Bill Gates, co-founder and former CEO of Microsoft, once said something along the lines of humans overestimating what a new technology could do in the short term and underestimating what it does in the long term.

I think this is the right way to view the possible trajectory of AI. The massive amounts of spending on AI development can't continue indefinitely. And no one has any clue about what related innovations will be built far into the future. Settling somewhere in the middle is ideal.

But what if AI is a total bust? If it doesn't usher in a new wave of product and service launches that create legitimate revenue-generating opportunities, then it might be all hype with no results.

Nvidia has been the single biggest beneficiary of the AI infrastructure boom. But if the ultimate financial returns don't support all its customers' capital expenditures, then the durability of demand and growth is a huge question mark over the next five years and beyond.

Nvidia stock could beat the market

As of this writing on July 23, shares of Nvidia trade at a forward price-to-earnings ratio of 39.5. Given its monster revenue and profit growth, as well as its dominant industry position, I don't view the valuation as being expensive.

Therefore, I wouldn't be surprised if this AI stock beats the market between now and 2030. In my opinion, it all depends on whether or not AI really is the game-changing technology that many believe it to be.

 The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Where Will Nvidia Be in 5 Years? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.