In Australia and globally, several powerful themes are driving investment. Electrification is reshaping energy systems, requiring significant spending on transmission infrastructure, renewable generation, and storage. At the same time, strong commodity prices are supporting mining companies, while large-scale infrastructure projects — including those linked to the Brisbane 2032 Olympics — are lifting activity domestically.

Against this backdrop, two ASX-listed companies, Wagners Holding Company Ltd (ASX: WGN) and NRW Holdings Ltd (ASX: NWH), have delivered standout share price performance over the past 12 months, rising over 157% and 94%, respectively.

But after such strong gains, are the fundamentals keeping pace?

Riding the infrastructure and construction wave

Wagners is a construction materials and infrastructure business with exposure to concrete, cement, composite materials, and aviation services. The company generates revenue by supplying essential inputs into infrastructure, civil construction, and mining projects — sectors that are currently benefiting from elevated investment levels.

Recent updates suggest Wagners has been experiencing strong trading momentum, supported by higher demand across its key divisions. In particular, infrastructure activity in Queensland and major project pipelines have been contributing to increased volumes and improved pricing outcomes.

The company has also continued to invest in its proprietary composite technologies, which offer lighter and more durable alternatives to traditional materials. This positions Wagners to benefit not only from near-term construction demand but also longer-term structural shifts in how infrastructure is built.

Looking ahead, the outlook appears supported by sustained infrastructure spending and population growth, particularly in regions such as southeast Queensland. If project activity continues to ramp up, Wagners could see further earnings growth, provided cost pressures remain controlled.

NRW Holdings: Leveraged to mining services growth

NRW Holdings operates as a mining services contractor, providing civil, mining, and drill and blast services to resource companies. Its revenue is largely tied to contract work across mine development, production, and infrastructure.

The company has benefited from strong commodity prices, which have left many miners with robust balance sheets and the ability to fund expansion projects and exploration programs. This has translated into a growing pipeline of work for contractors like NRW.

Recent results highlight solid profit growth and a healthy order book, with the company securing new contracts and maintaining strong utilisation across its fleet. Importantly, NRW's diversified exposure across commodities and clients helps mitigate reliance on any single project or resource.

The outlook remains favourable as mining investment continues, particularly in bulk commodities and critical minerals linked to the energy transition. As long as commodity markets remain supportive, demand for mining services is likely to stay elevated.

What could drive the next leg of growth?

Both ASX shares are benefiting from trends that appear durable rather than cyclical in nature.

Electrification requires significant capital investment in infrastructure. Mining companies are expanding to meet demand for key resources. And government-backed infrastructure pipelines remain strong.

However, after such significant share price appreciation, future returns may depend more heavily on continued earnings growth rather than multiple expansion.

For Wagners, this means maintaining margins while scaling production and delivering on project demand. For NRW, it comes down to converting its order book into sustained revenue and profit growth while managing costs.

If both companies can continue to grow revenue and earnings, maintain or expand margins, and avoid valuation compression, there is potential for further upside over time.

As always, the key will be execution.

The post 2 ASX shares booming on electrification and mining. Is there more upside ahead? appeared first on The Motley Fool Australia.

By investing internationally, you gain exposure to industries, companies, and growth drivers that simply don't exist locally.

The good news is that ASX exchange traded funds (ETFs) make that process easy, allowing investors to access world-class businesses without leaving the local market.

With that in mind, here are three ASX ETFs that offer different ways to invest in some of the best stocks in the world.

Vanguard MSCI International Shares ETF (ASX: VGS)

The first ASX ETF to consider is the Vanguard MSCI International Shares ETF.

Rather than trying to pick which country or sector will outperform, this fund takes a broad, all-weather approach. It invests across developed markets, giving exposure to thousands of companies spanning the US, Europe, and Asia.

Holdings include businesses such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nestle (SWX: NESN).

What makes the Vanguard MSCI International Shares ETF appealing is not any single stock, but the way it captures global economic progress as a whole. As industries rise and fall, and new leaders emerge, the index naturally evolves. This makes this fund a useful foundation for investors who want global exposure without having to constantly adjust their portfolio.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another way to invest in the world's best stocks is through a quality lens, which is exactly what the Betashares Global Quality Leaders ETF aims to do.

This fund focuses on businesses with strong profitability, robust balance sheets, and consistent earnings. Instead of spreading exposure as widely as possible, it narrows the field to stocks that have demonstrated an ability to perform through different market conditions.

Holdings include stocks such as Johnson & Johnson (NYSE: JNJ), Tokyo Electron, and Meta Platforms (NASDAQ: META). These are businesses that often benefit from pricing power, brand strength, or structural advantages.

This fund was recently recommended to clients by Betashares.

VanEck MSCI International Value ETF (ASX: VLUE)

A final ASX ETF to consider is the VanEck MSCI International Value ETF, which takes a different approach to global investing.

Rather than focusing on growth or quality, it looks for international companies trading at relatively attractive valuations based on fundamentals such as earnings, cash flow, and book value. This often leads to exposure in areas that are out of favour but not necessarily broken.

Holdings include companies such as Intel (NASDAQ: INTC), Verizon Communications (NYSE: VZ), and Toyota Motor Corporation (FRA: TOM). These businesses may not dominate headlines, but they play important roles in the global economy.

VanEck recently recommended this fund to clients.

The post Want to invest in the best stocks in the world? Try these ASX ETFs appeared first on The Motley Fool Australia.

For Australian investors, the move is highly relevant. Meta is a major holding in several ASX-listed ETFs, including the BetaShares NASDAQ 100 ETF (ASX: NDQ), VanEck Morningstar Wide Moat ETF (ASX: MOAT), ETFS FANG+ ETF (ASX: FANG), and the Global X Artificial Intelligence ETF (ASX: GXAI).

What did Meta report?

Overall, Meta's numbers were impressive. Fourth-quarter revenue jumped 24% year on year to US$59.9 billion, while earnings per share rose 11% as costs climbed sharply. Advertising demand remained strong, daily active users across Meta's platforms increased, and management guided to around 30% revenue growth in the March quarter was a clear acceleration from full-year growth.

But the result wasn't really about last quarter's earnings. It was about spending.

Meta now expects capital expenditure of US$115 billion – US$135 billion in 2026, as it pours money into data centres, AI infrastructure, and what CEO Mark Zuckerberg has described as "personal superintelligence".

That's an extraordinary number and one that would normally make investors nervous, but the market welcomed it.

The reason is straightforward. Meta is funding this AI arms race from a position of strength. Its core advertising business is growing rapidly, generating enormous cash flows, and still delivering operating margins above 40%. Management has also indicated that, despite the surge in investment, 2026 operating income should be higher than 2025.

The bigger question is whether the spending will ultimately be worth it.

In the near term, AI investment is likely to boost investor sentiment around Meta as an "AI winner" whilst also potentially boosting revenue growth but weighing on earnings-per-share growth in 2026 as depreciation and infrastructure costs ramp up.

Investors, therefore, need to look beyond next year to assess the payoff.

The bull case is that current investments strengthen Meta's moat, and if Meta's AI push leads to new products, better ad performance, and sustained elevated growth beyond 2026, the current spending surge could prove highly profitable over time.

Foolish bottom line

Meta's rally is a vote of confidence that Zuckerberg and his team are striking the right balance between growth, profitability, and AI investments.

There was also a sense, going into the result, that Meta wasn't priced at an extreme valuation multiple relative to its growth, though execution risk remained. The sharp share price reaction suggests investors are increasingly confident that Meta is on the right track.

The post Meta shares soar as huge AI investments continue appeared first on The Motley Fool Australia.

Saying that, I am also an investor who loves to buy shares at the kind of steep discounts that we do tend to see during a stock market correction or crash. As such, I do tend to keep some money on the sidelines for that time that the inevitable market crash rolls around.

Now, I, along with everyone else on the planet, have no idea when the next market crash will arrive. For all I know, it could be in 2026 or in 2036.

But I do know the companies that I will attempt to load the boat with when that crash does come. 

My stock market crash buy list for 2026

When the market goes through a period defined by intense fear, I usually try to prioritise companies that tend to trade at lofty valuations. That's because it is often the only time you can buy shares of these companies at reasonable prices. 

As such, I would have my eye firmly on two ASX tech shares in the next crash. Those are TechnologyOne Ltd (ASX: TNE) and Pro Medicus Ltd (ASX: PME).

Both of these companies are growing at exceptional rates, with high levels of free cash flow and compelling growth runways. As a result, it is normal for both TechnologyOne and Pro Medicus to trade with expensive price tags. But if there is a buying window to snatch up these stocks at a bargain price, I'll be trying hard to climb through it.

I would also be looking to buy more shares of Washington H. SouL Pattinson and Co Ltd (ASX: SOL). As I've long documented, Soul Patts is one of my top ASX investments, and any chance to buy more shares of this market-beater at low prices would (at least in my view) do wonders for my long-term wealth.

I wouldn't stop at the ASX, though. These days, stock market crashes are global events. And I will be turning to the US markets when the next one happens as well. Some of the stocks I would be looking forward to loading up on include Costco Wholesale Corp (NASDAQ: COST), Mastercard Inc (NYSE: MA), McDonald's Corp (NYSE: MCD) and Meta Platforms Inc (NASDAQ: META). These are all top-quality companies that (with the possible exception of Meta) never seem to go on sale. If they did, I would be there with as much cash as I could muster.

The post Here's my buy list if the stock market crashes in 2026 appeared first on The Motley Fool Australia.

With more than $8 billion in assets under management, QUAL is currently the fifth most popular ASX ETF on our markets. It comes in behind the Vanguard Australian Shares Index ETF (ASX: VAS), the Vanguard MSCI Index International Shares ETF (ASX: VGS), the iShares S&P 500 ETF (ASX: IVV) and the BetaShares Australia 200 ETF (ASX: A200).

Unlike those four ETFs, though, QUAL isn't a market-wide index fund that blindly invests in companies according to their market capitalisation, with few other considerations.

Instead, it tracks an index that actively screens companies to identify their quality. These screens include factors like a stock's return on equity, earnings stability and financial leverage.

After applying these screens to a range of internationally listed shares, the VanEck International Quality ETF settles on a portfolio of around 300 different stocks, hailing from more than a dozen different countries. These countries range from Switzerland, Japan and the United Kingdom to China, Denmark and Ireland.

However, the vast majority of QUAL's portfolio is drawn from the United States of America, which commands more than three-quarters of this ETF's weighted holdings.

So, let's get into what you're actually buying when purchasing QUAL units in 2026.

QUAL: What's in this ASX ETF's box?

Here are the current top ten holdings of the VanEck International Quality ETF, as well as their respective weightings in the QUAL portfolio:

1. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) at 5.67% of the total QUAL portfolio
2. Meta Platforms Inc (NASDAQ: META) at 5.02%
3. NVIDIA Corporation (NASDAQ: NVDA) at 4.64%
4. Apple Inc (NASDAQ: AAPL) at 4.62%
5. Microsoft Corporation (NASDAQ: MSFT) at 4.46%
6. Eli Lilly & Co (NYSE: LLY) at 3.44%
7. Visa Inc (NYSE: V) at 2.92%
8. ASML Holding N.V. (AMS: ASML) at 2.52%
9. Johnson & Johnson (NYSE: JNJ) at 1.86%
10. Walmart Inc (NYSE: WMT) at 1.77%

Some other significant QUAL holdings include Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), Costco Wholesale Corp (NASDAQ: COST) and Caterpillar Inc (NYSE: CAT).

Not only does this list reveal how dominant the US is in this ASX ETF, but it shows how similar its holdings are to a broad-market US index fund like the iShares S&P 500 ETF. We discussed that ETF just the other day, so check out how its holdings compare to QUAL's here.

This methodology seems to have worked quite well for the VanEck International Quality ETF, though. As of 31 December, QUAL units have returned an average of 14.8% per annum over the past ten years, and 22.85% per annum over the past three. It will be interesting to see if this performance keeps up in 2026.

This ASX ETF charges a management fee of 0.4% per annum.

The post Investing in the VanEck International Quality ETF (QUAL)? Here's what you're really buying appeared first on The Motley Fool Australia.

Only two Mag 7 shares delivered impressive capital growth, while the other five underperformed the major US indices.

Yep, they underperformed.

The health of the Mag 7 companies matters to Australian investors because we are heavily invested in them, whether we like it or not.

Got a superannuation fund? Chances are a chunk of your retirement savings are invested in these seven high-tech companies.

Own exchange-traded funds (ETFs) tracking the US or global markets?

You're definitely invested in the Mag 7 stocks.

The Mag 7's high market caps mean they dominate the S&P 500 Index (SP: .INX) and the Nasdaq Composite Index (NASDAQ: .IXIC).

Therefore, their performance has a direct impact on many Australians' investments.

Let's take a look at how the Magnificent 7 stocks performed in 2025, starting with the No. 1 riser.

And no, it's not the stock you think!

Magnificent Seven stocks in 2025

To set the scene for you, the S&P 500 rose 16.39% and the Nasdaq Composite lifted 20.36% last year. (Compare that to ASX shares here.)

Here's how the Magnificent Seven stocks compared to the broader market.

1. Alphabet Inc Class A (NASDAQ: GOOGL)

Both Class A and Alphabet Inc Class C (NASDAQ: GOOG) shares lifted 65% in 2025.

Class A stock closed at US$313 per share, and Class C shares closed at $313.80.

Nvidia Corp (NASDAQ: NVDA)

US stock market darling Nvidia still put in a good performance as it continues to leverage the artificial intelligence megatrend.

Stock in the US graphics and AI chip designer rose 39% to close at US$186.50 per share on 31 December.

In October, Nvidia became the first company in the world to reach a US$5 trillion market cap.

Investment platform Stake reports that Nvidia was one of the five most traded US stocks by Australian traders last year.

According to Stake's 2025 Retail Investor Report Card:

It beat revenue estimates every quarter in 2025 by an average of 8.9% and is on track to generate US$212B in FY26.

Its earnings have become a global market catalyst: Nvidia's results serve as a directional signal for traders worldwide.

For Stake investors, the biggest 'buy-the-dip' moment came during the DeepSeek moment in January, when Nvidia lost US$260B in market cap but buy orders surged 460%.

Microsoft Corp (NASDAQ: MSFT)

The Microsoft stock price rose 15% to close 2025 at US$483.62 per share.

Meta Platforms Inc (NASDAQ: META) 

Meta Platforms shares rose 13% to finish the year at US$660.09.

Tesla Inc (NASDAQ: TSLA)

Stock in electric vehicle manufacturer Tesla rose 11% to US$449.72 per share.

Stake analysts said Tesla was the only Magnificent Seven stock not to set a new share price record in 2025.

Apple Inc (NASDAQ: AAPL) 

US technology stock Apple rose by 9% to close at US$271.86 per share on 31 December.

Amazon.com, Inc. (NASDAQ: AMZN) 

The Amazon share price inched 5% higher to close at US$230.82 on 31 December.

Interesting sidenote

My US Fool colleague Trevor Jennewine recently covered the third-quarter report from Warren Buffett's Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B).

The report showed that the 'Oracle of Omaha', who retired at the end of last year, bought Alphabet stock — the best performer of the Magnificent Seven in 2025 — and continued to sell down Apple — the second-worst performer of the group — during the third quarter.

Berkshire Hathaway purchased 17.8 million shares in Alphabet, which now accounts for 2% of the company's $267 billion portfolio of 41 stocks.

Berkshire sold 41.7 million Apple shares, and although the company remains Berkshire's largest holding at 21%, its position has reduced by 74% in just two years.

The post Here's how the US Magnificent Seven stocks performed in 2025 appeared first on The Motley Fool Australia.

Given this enduring popularity, it's a great time, as we start another lap around the sun, to do a deep dive into this index fund. So let's talk about two reasons ASX investors might want to buy the Vanguard Australian Shares ETF in 2026, and two reasons why they might wish to reconsider an investment.

Two reasons why the VAS ETF is an ASX buy in 2026

VAS: Simple and cheap

One of the reasons ASX investors love investing in VAS is its simple nature. This index fund offers exposure to the largest 300 stocks listed on the ASX, weighted by market capitalisation. Nothing more, nothing less. Like all index funds, this avenue is appealing for many investors who wish to take a hands-off, passive approach to investing. The largest 300 companies in Australia change over time, VAS changes with them though, periodically rebalancing its portfolio to ensure that the successful stocks are added to, while the losers are weeded out.

The Vanguard Australian Shares ETF charges a relatively cheap 0.07% per annum for this service.

A stellar long-term track record

We can point to decades of historical data that show the Australian share market has always generated wealth-building returns for investors. The Vanguard Australian Shares Index ETF has itself returned an average of 9.15% per annum since its inception in 2009. But, as we looked at in August of last year, Vanguard itself has calculated that the Australian market returned 9.3% per annum over the 30 years to 30 June 2025.

Past performance is never a guarantee of future returns, of course. But it still gives us an insight into the potential benefits of long-term investing.

Two reasons to sell the Vanguard Australian Shares ETF (VAS)

So there are plenty of positives in buying the VAS ETF for an ASX portfolio. But this is arguably no slam dunk. Many investors have justified concerns about ploughing more capital into this fund in early 2026. Let's go through two.

Banks and miners

One of the primary concerns over buying more VAS units in the ASX investor community is its over-concentration on two sectors of the Australian share market. Most ASX investors know that bank stocks like Commonwealth Bank of Australia (ASX: CBA) and mining shares like BHP Group Ltd (ASX: BHP) dominate the ASX. But a look at VAS' portfolio throws this dynamic into sharp relief.

As it currently stands, more than 50% of any investment in VAS today would go into either financial or mining shares. That's 32.1% to financials and 22.1% to miners. The next most influential sector in this ASX ETF is healthcare, making up just 7.9% of VAS' portfolio. The big four banks alone attract more than $1 of every $5 invested in the fund.

This might be just fine with investors who prioritise dividend income. But any investor who wants true diversity might wish to at least dilute this heavy exposure to banks and miners with other ASX ETFs.

VAS: Where's the innovation?

Another potential concern that some ASX investors might have with the Vanguard Australian Shares ETF is the lack of innovative, exciting and quick-growing companies at its highest echelons. VAS' banks and miners might be mature, profitable businesses. But there aren't too many companies in this ETF that are moving fast or breaking things, to paraphrase Mark Zuckerberg.

While the flagship S&P 500 Index that tracks the US markets holds innovators like Amazon, Microsoft, NVIDIA and Zuckerberg's own Meta Platforms among its top holdings, most of the ASX's top stocks have been delivering steady but slow growth for decades.

If you'd like to invest in an index fund that includes at least some innovative, exciting companies that are growing at healthy clips, VAS might not be the fund for you.

The post 4 pros and cons of buying the Vanguard Australian Shares ETF (VAS) in 2026! appeared first on The Motley Fool Australia.

The good news is that exchange-traded funds (ETFs) remove much of that pressure and offer a simple way to invest.

With a single investment, you can gain instant diversification and exposure to hundreds or even thousands of companies.

For Australians starting their investing journey in 2026, here are five ASX ETFs that stand out as sensible, beginner-friendly options.

Vanguard Australian Shares ETF (ASX: VAS)

The Vanguard Australian Shares ETF is often considered a cornerstone ETF for local investors. It provides exposure to the 300 largest shares listed on the ASX, making it an easy way to invest in the Australian economy as a whole.

Its portfolio includes blue-chip names such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), and Wesfarmers Ltd (ASX: WES). For beginners, this fund offers simplicity, diversification, and a steady stream of income over time.

iShares S&P 500 ETF (ASX: IVV)

If you want global exposure without complexity, the popular iShares S&P 500 ETF is a strong place to start. It tracks the S&P 500 Index, giving investors access to 500 of the largest stocks in the United States.

Holdings include Microsoft Corp (NASDAQ: MSFT), Apple (NASDAQ: AAPL), NVIDIA Corp (NASDAQ: NVDA), Johnson & Johnson (NYSE: JNJ), and Visa Inc (NYSE: V). For beginners, this fund offers exposure to some of the world's most profitable businesses with a single, low-cost investment.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF could be worth considering. It is designed for investors who want broad international diversification beyond Australia. It invests across developed markets such as the United States, Europe, and Japan.

Its holdings include companies like Alphabet Inc (NASDAQ: GOOGL), Nestlé (SWX: NESN), Toyota Motor Corp (TYO: 7203), and LVMH Moët Hennessy Louis Vuitton (FRA: MOH).

Betashares Australian Quality ETF (ASX: AQLT)

The Betashares Australian Quality ETF takes a quality-focused approach to Australian shares. Rather than simply tracking the biggest companies, it targets businesses with strong balance sheets, reliable earnings, and solid cash flow.

Top holdings include Telstra Group Ltd (ASX: TLS), Macquarie Group Ltd (ASX: MQG), National Australia Bank Ltd (ASX: NAB), and Woodside Energy Group Ltd (ASX: WDS). This ETF could suit beginners who want a more selective take on the local market. It was recently recommended by analysts at Betashares.

Betashares Nasdaq 100 ETF (ASX: NDQ)

Finally, the Betashares Nasdaq 100 ETF adds a growth tilt to a beginner portfolio by tracking the Nasdaq-100 Index. It provides exposure to innovative companies shaping technology, healthcare, and consumer trends.

Holdings include Amazon.com (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), Broadcom (NASDAQ: AVGO), and Netflix (NASDAQ: NFLX).

The post 5 fantastic ASX ETFs for beginners in 2026 appeared first on The Motley Fool Australia.

Shares of Meta Platforms (NASDAQ: META) have soared 443% over the past three years, closing at $661.50 on Dec. 22. At this share price, Meta now trades in the same range where companies such as Apple, Nvidia, and Tesla previously announced forward stock splits.

While Meta has never executed a forward stock split since going public, the company's rising share price and growing earnings power have meaningfully increased the probability of a split in 2026.

Stock splits don't change the value of any investor's holdings, but here's why a Meta stock split could prove beneficial for investors, if it were to enact one.

Upside drivers

Although stock splits do not change a company's fundamentals, they tend to improve liquidity and broaden the investor base as they lower the per-share price (while increasing the number of shares), which can support higher trading activity and market valuation over time. While the availability of fractional shares has reduced some barriers to entry in stocks with high nominal share prices, research suggests that many retail investors still prefer owning full shares.

According to data from Bank of America's Research Investment Committee, companies that split their stock reported an average total return of 25.4% in the 12 months following the split announcement, more than double the 11.9% average return of the benchmark S&P 500 index in the same time frame. Hence, Meta's stock could see an incremental upside from improved liquidity and broader participation following a stock split.

Meta reaches almost 3.5 billion people daily across its family of apps, giving it unmatched global scale and pricing power in digital advertising. Management has also guided for fiscal 2025 capital expenditures to be in the range of $66 billion to $72 billion, mainly for expanding its artificial intelligence (AI) infrastructure.

These investments are already showing results. Meta's AI-driven ad tools are improving ad targeting efficiency and advertiser returns on ad spend. The company is also expanding its addressable market with newer ad surfaces, including on WhatsApp, Reels, and Threads.

Hence, for long-term investors, a potential stock split could serve as an accelerator on top of the company's robust fundamentals, which can drive up its share prices in the coming months. I think Meta could be a stock-split stock that could make investors rich.

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

The post The next stock-split stock that could make you rich appeared first on The Motley Fool Australia.

Artificial intelligence (AI) is responsible for adding trillions of dollars in value to a handful of companies over the last few years. Nvidia, for example, briefly touched a $5 trillion market cap this year, thanks to its dominant position in the market for graphics processing units (GPUs). Four other companies sit firmly above the $2 trillion threshold as we approach the new year. 

But three AI stocks currently have similar market caps around $1.6 trillion as of this writing, and are vying to become the first new $2 trillion company of 2026: Meta Platforms (NASDAQ: META), Tesla (NASDAQ: TSLA), and Broadcom (NASDAQ: AVGO). Here's my prediction for the next company to top the milestone, and it could come as soon as next year. 

Artificial intelligence is fueling all three

Meta, Tesla, and Broadcom have all seen their stock prices heavily influenced by advances in AI this year.

Meta stock climbed higher early in the year as its efforts to improve its recommendation algorithms bore fruit. Ad revenue climbed higher as time spent on its apps increased, and ads became more effective. However, the stock took a step back recently as management shared plans to increase its AI-related spending.

Tesla's value is heavily tied to its robotaxi service and AI innovations. The stock received a boost over the summer when it launched its robotaxi pilot in Austin, Texas. Investors added to those gains on promising progress on the company's next-generation AI chip for its vehicles.

Broadcom's custom AI accelerator business has gained momentum in 2025, as the company signed big contracts with OpenAI and Anthropic, the latter of which is buying Alphabet's Broadcom-designed tensor processing units (TPUs). To that end, Alphabet and Broadcom are seeing excellent progress in shifting more developer workloads to TPUs, which offer greater energy efficiency and cost savings versus Nvidia's GPUs.

Broadcom stock took a step back after its last earnings report, as many analysts were disappointed with management's expectation that greater AI chip sales would come at a lower gross margin.

While all three of these stocks have a path to a $2 trillion valuation in 2026, I expect Meta Platforms to reach the milestone first. Here's why.

AI-powered earnings growth at an attractive valuation

Even with its run rate of $200 billion in annual revenue, Meta is still growing its bottom line quickly. Adjusted earnings per share climbed 20% in the third quarter, and improvements in AI are the reason.

Meta has seen an increase in both ad impressions and price per ad for eight straight quarters. That indicates that it's increasing user engagement and opening new places within its apps for advertising while making ads more effective.

Management attributes a shift in its recommendation algorithm to make it more general across formats as the primary reason users are spending more time on its apps. Meta has seen similar improvements by applying the same methodology to its advertising algorithm. In other words, bigger models have directly translated into more revenue.

That trend should continue in 2026, as Meta opens up more opportunities for advertising, including on Threads and WhatsApp. It could also begin monetizing Meta AI, its generative AI chatbot. The improvements in its algorithms over the last couple of years should enable it to ramp up advertising quickly without as much negative impact on its pricing as we've seen in the past.

The bigger opportunity for Meta in 2026, though, may be the expansion of its generative AI features. It's reportedly working on an AI agent that can manage advertising campaigns for small businesses. CEO Mark Zuckerberg repeatedly talks about the opportunity to handle everything involved with creating, testing, and optimizing ad campaigns on its platform through an AI agent.

And chatbots specializing in sales and customer service for a company could open the door for more businesses to push Facebook and Instagram users to start messaging them through Meta's chat apps.

With small- and medium-sized businesses accounting for the bulk of advertisers on Meta's platform, these innovations have the potential to dramatically increase the amount they're willing to spend on ads. If the overhead for these clients is much lower, they can increase their ad spending and scale up their businesses faster.

Those efforts should fuel another year of strong revenue growth. And while depreciation expense from the increase in AI-related capital expenditures could eat into earnings growth, Meta should be able to manage continued improvements in earnings per share with the help of share repurchases.

The stock trades for just 26 times forward earnings expectations, which is much lower than Broadcom's multiple and less than one-tenth the multiple Tesla stock trades for. I expect Meta to fetch a higher earnings multiple as it proves its AI spending to be well worth it once again in 2026, pushing its valuation to $2 trillion. 

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

The post Prediction: This AI stock could be the first new $2 trillion company in 2026 appeared first on The Motley Fool Australia.

Meta Platforms has a rare ecosystem

Meta Platforms ended the third quarter with 3.54 billion daily active users across its websites and mobile apps, an 8% year-over-year increase. The world's population is about 8.3 billion people. If we remove all those who are too young to have an Instagram account, it may well be the case that something like half of eligible adults (or young adults) worldwide visit at least one of Meta's websites and apps every single day. That user base is a veritable goldmine.

And the best part: Most of them are unlikely to go anywhere anytime soon, given the company's strong network effects. Consider why people open Instagram accounts. It could be to keep up with friends and family, to become an influencer, or to promote products for their businesses, among other reasons. For each of these uses, the platform becomes even more valuable as more people join in, and for those who are already in those networks, it makes little sense to leave.

Meta Platforms' ecosystem makes it an incredible target for advertisers. It also allows it to launch new monetization opportunities. Less than three years ago, Meta Platforms launched its X competitor, Threads -- it already has 150 million daily active users. According to management, it's on track to become the leader in its category.

Facebook Marketplace is another opportunity that fits naturally within the company's strategy. Anyone else starting an online platform to connect buyers and sellers would have to work hard to attract an audience. For Meta Platforms, it wasn't difficult since it already has a large one. So long as Meta Platforms' vast ecosystem stays in place, the tech leader should find many more monetization schemes, even as advertising remains the most important.

Meta is a buy-and-forget stock

Meta Platforms' work in AI is undoubtedly strengthening the business. For instance, AI-powered algorithms are helping it increase engagement while enhancing the return on investment marketers get from ads on its platforms. However, none of that would matter if not for the company's existing user base. Meta still has ample growth potential over the long run, and much of the fuel for that will be its vast ecosystem. That's why I am staying put.

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

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The Magnificent Seven technology stocks have powered the S&P 500 through this bull market so far -- that's because investors like their solid, well-established businesses and their promise in the high-potential artificial intelligence (AI) market. Some are bigger AI players than others, but they all are participating to some degree in this technology. Investors are enthusiastic about AI because it may supercharge earnings and stock performance over time.

And, as mentioned, the stock performance already has started, with the Magnificent Seven stocks each advancing in the double- or triple-digits over the past three years. This is great, but it's resulted in one thing that may be holding investors back from buying at least certain players right now: Stocks have become more expensive.

In fact, some analysts and investors have even worried about an AI bubble. Those concerns weighed on the S&P 500 in the early weeks of November, though tech companies' earnings reports and comments on demand haven't supported the idea of a bubble taking shape. Earnings have climbed, and companies have spoken of high demand for AI products and services.

Still, it's clear many AI stocks are expensive these days. But the good news is bargains also exist -- even among Magnificent Seven AI stocks. And two in particular may be offering investors a once-in-a-decade buying opportunity before the new year: They are the cheapest of the Magnificent Seven, but due to their potential in AI, this may not last for long. Let's check out these stocks to buy now. 

1. Meta Platforms

Meta Platforms (NASDAQ: META), trading for 26x forward earnings estimates, is the cheapest Magnificent Seven stock today. This is a fantastic deal considering the company's long history of earnings growth, which offers it the ability to invest in AI and reward shareholders with dividends.

You may know Meta mainly for its social media leadership -- the company owns a number of apps, including Facebook and Instagram -- and this platform has been its ticket to revenue growth. Advertisers come to Meta to reach us, and this has resulted in billion-dollar revenue and profit for the company.

Meta now aims to use AI to revolutionize advertising, automating ads across its platform and making them more successful. Meanwhile, the presence of AI on its apps may keep us on them longer. All of this may result in advertisers increasing their spending on ads here. And Meta's investments in AI also could lead to the development of new products and services that may drive revenue down the road.

All of this makes Meta look like a steal at today's valuation.

2. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the second-cheapest of these seven tech titans, as it trades for 29x forward earnings estimates. Like Meta, Alphabet may not remain at this level for long as its AI investment powers revenue higher.

Alphabet uses AI across its Google Search business, and that should boost advertising revenue as it takes a route similar to Meta's -- improving the overall advertising experience and ad results. And Alphabet also is benefiting from AI through its Google Cloud business -- here, it offers a wide range of AI products and services to customers, and these have been fueling revenue growth.

In the latest quarter, for example, Google Cloud revenue climbed 34% to more than $15 billion, and for the first time ever, Alphabet reached total quarterly revenue of more than $100 billion. As a leading cloud player, Google Cloud should be well-positioned to attract AI customers looking for capacity -- demand already has been surging and hasn't shown signs of letting up. In the quarter, Alphabet said demand for AI infrastructure and generative AI systems drove cloud revenue.

So, Alphabet, like Meta, is on track for more growth as this AI boom marches on -- and that means getting in on these stocks at today's levels may be a once-in-a-decade opportunity.

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

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Meta Platforms (NASDAQ: META) shares popped 3.4% on Thursday despite a mere 0.22% increase in the Nasdaq Composite on reports that the company was cutting metaverse spending in favor of artificial intelligence (AI) and smart glasses.

Here's why Meta's capital is better used on non-metaverse projects and why the growth stock is a great buy in December. 

The harsh reality of Reality Labs

Facebook changed its name in October 2021 to Meta Platforms to better capture the company's expansion beyond its flagship social media app. A name change was the right move, as Instagram is arguably more valuable than Facebook. Along with WhatsApp and Messenger, the four apps are known as Meta's Family of Apps.

The name change to Meta Platforms reflected an increased emphasis on engaging through virtual worlds -- a far more ambitious digital frontier than the desktop and mobile silos the Family of Apps resides in. The name change was followed by a sharp decline in Meta's stock price, which fell 64.2% in 2022 compared to a 33.1% decrease in the Nasdaq.

The sell-off was due to a decline in Meta's Family of Apps operating income and losses on metaverse, augmented reality, and virtual reality spending, which is under the company's research and development arm, Reality Labs.

Meta's losses at Reality Labs have continued to increase. But its Family of Apps have been the saving grace, as operating income from that segment is more than offsetting mounting losses at Reality Labs.

Data source: Meta Platforms.

Family of Apps is more than absorbing Reality Labs' losses

Since the start of 2023, Meta's stock price is up a mind-numbing 450% compared to a 124.6% gain in the Nasdaq as investors have given Meta the benefit of the doubt due to excellent growth from the Family of Apps.

Yet despite that increase, Meta's profits are increasing at such a torrid rate that it's still the cheapest "Magnificent Seven" stock, a group of tech-focused companies that includes Meta, Nvidia, Apple, Alphabet, Microsoft, Amazon, and Tesla.

As you can see in the following chart, Meta's revenue and earnings have exploded higher in recent years. And even when factoring in Reality Labs losses, Meta's operating margins are still sky high at 43.3%.

META Revenue (TTM) data by YCharts

Looking at the nine months ended Sept. 30, Meta generated $139.8 billion in Family of Apps revenue and $71.7 billion in Family of Apps operating income. This means that without the Reality Labs drag on profitability, Meta's advertising revenue operating margin would be 51.3%.

For context, Nvidia, which is an ultra-profitable company with customers lining up out the door for its graphics processing units, has trailing 12-month operating margins of 58.8%. This goes to show just how much of a cash cow Family of Apps is.

Meta's investment thesis just got even better

Meta's decision to cut back on metaverse spending in favor of AI and its Family of Apps is excellent news for long-term investors, especially value investors who are interested in Meta for its high free cash flow, impeccable balance sheet, and growing dividend. Before getting too excited about the news, investors may want to hear commentary directly from CEO Mark Zuckerberg and the rest of the Meta management team to ensure that the strategic shift is lasting and not a temporary change of heart.

The social media giant is investing heavily in AI by building its own data centers, refining its search algorithm to better align content with user interests and connect advertisers with relevant buyers, and developing its Llama large language model to power its Meta AI assistant, among other initiatives. With such a massive opportunity in AI, there's less reason for Meta to continue flooding Reality Labs with capital with no return on investment in sight.

Meta was already one of my highest conviction growth stocks to buy in 2026. This news only makes the investment thesis more attractive, making Meta a screaming buy now. 

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

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Meta Platforms (NASDAQ: META) is a company many of us have close contact with daily. That's because it's the owner of some of the world's most commonly used apps: Facebook, Messenger, Instagram, and WhatsApp. About 3.5 billion people around the globe use at least one of these daily. 

The tech giant doesn't consider itself just a social media company, though. In recent years, it's made major steps in the world of artificial intelligence (AI) -- for example, it's developed its own large language model, and this tool powers certain Meta products, like the company's AI assistant.

So, owning Meta stock offers you access to a social media titan as well as a potential winner in the exciting field of AI. But should you wait to get in on this player? No -- Here's one compelling reason to buy Meta shares hand over fist right now.

A solid earnings track record

It's important to note that Meta's well-established social media business has helped it produce a long history of earnings growth. Advertisement across Meta's apps drives revenue, as many sorts of businesses sign up for ads to reach us where they know they'll find us -- on these social media platforms. In the recent quarter, advertising revenue climbed about 25% to $50 billion.

In fact, Meta's financial picture is so strong that the company is able to expand and invest in AI as well as pay shareholders a dividend.

While AI represents a considerable investment for Meta today, this effort could deliver big down the road. Meta is using AI to improve the overall advertising experience and boost the capabilities of its apps to keep users on them longer -- all of this should encourage advertisers to keep coming back to Meta and even increase their ad spending. Finally, the investment in AI could lead to additional products and services that may expand revenue streams in the coming years.

Why buy now?

All of this makes Meta a fantastic stock to own well into the future. But why buy now? Right now, Meta is the cheapest of the Magnificent Seven tech stocks that have driven the S&P 500 to record highs in recent years.

Meta trades for 24x forward earnings estimates, which looks cheap relative to peers and also seems very reasonable considering the complete Meta package.

META PE Ratio (Forward) data by YCharts

This is particularly noteworthy today as investors worry about the formation of an AI bubble, as valuations of many AI stocks have exploded higher. Meta, trading at these levels, looks much less vulnerable than players that are trading at lofty valuations.

This, along with Meta's strengths in social media and AI ambitions, makes it a stock to buy hand over fist right now.

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

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To illustrate, the iShares Core S&P/ASX 200 ETF (ASX: IOZ), a simple ASX 200 index fund, has returned 12.97% per annum since 31 October 2022.

The US markets have done far better, though. The iShares S&P 500 ETF (ASX: IVV) has returned an average of 21.4% over that same timespan. That's exceptional, given that this index's long-term average is about 7.5% per annum.

However, there is one ASX ETF that has put these funds to shame.

It is known as the Global X FANG+ ETF (ASX: FANG).

Over the three years to 31 October, this ASX ETF has delivered not a 20% or 30% return per annum. Not even 40%.

Its average rate of return has been an astounding 54.24% per annum. This astronomical rate of return would have been enough to turn $10,000 into roughly $36,700 over that three-year span.

So how has this high-flying ASX ETF done it?

FAANGing to the top

Well, FANG is a fund that only holds ten stocks within it. By contrast, the ASX 200 ETF holds, well 200, and the S&P 500 fund, 500.

Those ten stocks are special, though. As you can probably gather from the name, they include all five members of the old 'FAANG' club – Facebook (now Meta Platforms), Apple, Amazon, Netflix and Google (now Alphabet).

In addition to these five stocks, FANG also holds Broadcom, CrowdStrike, NVIDIA Corp, ServiceNow and Microsoft.

Microsoft and NVIDIA are members of the 'Magnificent 7' club that FAANG has morphed into. Meanwhile, Broadcom is a chipmaker and software stock. ServiceNow operates in the cloud-based business software space, and Crowdstrike is a leader in cybersecurity.

As you can imagine, all of these companies have enjoyed a phenomenal few years, thanks to the boom in interest in AI-related companies.

To illustrate, Broadcom stock is up approximately 645% since early December 2022. Some other notable winners include Crowdstrike (up 311%), Meta Platforms (up 425%) and, of course, NVIDIA (up a massive 948.5%).

Given that all ten of these FANG stocks have been unbridled winners, it's no surprise to see the ETF deliver such breathtaking gains.

So is this ASX ETF a screaming buy?

Well, that's the trillion-dollar question. There's no doubt that FANG's ten holdings are some of the best and most profitable companies in the world, and many will probably continue to be for years to come. However, that doesn't mean this ETF will continue to grow at 50%-plus every year going forward. A majority of its holdings are now worth more than US$1 trillion, and in many cases, far higher than that. There comes a point when companies simply cannot sustain growth rates due to sheer size.

This ETF is also heavily exposed to the US tech sector. It is highly concentrated and may be punished if the now-positive sentiment turns against tech shares.

It is difficult to judge what kind of future this ASX ETF holds in store for its investors. I would be surprised if it continues to see anything close to its recent blazing performance in the years ahead. But then again, it's not hard to make the case that it represents a stake in some of the world's top businesses. Investors should keep in mind that FANG represents a very narrow bet on a narrow range of companies, and judge the risks and potential rewards for themselves.

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Tech stocks have experienced choppy trading patterns in recent weeks. However, the long-term outlook for top companies in the sector continues to position investors for excellent return potential.

The tech-centric Nasdaq Composite has returned 90% over the last five years, outperforming the S&P 500 and Dow Jones Industrial Average. Artificial intelligence (AI) has been a significant catalyst for the growth of the largest tech companies over the last few years, but it's just getting started.

The following AI stocks are excellent options to profit from the growth of this revolutionary technology. 

1. Advanced Micro Devices

Leading tech companies will continue to invest in advanced computing hardware until AI surpasses human intelligence. That's where the world is heading. The stakes are enormous, but to achieve this, these companies will need significantly more computing power. This is why investors should consider investing in Advanced Micro Devices (NASDAQ: AMD).

AMD has navigated through a slump in its growth over the past few years, but the investments it has made to catch up in the AI chip market are starting to pay off. Revenue grew 36% year over year in the third quarter, reaching $9.2 billion. It also reported a 30% year-over-year increase in adjusted earnings per share and record free cash flow, demonstrating how AMD is profitably scaling its business.

It's just getting started. The company is driving this accelerating growth by offering a superior cost-performance balance compared to competing chips. Its fifth-generation Epyc central processing units (CPUs) for servers continue to gain market share on Intel, while its MI300 series of graphics processing units (GPUs) are valued for their efficiency in handling AI inference workloads.

The launch of the MI450 GPU next year is expected to drive record revenue. OpenAI is slated to purchase a large cluster of MI450s in the second half of 2026. This is part of a long-term agreement that will make AMD a key strategic partner for the owner of ChatGPT.

These deals indicate further growth for AMD that could deliver substantial returns for investors. Analysts are currently projecting annualized free-cash-flow growth of 66% through 2029. This is why the stock rocketed to new highs and could offer significant upside.

2. Meta Platforms

Meta Platforms (NASDAQ: META) has over 3.5 billion people using its services daily, with more than 3 billion on Instagram alone. Meta is making these services even more profitable and engaging for users by leveraging AI. With substantial resources to expand its data center capacity, Meta is building an unstoppable competitive advantage around its tech infrastructure.

Its third-quarter financial results were outstanding, with revenue up 26% year over year. Its ad revenue is generating a significant operating margin of 43% on a trailing-12-month basis, contributing to $44 billion in free cash flow.

Meta has made improvements to its ad technology, where AI is driving better efficiency and more relevant ads shown to users. AI-driven ad tools are generating over $60 billion annually, accounting for approximately a third of the company's total revenue.

The stock is down 20% since the third-quarter earnings report, primarily due to the company's plan to accelerate capital spending over the next year. This is expected to put pressure on margins and profits. However, the additional GPUs and compute capacity will further expand its AI capabilities, potentially leading to lucrative opportunities to generate more profits in the future.

These investments will strengthen Meta's long-term competitive moat and potentially lead to the development of new AI-driven services. There is considerable long-term upside for Meta that is not fully reflected in its current valuation. The stock is trading at just 20 times 2026 earnings estimates, which appears to be a bargain for a leading tech company.

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

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Artificial intelligence (AI) stocks have been in fine form on the stock market in 2025, and this is evident from the healthy gains of 21% clocked by the tech-laden Nasdaq Composite index so far this year.

AI stocks such as Nvidia, Broadcom, AMD, Palantir, and others have delivered outstanding gains to investors in 2025. However, not all companies benefiting from the AI revolution have turned out to be great investments. Meta Platforms (NASDAQ: META) is one such name.

The "Magnificent Seven" stock is up just 4% this year, and that's because it has witnessed a sharp pullback of late. The stock fell substantially after releasing its third-quarter results on Oct. 29. A massive noncash tax charge that led the company to miss Wall Street's earnings estimates, and Meta's decision to boost capital spending to fund its AI initiatives have been weighing on its shares of late.

However, it won't be surprising to see this tech giant regain its mojo and deliver stronger gains than some of the more popular AI stocks that have outperformed it this year. Let's see why that may be the case. 

Meta Platforms' AI efforts are paying off

Meta Platforms reported an impressive year-over-year increase of 26% in Q3 revenue to $51.2 billion. The company's non-GAAP earnings would have landed at $6.73 per share as compared to the year-ago period's reading of $6.03 per share had it not been for the $15.9 billion non-cash income tax charge related to the implementation of the "big, beautiful bill."

Importantly, Meta management believes that it will "recognize significant cash tax savings for the remainder of the current year and future years under the new law." What's worth noting is that Meta's earnings would have increased by double digits (excluding the impact of the tax charge). That's impressive considering that its costs and expenses increased by 32% year over year in Q3, exceeding its revenue growth.

AI is a key reason why Meta's bottom line is increasing at a healthy pace despite the higher spending. The company's AI-driven content recommendations are leading to higher engagement on its social media properties. Specifically, Meta saw a 5% jump in the time spent on Facebook last quarter, along with a 10% jump in time spent on Threads.

This higher engagement combined with Meta's AI-powered ad tools is contributing to an increase in ad impressions delivered, as well as an increase in the average price per ad. Meta's ad impressions across its family of apps increased by 14% year over year in Q3. Additionally, the average price per ad jumped by 10%.

It is easy to see why that's the case. Meta's AI advertisement solutions are delivering a 22% increase in return on ad spend as compared to non-AI ad tools. The company points out that "for every dollar U.S. advertisers spend with Meta, they see a $4.52 return when they use our new AI-driven advertising tools."

Not surprisingly, Meta says that it has already achieved an annual revenue run rate of over $60 billion for its end-to-end AI-equipped advertising tools. That suggests Meta generated $15 billion in revenue last quarter from its AI-powered ad tools. This puts the company on track to corner a sizable chunk of the $107 billion revenue opportunity that the adoption of AI tools within the marketing space is expected to create by 2028.

Given that Meta is on track to end 2025 with $198.5 billion in revenue, the AI-related opportunity within advertising should eventually allow the company to deliver solid incremental growth over the next three years.

But what about the expenses?

Meta is going all out to build more AI-equipped tools. This explains why the company is now on track to reach $71 billion in capital expenses this year as compared to its earlier expectation of $69 billion. That's a big jump over the $39.2 billion that Meta spent in 2024. What's more, the company points out that its expenses will grow at a faster rate in 2026.

This is a key reason why Meta stock has struggled of late, as investors are probably questioning the rationale behind the heavy AI-related spend the tech giant is incurring. But the good part is that AI is indeed driving tangible growth for Meta, as we saw in the discussion above. That's why it makes sense for the company to continue investing more in AI infrastructure and talent.

This probably explains why analysts have raised their revenue forecasts for Meta.

META Revenue Estimates for Current Fiscal Year data by YCharts

Even better, investors are now getting a good deal on this stock. It is trading at 8.3 times sales, which is lower than the U.S. technology sector's average price-to-sales ratio of 9.1. Assuming Meta hits $271 billion in sales at the end of 2027 and trades in line with the tech sector's average, its market cap could jump to $2.46 trillion.

That suggests a potential jump of nearly 60% from its current market cap. However, the fast-growing adoption of AI tools in the ad space and the head start that Meta has over here suggest that it could end up delivering faster growth, and that could set the stock up for bigger gains. That's why it would be wise for investors to buy this underperforming tech stock before it steps on the gas.

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

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The prediction comes amid strong global interest in US shares and exceptional annual returns over the past few years.

Australian investors are well aware of this trend and have piled into US stocks via exchange-traded funds (ETFs).

But now, Goldman suggests investors start thinking of diversifying away from US shares and into other global markets.

Looking at the decade ahead, Peter Oppenheimer, chief global equity strategist at Goldman Sachs Research, said:

We expect higher nominal GDP growth and structural reforms to favor emerging markets, while artificial intelligence's long-term benefits should be broad-based rather than confined to US technology stocks.

A declining US dollar could also favor non-US equities, adding an extra layer of opportunity for globally diversified portfolios.

Right now, the US market is killing it.

Over the past two Australian financial year periods, US shares have outperformed the local bourse by a significant margin.

In the 2025 financial period, the S&P 500 Index (SP: INX) rose by 13.63% and delivered total returns (including dividends) of 15.16%. The Dow Jones Industrial Average (DJX: .DJI) lifted 12.72% with total returns of 14.72%.

By comparison, the S&P/ASX 200 Index (ASX: XJO) rose by 9.97% and provided total returns of 13.81%.The S&P/ASX All Ordinaries Index (ASX: XAO) lifted 9.47% and delivered total returns of 13.23%.

In the 2024 financial period, the S&P 500 rose by 23.31% and delivered total returns of 25.02%, while the Dow Jones Industrial Average rose by 12.88% and gave a total return of 14.99%.

By comparison, ASX 200 shares rose by 7.49% and gave a total return of 11.44%, and the ASX All Ords rose by 7.55% and delivered total returns of 11.44%.

However, looking ahead, Goldman Sachs says America's dominance in global investors' portfolios will not continue.

US shares: Goldman's hot tip for investors

Goldman says US shares will underperform other trading regions, based on total average annual returns, over the next 10 years.

As this table below shows, Goldman expects US shares to provide an average annual return of more than 6.5% over the next decade.

This is less than the broker's predicted average annual returns for Europe, Japan, Asia ex-Japan, and emerging markets.

The broker says the US market's performance will be driven by earnings per share (EPS) growth and modest dividends over the next decade.

Goldman expects US stock valuations to trend lower, with share buybacks providing some compensation for lower share prices.

The broker foresees the best average annual total returns coming from emerging markets, driven by China and India.

Source: Goldman Sachs

Goldman Sachs points out that weakness in the US dollar has historically coincided with an outperformance in non-US markets.

Some global investors also feel concerned that AI may be a bubble, given high valuations for US technology companies and rising business investment into AI that is yet to translate into significant productivity and earnings growth at scale across the broader market.

Others are concerned that the Magnificent 7 US stocks of Apple Inc, Microsoft Corp, Nvidia Corp, Amazon.com Inc, Meta Platforms Inc, Tesla Inc, and the two Alphabet Inc stocks, GOOGL and GOOG, represent too large a chunk of the US market.

Therefore, any pullback in their price trajectory could weigh heavily on US stock indices, which would impact many investors around the world given the popularity of index-tracking ETFs.

However, Eric Sheridan, also from Goldman Sachs Research, does not think the US tech sector is in a bubble.

Evidence of that includes most of the Mag 7 still generating large free cash flows, conducting buybacks, and paying dividends.

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Collectively, the seven biggest technology companies in the world have come to be referred to as the "Magnificent Seven." Two of them are Meta Platforms (NASDAQ: META) and Amazon (NASDAQ: AMZN). And Wall Street believes this duo is worth buying.

Some investors may be surprised to hear that Meta Platforms and Amazon stock could still be good buys today. After all, they're each worth more than $1.5 trillion, and their share prices are up by around 460% and 630%, respectively, over the last decade. How much more upside could these two tech giants possibly have?

As it turns out, select Wall Street analysts believe that these two stocks could gain at least 20% over the next year. Whether or not the next 12 months will pan out like that, I'm not sure. But with an eye toward the longer term, I believe Meta Platforms and Amazon are both good investment ideas today.

1. Meta Platforms

At the time of this writing, Meta stock is down 20% from its all-time high. Investors don't like how much money it's spending on dubious projects. In the third quarter alone, its Reality Labs division, which includes its metaverse-related projects, reported an operating loss of $4.4 billion while generating just $470 million in revenue. Moreover, spending in its Superintelligence Labs division, which supports its artificial intelligence (AI) ambitions, continues to ramp up.

However, if any company has ample money to burn, it's Meta Platforms. Across its various apps, including Facebook, more than 3.5 billion people interact with the company daily. This makes it one of the greatest advertising businesses on Earth, which is why it delivered an incredible Q3 operating margin of 40%. This was its margin after laying out massive sums on its AI and metaverse efforts.

Indeed, Meta continues to make money hand over fist, and it's not stingy. Between share repurchases and its growing dividend, the company returned $4.5 billion to shareholders in Q3. In short, Meta's core business is stronger than ever, it's investing billions of dollars in its efforts to find new growth avenues, and it's rewarding its shareholders. This makes Meta stock hard to overlook.

Moreover, after its 20% pullback, Meta is now the cheapest member of the Magnificent Seven, trading at just 24 times next year's expected earnings. If the company continues to execute as it has been, that's a good bargain.

2. Amazon

It's hard to ignore Amazon's retail business in North America, considering that it now generates over $100 billion in quarterly sales. But that's what I want to do. Instead, I want to focus on Amazon Web Services (AWS), because that business unit accounts for two-thirds of the company's operating profits, making it extremely consequential to Amazon's overall performance. And the outlook for AWS remains incredibly strong.

AWS is Amazon's cloud computing platform. Enterprises worldwide continue to migrate their operations and data onto computers at data centers. The growth in AI workloads is only accelerating this trend. Revenues for AWS were up 20% in the third quarter, which is an incredible growth rate for a business that has an annual revenue run rate of more than $100 billion.

Growth should stay strong. Amazon ended Q3 with nearly $200 billion in performance obligations and said that the majority of that amount was related to AWS. That represents a 22% increase from the performance obligations that it had at the end of the third quarter of 2024. In short, the outlook remains bright for AWS' growth, which points to strong future profits for Amazon.

I believe that Meta Platforms stock may be the better bargain of these two today. That said, I believe that Amazon's stock performance could still be better than average. Historically, Amazon stock performs well when it posts strong growth in its operating profits. And given that its performance obligations for AWS continue to rise, it appears that its trend of rising operating profits will persist.

Meta Platforms and Amazon have each produced incredible gains in recent years. But there's no reason to believe they can't provide investors with further long-term share price growth. 

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

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For one, there are simply more shares to choose from on the US markets. For another, the US is home to some of the best, and most globally dominant, businesses in the world. As such, it is a fertile hunting ground for long-term wealth builders.

So today, let's discuss three US stocks that I think have the potential to make ASX investors a lot of money.

3 US stocks that could help ASX investors build wealth

Meta Platforms Inc (NASDAQ: META)

It's easy to forget that the US stock behind the ubiquitous social media platforms of Instagram and Facebook is now known as Meta. Despite this company's investments in the 'metaverse' looking less than fruitful, its earnings engines are still firing with gusto. In its most recent quarterly report, Meta revealed that its revenues were up a staggering 26% year-on-year to US$51 billion.

This was thanks in part to more ad impressions, and higher revenue received from each ad. The company also enjoyed an 18% boost in income from operations to US$20.5 billion.

Despite this, Meta stock is currently in a bit of a slump, down almost 23% from where it was three months ago. This could be a good time to get in on this massive and highly influential company.

Mastercard Inc (NYSE: MA)

Next up, we have payments stock Mastercard. I've long been bullish on this payments network provider, given the global shift towards electronic payments. Although cashless transactions are the norm in Australia, it's easy to forget that that is not the case in many other countries. But that is changing, and Mastercard stands to be a prime beneficiary from what could be a decades-long tailwind.

This is evident in this US stock's most recent quarterly earnings from late last month. This showed Mastercard enjoying a 17% rise in revenues over the quarter to US$8.6 billion. Operating income was up 26% to US$5.1 billion, while earnings per share rose 23% to US$4.34.

With numbers like that, I think this US stock is an exciting long-term wealth builder.

Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B)

Warren Buffett's Berkshire Hathaway is one of the most famous companies in the world. It is a massive conglomerate consisting of entities underlying businesses (such as Dairy Queen and Duracell), as well as part-investments in other stocks (most famously, Apple and Coca-Cola).

Given Warren Buffett's impending retirement as CEO, investors have been, understandably, a little subdued on this company. Berkshire stock is up around 9.6% over the past 12 months. Whilst that's an objectively decent return, it significantly trails the S&P 500's 12.6%.

This might be a good time to buy this company, though. Although Buffett's leadership will be a significant loss, I think he has set up an admirable succession plan. Long-time deputy Greg Abel will take the reins in January, a man who has Buffett's unequivocal confidence. That says a lot, and thus, I am confident Berkshire will be a wonderful investment for years to come.

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