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 looks like a rare case where the scale of the business and the quality of earnings simultaneously support the valuation, but some of the multiples already reflect strong market expectations. TTM revenue reached $200.6 billion, and net income was $62.6 billion, confirming a very strong operating base and improved business monetization. The net profit margin of 17.44% and operating margin of 12.08% are notably above industry benchmarks, while the gross margin of 50.77% points to sustained pricing power and an efficient cost structure. ROE of 30.5%, ROA of 15.21%, and ROI of 25.3% also look very strong and, based on recent trends, are generally improving, which supports a valuation premium. At the same time, P/E of 19.97 is only slightly above the industry median, but P/S of 3.34 and P/B of 5.07 are significantly higher, indicating richness relative to revenue and book value. From a cash-based valuation perspective, P/FCF looks anomalously low, which may reflect very strong free cash flow, but this metric should be interpreted cautiously due to possible volatility in the calculation base. The debt burden is generally moderate: debt/equity of 0.23 is below the industry median, however long-term debt has increased to $128.9 billion, and current liquidity remains less than ideal — current ratio is 1.03 and quick ratio is 0.88. This means the balance sheet does not look strained, but the liquidity cushion is not comfortable either, especially amid rising liabilities. Equity and assets continue to grow, confirming business expansion and a strengthening financial base. The company does not pay dividends, so shareholder returns depend entirely on earnings growth and market revaluation. Overall, the fundamentals are strong, but due to high multiples and an already elevated expectation base, the potential for further valuation rerating appears limited and calls for a conservative approach.

Amazon.com, Inc.

Сильный индекс, без изменений. Быки в растерянности.

Strong index, flat. The bulls are confused.

Сильный индекс, без изменений. Медведи в растерянности.

Strong index, flat. The bears are confused.

Слабый индекс, значительно вырос. Рынок не поддерживает быков.

Weak index, significantly up. The market does not support the bulls.

Слабый индекс, значительно упал. Рынок на стороне медведей.

Weak index, significantly down. The market is on the bears' side.

Слабый индекс, незначительно вырос. Приток средств в лонги остается на невысоком уровне.

Weak index, slightly up. The inflow of funds into longs remains at a low level.

Слабый индекс, незначительно упал

Amazon demonstrates strong growth in profitability and margins with moderate debt, but high P/S and P/B ratios limit revaluation potential.

Key Points
SpaceX makes up over half of Harvard's public equity portfolio and is a massive bet on the future.
TSMC is a great way to play the AI infrastructure boom, while Cerebras is focused on the inference market.
Amazon and Alphabet are two of the world's leading cloud computing companies, with strong growth ahead.
Harvard University has the largest academic endowment in the world, valued at nearly $68 billion. While the endowment invests in approximately 15,000 funds, it also holds individual stocks, with 75% of its public equity portfolio held in five AI stocks.
Let's take a closer look at these stocks to see if this is a genius move or a risky bet.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
1. Space Exploration Technologies
Space Exploration Technologies (NASDAQ: SPCX) -- otherwise known as SpaceX -- is Harvard's largest individual stock holding by a wide margin, representing over 52% of its public equity portfolio. Note, however, that this $2.2 billion investment would only account for about 3% of its total endowment. As such, the investment looks like a much smarter, less risky bet than it may appear on the surface.
SpaceX is very much an investment focused on the future, with ambitious goals including putting data centers in space, Earth-to-Earth cargo transport, asteroid mining, and even colonizing Mars. The company's reusable rockets have helped change the economics of space launches, and it is now trying to adapt that technology to its larger Starship rocket, opening up a whole new world of possibilities.
With bets on space, AI infrastructure, AI coding, AI models and applications, and satellite internet, SpaceX has huge growth potential, making it a solid stock to own.
2. Taiwan Semiconductor Manufacturing
If you want to invest in the AI infrastructure build-out without picking a chip technology winner, Taiwan Semiconductor Manufacturing (NYSE: TSM) is a great option. It currently accounts for more than 8% of Harvard's stock portfolio.
TSMC is the world's leading manufacturer of advanced logic chips, including graphics processing units (GPUs), custom AI accelerators, and central processing units (CPUs). The company has a near-monopoly in advanced chip manufacturing and strong pricing power, making it one of the best ways to play the data center build-out.
3. Cerebras Systems
Cerebras Systems (NASDAQ: CBRS) makes up nearly 6% of Harvard's stock portfolio and is an interesting bet on the future of inference technology. The company's wafer-sized chips are 30 times faster than GPUs for inference and six times faster than Groq's language processing units (LPUs). Meanwhile, the company has a large commitment from OpenAI.
However, given the high cost of SRAM (static random-access memory) and the specialized power management and cooling required, Cerebras' systems are expensive and are currently viewed as a high-end niche solution. If its superior technology can break into the mainstream, the stock could have some huge upside, with the inference market projected to become much larger than the one from AI model training.
4. Amazon
Amazon (NASDAQ: AMZN) is Harvard's fourth-largest individual stock holding, accounting for over 5.5% of its public equity portfolio, and the university increased its position by over a third during Q2. The company operates the world's largest cloud computing and e-commerce businesses, and both segments have been firing on all cylinders.
Amazon Web Services (AWS), Amazon's cloud computing unit, is seeing strong revenue growth driven by AI demand, and with a nearly $500 billion backlog and massive infrastructure investments, growth should continue to accelerate in the coming years. Meanwhile, the company's investments in AI and robotics are driving incredible operating efficiency in its e-commerce operations, resulting in robust profit growth. This makes the stock a top option to own.
5. Alphabet
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) rounds out Harvard's top-five stock holdings, accounting for nearly 4% of its portfolio. Alphabet is the most complete AI company, having both a top-tier foundational model and world-class AI chips.
Alphabet's Tensor Processing Units (TPUs) are one of the company's biggest advantages, allowing it to train its AI models and run inference at significantly lower cost than competitors. This also gives the company some of the best cloud computing economics, with a one-year payback on its chip and networking investments when it uses its TPUs. Meanwhile, it feeds AI models directly into its Google Search platform, where it has a huge distribution and monetization edge. This makes Alphabet a top AI stock to own over the long haul.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, 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 Alphabet 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 $350,756!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,363,905!*
Now, it’s worth noting Stock Advisor’s total average return is 922% — a market-crushing outperformance compared to 213% 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 October 22, 2026.
Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Harvard's Endowment Has 75% of Its Stock Portfolio in 5 AI Stocks. Genius Move or Dangerous Trap?

Key Points
Nuclear energy is experiencing a global revival, driven by energy security, decarbonization efforts, and soaring electricity demand.
Uranium supplies are struggling to keep pace as inventories shrink and utilities compete to secure long-term fuel contracts.
Uranium prices could remain near $100 per pound, benefiting producers such as Cameco and Uranium Energy.
The nuclear revival is gaining momentum. Governments worldwide are turning to nuclear energy to strengthen energy security. Meanwhile, hyperscalers need reliable, around-the-clock power to support surging electricity demand. Nuclear energy stands out for its emission-free, 24/7 baseload power, unlike intermittent renewables.
That combination is strengthening the outlook for nuclear energy and its essential fuel, benefiting uranium miners like Cameco (NYSE: CCJ) and Uranium Energy (NYSEMKT: UEC). With spot prices near $90 per pound and approaching historic highs, investors are asking a crucial question: Where does uranium go from here? Here's what I predict will happen to uranium next.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
New nuclear reactors are coming online at a rapid rate
In the mid-2000s, nuclear energy was enjoying a resurgence. However, economic shifts, project delays, and the 2011 Fukushima disaster derailed this momentum and delivered a final blow to the industry for a decade.
However, things have shifted recently. At COP28 in 2023, over 20 nations, including the U.S., U.K., Japan, Canada, South Korea, and France, pledged to triple global nuclear energy capacity by 2050. The driving force behind this pledge was net-zero carbon-emission goals, which would be nearly impossible without nuclear energy.
China is leading the charge, with 38 commercial reactors under construction. The country aims to approve 10 to 15 gigawatts (GW) of new capacity annually and hopes to surpass the U.S. in nuclear generation by the end of the decade. In Japan, reactor restarts are working through regulatory approval. Meanwhile, in the U.S., power purchase agreements are bringing decommissioned plants, such as Three Mile Island Unit 1 and Palisades, back online.
In addition, President Donald Trump's administration wants to quadruple nuclear energy capacity by 2050. As part of this, policymakers want to have 10 new large-scale commercial nuclear reactors under construction by 2030. The Department of Energy is also fast-tracking testing of advanced nuclear reactors through its Reactor Pilot Program.
Uranium faces structural shortages as demand surges
Nuclear fuel procurement differs from oil and gas. Nuclear fuel accounts for no more than 10% of a plant's operating expense, so utility fuel buyers are price-insensitive and lock in long-term supplies. After Fukushima, utilities could secure cheap secondary supplies and rely on the spot market for uranium. However, buyers are now looking to secure fuel commitments for the next decade.
Uranium markets are reaching an inflection point. Inventories have dwindled, so buyers must rely on the primary mine supply. The market is facing bottlenecks. For example, in Kazakhstan, which accounts for 40% of global output, in situ recovery (ISR) mining operations have been hampered by shortages of sulfuric acid.
On top of that, energy demand is booming. Rising artificial intelligence (AI) workloads and growing data center infrastructure are driving incredibly strong demand for power. Total data center power consumption is projected to double by 2030, while total U.S. electricity demand is estimated to expand 25% by 2030.
Technology companies are making deals left and right to secure energy. Constellation Energy (NASDAQ: CEG), which owns and operates the largest nuclear energy fleet in the U.S., has signed long-term power purchase agreements with Alphabet, Amazon, Microsoft, and Walmart.
As part of this, Constellation, Vistra, and other power providers are using power uprates to extend the life of their nuclear plants and bring decommissioned plants back online.
What's next for uranium prices
Uranium prices are around $90 per pound, but supplies are likely to remain tight over the next decade. Utilities face a widening uncommitted supply gap, with cumulative uncommitted uranium requirements estimated to exceed 800 million pounds of triuranium octoxide, also called yellowcake, through 2035.
Spot uranium prices will likely remain elevated around $100 per pound for the next few years, as demand surges amid the deficit, with some experts arguing this is necessary to justify the investments needed to finance the next generation of underground and open-pit mines. Bank of America projects uranium could jump to $130 per pound by next year, a nearly 44% increase over today's spot price.
Global energy demand is growing, and nuclear energy is poised to play a crucial role in filling those gaps, benefiting uranium miners. Cameco uses long-term contracts and has agreements to deliver 28 million pounds of yellowcake annually over the next five years. Meanwhile, Uranium Energy is completely unhedged, giving investors exposure to rising spot prices but also adding volatility if spot prices decline meaningfully.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,885,382 today.*
Now, for the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast.
*Stock Advisor returns as of October 22, 2026.
Courtney Carlsen has positions in Alphabet, Cameco, Constellation Energy, Microsoft, and Vistra. The Motley Fool has positions in and recommends Alphabet, Amazon, Cameco, Constellation Energy, Microsoft, Vistra, and Walmart. The Motley Fool has a disclosure policy.

Uranium Is Near $90 a Pound. Here's My Prediction for What's Ahead for the Fuel.

Key Points
Amazon.com continues to dominate through its dual engines of e-commerce scale and high-margin AWS cloud services.
Home Depot maintains its leadership in the home improvement market by deepening its focus on professional trade customers.
Which retail powerhouse offers the better balance of growth and valuation for your 2026 portfolio?
Investors choosing between a cloud computing giant and a home improvement leader face a classic growth versus stability dilemma. Both Amazon.com (NASDAQ:AMZN) and Home Depot (NYSE:HD) are pillars of the retail landscape.
Amazon.com relies on its massive e-commerce scale and high-margin cloud services to drive long-term expansion. Home Depot dominates the physical world of home repair, serving both casual homeowners and professional contractors. While they serve different needs, both compete for a place in portfolios seeking exposure to resilient consumer spending.
The case for Amazon.com
Amazon.com operates global online and physical stores while providing high-growth services like AWS cloud computing. It serves a massive customer base of consumers, sellers, and advertisers through its digital platforms and advertising segment. A recent $309.5 million settlement over customer refund issues highlights the legal complexities the company must navigate at its immense scale.
In its latest annual report, which covers FY 2025, revenue reached nearly $716.9 billion, a 12.4% increase from the previous fiscal year. Net income climbed to approximately $77.7 billion, up from roughly $59.2 billion in FY 2024. This growth resulted in a net margin of roughly 10.8%, showing an upward trend from the 5.3% margin reported in FY 2023.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.4x. This ratio shows the company uses relatively little debt compared to its equity, which is the value left for shareholders after all debts are paid. The current ratio was nearly 1.1x, and free cash flow reached nearly $7.7 billion, representing the cash left after paying for operations and equipment.
The case for Home Depot
Home Depot is a leader among retail stocks, operating 2,359 stores across the United States, Canada, and Mexico. It focuses on serving DIY consumers and professional contractors through a blend of physical stores and digital channels. Recent acquisitions of SRS and GMS have strengthened its position in the professional trade market, specifically for interior building products like drywall.
In its latest annual report, which covers FY 2025, revenue reached nearly $164.7 billion, representing a 3.2% increase over the previous fiscal year. However, net income for the period was roughly $14.2 billion, which was lower than the nearly $14.8 billion recorded in FY 2024. This led to a net margin of approximately 8.6% as expenses and consumer habits shifted.
As of its February 2026 balance sheet, the debt-to-equity ratio was approximately 5.1x, indicating that total liabilities exceed shareholder equity. The current ratio, which measures the ability to cover short-term bills with short-term assets, was roughly 1.1x. Free cash flow reached nearly $12.6 billion, which represents the cash remaining after the company pays for its ongoing operations and business investments.
Risk profile comparison
Amazon.com faces intense global competition from rivals in retail, cloud computing, and digital services. Rapid growth in areas like artificial intelligence creates operational complexity and can strain management resources. Additionally, regulatory and geopolitical risks in markets like China and India present ongoing challenges for its international expansion efforts.
Home Depot faces a significant class action lawsuit regarding its use of AI-powered surveillance in parking lots. The company is also highly sensitive to the housing market and general economic conditions, including interest rate changes. Any failure to integrate acquisitions like SRS and GMS, or manage supply chain disruptions, could impact its long-term competitive position.
Valuation comparison
Amazon.com looks slightly more affordable based on future earnings estimates, but Home Depot trades at a lower multiple of its sales.
Metric
Amazon.com
Home Depot
Forward P/E
19.8x
20.4x
P/S ratio
3.5x
1.8x
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
As the saying goes, don't put all your eggs in one basket. That's the point of having a diversified portfolio, but it also applies to business practices. Amazon and Home Depot apparently know this, but are approaching it differently.
Along with offering a massive variety of retail products -- and an incredible logistics network -- Amazon generates income in other ways. The most important of these is Amazon Web Services (AWS), a cloud-based platform that provides infrastructure for its customers to use rather than investing in their own servers. The company also makes money from advertising, third-party seller services, and subscriptions to digital content.
Home Depot also relies on multiple revenue streams. Its many retail locations serve individual DIY consumers with a huge array of products from building materials to appliances and landscaping supplies. But it also relies on high-volume professional contractors and has been working to expand this market. It recently acquired SRS Distribution (exterior construction supplies) and GMS (largely interior construction supplies), providing a foundation for Home Depot's future growth. Serving both consumer and professional markets helps the company weather fluctuations in demand, but both rely on the strength of the housing economy to thrive.
I think they are both compelling investments, but if I had to choose one, it would be Amazon. Its diversified approach, which extends far beyond retail, gives it the long-term growth potential and resilience I look for in my portfolio.
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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
Pamela Kock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Home Depot. The Motley Fool has a disclosure policy.

Amazon vs. Home Depot: Which Consumer Stock Is a Better Buy in 2026?

Amazon.com (NASDAQ:AMZN), a global e-commerce, cloud computing, and digital advertising platform, closed at $262.45, up 4.98%. Morgan Stanley's top-pick call and higher price target lifted shares, and investors are watching Amazon Web Services (AWS) growth in the company's October 29 earnings report.
Trading volume reached 54.5 million shares, coming in about 4% above its three-month average of 38.9 million shares. Amazon.com IPO'd in 1997 and has grown 263,927% since going public.
How the markets moved today
The S&P 500 (SNPINDEX: ^GSPC) closed at 7,691, up 0.42%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) closed at 26,431, up 1.11%. Within internet retail, cloud computing, digital advertising, and logistics services, Walmart (NASDAQ:WMT) closed at $118.70, down 0.09%, while Microsoft (NASDAQ:MSFT) closed at $533.52, up 0.84%, underscoring mixed trading as cloud scrutiny and AI spending stay in focus.
What this means for investors
On Monday, Oct. 19, Morgan Stanley named Amazon a top pick, kept an Overweight rating, and lifted its target to $350 from $335. A key driver behind the increase in its share price target is the artificial intelligence boom.
Morgan Stanley noted five key catalysts for Amazon's stock, including AWS growth nearly tripling from 2025 to 2028 as customers increasingly adopt AI. Other catalysts are greater AWS profits, Amazon's Bedrock AI platform, AI-powered shopping, and robotics.
AWS delivered impressive results for Amazon in the second quarter. Revenue rose 37% year over year to $42.2 billion, representing the fastest growth in 18 quarters. Wall Street investors will be expecting another quarter of strong performance when Amazon reports Q3 2026 earnings on October 29, although litigation and regulatory risk remain a longer-term overhang on valuation.
Two weeks ago, a UK competition watchdog stated AWS and Microsoft should do more to address barriers to switching cloud providers, a reminder that regulation can affect margins.
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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
Robert Izquierdo has positions in Amazon, Microsoft, and Walmart. The Motley Fool has positions in and recommends Amazon, Microsoft, and Walmart. The Motley Fool has a disclosure policy.

Stock Market Today, Oct. 19: Amazon Surges on Morgan Stanley Top Pick and $350 Price Target

Key Points
Amazon, Coca-Cola, and Visa each show durable demand that could continue to grow.
Amazon’s revenue is surging, largely driven by insatiable demand for cloud services.
Coca-Cola and Visa are reporting solid results, with both businesses chasing opportunities for long-term revenue growth.
Amazon (NASDAQ: AMZN), Coca-Cola (NYSE: KO), and Visa (NYSE: V) are three members of the Dow Jones Industrial Average (DJINDICES: ^DJI) that continue to post solid financial results in 2026. These companies are unstoppable not because their share prices have been steady, but because each one has competitive advantages that can keep the business growing for years. Here's why they look like solid stocks to buy now.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
1. Amazon's cloud backlog is growing at triple-digit rates
Amazon is famous for its online store, but most of its revenue comes from cloud computing, advertising, fulfillment services, subscriptions, and hardware devices like Kindle. The stock has returned about 10% so far this year, slightly ahead of the Dow Jones Industrial Average's roughly 9% gain through mid-October, as of Oct. 15, 2026. Investors have worried about the heavy capital spending needed for cloud infrastructure, which is pressuring free cash flow.
But that spending is tied to the growing demand for artificial intelligence (AI) cloud services, with Amazon leading the cloud market. On the July 30, 2026earnings call CEO Andy Jassy said the cloud backlog stands at $496 billion and is growing in the triple digits year over year. Amazon's total net sales grew 20% year over year in the second quarter, with analysts expecting full-year sales to be up about 15% over 2025.
The long-term cloud contracts included in the backlog provide Amazon with clearer visibility into future revenue. At the Oct. 15 close of about $255, the stock trades at a forward price-to-earnings (P/E) ratio of 30, based on Wall Street's 2026 consensus earnings estimate, and 24 times next year's. Wall Street expects roughly 21% annual earnings growth over the next several years, according to consensus estimates. This valuation and growth could support market-beating returns over the next five years.
2. Coca-Cola is using digital tools to reach more consumers
Coca-Cola has a large portfolio of brands, including Powerade, Sprite, and Fairlife. The shares have returned about 34% year-to-date through mid-October, well ahead of the Dow Jones Industrial Average. That outperformance still leaves room for more upside as the company begins to leverage AI tools to drive more demand.
Demand looks healthy despite a weak consumer spending backdrop. Organic (non-GAAP) revenue grew 6% year over year, excluding the impact of acquisitions, divestitures, and foreign currency changes. This reflects a diversified portfolio of top brands that can meet demand for many different occasions.
It is leveraging digital tools and AI to enhance its marketing campaigns and better engage consumers. This effort targets the large share of beverage consumption in developing markets that goes unpaid, creating a substantial long-term growth opportunity for the company.
At the Oct. 15 close of about $92, the stock trades near a 28 forward P/E and offers a high trailing dividend yield of close to 2.3% -- more than double the S&P 500 average. The stock is unlikely to outperform over the long term at this valuation, especially given that earnings are expected to grow at only a single-digit annual rate. But this is a steady performer that offers a nice yield for investors seeking extra income.
3. Visa has captured only a small slice of its addressable market
Visa operates one of the world's leading payment networks, which powers its credit and debit cards, Visa Direct, and other value-added services. The shares have returned about 15% so far this year, ahead of the Dow Jones Industrial Average's roughly 9% gain through mid-October. Even after those gains, the stock is still fairly priced to reach new highs in 2027 and beyond.
Recent results showed continued momentum even as the payments landscape shifts toward agentic AI commerce, where bots can shop and complete orders autonomously for consumers. Net revenue rose 14% year over year in the fiscal third quarter of 2026. At the September Goldman Sachs conference, CEO Ryan McInerney noted that in key areas such as issuer services, acceptance, and risk and identity, Visa has captured only low-single-digit shares of the available opportunity.
The growing adoption of AI agents is an opportunity for Visa to see even higher payment volume over time, since these bots still need traditional payment methods like credit cards to make purchases. McInerney said Visa is "very optimistic" about this opportunity.
At the Oct. 15 close of about $400, the stock trades near a 26 forward P/E. Wall Street expects earnings to grow at an annualized rate of 14% over the next several years. That combination of value and growth should fuel more gains over the next five years.
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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, and Visa. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

3 Unstoppable Dow Stocks to Buy Before October Ends

The S&P 500 Index ($SPX) (SPY) is up by +0.57% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down by -0.11%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.52%. December E-mini S&P futures (ESZ26) are up +0.58%, and December E-mini Nasdaq futures (NQZ26) are up +1.51%.
Stock indexes are mostly higher today, with chipmakers and AI-infrastructure stocks leading the broader market higher after last week’s selloff. Earnings optimism is lifting stocks ahead of this week's earnings results from Meta Platforms, Tesla, and Netflix. Also, weaker crude oil prices today have improved market sentiment and are supportive of stocks.
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On the downside, homebuilders are under pressure after today’s US economic news showed the Oct NAHB housing market index fell 3 points to a 14-year low of 29, below expectations of 31.
Mostly better-than-expected Chinese economic news is positive for global growth prospects and stocks. China Q3 GDP rose +1.2% q/q and +4.5% y/y, stronger than expectations of +1.0% q/q and +4.4% y/y. Also, China's Sep industrial production rose +5.5% y/y, right on expectations and the largest increase in 6 months. In addition, China's Sep retail sales rose +1.1% y/y, stronger than expectations of +0.5% y/y and the largest increase in 6 months. Finally, China's Sep surveyed jobless rate unexpectedly fell -0.1 to 5.2%, below the expected 5.3% and signaling a stronger labor market. On the downside, China's Sep new home prices fell -0.14% m/m, the fortieth consecutive month of declines.
Stocks have support from the prospect of solid quarterly earnings results. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of today, 45 of the S&P 500 companies have reported results, with 80% beating estimates.
Nov WTI crude oil prices (CLX26) are moving lower today on some profit-taking after last week's rally to a 5-week high. US Energy Secretary Wright said Persian Gulf oil flows have recovered to about 80% of their pre-war level, though refined-product shipments remain constrained. Crude oil prices have underlying support from concerns about disruptions to Middle Eastern energy supplies after Houthi rebels in Yemen targeted Yanbu in Saudi Arabia, a significant Red Sea port for Saudi oil exports that avoids the Strait of Hormuz, with missiles and drones. Also, the UK Maritime Trade Operations reported that two tankers were attacked in the Persian Gulf near Saudi Arabia's port city of Jubail over the weekend.
Markets are discounting a 17% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are mixed today. The Euro Stoxx 50 fell to a 1-week low today and is down -1.18%. China's Shanghai Composite closed up +0.39%. Japan's Nikkei-225 Stock Average fell to a 1-month low and closed down -0.62%.
Interest Rates
December 10-year T-notes (ZNZ6) are down -4 ticks. The 10-year T-note yield is up +3.2 bp to 5.127%. Today’s stock rally has reduced safe-haven demand for government debt, weighing on T-notes. Losses in T-notes are limited amid some safe-haven buying due to the social unrest in France. Weaker WTI crude oil prices today are also lowering inflation expectations and supporting T-notes.
European government bond yields are moving higher today. The 10-year German bund yield is up +3.6 bp to 3.462%. The 10-year UK gilt yield is up +5.7 bp to 5.430%.
The German Bundesbank said in a report today that "inflation risks in the Eurozone are clearly tilted to the upside."
Markets are discounting an 8% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks are moving higher today, recovering some of last week’s rout. The iShares Semiconductor ETF (SOXX) is up more than +2%. SanDisk (SNDK) is up more than +6% to lead gainers in the S&P 500 and Nasdaq 100, and Western Digital (WDC) is up more than +6%. Also, Marvell Technology (MRVL) is up more than +5%, and Intel (INTC), Seagate Technology Holdings Plc (STX), Lam Research (LRCX), and Micron Technology (MU) are up more than +4%. In addition, Advanced Micro Devices (AMD) and Applied Materials (AMAT) are up more than +3%, and Analog Devices (ADI), KLA Corp (KLAC), Broadcom (AVGO), and Qualcomm (QCOM) are up more than +2%.
The Magnificent Seven stocks, excluding Meta, are up today, supporting broader market gains. Amazon.com (AMZN) is up more than +4% to lead gainers in the Dow Jones Industrials, and Tesla (TSLA) is up more than +3%. Also, Nvidia (NVDA), Alphabet (GOOGL), and Microsoft (MSFT) are up more than +1%. In addition, Apple (AAPL) is up +0.14%. Conversely, Meta Platforms (META) is down -0.87%.
Cloud infrastructure stocks are climbing today. Applied Digital (APLD) is up more than +8%, and Nebius Group NV (NBIS) and Lumentum Holdings (LITE) are up more than +3%. Also, CoreWeave (CRWV) and Arista Networks (ANET) aew up more than +2%, and Oracle (ORCL) is up more than +1%.
Home builders and building supplies are slipping today after the US Oct NAHB housing market index fell more than expected to a 14-year low. DR Horton (DHI) and Pulte Group (PHM) are down more than -2%, and Lennar (LEN), KB Home (KBH), Toll Brothers (TOL), and Builders Firstsource (BLDR) are down more than -1%.
Disc Medicine (IRON) is up more than +39% after announcing that its investigational drug bitopertin met all primary and secondary endpoints in a Phase 3 Apollo trial in adults and adolescents with erythropoietic protoporphyria.
Cleveland Cliffs (CLF) is up more than +13% after reporting Q3 adjusted Ebitda of $612 million, above the consensus of $591.5 million.
Datadog (DDOG) is up more than +5% after Bernstein upgraded the stock to outperform from market perform with a price target of $350.
NRG Energy (NRG) is down more than -5% to lead losers in the S&P 500 after Jeffries cut its price target on the stock to $131 from $160.
Ameriprise Financial (AMP) is down more than -3% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $445.
Earnings Reports (10/19/2026)
AGNC Investment Corp (AGNC), BOK Financial Corp (BOKF), Cleveland-Cliffs Inc (CLF), Crown Holdings Inc (CCK), Fifth Third Bancorp (FITB), FNB Corp/PA (FNB), RLI Corp (RLI), Steel Dynamics Inc (STLD), W R Berkley Corp (WRB), Western Alliance Bancorp (WAL), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Strength in Chipmakers and AI-Infrastructure Stocks Lead the Broader Market Higher

Key Points
Amazon and Alphabet have fast-growing cloud computing segments and strong core businesses.
In addition, Amazon and Alphabet's custom chip businesses give them an edge.
Any slowdown in AI spending would lead to strong free cash flow for both companies.
If I were going to buy two "Magnificent Seven" stocks and hold them for the rest of the decade, my choice would be easy. I'm buying Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN). The two companies actually have a lot in common, as they are two of the world's largest cloud computing providers. Over the next several years, I think these are the type of AI stocks to own.
The pick-and-shovel providers of AI infrastructure, like Nvidia, have clearly dominated the early phase of AI. Right now, there is a rush to build out AI data centers, which has driven huge demand for chips, networking, and other components. However, as the market starts to mature, the large cloud providers, such as Alphabet and Amazon, will be the best positioned.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Cloud computing giants
The reason is simple: The big cloud computing stocks can win in both a high-spending environment and a slow-spending one. Right now, both Amazon and Alphabet are getting strong returns on their AI infrastructure spending. Amazon has said it is signing five-year or longer contracts and getting a payback within two to three years, with chips having about a six-year useful life.
Meanwhile, Alphabet is getting a payback in around two years, and in half that time when it uses its own tensor processing units (TPUs). With these types of returns getting locked in, it makes sense to invest as much as possible into building out AI infrastructure.
However, the companies also win when demand starts to slow. In that scenario, Amazon and Alphabet can cut back on their AI infrastructure capex, which in turn will lead to huge free cash flow generation. They will then be able to quickly pay off any debt associated with their AI investments or start buying back stock. In essence, they are in a win-win scenario.
Amazon and Alphabet are also in a strong position due to their custom chip businesses. Over the long term, they should be able to achieve much better returns than providers that rely on Nvidia GPUs, like neoclouds or SpaceX. Alphabet is already starting to see this, and Amazon should see better returns as its custom chips become a bigger part of its business.
Strong core businesses
In addition to their fast-growing cloud computing segments, both Alphabet and Amazon have strong core businesses that generate substantial cash flow to fund their AI infrastructure build-outs.
Alphabet, of course, is the world's search leader with Google Search. As search and AI chatbots blend together, Alphabet is in an enviable position because it controls the distribution. By owning the world's leading browser and smartphone operating system, together with a revenue-sharing deal with Apple to be the default search engine on its devices, Alphabet is the de facto gateway to the internet.
Meanwhile, it has incorporated its top-tier Gemini AI model into its search solution with features like AI Overviews and AI Mode, which bring AI to consumers without them having to change their normal routines or open a separate app.
By having its own chips, Alphabet is also able to train its AI models more cheaply than competitors. At the same time, its vast ad network allows it to monetize consumer AI better than newer start-ups, giving it a significant overall advantage in the space.
Amazon, meanwhile, remains the world's largest e-commerce provider. The business continues to see strong sales, and Amazon is also pushing into new areas to drive growth. Meanwhile, the company's investments in robots, where it is the world's largest manufacturer, and AI have created tremendous efficiencies, which have led to strong operating leverage in its e-commerce operations.
Both Alphabet and Amazon have multiple avenues to be AI winners, making them my top Magnificent Seven stocks to own for the long term.
Should you buy stock in Alphabet right now?
Before you buy stock in Alphabet, 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 Alphabet 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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy.

2 "Magnificent Seven" Stocks to Buy and Hold for the Rest of the Decade

Key Points
Semiconductor and infrastructure companies that enable artificial intelligence have been the biggest beneficiaries of the technology to date.
Morgan Stanley believes the AI boom is at an inflection point, with software companies and businesses adopting AI becoming the next major beneficiaries.
Amazon’s investments in AI are making its retail business more efficient, and Datadog is capitalizing on massive amounts of telemetry data created by AI.
The artificial intelligence boom began with the launch of ChatGPT in November 2022. The viral application brought generative AI into the mainstream, setting in motion a sequence of events that has led to one of the most aggressive investment cycles in history.
To date, the AI trade has largely focused on semiconductor companies and infrastructure providers, but Morgan Stanley analysts think we've reached an inflection point where the AI trade will broaden to software companies and AI adopters, meaning businesses that use the technology to reduce costs.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Here are two stocks Morgan Stanley analysts believe are well-positioned to benefit as the AI trade evolves.
Image source: Getty Images.
Amazon: Using AI and robotics to makes its retail operations more efficient
The next wave of the artificial intelligence boom "will likely reward companies that use the technology to improve decisions, lower costs, and strengthen margins -- not just those building AI infrastructure," according to Ellen Zenter, strategist at Morgan Stanley Wealth Management.
Amazon (NASDAQ:AMZN) is an excellent example. The company is leveraging expertise in artificial intelligence and robotics to make its retail business more efficient. Amazon has developed dozens of generative AI applications that optimize inventory management, last-mile delivery, and warehouse operations. The company has also developed AI models that make its robots faster and more productive.
While costly, investments in those areas have already moved the needle. Amazon's trailing-12-month operating margin expanded more than 3 percentage points in the last two years, reaching 12.1% in the most recent quarter. Operating income increased at 21% annually over the same period. But the company still has room to reduce costs.
Morgan Stanley analysts led by Brian Nowak view Amazon as the most underappreciated beneficiary of generative AI across their coverage universe, and they expect the company's operating margin to hit 17% by 2028 as retail operations become increasingly efficient.
"We're expanding our deployment of robotics and automation, which have been integral to our operations for decades," CFO Brian Olsavsky told analysts. He also said the company will more than double its fleet of robotic arms this year. "We see meaningful opportunities to further enhance productivity across our global fulfillment network."
Wall Street expects earnings to grow at 21% annually over the next three years, but that figure could be low. Amazon beat the consensus earnings estimate in five of the last six quarters, and it may continue to do so as AI and robotics drive efficiency gains. That makes the current valuation of 20 times earnings look downright cheap.
Datadog: Software that supports AI infrastructure and applications
Today, a significant percentage of the S&P 500's market capitalization is concentrated in AI enablers, especially chipmakers and infrastructure companies. Morgan Stanley analysts led by Stephen Byrd still see upside in semiconductor stocks like Nvidia and Broadcom, but they also expect the AI trade to broaden to software companies.
Datadog (NASDAQ:DDOG) is a leader in observability and digital experience monitoring software. Its platform integrates more than two dozen performance-monitoring products that help businesses identify and fix problems with their infrastructure and applications. Its platform leans on an artificial intelligence engine called Watchdog to automatically detect, prioritize, and resolve incidents.
Datadog has developed software products that support AI. Its Agent Observability module helps businesses evaluate, optimize, and monitor AI agents throughout development and production. Meanwhile, Bits AI is an intelligent assistant that helps IT teams investigate incidents, troubleshoot performance issues, and resolve problems faster.
Datadog reported impressive financial results in the second quarter. Revenue increased 36% to $1.1 billion, an acceleration from 32% growth in the previous quarter, driven by particularly strong demand from AI customers. And non-GAAP earnings rose 41% to $0.65 per diluted share. Management also raised its full-year guidance, with revenue growth now expected to be 30%.
Looking ahead, Wall Street expects Datadog's adjusted earnings to grow at 19% annually through 2028. But analysts have consistently underestimated the company. Datadog beat the consensus earnings estimate by an average of 11% over the last six quarters. Even so, the current valuation of 104 times adjusted earnings looks expensive.
Personally, I agree with Morgan Stanley about Datadog being well-positioned to benefit as the AI boom expands beyond semiconductor companies, and I think investors can buy a small position in the stock today. But I would wait for a substantial pullback before building a larger position. The rich valuation makes Datadog a risky investment.
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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Broadcom, Datadog, and Nvidia. The Motley Fool has a disclosure policy.

The AI Boom Is Entering a New Phase: 2 Stocks to Buy Now, According to Wall Street Analysts

Key Points
Amazon plans to spend $220 billion in capital expenditures this year.
The market shrugged off that number in Q2 because Amazon showed solid growth in its chips and AI businesses.
Wall Street is in the show-me phase of AI spending, where investors demand results. Amazon should deliver.
It's nearly Amazon's (NASDAQ: AMZN) turn to step up to the earnings podium. The e-commerce and cloud computing mega-giant is scheduled to report third-quarter earnings on Oct. 29, and I think investors have plenty of reasons to be optimistic.
Amazon spent much of 2026 defending its massive investments in artificial intelligence (AI) infrastructure, with capital expenditures expected to reach approximately $220 billion this year. That's an enormous amount of money, even for a company of Amazon's size.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
However, the market isn't necessarily impressed by big spending announcements anymore. I've argued that Wall Street is in the "show-me" phase of AI, where investors want evidence that those investments are generating meaningful returns.
Amazon delivered some of that evidence in July, when its cloud computing business reported outstanding growth and Amazon stock jumped 12% in a single day. If that momentum continues into Q3, I think Amazon stock could soar once again following its upcoming earnings report.
Amazon is giving Wall Street what it wants
Amazon Web Services (AWS) is unquestionably the company's most important generator of profits, even though its online retail operations account for a much larger share of revenue. AWS revenue increased 37% from a year ago to $42.2 billion in the second quarter, its fastest growth in 18 quarters. Operating income jumped to $16.6 billion from $10.2 billion a year earlier.
That's particularly impressive when compared with Amazon's retail operations. Its North America segment generated $116.2 billion in revenue, but only $9.1 billion in operating income.
AWS also reported an annualized revenue run rate exceeding $25 billion for its AI business, while its custom chips business, which includes the Trainium AI processor, reached a similar annualized pace.
Those figures demonstrate that Amazon is doing more than building expensive data centers and hoping customers eventually show up. Companies are already paying for the computing capacity and AI services that AWS provides.
The demand isn't limited to one customer or application. Amazon has announced agreements involving companies such as OpenAI, Anthropic, Pinterest, and Uber Technologies.
That's the kind of evidence investors should be looking for during the show-me phase of AI.
Anthropic gives Amazon another advantage
Amazon's relationship with Anthropic, the developer of the Claude family of AI models, provides another interesting opportunity.
Amazon has invested $13 billion in Anthropic, and the companies have an extensive cloud computing relationship. Anthropic uses AWS infrastructure and Amazon's custom AI chips to support its growing computing requirements.
That arrangement gives Amazon two potential ways to benefit from Anthropic's expansion. First, AWS can generate revenue by supplying computing capacity to Anthropic. Second, Amazon could benefit from an appreciation in the value of its investment in the AI company.
In fact, Amazon's Q2 results included $53.4 billion in non-operating pretax income, primarily attributable to its Anthropic investment. That's an impressive gain, but there's an important distinction. Investment-related accounting gains aren't the same as recurring profits generated by AWS operations.
For that reason, I'll be paying much closer attention to AWS revenue and operating income than to any additional gains associated with Anthropic's valuation. Amazon doesn't need another enormous paper gain to demonstrate that its AI strategy is working. Continued growth in its cloud business would be much more meaningful.
The $220 billion question
Amazon's spending comes with a substantial financial cost. It reported negative free cash flow of $7.6 billion for the 12 months ending June 30, compared with positive free cash flow of $18.2 billion during the preceding 12-month period.
Amazon attributed much of that deterioration to increased spending on property and equipment, primarily related to AI investments.
I think there's a huge difference between spending aggressively without meaningful customer demand and spending aggressively while your most profitable business is expanding at its fastest pace in years. Amazon appears to be in the latter category.
The Q3 report should provide another opportunity to evaluate that argument. Investors will want to see continued AWS revenue growth, healthy operating income, and evidence that demand for AI computing remains strong.
Another strong AWS quarter could go a long way toward addressing those concerns -- and provide the catalyst for a substantial post-earnings rally that I think Amazon will deliver after Oct. 29.
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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 19, 2026.
Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Pinterest. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Prediction: Amazon Stock Will Soar After Oct. 29

Key Points
The S&P 500 has consistently outperformed most stocks and actively managed funds.
It’s still a safe place to park any cash you don’t need right away.
The S&P 500 (SNPINDEX: ^GSPC) has generated an average annual total return of about 10% since its inception in 1957. However, the index has also gone through some wild swings over the past seven decades -- and those downturns shook out many long-term investors.
Over the past 12 months, the S&P 500 has risen 15% and trades just 2% below its all-time high. It also trades at 21 times forward earnings, compared to its average forward multiple of 17 for the past 25 years. Those numbers suggest it might not be the best time to invest in the S&P 500 via an exchange-traded fund (ETF) such as Vanguard's S&P 500 ETF (NYSEMKT: VOO).
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
However, the S&P 500 has also consistently rewarded investors who simply tuned out the near-term noise, stayed invested through downturns, and focused on the long-term gains. So should you invest in the S&P 500 today, even though it looks historically expensive?
Why is the S&P 500 such a resilient investment?
The S&P 500 includes the 500 largest companies in the United States. To join that elite club, they must have a market cap of at least $22.7 billion, have been profitable for at least the past four quarters, and have adequate liquidity and trading volume.
A company can't join the index until 12 months after its IPO, and at least 10% of its shares must be publicly traded. It also excludes certain companies -- including master limited partnerships (MLPs), business development companies (BDCs), and closed-end funds (CEFs) -- which don't issue common stock.
The S&P 500 rebalances itself quarterly to add rising stars and prune its laggards, and adjusts their weights based on their market caps. Over the long term, most actively managed funds struggle to outperform the S&P 500's automated indexing strategy.
That's why Vanguard's founder, John Bogle, advised investors to simply "buy the haystack" instead of searching for individual needles. Today, the S&P 500's biggest components include Nvidia (8.4% of the index), Apple (7.4%), Microsoft (5.8%), Amazon (3.7%), and Alphabet (3.1%). That makes it an easy way to gain instant exposure to the country's top companies without having to do too much homework on each stock.
But is there a "right" time to invest in the S&P 500?
The S&P 500 is a balanced investment for long-term investors, but they must be able to withstand double-digit drawdowns without panicking. Over the past two decades, the S&P 500 experienced peak-to-trough declines of 57% from Oct. 2007 to March 2009, 34% from Feb. to March 2020, and 25% from Jan. 2022 to Oct. 2022.
However, the S&P 500 has generated a total return of 686% (including reinvested dividends) since its first trading day in 2007, and a total return of 162% since the first day of 2020. Even if you had invested in VOO on Jan. 3, 2022 -- the day the S&P 500 peaked before the Fed's interest rate hikes crashed the market throughout most of the year -- you'd still be sitting on a total return of 71%. Therefore, investors who sold their stocks during the nadir of each of those downturns are probably kicking themselves for leaving so much money on the table.
So if you plan to stay invested for at least a few more years, you shouldn't worry about timing the perfect entry point. Instead, it's smart to start a position in the S&P 500 today, commit to investing more every month, and let dollar-cost averaging smooth out your long-term gains.
Should you buy stock in S&P 500 Index right now?
Before you buy stock in S&P 500 Index, 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 S&P 500 Index 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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% 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 October 18, 2026.
Leo Sun has positions in Amazon and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.