Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content. In addition, the company offers programs that enable sellers to sell their products in its stores; and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. Further, it provides compute, storage, database, analytics, machine learning, and other services, as well as advertising services through programs, such as sponsored ads, display, and video advertising. Additionally, the company offers Amazon Prime, a membership program. The company's products offered through its stores include merchandise and content purchased for resale and products offered by third-party sellers. It serves consumers, sellers, developers, enterprises, content creators, advertisers, and employees. Amazon.com, Inc. was incorporated in 1994 and is headquartered in Seattle, Washington.

Amazon выглядит как качественный, но уже не дешёвый бизнес: операционная эффективность и прибыльность заметно сильнее среднеотраслевых уровней, однако оценка по рынку остаётся высокой. P/E на уровне 24.91 лишь немного выше медианы отрасли, но P/S 3.04, P/B 6.35 и особенно P/FCF 151.43 существенно выше отраслевых ориентиров, что ограничивает потенциал переоценки. При этом динамика мультипликаторов в целом улучшается: P/E, P/S, P/B и P/FCF снижаются от более высоких значений в предыдущие периоды, а это говорит о том, что рост прибыли и денежного потока частично догоняет цену. Рентабельность сильная: ROE 23.34%, ROA 11.55% и ROI 19.71% значительно выше медианы, а маржа чистой прибыли 12.22% и операционная маржа 11.50% подтверждают устойчивость бизнеса. Валовая маржа 50.60% тоже высокая и продолжает постепенно улучшаться, что важно для крупного ритейла и облачных/сервисных направлений. По ликвидности картина смешанная: quick ratio 1.01 уже комфортный, но current ratio 1.18 всё ещё ниже отраслевой медианы, поэтому запас прочности не идеален. Долговая нагрузка в целом умеренная: debt/equity 0.27 выглядит приемлемо и лучше отрасли, но долгосрочный долг вырос до 65.65 млрд, что требует внимания. Выручка, прибыль, EBITDA и собственный капитал за последние годы растут, а это поддерживает фундаментальную стоимость и снижает риск, что текущая прибыльность окажется разовой. Наличие 123.03 млрд денежных средств и рост активов до 818.04 млрд усиливают финансовую устойчивость компании. Отсутствие дивидендов означает, что инвестор получает ставку на рост и реинвестирование, а не на текущий денежный поток. В сумме фундаментал оправдывает премию к сектору, но из-за очень высоких мультипликаторов и слабой дивидендной поддержки потенциал дальнейшего повышения оценки выглядит ограниченным, поэтому прогноз стоит слегка снизить и сохранить консервативный подход.

Amazon.com, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно упал. Медведи в растерянности.

Strong index, significantly down. The bears are confused.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Сильный индекс, без изменений. Рынок на стороне медведей.

Strong index, flat. The market is on the bears' side.

Средний индекс, без изменений. Отток средств из лонгов на высоком уровне.

Medium index, flat. Outflow of funds from longs at a high level.

Средний индекс, незначительно упал. Приток средств в шорты на высоком уровне.

Medium index, slightly down. Inflow of funds into shorts at a high level.

Сильная прибыльность и рост Amazon поддерживают оценку, но очень дорогие P/S и P/FCF ограничивают апсайд и требуют умеренной осторожности.

Key Points
Microsoft's Azure grew 40% last quarter, outpacing Amazon's cloud unit.
Amazon Web Services just posted its fastest growth in 15 quarters.
One of the two stocks looks more attractive on both growth and price.
The biggest question hanging over the AI boom is whether the enormous sums invested in it will yield a return. For the two companies that dominate cloud computing, the payoff shows up in their cloud divisions.
Microsoft (NASDAQ: MSFT) runs Azure, and Amazon (NASDAQ: AMZN) runs Amazon Web Services (AWS) -- the two biggest sellers of rented computing power and the platforms turning artificial intelligence (AI) demand into revenue. Together, they plan to spend close to $400 billion on capital expenditures this year, much of it on AI data centers.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Both stocks have lagged the market this year, with Microsoft among the megacaps' biggest laggards, down about 19% year to date as of this writing. Is it the better buy? Or should investors bet on the better-performing stock of the two: Amazon?
Microsoft: Azure stays out front on growth
The case for Microsoft starts with a single number. In its fiscal third quarter of 2026 (the period ended March 31, 2026), Azure and other cloud services revenue grew 40% year over year, edging up from 39% the prior quarter. That keeps Azure ahead of AWS, which has a slower growth rate.
Additionally, Microsoft's overall cloud business, as Microsoft defines it, goes well beyond Azure. Total Microsoft cloud revenue reached $54.5 billion, up 29%, and the company's AI business passed a $37 billion annual run rate, up 123%. And commercial remaining performance obligations (revenue under contract but not delivered) climbed 99% year over year to $627 billion.
Further, profitability arguably sets the software giant apart. Even with heavy AI spending, its operating margin reached 46.3% in the fiscal third quarter, up from 45.7% a year earlier. And it impressively returned $10.2 billion through dividends and buybacks during the period.
Of course, there's a spending story behind the software giant's cloud growth. Microsoft expects to spend about $190 billion on capital expenditures this year -- up 61%, and its gross margin has narrowed as data-center depreciation mounts. Its deal with OpenAI also changed in April, leaving Microsoft's access to OpenAI's technology no longer exclusive.
At about 23 times earnings, Microsoft's valuation looks attractive next to its underlying business growth. Indeed, on the company's fiscal third-quarterearnings call chief financial officer Amy Hood said Microsoft expects Azure growth to show "modest acceleration in the second half of the calendar year compared with the first half."
Amazon: AWS reaccelerates, with more behind it
Amazon's cloud growth is slower, but it has shown a more meaningful acceleration in recent quarters. AWS revenue rose 28% year over year in the first quarter of 2026, the fastest growth in 15 quarters and an acceleration from 24% in the fourth quarter of 2025 and 20% in the third.
"It is very unusual for a business to grow this fast on a base this large, and the last time we saw growth at this clip, AWS was roughly half the size," said Amazon CEO Andy Jassy on the company's first-quarterearnings call
AWS is where Amazon makes most of its money. It produced $14.2 billion in operating income in Q1 -- close to 60% of total operating profit on about a fifth of revenue, at a margin near 38%.
Further, Amazon's retail business looks solid, with North America sales up 12% in Q1. And advertising revenue has topped $70 billion over the trailing 12 months.
Notably, AWS's signed-contract backlog reached $364 billion, even before including a recent Anthropic deal worth more than $100 billion. But Amazon's spending to support its cloud computing growth story is just as aggressive as Microsoft's. The company expects capital expenditures to total about $200 billion this year. And its free cash flow has dropped to about $1 billion over the past year, from nearly $26 billion.
And when it comes to valuation, Amazon is easily the more expensive stock. Its price-to-earnings ratio sits at about 29 as of this writing.
Which is the better AI cloud stock?
If I had to choose between these two stocks today, I'd lean toward Microsoft after its stock's recent severe pullback. The software giant's Azure is growing faster than AWS, yet the stock trades at a lower price-to-earnings ratio. Add in an operating margin near 46% and a dividend, and the company returns more profit and more cash per dollar invested to shareholders.
Of course, Amazon isn't bad in its own right. AWS is reaccelerating, its cloud margins are strong, and its retail and advertising arms are growth engines Microsoft lacks. Further, both of these stocks face substantial risks. Microsoft's margins are under pressure, and its OpenAI edge has eroded some, while Amazon's free cash flow has nearly vanished. Further, both companies will need to demonstrate to investors an attractive return on invested capital from their AI spending in the coming years.
What would change my view? If AWS keeps closing the growth gap with Azure while Microsoft's margins slip, the case could flip quickly.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The Better AI Cloud Stock: Microsoft or Amazon?

Key Points
After years of struggles, Etsy's niche marketplace has narrowed its focus, and growth is back on the table.
Amazon's sprawling logistics network is key to its success as it enables an exceptional value for shoppers.
The better stock to buy isn’t necessarily the one that trades at the cheapest valuation multiple.
When you think of online shopping, Amazon (NASDAQ: AMZN) is most likely the first company that pops into your head. From only selling books to now offering cars and small homes, this behemoth of an organization dominates the world of commerce.
The "Magnificent Seven" constituent has risen 5% in 2026 (as of June 11). While it's hard to complain about a positive gain given the volatility markets have experienced, this return comes up well short of another e-commerce stock, which is up 25% this year.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Is this much smaller online marketplace a better buy than Amazon right now?
Small fish in a big pond
Retail is a gargantuan industry. Within this, the e-commerce category is also massive, with global sales estimated to be more than $6.4 trillion in 2026. That's a big pond to fish in for Etsy (NYSE: ETSY), whose shares are handily outperforming Amazon's this year. It has successfully carved out a niche in the market.
Etsy's focus on handcrafted, vintage, and unique goods is a key differentiator. However, its performance in recent years, following a surge in demand during the depths of the pandemic, has been disappointing, as growth slowed dramatically. This explains why the shares trade 77% off their peak.
But the company's fundamentals are improving. Gross merchandise sales are projected to rise in the low single digits in 2026, after four straight years of declines. Etsy's profitability is improving, with net margin expanding from 12.2% (for the core Etsy marketplace) in Q1 2025 to 16.6% in the latest quarter.
And management is focused on launching product enhancements to boost engagement. For instance, Etsy is leveraging artificial intelligence (AI) to help streamline the listing process for sellers and improve search for buyers.
The biggest challenge for Etsy, though, is that its performance is deeply tied to macroeconomic factors. Because its merchandise is largely discretionary, consumers don't feel the need to visit the marketplace frequently, especially when inflation is high. The number of repeat buyers, those who made purchases on two or more days in the past 12 months, declined 3.2% year over year.
Scale is the advantage
Etsy is winning the race in 2026, but Amazon's stock's trailing-five-year rise runs laps around its smaller industry peer.
Amazon's dominant position in online retail is difficult to overstate. There were almost 2.1 billion visitors to Amazon.com in April. Of total online shopping in the U.S., 40% of this activity was accounted for by Amazon's marketplace. And its online stores raked in $64 billion in revenue in the first three months of 2026. The company's scale is unmatched.
The customer value proposition can't be beat. Extremely low prices on a massive selection of goods, with fast and free delivery, give individuals a level of convenience they have never experienced before. The compelling Prime membership supports consumer loyalty.
Logistics play a critical role. Amazon has invested aggressively to build the necessary infrastructure to bring down shipping costs and speed up delivery times. This leads to a durable advantage against its rivals, driving sustainable financial performance.
View these stocks through a risk lens
While Etsy and Amazon operate in the same industry, they deploy different strategies. Etsy is a niche marketplace that might only draw hobbyist sellers and buyers. Amazon aims to be the store that sells everything, prioritizing convenience and catering to the masses.
Despite what the scoreboard shows in 2026, Amazon is the better buy right now. It trades at a forward price-to-earnings ratio that's 144% higher than Etsy's But its proven competitive advantages and ability to steadily grow in all economic environments make it a safer choice.
Investors comfortable taking on more risk and accepting greater uncertainty over the next three to five years might lean toward Etsy. If it can execute extremely well and macro conditions are accommodative, which aren't guaranteed, then it can be a winner.
Should you buy stock in Etsy right now?
Before you buy stock in Etsy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Etsy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Etsy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Meet the E-Commerce Stock That's Up 25% in 2026. Is It a Better Buy Than Amazon?

Key Points
Roku shares moved higher on Friday afternoon, after Bloomberg reported that the streaming pioneer was exploring a potential sale of the company.
With Roku growing faster than it has in four years, it seems like the wrong time to cash out.
It's more bitter than sweet when a high-conviction stock you own is on the bidding block.
You're not supposed to be upset when you see your largest holding trading sharply higher, but that's just where I was on Friday afternoon. Roku (NASDAQ: ROKU) shares popped 20% on the final market day of the week, most of that coming in the last hour and change.
I ran through the usual suspects that would cause this kind of midday jump. It couldn't be fresh financials. Roku is six weeks away from its next quarterly update, and even if that wasn't the case, it wouldn't push out results during the trading day. A major analyst upgrade wasn't going to create much of a fuss for a widely followed company. An activist investor rattling the cage was unlikely. With Roku's ascending fundamentals and market-thumping stock performance over the past year, a proxy battle couldn't be in the cards.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
A marketing or content partnership, like the promising ad deal Roku struck with Amazon last year, can move the stock higher. It just didn't seem likely that it would be that much higher. That left the lone possibility for the spike being Roku's status as a buyout candidate, and, unfortunately, I was right.
Thinking outside the box
Bloomberg reported late in Friday's trading day that Roku is exploring the sale of the company. Unnamed sources close to the matter say that discussions have taken place with at least one media company as a potential buyer. Buyout chatter doesn't always move a stock, but when it comes from a historically reliable news source, the market takes it seriously.
Buyout talks usually end in question marks instead of exclamation points and signatures, and Roku isn't desperate. It will need someone to pay a healthy premium to take it out of investors' hands. The shares have soared 87% over the past year. It was crushing the market with a roughly 50% jump before Friday's pop.
Roku is finally becoming the company investors were hoping it would be. It's been consistently profitable over the past year. The 22% year-over-year growth it posted in its latest quarter is its strongest top-line increase in four years. The same company that was struggling with monetization a couple of years ago is coasting now. Roku delivered 27% growth in ad revenue and a 30% uptick for its subscriptions business in the first quarter. With a growing audience of more than 100 million homes on its platform, Roku continues to be larger than the well-financed consumer tech titans in this space.
It only helps Roku's leverage that Evercore ISI's analyst raised its price target on the shares earlier in the day from $160 to $185. Even after Friday's afternoon surge, that analyst price target is a healthy 29% premium to its weekly close.
Teardrops in the bidding war
I've written about Roku's buyout potential for years. Even last summer, in a podcast discussing the next potential Rule Breakers buyout, I went with Roku. I always figured it would be one of the consumer tech giants in this space. More than likely, I figured it would be a tech behemoth that never made a dent in this market. That's you, Microsoft.
Bloomberg's report that Roku's first conversation has been with an unnamed media company is surprising. The appeal to Roku is its agnosticism, a big reason it's been able to keep three of the "Magnificent Seven" companies in this niche far behind in its rearview mirror. If a media company behind one of the leading streaming service stocks gobbles up Roku, it's going to be harder to appeal to the thousands of other streaming apps on its operating system.
Sure, there's an allure to pitching streaming ads to Roku's gargantuan audience. Connected TV is the future, and Roku is in the pole position, with its viewers spending an average of more than four hours a day on the platform.
You can argue that I should be happy if someone is willing to pay 20% to 30% more for Roku stock than where it's trading at today. Even if it takes a few quarters for the deal to close, it should beat the market. I can also just bow out when a potential deal is announced, putting that money to work elsewhere.
You would be right, but I'm still allowed to be selfish. When you put in the time and research into a high-conviction stock, it's not easy to find a replacement. Suffering through plenty of highs and lows with Roku over the years, I hate to see a potential exit strategy now, when the bullish momentum actually feels sustainable.
I won't get in the way of a buyout. I'm not going to storm the wedding and object to the pairing when given the chance. But I will take my premium and move on to the reception hall. So if you see me teary-eyed as the Chicken Dance plays, know that I wasn't the chicken here.
Should you buy stock in Roku right now?
Before you buy stock in Roku, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Roku wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Rick Munarriz has positions in Roku. The Motley Fool has positions in and recommends Amazon, Microsoft, and Roku. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Please, Don't Give My Roku Stock Away

Key Points
Amazon is more leveraged to cloud computing than Microsoft is.
Both companies are growing and are valued similarly.
Two of the largest and most important companies in the world are Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN). Both companies rank among the top five largest companies in the world, coming in at fourth and fifth, respectively. However, investors may be torn between which is the better choice.
On the surface, they look like completely different businesses, but the more you dig, the more you'll find they have in common. But which is the better buy? Let's find out.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Cloud computing is a major component for each
Ask your average person what each company does, and you'd likely get a response along the lines of: "Microsoft makes computer software, and Amazon sells goods and delivers them." While those two statements aren't wrong, they ignore the most important part of each business: cloud computing.
Both Microsoft and Amazon have major cloud computing divisions, with Microsoft Azure and Amazon Web Services (AWS) integral to their businesses. The effect cloud computing has on their businesses is impressive, especially with Amazon. AWS accounted for 59% of operating profits in Q1 despite generating only 21% of total revenue. Microsoft is less granular with its cloud reporting, and we only know that it grew 40% year over year -- Microsoft's fastest-growing individual unit.
These two are very similar businesses and are the primary reasons to invest in the stock, but you're not going to find much difference between the two, so let's look at their other business segments.
For Microsoft, a significant chunk of its sales comes from business productivity software, a high-margin business that's pretty safe during a downturn. Amazon's commerce business is also solid, but it operates on a low-margin model (sometimes at a loss) and can be impacted by consumer sentiment.
Microsoft has a stronger core business outside of cloud computing, so I'm giving it the win here.
Winner: Microsoft
Both companies are growing at a similar rate
During their most recent quarters, each business grew at around the same pace. Microsoft's revenue rose 18% year over year, and its cash from operations rose 26%. Cash from operations is a better metric for these two companies than earnings because each is spending heavily on data centers and also has various one-time effects coming from significant investments in generative artificial intelligence firms like Anthropic and OpenAI.
Amazon's revenue grew 17% year over year, but its cash from operations rose 53% thanks to AWS' strength.
Because there is such a difference in profit margins between Amazon's commerce and cloud business, it will likely continue to grow cash from operations at an outsize pace for some time, as its high-margin business is growing far faster than its low-margin businesses. Microsoft is more balanced and won't show as rapid a cash flow growth as Amazon will in the future.
Winner: Amazon
Both stocks are priced cheaply from a historical standpoint
Sticking with the trend of using cash from operations, both stocks are valued at a pretty cheap level, at least compared to the last five years.
This price tag, especially for Microsoft, is far off from its normal levels. Even Amazon is valued decidedly lower than it was over the previous few years, but it's not down as much. With both companies trading at nearly identical prices, I don't know if I can call one a winner here. They are both excellent stocks to buy and have the same price tag. As a result, I'm going to call this one a tie.
Winner: Tie
A tie?!
The reality is that both Amazon and Microsoft are excellent investments. I don't think investors can go wrong with either, and with their attractive prices, now is a perfect time to buy. However, this analysis cannot just end in a tie. If I'm looking for a differentiating factor, I think Amazon has it.
Amazon's custom AI chip business is exploding, growing at a triple-digit year-over-year pace. Additionally, it has deep partnerships with Anthropic. While Microsoft has its own custom AI chip and has a partnership with OpenAI, Amazon's custom chip business is doing better, and by all accounts, Anthropic's models are outperforming OpenAI's. As a result, I'll give the edge to Amazon at the moment.
Should you buy stock in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Keithen Drury has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Better Stock to Buy Now: Amazon vs. Microsoft

Key Points
Anthropic says its new Claude Fable family of models is as powerful as the Mythos model that it chose not to release to the public.
Over the past several months, the company has signed a number of partnerships with AI hyperscalers.
Chipmakers, cloud providers, and capacity partners are becoming increasingly important for Anthropic as the company rapidly scales up.
Fresh off a $65 billion Series H funding round and the confidential filing of its S-1 with the Securities and Exchange Commission, Anthropic has unveiled its most powerful large language model to date, Fable 5.
Let's explore what makes Fable so distinctive in the world of frontier artificial intelligence (AI). From there, I'll suggest four top stocks that are poised to benefit as Anthropic's model capabilities create new demand and opportunities across the AI system.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
What makes Claude Fable different than other generative AI models?
What truly distinguishes Fable is its design for agentic work rather than isolated prompt responses. Since the model features coherent reasoning and execution across extended sessions, it is inherently designed for autonomous handling of multistep projects that previously required constant human oversight.
In business environments, Fable has demonstrated strong performance in software engineering, where it can complete applications, build functional games, or iterate on existing user interfaces with minimal guidance. It extends beyond simple image recognition, making it capable of deeper interpretation of diagrams, charts, tables, and nested content within files.
Which hyperscalers benefit from the release of Claude Fable 5?
Like all frontier AI models, Fable relies on huge parallel processing power during both training and inference. Over the last several months, Anthropic has deepened its technical collaboration with Nvidia (NASDAQ: NVDA) through architecture optimization and large-scale deployments that incorporate the chipmaker's Blackwell and Vera Rubin GPU architectures.
This relationship will drive higher volumes of chip procurement and accelerate the adoption of Nvidia's full-stack ecosystem. As businesses adopt Fable for more demanding AI workloads, Nvidia should capture sustained hardware demand that supports its leadership in the accelerated computing landscape.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) will also be a quiet winner from Fable's development. Like Nvidia, Google Cloud supplies Anthropic with access to its custom Tensor Processing Units (TPUs) for training needs.
Anthropic already runs workloads through Google Cloud's Vertex AI platform. Fable's release is likely to increase the scale of this operation. This will allow Alphabet to monetize both its data center capacity and its proprietary custom silicon hardware while deepening integration between its cloud infrastructure platform and Anthropic's AI model development.
Amazon (NASDAQ: AMZN) has one of the largest infrastructure commitments in the AI sector with Anthropic. Their multiyear agreement secures 5 gigawatts of new AI capacity, featuring substantial use of Amazon's custom Trainium and Inferentia chips. Their relationship also includes a $100 billion commitment over the coming decade from Anthropic to continue using Amazon Web Services (AWS) as its primary cloud provider.
SpaceX is the hidden winner with Claude Fable
SpaceX (NASDAQ: SPCX) is aggressively carving out a distinctive role in AI infrastructure by leasing cloud capacity. A new arrangement with SpaceX grants Anthropic access to 300 megawatts of new capacity featuring a cluster of more than 220,000 Nvidia GPUs. Per the terms of the deal, Anthropic will pay SpaceX $1.25 billion per month over the next three years.
For SpaceX, the relationship with Anthropic represents an ability to monetize its advanced data center infrastructure, which was originally developed for its own needs. The partnership converts some of that AI capacity into a steady revenue stream while positioning SpaceX as an emerging hyperscale compute provider.
In my view, Fable's arrival will accelerate infrastructure spending across a number of partners while offering end users a different level of AI-powered assistance.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Adam Spatacco has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

These 4 Artificial Intelligence Stocks Have Room to Run Thanks to Anthropic's New Fable Model

Key Points
Amazon has huge profit growth coming its way.
Meta Platforms is far cheaper than SpaceX.
Nebius is outgrowing SpaceX.
Space Exploration Technologies -- more commonly known as SpaceX -- is the latest hot company to go public, and investors are paying close attention to it. I understand the buzz around the stock, but there are several other investments that I think are better buys right now.
I have three of them, and each represents a different way to outperform SpaceX over the long haul.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
1. Amazon: rapid profit growth
Amazon (NASDAQ: AMZN) is one of my top stock picks right now because it's undergoing huge expansion in one business segment. In 2026, management plans $200 billion in data center capital expenditures (capex). It has that money thanks to huge cash flows -- something SpaceX doesn't quite have. (For reference, SpaceX had $20.7 billion in capex during 2025.)
Once those data centers are built and monetized, Amazon will undergo huge profit growth because Amazon Web Services (AWS), its cloud computing wing, has much higher profit margins than its core e-commerce business. AWS made up 59% of operating profits in the first quarter. With that segment expected to undergo rapid growth in the near future and its high operating margin, profits are set to explode over the next few years.
It will likely outgrow SpaceX from this perspective, making it a great stock to buy instead.
2. Meta Platforms: valuation
SpaceX is a very expensive stock. In 2025, the business generated $20.7 billion in revenue, and if management could snap its fingers and instantly generate a 40% profit margin, that would result in earnings of $8.3 billion, at a $1.75 trillion market cap, which would value the stock at 210 times trailing earnings (that don't exist). That's a huge premium for a company that's newly public, and investors should consider some other values out there, like Meta Platforms (NASDAQ: META).
Meta operates several social media platforms, like Facebook, Instagram, WhatsApp, and Threads. These generate plenty of advertising revenue and make it very profitable. However, the market doesn't give Meta much of a premium: It trades for 21 times trailing earnings and 18 times forward earnings.
During its last quarter, revenue rose at a 33% pace -- the same growth that SpaceX put up in 2025. For SpaceX to trade at the same price tag as Meta, it would need to maintain its hypothetical profit margin and grow its revenue 10 times from here. That's a huge ask, and makes me lean toward Meta's stock. With Meta trading for a far cheaper price tag, it makes more sense to invest in that SpaceX.
3. Nebius: revenue growth
If you're looking for a real rocket ship of a company, then Nebius (NASDAQ: NBIS) is your ticket. While SpaceX grew at a respectable 33% pace in 2025, Nebius put it to shame. In the first quarter, revenue rose 684% year over year.
And the company is building data centers for artificial intelligence (AI) workloads. It operates as an autonomous business that already has major clients, and it's backed by the titan in the AI industry, Nvidia. There is clearly a huge demand for these facilities, and Nebius aims to expand from $1.25 billion in annual recurring revenue by the end of 2025 to $7 billion to $9 billion by the end of 2026.
That's dramatic expansion, but Wall Street believes it won't just stop at the end of this year. Analysts expect 550% revenue growth in 2026 and 225% in 2027.
SpaceX is nowhere near those growth rates and really has no chance to match them based on its current size. I think Nebius has a much better chance to outperform it over the next few years, making it the better buy now.
Should you buy stock in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 14, 2026.
Keithen Drury has positions in Amazon, Meta Platforms, Nebius Group, and Nvidia. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Forget SpaceX: 3 Stocks That Are Brilliant Buys Right Now

Key Points
Most S&P 500 index funds are market-cap weighted.
An alternative approach is an equal-weighted fund.
Both can serve you well, and one looks less risky.
What's the investment I've recommended most often for most people? A low-fee exchange-traded fund (ETF) that tracks the S&P 500 index, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO) or the SPDR S&P 500 ETF (NYSEMKT: SPY). I suspect many of my colleagues would say the same. Even Warren Buffett has recommended it. In his 2016 letter to shareholders, he noted, "Over the years, I've often been asked for investment advice... My regular recommendation has been a low-cost S&P 500 index fund."
So I'm sorry to point out that it's not a perfect kind of investment. It has some issues.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
What's wrong with the S&P 500?
Here's a big one: It's way more concentrated than most people realize. For example, check out its recent top 10 components:
Company
Weight in S&P 500
Nvidia
7.43%
Alphabet (A and C share classes)
6.59%
Apple
6.48%
Microsoft
4.35%
Amazon.com
3.92%
Broadcom
2.74%
Tesla
2.26%
Meta Platforms
2.17%
Micron Technology
1.65%
Berkshire Hathaway
1.56%
Those weightings may not seem huge until you remember that there are about 490 other companies. These 10 above represent about 2% of the index's holdings but 39% of its total value. So if you invest in the S&P 500 because it's a great way to be quickly and easily invested in 500 of America's biggest companies, you are invested in those companies, but more than a third of your investment is in these 10 companies alone.
Here are the weightings of some other companies:
Company
Rank in S&P 500
Weight in S&P 500
McDonald's
54
0.30%
PepsiCo
59
0.29%
Pfizer
80
0.22%
Kroger
261
0.06%
Clorox
468
0.02%
As you can see, you won't have much invested in the vast majority of the companies.
That can be OK, though. Maybe you like those tech heavyweights in the top 10 -- which include all of the "Magnificent Seven" stocks (Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla). Maybe you want to invest in the 500 companies, with most of your money going to the biggest. After all, most of them have grown very rapidly over the past few years.
Keep in mind, though, that when there's a stock market crash or correction, as there invariably is now and then, those high-flying growth stocks are often the ones that fall harder. That, too, can be OK as long as you have a very long-term investing period. But it's not ideal.
Is there a better alternative to the S&P 500?
There is an alternative to standard S&P 500 index funds that's worth considering: An equal-weighted one. Standard ones are weighted by market cap, meaning the larger a company's market cap, the greater its weighting. The Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), in contrast, is equal-weighted. The 500 components are rebalanced quarterly, so between rebalancings you'll see fluctuations in the weightings as various stocks gain or lose value from day to day and year to year. Check out its recent top 10 holdings:
Company
Weighting
Dell Technologies
0.48%
SanDisk
0.48%
Intel
0.42%
Advanced Micro Devices
0.42%
Humana
0.40%
Micron Technology
0.40%
Hewlett Packard Enterprise
0.40%
Seagate Technology
0.40%
ON Semiconductor
0.35%
Western Digital
0.35%
Note that Micron Technology appears in both top 10 lists, but in the earlier one, it has a 1.67% weighting, while in the fund above, it has a much lower weighting of 0.35%. This kind of index fund has you much more invested in the other 490 stocks beyond the top 10 -- though, of course, each stock has a relatively minor weighting. But every promising stock will have an equal chance of outperforming for you.
An equal-weighted S&P 500 ETF may not grow as fast as a market-cap-weighted one, but during a market downturn, it may hold its value a bit more. Over the past 15 years, this ETF has averaged annual gains of about 12%, while the Vanguard S&P 500 ETF has averaged 14.4%. There's a trade-off, but it's not enormous. Give equal-weighted S&P 500 index funds some consideration.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Selena Maranjian has positions in Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nvidia, and Pfizer. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, Hewlett Packard Enterprise, Intel, Meta Platforms, Micron Technology, Microsoft, Nvidia, Pfizer, Tesla, Vanguard S&P 500 ETF, and Western Digital. The Motley Fool recommends Kroger and ON Semiconductor and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Have S&P 500 Index Funds, Often Touted as the Best Stock Investments, Become Dangerous? There's a Worrisome Development -- and a Possibly Better Alternative.

Key Points
Microsoft looks like a huge bargain compared to SpaceX.
Nebius Group is growing far faster than SpaceX.
Nvidia provides a combination of growth and value that SpaceX doesn't offer.
Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, is attracting a lot of attention, as it should. It's the largest IPO the world has ever seen, led by the visionary Elon Musk. Although Musk may be a polarizing figure, there's no denying the success he's delivered to investors so far through Tesla.
While investors may want Tesla-like returns, achieving them with SpaceX will be nearly impossible given its sheer size. Instead, I think investors should focus on other stocks that look like great values or are growing at lightspeed. These all appear to be better investments than SpaceX and will make investors far more money over the next few years.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
1. Microsoft
Microsoft (NASDAQ: MSFT) may sound like a boring old investment, which may be partially true. However, it has a few things going for it.
First, it's well off its all-time highs. The market has turned sour on Microsoft's stock despite the company's excellence in many areas, specifically in artificial intelligence (AI). Its AI product lineup grew annual recurring revenue by 123% to $37 billion during its most recent quarter.
Additionally, its cloud computing division, Azure, increased revenue by 40%. Overall, Microsoft's quarterly revenue rose at an 18% pace to $82.9 billion. For reference, SpaceX's 2025 revenue totaled $18.7 billion, up 33%.
Microsoft is also attractively valued, trading at one of the lowest price-to-earnings (P/E) ratios the market has seen in a while.
While SpaceX may be the flashy stock, Microsoft is the workhorse that will deliver for investors over the long term. As a result, I think it's an excellent buy right now.
2. Nebius Group
If Microsoft is growing too slowly for your liking, Nebius (NASDAQ: NBIS) might be a better pick. In one aspect, Nebius and SpaceX may be head-to-head competitors.
Nebius is a neocloud company specializing in AI-ready cloud computing. Part of SpaceX's business plan is to launch AI data centers into space, and whether it's a success remains to be seen.
One thing that isn't up for debate is Nebius's success right now. In the first quarter, it grew revenue by 684% year over year. That's not the end of it, either. Wall Street analysts expect 550% revenue growth for 2026 and 225% in 2027. SpaceX can only dream of growth like that, and it doesn't have any divisions remotely close to Nebius's growth rate.
I think Nebius is primed to continue growing rapidly and will easily outpace SpaceX over the next few years, making it a better stock pick.
3. Nvidia
If you're looking for a combination of growth and value, then Nvidia (NASDAQ: NVDA) is your ticket.
The world's largest company makes GPUs that power AI workloads in data centers. It's growing at a remarkable pace right now and is expected to keep that up for some time. For fiscal year (FY) 2027 (ending January 2027), Wall Street analysts expect 81% growth and 41% in FY 2028. Those are both faster growth rates than SpaceX is currently growing, and Nvidia can also be purchased at a pretty attractive valuation.
At 31 times earnings, it's not particularly expensive, especially compared to other tech stocks like Apple and Amazon, which trade at 36 and 29 times earnings, respectively. Neither of these (or any other big tech stock, including SpaceX) has growth remotely close to Nvidia.
Nvidia is a rare combination of growth and value and will likely result in huge returns. I think it will easily outperform SpaceX moving forward, and I'm putting my money there instead of the latest hot IPO.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $532,856!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $55,487!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $433,268!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of June 14, 2026.
Keithen Drury has positions in Amazon, Microsoft, Nebius Group, Nvidia, and Tesla. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Genius Stocks I'm Buying Instead of the SpaceX IPO

Key Points
Costco, Walmart, and Amazon are all strong retail stocks.
Amazon is riskier, but it has more upside thanks to its cloud business.
Picking a winner depends on the goals and needs of a portfolio.
Costco Wholesale (NASDAQ: COST), Walmart (NASDAQ: WMT), and Amazon (NASDAQ: AMZN) have all carved out their own niche in serving retail shoppers. Walmart is known for low prices, Costco sells bulk items, and Amazon sells and ships pretty much anything you need.
As investments, they are also all unique in how they can fit into a portfolio. Finding the winner between the three comes down to holding periods and investing goals.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The membership model that keeps making money
Walking through a Costco is often described as being on a treasure hunt, with some members even sharing their shopping trips on social media. With its bulk deals and private-label Kirkland Signature brand, Costco has built a loyal following that helps it boast an impressive membership renewal rate. As of its fiscal Q3 2026, Costco's membership renewal rate in the U.S. and Canada was 92.2%, while its worldwide membership renewal rate was 89.7%.
Mostly known for its warehouse shopping experience, Costco is also seeing positive results from connecting more with its customers online. In the third quarter, e-commerce site and app traffic rose 37%, while digitally enabled comparable sales increased 21.5%. While the quarter was strong and the company generally met or slightly beat expectations, the report wasn't enough to impress investors, and the stock price has recently dipped. Costco is richly valued, with a forward price-to-earnings ratio of 43.1, so expectations are high.
Still, over the last five years, Costco has done well by its shareholders, with the stock climbing over 150%. It's also a dividend payer, and while that yield is on the smaller side at 0.6%, Costco is also known for paying out a special dividend from time to time. In 2024, the one-time special dividend payout was $15 per share.
Constant dividends with a side of tech
Walmart is the only Dividend King on the list, earning that title by increasing its dividend payout for 50 or more consecutive years. That shows stability in the company's business model, because no matter what is going on in the economy, it has consistently rewarded its shareholders with dividend increases for the past 53 years. That comes from having a reliable business model.
Unlike some other Dividend Kings, however, Walmart is also known for providing stock price appreciation, particularly over the last five years, with shares also up over 150%, like Costco. That growth can continue over the long term as it infuses more technology into its business, such as its artificial intelligence (AI) shopping agent, Sparky. It also has growing revenue from its Walmart+ membership and a budding advertising division.
Follow the AI leader
Amazon has a retail presence like Walmart and Costco, and it also has a grocery component through its ownership of Whole Foods. But there's an even bigger opportunity outside of the retail sector for Amazon.
Much as in the chip sector for AI, where most roads lead to Nvidia, that's increasingly becoming true with Amazon's cloud business. In its 2026 first-quarter earnings report, Amazon announced new Amazon Web Service (AWS) agreements with Anthropic, Meta Platforms, Nvidia, OpenAI, and Uber Technologies. In that report, Amazon also announced that AWS revenue increased 28% to $37.6 billion, which was its fastest revenue growth in 15 quarters.
For Amazon, the only catch is that it is judged more as a tech company than a retailer. Tech stocks are usually the first stocks investors rotate out of during periods of heightened economic uncertainty, as they are seen as risky.
The winning stock
Walmart, Costco, and Amazon are well-run companies, and each could be worth holding in a portfolio. But with the idea that you'd be buying a stock in 2026 to hold for years or decades for stock price appreciation, Amazon could offer the most potential thanks to its AI opportunities. It's making heavy investments to win the AI race against other big tech companies, but as those capital expenditures start showing up as revenue and margins improve, that can help the stock price break out.
For long-term investors seeking reliable income, however, Walmart is worth considering. The dividend yield is on the lower side at 0.8%, but that indicates a sustainable yield. Plus, while Amazon could offer more long-term stock price appreciation because of its cloud services and involvement in AI, Walmart's dividend payout can help increase its total return potential.
Should you buy stock in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Meta Platforms, Nvidia, Uber Technologies, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Costco vs. Walmart vs. Amazon: Which Stock Is the Smartest Buy in 2026?

Key Points
Apple's capital expenditures totaled about $12.7 billion in fiscal 2025, a fraction of its mega-cap peers' spending.
The company announced a new $100 billion share repurchase program in April.
AI infrastructure stocks have sold off this month on spending and financing concerns.
Some of the technology world's biggest spenders had a rough week. Oracle sank by a double-digit percentage after pairing record quarterly results with plans to raise tens of billions of dollars in additional financing for its artificial intelligence (AI) data center build-out. Chip stocks fell hard, too, as investors questioned when all of this spending starts paying for itself.
Some investors may think the best way to diversify away from these AI companies is to venture beyond tech. But I actually think one of tech's biggest names offers some good balance to stocks like this. I'm talking bout the $4.3 trillion iPhone-maker: Apple (NASDAQ: AAPL).
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Apple has been flagged by some investors in recent years as behind "behind" on AI as other tech giants spend far more to capitalize on opportunities in the AI era. But what if this is actually a strength?
A spending gap in the hundreds of billions
Apple's capital expenditures in fiscal 2025 (the period ended Sept. 27, 2025) totaled about $12.7 billion. Its mega-cap peers -- Microsoft, Alphabet, Meta Platforms, and Amazon -- combined to spend more than $400 billion on the same line item in calendar 2025.
And the gap is set to widen. Amazon alone expects its capital spending to reach about $200 billion this year -- about 16 times what Apple spent in its most recent fiscal year.
But this doesn't mean Apple is ignoring AI. The company is simply approaching it differently. At its developers conference on Monday, Apple unveiled its long-awaited Siri overhaul, powered by Alphabet's Gemini models under a partnership that reportedly costs about $1 billion per year, with the new software arriving this fall. Additionally, Apple's AI effort seems to run largely through its operating budget: research and development spending was $34.6 billion in fiscal 2025 -- nearly three times its capital expenditures -- and it climbed 33% year over year in the company's most recent quarter.
And while peers borrow to build, Apple keeps handing cash back to shareholders. Alongside its fiscal second-quarter results in April (the period ended March 28, 2026), the company announced a new $100 billion share repurchase authorization and raised its dividend 4%. The quarter itself was Apple's best March quarter ever, with revenue climbing 17% year over year to $111.2 billion and earnings per share jumping 22%.
"Our strong business performance during the March quarter generated over $28 billion in operating cash flow and drove new March quarter records for both operating cash flow and EPS," said Apple chief financial officer Kevan Parekh in the company's fiscal second-quarter earnings release.
In other words, the cash that rivals are pouring into data centers is, at Apple, still flowing to shareholders.
The case against patience
Of course, there's a less flattering version of this story.
Apple's revamped Siri runs on models built by a direct rival rather than on technology Apple owns. If AI assistants become the main way people interact with their devices, depending on Alphabet for that critical layer could prove costly. The rival, in effect, now sits inside the product Apple's customers talk to.
And the stakes are enormous. Apple's installed base has surpassed 2.5 billion active devices. That base is a key part of the company's moat -- and it's also what could erode if a competitor's assistant becomes the one consumers actually prefer.
What to watch
Investors should watch two things from here.
The first is how quickly users embrace the new Siri once it ships this fall. This could be revealed in any management commentary in the first quarterlyearnings callfollowing the release of Siri AI.
The second main factor to watch is whether iPhone and services momentum holds up in the upcoming quarterly reports. Sustained double-digit growth in both iPhone and services revenue would suggest customers are buying into Apple's AI strategy.
For now, I think the past week strengthens Apple's case.
Restraint can look like timidity when AI infrastructure stocks are soaring. But when the market starts questioning the spenders' debt loads and cash burn, that same restraint starts to look like discipline. Sure, Apple may still need to prove it can deliver great AI experiences. But isn't letting someone else shoulder hundreds of billions in spending -- while you keep the customer relationship -- the kind of position most businesses dream of?
Should you buy stock in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,268!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,259,391!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 13, 2026.
Daniel Sparks and his clients have positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.