Market volatility is the norm in 2026, with political uncertainty and inflationary pressures defining price moves in the first half of the year. History shows that long-term wealth is not built by reacting to these short-term headlines; rather, it's built by maintaining disciplined exposure to high-quality assets that can grow your nest egg over time.

Instead of choosing assets based on your prediction of where the price action might go next, the wiser approach for long-term investors is to seek out those with a history of durable growth and stability regardless of the market environment.

The following investments include a mix of stocks and exchange-traded funds (ETFs) that stand out as compelling options for investors wanting to navigate the current market turbulence and build a portfolio that's positioned for long-term success.

Vanguard S&P 500 ETF

• Type: Domestic index fund
• Assets under management: $1.60 trillion
• 10-year average annual total return: 15.6%

The Vanguard S&P 500 ETF (VOO) is a simple but incredibly effective buy-and-hold investment. Like other S&P 500 ETFs, the VOO tracks the performance of the broad-market index, giving investors low-cost exposure to 500 of the largest publicly traded U.S. companies.

This broad diversification allows investors to participate in the long-term growth of the U.S. economy without having to buy individual stocks. The large-cap nature of the S&P 500 also ensures there are no risky start-ups included in VOO's holdings, and all are established companies with sizeable operations.

With an ultra-low expense ratio of just 0.03%, or $3 on every $10,000 invested, investors don't have to worry about sacrificing gains to management fees. Since the stock market always trends up when you measure in years and decades instead of weeks or months, there's a strong likelihood that this fund will ride out the noise and deliver gains no matter what happens in the second half of 2026 and beyond.

Vanguard Total International Stock ETF

• Type: International Index fund
• Assets under management: $606.0 billion
• 10-year average annual total return: 9.8%

While many U.S. investors maintain an outsize allocation to domestic assets, international exposure remains an important component of a well-balanced long-term portfolio.

That's particularly true now when it seems that America's global leadership is shifting as a result of weakening relationships with traditional allies and the rise of China as a world economic superpower.

The Vanguard Total International Stock ETF (VXUS) provides exposure to roughly 8,800 companies across developed and emerging markets — and no holdings within the U.S. This makes VXUS a valuable buy-and-hold investment for investors looking for an alternative to domestic stocks, as well as for those who want to layer on some geographical diversification via a single holding.

VXUS is a member of the Kiplinger ETF 20, our favorite exchange-traded funds.

Japan is the current country leader in VXUS with about 15% of assets, followed by the U.K. and Canada at around 8% of assets apiece. Asia is also well represented, with top holdings that include Taiwan's Taiwan Semiconductor Manufacturing (TSM) and South Korea's Samsung Electronics (SSNLF).

This broad exposure provides peace of mind for investors who don't want to place bets on which local economy is in favor, with VXUS providing access to the entire world of global stocks.

Health Care Select Sector SPDR Fund

• Type: Healthcare sector fund
• Assets under management: $606.0 billion
• 10-year average annual total return: 9.8%

Healthcare has long been regarded as one of the market's most defensive and dependable sectors, particularly during periods of economic uncertainty. People will keep buying medication or visiting the hospital regardless of broader spending trends or inflationary pressures.

Demographic trends also strengthen the long-term investment case for healthcare. Aging populations will create increased demand for medical services for decades, and leading companies are chasing a wide range of innovations such as cancer therapies and heart disease treatments to meet the growth opportunities within the sector.

The Health Care Select Sector SPDR Fund (XLV), another Kip ETF 20 member, is the largest exchange-traded fund tied to this critical sector of the U.S. economy. XLV offers investors targeted exposure to the largest and most financially stable companies in the pharmaceuticals, medical devices and healthcare services industries.

About 60 healthcare stocks make up the XLV portfolio, led by Big Pharma giant Eli Lilly (LLY) and Dow Jones stock Johnson & Johnson (JNJ).

Apple

• Type: Large-cap technology stock
• Market cap: $4.57 trillion
• 10-year average annual total return: 29.9%

It's hard to predict what the future looks like and which companies will be thriving in 10 or 20 years. But Apple (AAPL) remains one of the strongest buy-and-hold investments in global markets, and its odds of long-term success are strong regardless of any short-term volatility.

Just a few things that create stability for Apple are its massive scale, including its distinction as the first U.S. company to surpass a $1 trillion market capitalization in 2018.

It also has about $45 billion in cash on its balance sheet — which surges to about $132 billion total when you include marketable securities that can be converted to cash relatively easily. That's enough to buy a company the size of Starbucks (SBUX) outright.

This financial stability is built on unmatched brand loyalty, which generates significant cash even without selling new devices. Apple has successfully grown its high-margin Services division to a business that rakes in more than $100 billion in annual revenue through the App Store, Apple Pay, iCloud, Apple TV and other offerings.

There's no such thing as a sure thing on Wall Street. But with deep pockets, a history of success and a tremendous future revenue stream, AAPL seems to be one of the best stocks to buy for the long run.

iShares Gold Trust

• Type: U.S. commodities-focused fund
• Assets under management: $68.5 billion
• 10-year average annual total return: 13.7%

Commodities don't have any fundamentals — a pile of metal can't develop a new product or improve profit margins. But what physical commodities, including gold, do have is a real-world value that cannot be disputed. Unlike popular trends such as AI or blockchain, there's no debate as to what gold will become in the years ahead.

Because of its tangible and unchangeable nature, gold has re-emerged as an important portfolio diversifier amid heightened economic uncertainty, inflation concerns and ongoing market volatility.

The iShares Gold Trust (IAU) provides investors with direct exposure to the price of gold without the hassle of buying physical gold, storing it in a safe, then trying to sell it. IAU is one of the largest and most cost-effective gold ETFs available, and is tied directly to the movements of gold bullion. The trust owns gold bars stored in vaults, primarily in London, and each share in this fund represents fractional ownership of the trust's total holdings.

If you're looking for a buy-and-hold investment with peace of mind, the commodity-backed IAU is one of the most solid investments out there — in more ways than one.

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The main stock indexes struggled for big gains on Wednesday, though a positive showing suggests investors, traders and speculators are generally in a "risk on" mood amid optimism about the long-term durability of the market's major theme. The geopolitical landscape is still rocky, but the earnings environment remains healthy.

The White House rapid response team described a draft peace plan that was reported by Iranian state TV and would open the Strait of Hormuz as a "complete fabrication" and "not true." At the same time, President Donald Trump told PBS News that Iran won't get relief from economic sanctions in exchange for its highly enriched uranium. "No, no, not at all. Not sanctions relief, no," the president answered when PBS asked about the status of a key point in negotiations to end the war.

The front-month West Texas Intermediate crude futures contract traded as low as $87.17 per barrel and closed down 4.7% for the day at $89.47. WTI traded as high as $119.48 on March 9, its intraday peak during the war in the Middle East.

The 2-year Treasury yield, a market-based gauge of short-term policy on interest rates, was down 1.7 basis points to 4.033% today vs 4.05% on Tuesday. The 10-year Treasury yield, a starting point for mortgage rates and corporate bonds, fell 1.4 basis points to 4.447% from 4.491%.

At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.4% at 50,644, the broad-based S&P 500 had added 0.02% to 7,520, and the tech-heavy Nasdaq Composite was up 0.07% at 26,674.

Goldman sets year-end target of 8,000 for the S&P 500

Meanwhile, Goldman Sachs strategists raised their year-end target for the S&P 500 to 8,000 from 7,600. "Continued earnings growth should drive continued equity market upside," the strategists write. "The increased return forecast reflects increased estimates for S&P 500 earnings following an exceptionally strong first-quarter reporting season."

The Russell 2000 Index of small-cap stocks closed lower but has added more than 17% year to date vs a gain of about 10% for the S&P 500 amid enduring appetite for riskier companies. Consumer discretionary stocks and consumer staples stocks were the top two sectors on Wednesday, both groups posting gains of greater than 1%.

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Technology and energy stocks joined financials and utility stocks in the red. Nvidia (NVDA, -1.1%) was one of three Magnificent 7 stocks to post a loss, joining Microsoft (MSFT, -0.8%) and Alphabet (GOOGL, -0.01%).

Amazon.com (AMZN, +2.5%), Apple (AAPL, +0.8%), Meta Platforms (META, +3.7%) and Tesla (TSLA, +1.6%) were up for the day.

Honeywell's Quantinuum files for an IPO

Honeywell (HON, -0.07%) was among 10 Dow Jones stocks in negative territory after its majority-owned subsidiary Quantinuum submitted paperwork to the Securities and Exchange Commission for an initial public offering (IPO).

Quantinuum plans to sell approximately 21.1 million shares at $45 to $50 per share, for estimated proceeds of $941.7 million at the midpoint of the offering and $1.09 billion if underwriters exercise their full allotments.

Quantinuum plans to list on the Nasdaq under the symbol QNT. Its market cap, assuming the IPO proceeds as expected, would approach $13 billion, making it the biggest pure-play quantum computing offering of 2026.

Quantinuum was founded in 2021 through the merger of Honeywell Quantum Solutions and UK-based startup Cambridge Quantum. Its customers include Amgen (AMGN, +0.03%) and JPMorgan (JPM, -2.5%).

Honeywell is Quantinuum's biggest shareholder, at approximately 54%. Other strategic investors include Amgen and JPMorgan, as well as Mitsui (MITSY, -4.2%) and Nvidia.

Zscaler has execution issues

Zscaler (ZS, -31.5%) was a major drag on Nasdaq-100 ETFs and mutual funds after management reported expectations-beating fiscal 2026 third-quarter results but underwhelmed Wall Street with its forward guidance.

Wedbush analyst Dan Ives says it's a matter of execution at the company level and not a sign of bigger problems for the AI boom. "We believe ZS is a premier name to own as increased enterprise AI adoption further amplifies the need for zero-trust architecture," Ives observes in a post-earnings analysis.

Ives reiterated his Overweight (Buy) rating but cut his 12-month target price for the cybersecurity stock from $300 to $220. "Overall, ZS needs to show better execution to get out of the investor penalty box," the analyst concludes.

Indeed, Zscaler says conservative estimates for the fourth quarter and the full year are about the departure of two sales executives.

"We already appointed a replacement for one of these leaders, and we are in the late stages of hiring a leader for the other role," management explained. "However, we are taking a prudent approach to our guidance during the transition."

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Two of the three main equity indexes traded in record territory Tuesday as Wall Street returned from a three-day weekend, and markets looked beyond continuing uncertainty in the Middle East. Apple (AAPL, -0.2%) hit a new high on optimism about its artificial intelligence (AI) initiatives amid broad gains for tech-related names, while energy, consumer staples and healthcare stocks struggled.

At the closing bell, the tech-heavy Nasdaq Composite had added 1.2% to 26,656, and the broad-based S&P 500 had risen 0.6% to 7,519 — new all-time closing highs.

But, despite celebrating the 130th anniversary of its May 26, 1896, debut, the Dow Jones Industrial Average was down 0.2% at 50,461.

"The stock market's focus on AI, oil prices, and geopolitics has recently been getting a challenge from interest rates," E*TRADE Managing Director Chris Larkin observes. "While the twists and turns of the story in the Middle East have continued to drive short-term momentum, a sustained increase in longer-term yields could prove to be a persistent headwind for stocks."

The front-month West Texas Intermediate crude futures contract settled at $93.69 per barrel, down 3% for the day.

The 2-year Treasury yield, seen by investors, traders and speculators as an indicator of short-term policy direction for the Fed, was down 8.5 basis points to 4.042% vs 4.127% on Friday. The 10-year Treasury yield, which impacts the cost of mortgage rates as well as corporate bonds, fell 8.1 basis points to 4.491% from 4.572%.

Meanwhile, The Conference Board's Consumer Confidence Index slipped to 93.1 in May from 93.8 in April, declining for the first time in four months. According to The Conference Board Chief Economist Dana Peterson, "Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified."

UBS analyst triples MU target price

Micron Technology (MU, +19.3%) joined the trillion-dollar market cap club Tuesday after President Donald Trump mentioned the tech stock during his speech at a rally in New York on Friday.

"Micron, boy Micron's great. They're investing hundreds of billions," Trump said, citing Micron's commitment to spend $100 billion to build the biggest-ever U.S.-based chip factory in the Empire State.

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Meanwhile, UBS analyst Timothy Arcuri reiterated his Buy rating and raised his 12-month target price from $535 to $1,635 for the tech stock, citing long-term agreements that lock in solid pricing and allow better visibility and a smoother earnings profile.

"In contrast to prior periods where offtake agreements were simply volume based," Arcuri explains, "these new 'enhanced' LTAs now incorporate longer durations, fixed volume commitments and — most importantly — a partially fixed pricing framework."

The analyst expects earnings per share "to remain comfortably >$100" through 2029, with Micron generating more than $400 billion in free cash flow during the same period.

"We believe the market will start to put a more 'normal' multiple on the stock," Arcuri writes, "and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex."

AZO hits the brakes

AutoZone (AZO, -8.9%) was one of the worst-performing S&P 500 stocks on Tuesday after management beat Wall Street's forecast for earnings per share but came up short of expectations for revenue and international growth.

High-priced AZO, a natural fit for conversations about the next stocks to split, reported EPS of $38.07 on revenue of $4.84 billion vs a consensus estimate of $36.22 on $4.86 billion.

Same-store sales growth in the U.S. was 4.1% on a constant-currency basis. AutoZone's stores in Mexico and Brazil combined for year-over-year sales growth of 1.6%.

CEO Phil Daniele noted impressive growth for domestic DIY and commercial segments, and acknowledged that international sales "continued to be challenged," with flat sales in Mexico and Brazil.

Still, the CEO said, "We believe our market share continues to grow as we outpace our competition in both international marketplaces." AutoZone opened 82 new stores globally, in line with its plan to open approximately 355 to 365 stores for the full fiscal year as part of its strategy to add market share.

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Who would have believed at the turn of the 21st century that there would be such a thing as a trillion-dollar stock? (Or that the Dow would reach 36,000, for that matter?)

At the end of 2000, the most valuable company was Exxon Mobil (XOM), with a market capitalization — price times shares outstanding — of roughly $302 billion. That's one-fifteenth the value of Nvidia (NVDA) today. Just counting to a trillion incredibly fast, with no bathroom breaks, would take 32,000 years, according to the Q&A platform Quora.com.

In August 2017, however, I wrote, "It may be a matter of months, or more likely a few years, but sometime soon a U.S. company will breach the trillion-dollar mark." I was more right than I expected.

At the time, I offered estimates of when each would hit a trillion in market cap. Apple (AAPL) was first, as I predicted, but it took just 11 months, a year and a half ahead of schedule. The other four quickly followed: Amazon.com (AMZN) in September 2018; Microsoft (MSFT) in 2019; Alphabet (GOOGL), the former Google, in 2020; and Meta Platforms (META), the former Facebook, in 2021.

At that point, I wrote another column, saying, "I'm doubling down and recommending them all." Sure enough, as a group, they have nearly doubled. (Prices, returns and other data are as of September 30; stocks I like are in bold.)

Today, with the additions of Nvidia, Tesla (TSLA), Broadcom (AVGO) and Berkshire Hathaway (BRK.B), membership in the Trillion-Dollar Club (let's call it TDC) has grown to nine. The combined market cap of these stocks accounts for 41% of the capitalization of all the companies of the S&P 500 Index. A mere 10 years ago, the nine largest U.S. stocks had a total market cap of 18% of the S&P 500.

Today, eight of the nine members of the TDC are technology (or tech-related) stocks, and for the ninth, Berkshire, Apple alone represents one-fifth of assets. By contrast, in 2015, the top nine consisted of just five tech stocks, plus companies in banking, pharmaceuticals and energy, along with Berkshire. In 2005, only two tech companies graced a highly diversified top nine.

Concentrated bets

The top-heavy nature of the S&P 500 today should make any investor worried. The market is betting heavily, not simply on tech but on artificial intelligence. But you will notice from the bold-facing that I still like trillion-dollar stocks — at least the initial cohort.

Why? Let's start with Alphabet. Since 2017, revenues have quadrupled and earnings have quintupled, yet the stock's price-to-earnings (P/E) ratio, based on a consensus of analysts' forecasts of profits for the year ahead, has declined from 30 to 25. Analysts at investment research firm Value Line expect earnings will rise an average of 12% annually for the next five years, indicating a perfectly reasonable valuation.

Alphabet owns the global entertainment asset with the greatest potential, YouTube, with nearly 3 billion active users. The company is also sitting on more than $95 billion in cash and has very little debt; it has even started paying a small dividend.

Amazon's P/E has dropped from nearly 200 to 32. It dominates the e-commerce market, accounting for 38% of sales, compared with 6% for number two Walmart (WMT).

Apple's valuation has risen to 33, but it was absurdly low (16) in 2017. The company is a profit machine; it earns about 25 cents on every dollar of sales, and those dollars will exceed 400 billion this year. Microsoft has tripled its earnings since 2017. It has a powerful cloud-computing business and has integrated AI into all its platforms.

Meta gets the least respect. Its forward P/E has fallen from 29 in 2017 to 25, despite net profits rising from $18 billion to close to an estimated $72 billion in 2025. The company, which owns WhatsApp and Instagram, recently won its antitrust case, leaving the ownership of its assets intact.

I am less enamored of the TDC newbies. Nvidia was once a lovely choice. In making it one of my 10 stock picks for 2020, I wrote that it "may be the best artificial intelligence play." Since then, its market cap has risen from $122 billion to $4.5 trillion.

Ponder that number. It’s more than the capitalization of all the listed stocks in the U.K. It is greater than the GDP of Japan. Nvidia, with its graphic processing units, has little competition for top-level AI chips used in data centers, but that is going to change. There is too much money to be made.

Broadcom, a semiconductor company with a niche in AI chips called application-specific integrated circuits, which have specialized functions, is the change agent. It became the newest member of the TDC in December 2024 after its stock price increased by a factor of six in four years. Value Line expects earnings to continue rising at a 24.5% annualized clip through 2030.

Broadcom, like Nvidia, does not own manufacturing plants, or "fabs." That allows the company to retain its capital, but it also leaves it vulnerable to supply interruptions. My other worries about the future of the chip business are government intervention, geopolitical threats and a lack of electricity to power data centers in the U.S.; still, it’s hard not to like Broadcom.

Tesla, which reached $1 trillion in market cap in October 2021, then fell out of the club a few times and came back in, looks more attractive now that its CEO is getting back to work. I am especially excited about its battery storage business.

But Tesla is clearly a meme stock, driven by the enthusiasm of fans. Its revenues have been flat for three years, profits are microscopic by TDC standards, and capital spending requirements are huge.

The outlier, Berkshire, has a P/E in the mid-20s and a brilliant CEO in his nineties. I'm loyal to Warren Buffett and confident in his successors. Berkshire has a hoard of liquid assets, and insurance is the best business in America outside of tech.

When I wrote about trillion-dollar stocks in 2021, I warned about "a sort of law of financial gravity." It's not hard to imagine a stock with a market cap of $100 billion becoming a four-bagger (that is, quadrupling in value) or even a 40-bagger, as Nvidia has proven.

But could Nvidia quadruple from its current value? Could Microsoft or Apple, at $3.8 trillion each? It seems doubtful. Still, doubles or triples are satisfying.

The legacy TDC companies have shown a remarkable ability to innovate and adapt. Operating-system software, for example, used to dominate Microsoft's revenues. Now, it represents only about one-tenth of sales. Server and cloud services account for 40% today, with gaming and LinkedIn making significant contributions.

These are truly exceptional businesses with extensive moats and deep human capital. As crazy as it sounds, they deserve to be trillion-dollar companies — and to keep growing.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. Of the stocks mentioned here, he owns Amazon.com. You can reach him at JKGlassman@gmail.com.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Stocks were choppy to start the week as market participants looked ahead to this week's key inflation updates. The data starts rolling in on Tuesday morning with the release of the July Consumer Price Index (CPI) report.

The June CPI report showed that President Donald Trump's tariff policies are starting to have a moderate impact on inflation.

And over the next few months, Goldman Sachs economists "expect tariffs to continue to boost monthly inflation and forecast monthly core CPI inflation between 0.3% and 0.4%."

For July, specifically, the group anticipates a rebound in used car prices, though it believes new car prices fell 0.2%. The economists also expect upticks in airfare and categories with outsize exposure to tariffs, including household furnishings.

Overall, Goldman economists are eyeing a 0.3% monthly increase in headline inflation – unchanged from June thanks to lower energy prices – and a 0.3% rise in core CPI, higher than the 0.2% from the month prior.

Tuesday also marked the end of a trade truce between the U.S. and China, though the White House announced this afternoon that the deadline will be extended by 90 days.

Nvidia, AMD will give U.S. a cut of AI chip sales

In an effort to assist in easing semiconductor export restrictions, Nvidia (NVDA, -0.3%) and Advanced Micro Devices (AMD, -0.3%) agreed to give the U.S. 15% of the revenue the two companies get from selling their AI chips to China.

"We believe the potential combined annualized revenue run rate for these chips to be about $30 billion to $35 billion, which would essentially result in about a $5 billion revenue tax over the next year," says CFRA Research analyst Angelo Zino.

The analyst notes that "the tax will have a negative impact on profit margins tied to China sales," but he believes this is "worth the cost" of "reentry into the second-largest GPU market" in the world.

C3.ai stock spirals after "unacceptable" earnings

In other AI news, C3.ai (AI) plunged 25.6% after the enterprise artificial intelligence software firm reported preliminary results for its fiscal first quarter.

The company said it expects total revenue for the three-month period to arrive between $70.2 million and $70.4 million, well below the $101.7 million analysts were calling for and the $87.2 million it reported the year prior.

CEO Thomas Siebel said that the sales results "were completely unacceptable," and that the company's restructuring, which was announced in a separate press release, will accelerate growth going forward.

C3.ai will release its full fiscal Q1 results after the market closes on Wednesday, September 3.

The tech stock is now down more than 50% for the year to date and most of Wall Street remains on the sidelines. Of the 14 analysts covering AI who are tracked by S&P Global Market Intelligence, four say it's a Strong Buy, four have it at Hold and six call it a Sell or Strong Sell. This works out to a consensus Hold recommendation.

As for the main indexes, the tech-heavy Nasdaq Composite fell 0.3% to 21,385, the broader S&P 500 shed 0.3% to 6,373, and the blue-chip Dow Jones Industrial Average gave back 0.5% to 43,975.

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Stocks finished Friday with comfortable daily gains and impressive weekly returns, with one of the three main benchmarks ending today at a new all-time closing high.

Amid a relatively bare economic calendar, market participants turned to another onslaught of corporate earnings reports, with several stocks making outsize moves.

On the positive side of the ledger was Monster Beverage (MNST), which jumped 6.4% after stronger-than-anticipated second-quarter results.

Wall Street was quick to chime in on the energy drink maker after it reported earnings. UBS Global Research analyst Peter Grom, for one, lifted his price target on the consumer staples stock to $67 from $64, while maintaining a Neutral (Hold) rating.

"A key question heading into the print centered on the magnitude of higher tariff costs and how this would impact MNST's gross margin trajectory," Grom says. "There are many moving pieces, but we think the stronger profit delivery in the quarter and constructive commentary on the path forward is likely to alleviate any margin concerns in the near term."

Other post-earnings gainers included drugmaker Gilead Sciences (GILD) and cybersecurity stock Gen Digital (GEN), which added 8.3% and 7.7%, respectively, after their beat-and-raise quarters.

LegalZoom stock soars after a double upgrade

Meanwhile, LegalZoom.com (LZ) was one of the biggest percentage-gainers on Friday, soaring 31.2% after the small-cap stock was double upgraded to Buy from Underperform (Sell) by BofA Securities analyst Michael McGovern.

He also hiked his price target to $12 from $8, representing implied upside of more than 9% from today's close.

McGovern says the online platform, which supports legal, compliance and business management needs, has shifted its focus toward subscription-based growth and added strategic artificial intelligence (AI) partnerships, namely with Perplexity and OpenAI.

"LZ can likely sustain double-digit subscription revenue well into next year, as revenue growth has significantly exceeded our expectations," McGovern writes in a note to clients.

And the company's AI collaborations "can create a new funnel of throughput as AI usage substantially increases penetration of legal services online, lifting all boats."

The double upgrade came after LegalZoom reported its second-quarter earnings results, which showed a 10% year-over-year increase in subscription revenue. It also raised its full-year revenue forecast.

Trade Desk stock has its worst day ever after earnings

There were plenty of stocks that found themselves in the red after earnings, including The Trade Desk (TTD), which plummeted 38.6% after its results – its worst day on record.

While the cloud-based advertising platform beat on the top and bottom lines for Q2, CEO Jeff Green cautioned that third-quarter revenue growth could slow as "some of the world's largest brands are absolutely facing pressure and some amount of uncertainty" as a result of tariffs and their potential impact on inflation.

And Wedbush analyst Scott Devitt warned of "rising competitive intensity," which he says is primarily coming from Amazon.com (AMZN).

"The narrative has turned cautious, and we highlight multiple reports in recent months suggesting Amazon has more aggressively improved its demand-side platform (DSP) capabilities and offerings, with several marketers migrating larger budgets from TTD to Amazon's DSP," Devitt writes in a note to clients.

The analyst downgraded TTD stock to Neutral from Outperform (the equivalents of Hold and Buy, respectively), and slashed his price target to $68 from $90.

As for the main indexes, the Nasdaq Composite rose 1.0% to 21,450, a new all-time closing high. The S&P 500 gained 0.8% to 6,389, finishing just fractions of a point below its record high, while the Dow Jones Industrial Average added 0.5% to 44,175, putting it less than 2% below its peak from December.

July CPI headlines a busy week of economic data

Looking ahead to next week, the earnings calendar quiets down a bit. But all eyes will be on the economic calendar, with several key inflation updates set for release.

Most notable is the July Consumer Price Index (CPI) report, slated for release ahead of Tuesday's open.

The June CPI report showed that President Trump's tariff policies are starting to have a moderate impact on inflation.

And over the next few months, Goldman Sachs economists "expect tariffs to continue to boost monthly inflation and forecast monthly core CPI inflation between 0.3% and 0.4%."

For July, specifically, the group anticipates a rebound in used car prices, though it believes new car prices fell 0.2%. The economists also expect upticks in airfare and categories with outsize exposure to tariffs, including household furnishings.

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Stocks opened higher Thursday on strength in several chip stocks, which were boosted by assurances that President Donald Trump's proposed tariff on semiconductor imports would not apply to companies building in the U.S.

However, sentiment quickly shifted as market participants mulled over the latest round of earnings reports.

Late Wednesday, during a meeting in the Oval Office with Apple (AAPL, +3.2%) CEO Tim Cook – where the iPhone maker announced a new $100 billion investment in U.S. manufacturing over the next four years – Trump said he will impose a 100% tariff on chips being imported into the U.S.

"But the good news for companies like Apple is if you're building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge," he added.

Semiconductor stocks including Nvidia (NVDA, +0.8%), Broadcom (AVGO, +0.7%) and Texas Instruments (TXN, 0.0%) jumped out of the gate Thursday in reaction, but finished the day well off their intraday highs.

Intel stock drops after Trump calls for CEO to resign

Trump also chimed in on Intel (INTC, -3.1%), though what he had to say did the embattled chipmaker no favors.

In a post on Truth Social, the president accused Intel CEO Lip-Bu Tan – who took the reins in March – of being "highly CONFLICTED" because of his alleged ties to China, and said he "must resign, immediately."

This follows a letter that Senator Tom Cotton (R-Ark.) sent to Intel's board chair, Frank Yeary, earlier this month to "express concern" over "the security and integrity of Intel's operations."

The CEO, according to Cotton, "reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms," including some he says that "have ties to the Chinese People's Liberation Army."

Eli Lilly sinks on disappointing weight-loss drug data

Eli Lilly (LLY) also finished in negative territory Thursday, sinking 14.1%. The pharmaceutical giant said the highest dosage of its oral obesity drug, orforglipron, helped patients lose 12% of their body weight in a late-stage trial – less than the 15% some Wall Street analysts expected.

Separately, the company reported higher-than-expected second-quarter results thanks to strong sales of its diabetes treatment Mounjaro and its weight-loss drug Zepbound. It also raised its full-year earnings and revenue outlooks.

Fortinet plunges 22% after earnings

Elsewhere on the earnings calendar, Fortinet (FTNT) stock sank 22.0% after the cybersecurity firm disclosed its second-quarter results.

While the company reported higher-than-anticipated earnings on in-line revenue, its third-quarter revenue outlook of $1.7 billion at the midpoint falls short of what Wall Street is expecting.

Additionally, many analysts were disappointed that Fortinet said its firewall refresh – where customers upgrade their existing product to a new version – is nearly halfway through.

"We have been Overweight (Buy) on Fortinet with the thesis that a large firewall refresh was coming," says Morgan Stanley analyst Keith Weiss. "Given that firewall refresh is now 40-50% complete, the catalyst we had been expecting is no longer present, causing us to downgrade the stock [to Equal Weight, the equivalent of Hold]."

Wall Street is mostly on the sidelines when it comes to the cybersecurity stock. Of the 44 analysts covering FTNT who are tracked by S&P Global Market Intelligence, seven say it's a Strong Buy, three have it at Buy, 32 say it's a Hold and two have it at Strong Sell.

Morgan Stanley downgrades Caterpillar to Sell

Morgan Stanley also chimed in on Caterpillar (CAT) after the construction giant reported lower-than-expected second-quarter earnings earlier this week.

Analyst Angel Castillo lowered his outlook on the Dow Jones stock to Underweight (the equivalent of Sell) from Equal Weight, saying shares are "priced to perfection."

The stock up more than 50% from their early April lows. "All the while," Castillo notes, "profitability and fundamentals (i.e. price/margins) have deteriorated further pointing to negative earnings revision risk."

And this skews risk to the downside for the blue chip stock, he adds. CAT finished the day down 2.5%.

As for the main indexes, the tech-heavy Nasdaq Composite rose 0.4% to 21,242, the broader S&P 500 gave back 0.08% to 6,340, and the blue-chip Dow Jones Industrial Average fell 0.5% to 43,968.

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Stocks resumed their uptrend Wednesday as investors parsed through the latest batch of corporate earnings reports. Rising expectations for a September rate cut also kept spirits high after another Fed member signaled support for a lower federal funds rate.

While the majority of S&P 500 companies have already reported earnings, there are still plenty more to go. Among Wednesday's most notable post-earnings movers was Advanced Micro Devices (AMD), which shed 6.4% after its results.

AMD beat on the top line, but its Q2 earnings of 48 cents per share fell short of Wall Street's estimates. The chipmaker also said that year-over-year revenue growth in its data center segment slowed to 14% from 57% in Q1 and 115% in Q2 2024.

Revenue in AMD's artificial intelligence (AI) data center business was down compared to the year prior, "as U.S. export restrictions effectively eliminated MI308 sales to China, and we began transitioning to our next-generation MI350 series accelerators," said Advanced Micro Devices CEO Lisa Su in the company's earnings call.

But Argus Research analyst Jim Kelleher doesn't expect these restrictions to impact earnings in the upcoming quarters, given the Trump administration's signals that it intends to ease export controls on chip shipments to China.

Kelleher reiterated his Buy rating on the semiconductor stock after earnings and lifted his price target to $200 from $160, representing implied upside of more than 20% to current levels.

Super Micro Computer (SMCI, -18.3%) and Walt Disney (DIS, -2.7%) were also post-earnings losers.

Shopify soars after earnings

At the other end of the ledger was Shopify (SHOP), with the e-commerce technology firm surging 22.0% in the wake of its second-quarter earnings report.

SHOP reported higher-than-expected earnings and revenue and said it expects third-quarter revenue to increase by a "mid-to-high twenties percentage rate." Analysts, meanwhile, are projecting Q3 revenue growth of 22%.

Needham analyst Scott Berg, who initiated coverage on SHOP mid-July with a Buy rating, says he believes "the company remains in only the mid-cycle of a durable growth opportunity."

While Berg admits that he is a "touch cautious" on the consumer, "spending remains strong and the recent U.S. tax bill can spur near-term consumer spend that can positively impact SHOP's gross merchandise value."

McDonald's (MCD, +3.0%) and Arista Networks (ANET, +17.5%) also gained after earnings.

Apple's stock pops on $100 billion U.S. investment

In non-earnings news, Apple (AAPL) jumped 5.1% today – making it the best Dow Jones stock – as reports swirled that the tech giant will announce another $100 billion in U.S. manufacturing commitments at the White House later this afternoon.

This will add to Apple's previously announced $500 billion in U.S. investments.

The news follows threats from President Donald Trump to impose a 25% tariff on iPhones if Apple does not shift production of the devices to the U.S.

It also comes after the White House earlier today doubled tariffs on exports from India – to 50% – after the country said it will not stop buying Russian oil. Apple currently manufactures the bulk of iPhones sold in the U.S. in India.

As for the main indexes, the tech-heavy Nasdaq Composite climbed 1.2% to 21,169, the broader S&P 500 added 0.7% to 6,345, and the blue-chip Dow Jones Industrial Average added 0.2% to 44,193.

Kashkari signals support for a September rate cut

While no hard data was featured on today's economic calendar, appearances from several Federal Reserve officials were in the lineup.

Among them was Minneapolis Fed President Neel Kashkari, one of the more hawkish members of the central bank, who told CNBC's Squawk Box that "it may become appropriate to start adjusting" the federal funds rate in the near term as the economy slows.

This follows the July jobs report, which showed the labor market is much weaker than many had thought. Kashkari said that this, along with other recent data, gives him "confidence" that the economy is cooling.

Kashkari added that two quarter-percentage-point rate cuts by year's end "seems reasonable to me." However, the central banker noted that if President Trump's tariffs have an outsized impact on inflation, the Fed could cut just once or not at all.

According to CME FedWatch, futures traders are currently pricing in a 95% probability the Fed will announce a 0.25% rate cut at its next meeting in September – up from 47% one week ago.

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Back-to-school season is just around the corner, and over a dozen states are hosting tax-free holidays to help you get prepared.

Sales tax holidays, which start as early as this month (July) and last through August, can give shoppers a chance to purchase select items tax-free. These generally include school supplies, clothing, electronics, and food. Some states even exempt sales taxes on furniture, plants, and other household items, which is ideal for those going back to college.

Planning to shop during a sales tax weekend can be a good idea this summer, particularly as tariffs are driving up inflation.

Some major retailers like Walmart and Apple are simplifying the shopping experience for folks in participating states with a tax-free holiday by offering an online catalogue of qualifying items.

Here’s what you need to know about upcoming sales tax holidays in your state.

Apple back-to-school 2025 tax-free holiday

This summer, 17 states are celebrating sales tax holidays. However, not all will let you get a tax break on electronics for back-to-school or personal use.

Only ten states are offering a tax exemption on computers and related electronic accessories this summer, so you can jump into the new school year fully equipped.

Each state has different rules when it comes to which electronic items qualify for the sales tax holiday, and some have price limits on the items you can purchase under the exemption.

If you’re a fan of Apple, and your state is participating in a tax-free holiday this summer, you can shop online or in-store to purchase at a bargain price during the following select dates.

Snag deals tax-free at Walmart this summer

If you’re looking to purchase items other than electronics tax-free this summer, Walmart can be a good place to shop for school supplies, snacks, and clothing to get ready for the back-to-school season.

• A composition notebook worth $0.97 will cost you 50 cents.
• You’ll save a $1 on a box of Crayola colored pencils, and pay just 97 cents.
• Dry erase markers are worth $13.23, saving you $8.12.

You can purchase qualifying items during your state’s tax-free weekends, and Walmart will automatically apply the sales tax exemption whether you shop online or in-store.

Shoppers in 17 states, plus Puerto Rico, should keep track of the following dates so they don’t miss out on potential savings.

Participating states during Walmart’s tax-free holiday savings include Alabama, Arkansas, Connecticut, Florida, Iowa, Maryland, Massachusetts, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

For more information, see our guide on Sales Tax Holidays in 2025.

Why shop during a tax holiday

Sales tax holidays offer shoppers an opportunity to purchase a wide range of products free of tax. That can make a huge difference, since some participating states have among the highest sales tax rates in the country.

For example, in Tennessee, the statewide sales tax averages 7%, but average local taxes increase the combined sales tax rate to 9.556%. The state also imposes a grocery tax, so any break on taxes is a good reason to shop at a bargain.

Target, Walmart, and other major retailers are bracing for potential price hikes this summer, given that the Trump administration’s sweeping tariff pause is set to end mid-August. Now could be the right time to buy before prices soar.

Most tax-free holidays start as soon as late July, so don’t miss out on some potential savings at checkout as you get ready for the back-to-school season.

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Sure, that stock you bought last year has doubled, but have you ever picked a 10-bagger – one that went up 10 times your purchase price? What about a 100-bagger, or maybe even a 1,000-bagger?

Such things exist. We looked back to the turn of the century to see which stocks created the most wealth over nearly 25 years.

We started with the S&P 1500, an index tracking a broad swath of U.S. stocks of all sizes, and used return data from S&P Global Market Intelligence.

To make our top-10 list, a stock had to return more than 30,000%. The S&P 1500, by the way, has returned 666% in the same period.

Some stars of the 21st century didn't make the cut simply because they haven't shone quite long enough. Netflix (NFLX) is one. The DVD shipper-turned-streamer debuted its stock in May 2002, a little late for this list. But since its initial public offering, Netflix has returned more than 100,000%.

Still, our top 10 is loaded with power hitters. How did they do it, and what's next for these best-of-the-best companies? Read on to find out. (Prices and returns are as of June 30, unless otherwise noted.)

1. Monster Beverage

• 25-year cumulative total return: 155,103%
• Growth of $1,000: $1,551,030

Monster Beverage (MNST) is a monster, indeed. The company was known as Hansen Natural, having started in the 1930s as a seller of juices. By 2012, shareholders voted to change the company's name to Monster, reflecting the line of energy drinks that today make up more than 90% of revenue.

The sellers of these drinks, which contain more caffeine and sugar than traditional soft drinks, market them as boosting physical and mental energy. Monster is now the biggest player in a global market estimated at $90 billion in sales, with a 46% share in North America, according to Morningstar analyst Dan Su.

The key to dominance was a 2015 deal with Coca-Cola (KO) that saw the beverage giant distribute Monster products worldwide in exchange for a stake in the company that stands at about 20% today.

The energy-drink category is still growing faster than most beverages, and there's a new offshoot: performance beverages, or "better-for-you" drinks," which are often sugar-free and more narrowly target athletes and health-conscious consumers.

Andrew Strelzik, of BMO Capital Markets, who has a Hold rating on the consumer staples stock, says Monster has lost share in the category recently. Nonetheless, Monster shares have gained more than 20% since sales growth picked up in the fourth quarter.

That has left a number of analysts saying the market is now too confident about the firm's prospects. According to S&P Global, just 14 of 26 analysts who follow the stock have a Buy rating on Monster; three give it the rare Sell.

2. Nvidia

• 25-year cumulative total return: 126,100%
• Growth of $1,000: $1,261,000

As investors, we were always told that once a small company becomes a big one, and then a huge one, growth rates have to fall to reasonable levels. That's just math.

Then came Nvidia (NVDA). The company recorded $44 billion in sales in the quarter that ended April 27, up nearly 70% from the same quarter the year before.

Analysts estimate Nvidia will record roughly $200 billion in sales in the fiscal year that ends in January, up from $130 billion in the prior year and just $27 billion two years before that.

Nvidia invented the computer chips called graphics processing units. GPUs can execute more complex processes than traditional computer chips can, making them the best option not only for video games but also for artificial intelligence.

"Nvidia took an early lead in AI GPU hardware, but more important, developed a proprietary software platform," says Morningstar's Brian Colello. These tools allow AI developers to build their models with Nvidia and makes it less likely another chip designer will emerge as a leader in AI training.

Colello estimates Nvidia's fair value at $140 per share, about 11% below its recent close. That makes him conservative by Wall Street standards, as 59 of 75 analysts have a Buy rating on the tech stock. The median target price for the shares over the next 18 months is $175 a share, with the high $250, according to S&P Global.

"AI is growing faster than any platform shift before, including internet, mobile and cloud," says analyst C.J. Muse of investment firm Cantor Fitzgerald, who names Nvidia a "top pick."

3. Apple

• 25-year cumulative total return: 91,686%
• Growth of $1,000: $916,860

At the turn of the century, Apple (AAPL) was just showing signs of life after the first few years of founder Steve Jobs's return. We hadn't yet seen the iconic products that have made Apple what it is today. The iPod came in 2001, the iPhone debuted in 2007, and the iPad arrived in 2010.

The firm had just under $8 billion in revenue in the fiscal year ending September 2000; in fiscal 2024, it had nearly $400 billion in sales, with the iPhone making up just over $200 billion of that.

Services, a business unit that was inconceivable in the last century, brought in $96 billion. It includes its warranty program AppleCare, cloud storage, digital content sales and its Apple Pay system.

Now, Apple has what analysts call an ecosystem – an interlinked product suite of computers, phones, tablets and watches. Call it "sticky" – when you get deeper into Apple's world, you're more likely to buy more Apple products than to switch.

It has generally been a bad idea to bet against Apple over the past 25 years. But should you buy in right now? Only 26 of the 49 analysts who cover Apple say yes with their Buy ratings. The stock trades at 28 times expected earnings for the year ahead, above its historical average.

Others are advising clients to pause on Apple for now. Martin Yang, of Oppenheimer, who rates the stock a Hold, says Apple's high valuation, lack of apps that allow consumers to use AI, and stronger competition in China and emerging markets will keep it from increasing sales and profits above expectations.

4. Booking Holdings

• 25-year cumulative total return: 74,343%
• Growth of $1,000: $743,430

So many moments of the 1990s tech boom are now just faded memories. But William Shatner, the Star Trek icon and former spokesman for Priceline.com, still pops up in their ads today.

Priceline the company, however, became Booking Holdings (BKNG) in 2018. The name change recognized that Booking.com, a European-focused hotel-reservation site that Priceline bought in 2005 for just $135 million, is the company's dominant business. (The company's other well-known properties include Kayak, OpenTable and Asian site Agoda.)

That makes Booking the biggest and most geographically diversified of the travel sites. RBC Capital Markets analyst Brad Erickson, who likes the stock, says that "under almost any" economic scenario, the company "should fare better than most."

The company's most recent results showed weakness in U.S. travel, but the damage was limited by Booking's "uniquely broad geographic exposure," he says.

One big worry for Booking and its peers? Travelers using AI, rather than legacy travel sites, to plan vacations.

Erickson says he recently used four AI platforms to look at hotel rooms; only one let him make the reservation. Travel sites that allow users to complete a transaction may be more insulated from AI, or even helped by it if they are larger, better-known brands.

5. Tractor Supply Company

• 25-year cumulative total return: 60,133%
• Growth of $1,000: $601,330

If you live in one of America's large cities, you may think Tractor Supply Company (TSCO) is an industrial parts maker. It's actually a retailer with tens of millions of loyal customers who bought nearly $15 billion worth of their agricultural and animal products there last year.

The Tennessee-based company says its customers have above-average incomes and a lower-than-average cost of living, which is a nice combination to insulate the retailer from economic problems.

Tractor Supply has more than 2,500 stores in 49 states, with about 200 under the banner of Petsense, which it acquired in 2016. The care and feeding of animals is a major part of the business mix: Its livestock, equine and agriculture segment made up 26% of sales in 2024; pets bring in another 25%.

Analyst Joseph Feldman, of Telsey Advisory Group, says the company has room to grow: Tractor Supply plans 100 store openings per year from 2026 through 2030. Its Neighbor's Club loyalty program, which added 6 million members in the past year to reach 40 million, is targeted to reach 55 million in 2030.

Tractor Supply plans to boost sales at existing locations by building out garden centers.

"Overall, we expect the company to continue gaining market share and dominating in rural America," says Feldman. He recommends the consumer discretionary stock and says it could see $60 a share within the next 12 months, about a 13% gain from its recent close.

6. Texas Pacific Land

• 25-year cumulative total return: 55,580%
• Growth of $1,000: $555,800

For most of its first 100-plus years on the New York Stock Exchange, the stock price of Texas Pacific Land (TPL) was as flat as the western prairie. The company traces its roots to a failed attempt to establish a railroad in the 1870s; when it went bankrupt, it placed the land assembled for the project into a trust.

Eventually, oil and gas explorers found the Permian Basin under that dry and dusty Texas land, and the company began to collect royalties. By the turn of the 20th century, it was still a small business: Peak annual revenue was $13.1 million, according to S&P.

Things have improved. Texas Pacific Land collected $706 million in royalty revenue in 2024. And because the company has none of the expenses of drilling, extracting or processing, it is debt-free and has huge profit margins, reporting $454 million in net income last year.

But since 2021, most of the stock's gain has come not from the company's energy bona fides but from speculation that it's an artificial intelligence play. The idea – which TPL embraces – is that companies needing data centers and computing power will build on top of a natural source of energy.

In a May investor call, Chief Financial Officer Chris Steddum said, "we continue to advance discussions" with the owners of data centers. But there's no revenue from that yet.

Earnings estimates are scarce, but the shares trade at a lofty 53 times the past 12 months' earnings, according to S&P Global. Investors seem to be betting on a projection, not an existing business.

7. Old Dominion Freight Line

• 25-year cumulative total return: 40,227%
• Growth of $1,000: $402,270

This North Carolina company keeps on trucking. Old Dominion Freight Line (ODFL) is a "less-than-truckload carrier," which means it's willing to accept small shipments – and needs to operate a network of terminals to store its customers' freight.

Year after year, Old Dominion has invested in that network, and it now has more than 200 terminals across the U.S.

"Old Dominion remains committed to playing the long game," says analyst Patrick Tyler Brown, of investment firm Raymond James.

The company is not unionized, which minimizes labor costs. That helped Old Dominion to offer competitive pricing to win new customers when national competitor Yellow collapsed in 2023.

The trucking business is highly dependent on the economy, and fears of a recession have clipped the shares in 2025; they trade at about 30% below their 52-week high. Just eight of 25 analysts who follow the stock are bullish, with three slapping a Sell on the shares.

One is Emily Nasseff Mitsch, of CFRA, who sees the stock headed to $117 a share over the next 12 months, implying a loss of nearly 30% from recent levels, as increased competition and economic uncertainty lead to lower profit margins.

8. Deckers Outdoor

• 25-year cumulative total return: 35,238%
• Growth of $1,000: $352,380

In the world of fashion, one home run can make a company successful. Deckers Outdoor (DECK) has now scored two.

The company started in 1973 in California as a maker of flip-flops, then expanded into sandals with the Teva brand. In 1995, two years after the company sold its stock to the public, Deckers bought the company that made UGG boots. In 1998, Oprah Winfrey featured the boots on her show, and a fashion craze began.

UGGs peaked more than a decade ago, and Deckers has spent considerable time trying to revive the brand, with some success. In the meantime, the company spotted and acquired another wildly successful shoe: Hoka, created by two French trail runners in 2009.

Deckers reportedly paid just $1.1 million for the business in 2012, when it had less than $3 million in sales. Now, it probably accounts for over half of Deckers's $15 billion market capitalization (stock price times shares outstanding), says Morningstar analyst David Swartz. "It must be regarded as one of the most successful acquisitions in the apparel and footwear space ever."

So far in 2025, however, the company has warned that results for the quarter ending in June could come in below expectations, and has declined to provide guidance for the full fiscal year ending March 2026, given economic uncertainty, including the prospect of U.S. tariffs. (Deckers makes most of its products in Vietnam.)

Investors have cut the price of the stock in half this year – which some analysts believe presents a buying opportunity.

Given two market-leading brands, a robust balance sheet and industry-leading profit margins, analyst Zachary Warring, of CFRA, calls Deckers "best-in-class" and rates it a Strong Buy.

9. Tyler Technologies

• 25-year cumulative total return: 35,031%
• Growth of $1,000: $350,310

Tyler Technologies (TYL) sells software and services to local governments – over $2 billion worth in the past year.

Its products include software that ties together human resources, finance and other departments; a management system for local courts; and software that lets governments take payments. Many of the existing systems that governments use are badly out of date and must be replaced, not repaired, giving Tyler more opportunity.

Tyler can weather broader economic challenges better than software companies that sell to businesses, says Trevor Walsh, an analyst at Citizens Capital Markets & Advisory.

But the view that Tyler is a defensive software stock has made it an expensive software stock. Sales have increased about 10% per year over the past three years – modest for the industry. Yet the shares trade at more than 50 times estimated earnings for the next 12 months, a ratio that's roughly double the average of the 35 application-software companies in the S&P 1500, according to S&P Global.

Walsh says Tyler's strong cash flow and market leadership warrant the premium, and more: His 12-month target price for the shares, $700, implies about 18% upside from the stock's recent close. Wall Street generally backs that view; 15 of 20 analysts rate the shares a Buy.

10. Comfort Systems USA

• 25-year cumulative total return: 31,332%
• Growth of $1,000: $313,320

Comfort Systems' (FIX) job is to cool buildings – but its shares have been red-hot. The company is a provider of heating, ventilation and air conditioning (HVAC) systems.

For years, Comfort Systems bought up smaller companies in its highly fragmented industry, primarily in the South. The company emphasizes that its 19,000-person workforce is nonunion, making labor costs lower.

Annual profits have grown from $13 million in 2001 to nearly $600 million today. The balance sheet is nearly debt-free, and the company has raised its dividend 13 years straight.

Investors are excited about the future. The data centers and chip manufacturing plants necessary for AI need robust cooling systems. About 62% of Comfort Systems' revenue comes from its industrial business; a little more than half of that is tech-related.

Seven of eight analysts following the industrial stock are bullish, including Stifel's Brian Brophy. The company's "outsized exposure to data centers and manufacturing construction sets up for a favorable demand environment in the next several years," he says.

This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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To help you understand trends happening in AI and other new technologies, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Smart glasses are gaining fans fast. Meta’s Wayfarer AI glasses have sold nearly 2.6 million units since their 2023 launch. Smart glasses have cameras, microphones, open ear speakers and other sensors to power an AI voice assistant to give directions, send messages, take photos/video, answer questions and more.

Meta and other tech companies see the devices as a new way to spur AI adoption and build a bridge to future augmented-reality glasses that are still years aways. Get users hooked on smart glasses and someday they’ll upgrade to a more advanced headset, the thinking goes.

Even Apple wants to tap the nascent market, which is poised to grow at nearly 50% per year through 2029, according to market research firm IDC. The company wants to launch smart glasses by late 2026, according to a Bloomberg report, though delays are likely. Apple has struggled to find users for its high-end Vision Pro virtual reality headset, despite Apple’s advanced VR hardware and software. The company likely sees smart glasses as a market that is too good to pass up, since it will lead to future headsets.

Meta’s flashy marketing campaign with top celebrities donning its eyewear highlights the big bet on the market. Bloomberg recently reported that the company plowed another $3.5 billion into eyeglass maker EssilorLuxottica, owner of Ray-Ban and Oakley, to expand its partnership.

Expect many more models and styles in the next couple of years. Meta’s Ray-Ban glasses start at $299; prescription lenses cost extra. An Oakley sports edition is water resistant, with better battery life. A much pricier model, which shows digital info on the lens, could come by year-end. But it won’t be easy to add more tech without making the glasses too bulky for most buyers.

Other companies working on new smart glasses include Snap, Google, Samsung and China’s Xiaomi, promising strong competition and improved devices for years to come. Don’t be surprised if smart glasses continue to gain traction as everyday consumer devices.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Stocks opened cautiously higher Tuesday as market participants took in the latest inflation data and the unofficial start of second-quarter earnings season. But enthusiasm waned as the session wore on, with two of the three main benchmarks closing in negative territory.

Ahead of the open, data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) rose 0.3% month over month in June and 2.7% year over year. This was quicker than what was seen in May but in line with economists' forecasts.

Core CPI, which excludes volatile food and energy costs, was also higher than the month prior, but matched consensus estimates.

Some "goods" areas, such as furniture, appliances and electronics, saw rising prices and were likely a result of tariff pass-throughs, says John Luke Tyner, portfolio manager and fixed income analyst at Aptus Capital Advisors.

As for the positives in the June CPI report, Tyner points to "continued softening in shelter, car insurance and airfares," which helps "alleviate service pressures that have been problematic over the last several years."

Tyner adds that while tariffs haven't lifted inflation as much as feared just yet, it's still above the Federal Reserve's 2% target and is unlikely to change the central bank's stance on keeping interest rates unchanged.

Indeed, futures traders are currently pricing in a 97% chance the Fed holds rates steady at its next policy meeting in late July.

MP Materials jumps on big Apple deal

In single-stock news, MP Materials (MP) shares soared 20.0% after the mining company announced a $500 million deal with Apple (AAPL).

Under the terms of the agreement, MP will provide the tech giant with rare earth magnets that are manufactured in the U.S. from 100% recycled materials.

MP Materials is the only rare earth producer in the U.S., and the magnets are critical in consumer electronics, including smartphones and computers.

"This collaboration deepens our vertical integration, strengthens supply chain resilience, and reinforces America's industrial capacity at a pivotal moment," said MP Materials CEO James Litinsky.

Nvidia rally sends Nasdaq to new high

Apple, for its part, rose 0.2% – but it was hardly the best blue chip stock today. That honor went to Nvidia (NVDA), which rallied 4.0% on news the semiconductor manufacturer will be allowed to sell its H20 artificial intelligence (AI) chips in China.

NVDA shares went into a tailspin earlier this year after the Trump administration ramped up restrictions on China. But the chip stock has rebounded in recent months and last week, became the first company to top a $4 trillion market cap.

Nvidia's gain helped keep the Nasdaq Composite above water today, with the tech-heavy index climbing 0.2% to 20,677 – a new all-time closing high.

However, the Dow Jones Industrial Average shed 1% to 44,023 and the S&P 500 fell 0.4% to 6,243 due in part to weakness in financial stocks.

Bank stocks hold back the S&P 500

Among the day's most notable decliners was Wells Fargo (WFC), which plunged 5.5% after earnings.

While the big bank beat top- and bottom-line Q2 estimates, it lowered its full-year net interest income guidance.

"The good news was bad loans were down indicating more stable credit quality allowing for better than expected profits," says Brian Mulberry, senior client portfolio manager at Zacks Investment Management.

And while Mulberry says that weakness in the NII segment "is a concern in the short term," this pressure could lift if interest rates move lower later this year.

Wells Fargo wasn't alone in its post-earnings weakness. JPMorgan Chase (JPM, -0.8%) and BlackRock (BLK, -5.8%) also fell in the wake of their Q2 results.

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Overnight this week, you may have noticed your iPhone changed. Along with changes in the appearance of app icons and certain Apple features like the Notes or Calendar app, the latest Apple iPhone update also included some critical updates for security.

Because of this, if you have an iPhone or iPad that hasn't automatically gotten the latest iOS update, you should make sure to manually set it up as soon as possible. The steps to do so are included in further detail below.

iOS 18 (that's the 18th version of the iPhone "operating system") first became available in September, around when the new iPhone 16 was announced. It included new features like updates to the Photos app and how messages appear, as well as an introduction to Apple Intelligence — artificial intelligence features, that is — for iPhone 15s and 16s.

Last week, Apple announced an update to the operating system, recommending users update to iOS 18.1.1 or, for iPads, iPadOS 18.1.1. That new update specifically addresses security bugs found in the first edition of the operating system. According to our friends at Tom's Guide, iOS 18.1.1 has critical security fixes that stop possible "arbitrary code execution" and "cross-site scripting attacks."

While I'm not going to pretend to understand exactly what that means, I do know it means protecting your systems. And, as Kiplinger has said many times before, with more of our financial lives moving online and to apps on our phones, it's vital to keep those systems protected from possible attacks, whether it's direct hacking into your accounts or presenting opportunities for identity theft and fraud.

Other ways to protect your finances from cybersecurity threats include preemptively freezing your credit and using password managers like Nordpass or 1Password.

If you're not already an iPhone user or if you're considering upgrading to a newer version, this week is a good time to look into it with various Black Friday and Cyber Monday deals going on.

How to update your iPhone or iPad iOS

If you have an iPhone or iPad that hasn't automatically downloaded the latest iOS update (18.1.1), here are three simple steps to manually update your device:

1. On your device, go to "Settings"
2. Click "General," then "Software Update"
3. If you see an update available, click "Install Now"

iPhone deal quick links

• iPhone deals at Walmart
• iPhone deals at Amazon
• iPhone deals at Best Buy
• Apple's iPhone Upgrade Program

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To help you understand what is going on in the tech sector our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest… 

If you’re shopping for a used smartphone, you may be in for sticker shock. Used phones are hot commodities. 

“There are multiple tailwinds driving this business,” says Sean Cleland, head of mobile division at B-Stock, an online overstock marketplace that deals with big volumes of used phones. Cleland points to consumers holding onto older phones longer, fewer trade-ins and a lack of compelling new features on the latest models. There are signs many buyers have been waiting for Apple’s latest iPhone 16 and other new phones with new artificial intelligence features, such as summarizing emails, generating text and creating images.

Consider the iPhone 15 Pro Max, released September 2023. It still maintains 90% of the original retail price on the secondary market for end buyers, according to B-Stock. Apple’s iPhones are particularly good at holding onto their value because of regular software updates, rugged design and quality hardware. That means they last longer, receive new features via software updates and continue to have strong security.

Rising prices for new phones have also spiked demand for older models. It varies a lot by model and age, but used phones run about $300, on average. That’s a steep discount from nearly $1,000 or more for new, high-end devices.

High prices for refurbished models have prompted carriers and phonemakers to work harder to get people to trade in old models, which can then be sold in the U.S. or overseas through brick-and-mortar and online outlets, such as Amazon, eBay and Best Buy. 

This year’s strong smartphone sales could help a little by bringing more supply to the refurbished market. Worldwide smartphone shipments are set to rise nearly 6% this year, according to tech market research company IDC. Apple is hoping its newest model scores outsized sales, based on the fact that 300 million iPhone users haven’t upgraded their phones in four years according to Wedbush Securities. 

Some solace to frugal shoppers who may grimace at the elevated prices of used phones: “When you get something that’s preowned, it's a darned good device,” says Cleland. From trusted sellers, devices are cleared of data, tested, fixed (if necessary), cleaned and can last for years.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter. 

Apple (AAPL) will host its annual September product event this Monday, with things set to kick off at 1:00 pm Eastern time. The "Glowtime" event is expected to bring several major announcements from the tech giant, including the highly anticipated reveal of the iPhone 16 series.

For this year's event, technology information website Tom's Guide is watching for a long list of announcements. In addition to news on the iPhone 16, it is also anticipating the unveiling of the Apple Watch Series 10 and any updates to the company's Apple Intelligence generative artificial intelligence (AI) initiatives.

Technology blog TechRadar has similar expectations. Included in the things it is looking for are design changes, smart software tools and features for the new devices that are announced.

You can livestream the Apple event on Apple's YouTube channel, on Apple.com and on the Apple TV app.

Wall Street says Apple's a Buy ahead of the event

Apple had a highly publicized rough start to 2024, but shares bottomed in mid-April and are now up 18% for the year to date on a total return basis (price change plus dividends. This positive price action is just more of the same for AAPL, which boasts an impressive 20-year return. 

Unsurprisingly, Wall Street is overwhelmingly bullish toward the Dow Jones stock. Of the 46 analysts covering Apple tracked by S&P Global Market Intelligence, 25 say it's a Strong Buy, seven have it at Buy, 12 call it a Hold and two rate it a Sell. This works out to a consensus Buy recommendation and with high conviction.

Additionally, the average analyst target price for AAPL stock is $237.63, representing implied upside of over 7% to current levels. 

Speaking for the bulls is financial services firm Wedbush, which has a Buy rating and $285 price target on the blue chip stock.

Wedbush analyst Daniel Ives believes the September Apple event "will kick off Cupertino's biggest upgrade cycle in its history with AI now on the doorstep." Ives adds that recent checks across the Asia supply chain indicate "that this iPhone upgrade cycle could be a historical one, setting the stage for a supercycle."

He estimates that around 300 million iPhones globally are overdue for an upgrade. "In our view, Apple could sell north of 240 million iPhone units in fiscal 2025 as this AI-driven upgrade cycle takes hold."

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To help you understand what is going on in the tech sector our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest… 

Apple certainly wasn’t the first to launch a virtual-reality headset. But its high-tech, and high-priced, device officially kicked off the virtual reality era. The tech giant will sell over 400,000 units of the Apple Vision Pro in 2024, according to a recent forecast by tech market research company IDC. 

Enthusiasm over Apple’s VR debut has been subdued, to say the least. Sales are lower than some analysts had hoped, which has led to naysayers voicing concerns over the viability of VR devices more generally. However, it’s a strong showing for a first-generation headset that starts at a lofty $3,500. 

Part of this early push has been getting the device into the hands of software developers so that they can create VR apps and content. Apple is leaning into business uses for the Vision Pro, but sales are split between employers and consumers. Recently, sales slowed in the United States, but have picked up in overseas markets.

A cheaper Vision model is likely to jump-start sales next year and in 2026. The lighter headset will have fewer features and will probably cost around $1,500, with Apple aiming to eventually get its low-cost version priced at $1,000 or less. Considering that there are quality VR devices on the market today that cost $500 or less, driving down the cost of Apple’s version will be key. Apple is also working on an augmented-reality device, a super-lightweight headset that is more like normal glasses that overlay digital information onto the real world. 

Facebook-owned Meta is showing what the future of slim electronic glasses could look like. Meta’s Ray-Ban smart glasses have become a hit with diehard users and have exceeded the company’s sales expectations. The Ray-Ban glasses, which start at $300, look like stylish sunglasses but include open-ear speakers, five microphones, a 12-megapixel camera, 32 gigabytes of storage and Wi-Fi/Bluetooth connectivity. Users can give voice commands to snap a photo, video livestream what’s in front of them, listen to music, learn about things in front of them or answer questions via Meta’s artificial intelligence assistant. 

Both Meta and Apple want to make AR glasses that are stylish and sleek. Meta is reportedly working on a future set of smart glasses that can display information on the inside of the lens. Apple’s AR headset will have to strike a difficult balance between useful features and lightweight design. A lingering problem with AR devices is users’ limited willingness to wear the glasses all day. Similarly, today’s VR goggles are too bulky and alienate many would-be customers.

It's still a long road ahead for VR to hit the mainstream. Apple will continue a strong VR push, even if it faces some tough sales years in the future. The company has experience launching devices that failed to meet analysts’ sales expectations in the first year, yet went on to commercial success, such as the Apple Watch. 

Part of that road map includes doubling down on VR entertainment. Apple recently announced a new collection of upcoming video content for the Vision Pro, including immersive concerts, nature documentaries, virtual hot-air balloon rides and surfing videos. Expect bigger efforts on the production front. Early adopters are still lacking in things to watch and do in VR.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter. 

To help you understand what is going on in the tech sector our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest… 

The virtual reality industry got a much-needed jolt when Apple finally joined the fray with its first VR headset. If any company can bring face-worn devices to an audience beyond gamers, it’s the tech giant that introduced the world to the smartphone. “Apple is focused on the mass market,” says Jitesh Ubrani, research manager at IDC. “Apple is doing a great job introducing the technology to many people.”

It's still early days. But there’s huge long-term potential. Here’s an outlook for VR and the many ways it will be used. 

Vast improvements in tech components make amazing VR possible today. Headsets run on energy-efficient yet powerful mobile chips, and are packed with components: A memory chip, fast Wi-Fi, a slew of cameras, high-end eye displays, microphones, speakers, laser-scanning sensors, motion sensors, tiny cooling fans. (But batteries, on board or in a connected pack, are still heavy, yet last just 2-3 hours.) Users can fully immerse in a virtual world for calls, gaming, entertainment, etc. Or the front-facing cameras make a live video stream and 3D scan of the room so users can see their real environment populated by virtual screens or holograms. 

Today’s models will seem clunky in 5 to 10 years, as big improvements occur to shrink the size and weight, without hindering performance. Costs will fall, too.

The leaders are Apple and Meta. Meta has about 60% of global headset sales, focusing on lower-cost models ($500 or less) for gaming and social virtual worlds. Apple’s $3,500 Vision Pro has a dazzling display and dozens of high-end components, plus a new VR operating system that takes familiar apps and puts them into VR. Plus, Apple built two new chips: One for computing and one for eye/hand tracking. The device is controlled by incredibly precise eye and hand tracking. A simple glance at a digital icon and a subtle tap of two fingers will select it, with no noticeable lag.

There are plenty of other players, too. HTC, DPVR, Valve, Varjo, HP and China’s ByteDance make high-quality headsets. Alphabet, Samsung and Huawei are among the tech giants expected to launch a device. Augmented-reality glasses, a related category, are not full VR and use transparent lenses to overlay digital info onto the real world. Top vendors include Xreal, Vuzix, Magic Leap and Microsoft.

The possibilities are nearly endless when it comes to specific VR uses. But Apple shows how VR can eventually be a general computing device. Think of Apple’s breakthrough VR operating system, visionOS, as Windows for VR, a new way to access web browsers, e-mails, documents, photos and all other apps. A crisp PC monitor, any size, can float in a fixed position in the room in front of you. Other apps, such as photos or a calendar, can open to the sides or hang on a wall. You can put these holographic monitors in the actual room or turn your workspace into any setting, such as a rocky coast in Washington, a tranquil lake in Maine or a beach in Italy. Early businesses testing Apple VR include Walmart, Vanguard, SAP and Stryker. 

On-the-go workers can set up a virtual office anywhere, such as on a plane, in a crowded bus or in a hotel room. Even in a cramped taxi, users can multitask with huge displays and multiple windows open. Open a spreadsheet on one side, e-mail in the center and a web browser to the right. Receiving a call? A video chat will open in front of you, either in 2D or as a 3D avatar. Talking about a new product or design? A 3D hologram will appear on the desk and colleagues can collaborate to spin the object around, test updates and take notes on a virtual whiteboard.

VR will remain a niche market in the near term, hindered by high costs and a lack of VR content. But content is coming, as developers build VR apps, and Hollywood and others shift production to VR videos. Still, expect strong headset sales in coming years. By 2028, global yearly shipments of VR/AR headsets will hit 35 million, up from nearly 10 million this year, according to market research firm IDC. Apple’s device will sell at least 400,000 units in 2024. Expect Apple’s VR business to grow significantly, to about 10% of revenue, about the same share as iPad. Daily usage will rise steadily, too, a key metric.

There’s a rapidly growing list of uses for VR, including many practical ones. Today’s office apps are being optimized for VR. From collaboration tools such as Microsoft Teams and Slack, and web-based storage services such as Box, to project management tools such as OmniPlan, and video chats with life-size screens.

Some of the specific areas that are promising: 

• Sales. You can show products, such as heating systems, medical equipment, tools and more as 3D holograms at trade shows. Present large luxury goods that are tough to stock, such as yachts, RVs and private jets in a small showroom or on the road. Try on clothes or see new furniture at home.
• Design and prototyping. Bring designers together in a virtual room to jointly see a digital version of a product, such as high-end cars. Reduce the need for physical models and in-person reviews, plus make product tweaks easier. Models can also be brought anywhere. A prototype virtual truck can be placed on a real street, for example.
• Health care. Train doctors, nurses, surgeons, physical therapists, etc. Nurses can dissect cadavers or conduct a series of patient assessments on an avatar. Medical students can learn how to place electrodes for an electrocardiogram. Dental students can examine digital mouths and extract teeth. In real-life situations, surgeons can get patient info or share live video to get a consult with a remote expert.
• Real estate. Immersive tours of homes for buyers, sellers and agents to take 3D walk-throughs and overlay digital info, such as floor plans and room size. Avoid the wasted time of an in-person visit to a property a buyer wouldn’t like, and boost the odds of prospective buyers making a trip to a promising property.
• First response. Train police, firefighters and other emergency personnel in dangerous situations, such as unruly protesters, active shooters or a fiery car crash, with VR videos that track performance, offer new scenarios and speed up training.
• Mechanical fields, such as engineering, manufacturing, construction and more. Train welders, home builders, aviation mechanics, truck drivers, electricians, etc. Assemble and disassemble complex machines. Practice maintenance and new builds.
• Plus, entertainment, including concerts, video games, TV, theater and virtual worlds. Watch live sports — a baseball game from the dugout or a basketball game courtside.

VR has the potential to cannibalize other tech segments, including PC monitors, big-screen TVs, game consoles and smartphones. Movies are stunning in VR and will give theaters competition. Still, the apps that will harness VR the best have yet to be built. But they are coming soon and will start winning over new users. Start-ups and tech giants alike will find moneymaking opportunities in VR. To get there, expect even bigger investment from companies and venture capitalists.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter. 

Apple (AAPL) stock declined in an up market Monday after Berkshire Hathaway (BRK.B) disclosed it cut its stake by 13% in the most recent quarter. 

Is Warren Buffett, Berkshire's chairman and CEO, losing faith in what is by far the company's largest holding?

Not at all.

Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.) 

For the record, the greatest long-term investor of all time said that AAPL is "even better" than American Express (AXP) or Coca-Cola (KO), two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

Indeed, during the question and answer portion of the meeting, Buffett was asked: "[Has your] view of the economics of Apple business or its attractiveness as an investment changed since Berkshire first invested in 2016?"

Buffett: "No. But we have sold some shares."

Why? Because corporate taxes are "likely" to go up "later." He figures the federal government – at some unknown future date – will have to raise taxes to reduce the deficit. 

"With current fiscal policies, I think something has to give," said Buffett. "I think that higher taxes are quite likely."

That's not exactly a heretical idea, regardless of your policy preferences or political inclinations. It's also kind of irrelevant. Buffett is a steward of other people's capital. It's his job to maximize their returns. 

"If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year," Buffett said.

He noted that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%.

Buffett on paying taxes

Mind you, Buffett is no tax dodger. Here are some of the things he said about taxes when explaining the Apple stock sales:

• "Almost everybody I know pays a lot more attention to not paying taxes than I think they should."
• "We don't mind paying taxes at Berkshire."
• "We at Berkshire always hope to pay substantial federal income taxes. We think it's appropriate [to pay taxes] to a country that's been as generous to our owners. It doesn't bother me in the least to write that check. I would really hope that with all that America has done for all of [Berkshire shareholders], it shouldn't bother you that we do it."

The bottom line is that Berkshire doesn't mind paying taxes. But if they're going to go up, better to pay them at a lower rate today than a higher rate tomorrow. 

Apple by the numbers

Apple is still Berkshire Hathaway's largest holding.

At one point last year AAPL accounted for about half of the holding company's U.S. stock portfolio. However, with 790 million shares (down from 905 million at the end of 2023), Apple is now somewhere in the lower-to-mid-40% range.

That's a hefty allocation, but then Berkshire has always maintained a highly concentrated portfolio. Including its positions in Japanese brokerages, Berkshire's top five holdings – AAPL, Bank of America (BAC), AXP, KO and Chevron (CVX) – comprise about 75% of its equity portfolio.

We won't know the exact breakdown of Berkshire's holdings until it files its Form 13F with the Securities and Exchange Commission after the market closes on May 15.

Whatever the filing reveals, Apple bulls needn't fret about Berkshire Hathaway losing its taste for Apple.

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Investing profitably is no easy feat. And for those lucky enough to avoid the pitfalls of Wall Street and who can turn a tidy profit, nothing is more frustrating than seeing those hard-won returns get scaled back due to the "capital gains" taxes levied against them.

Folks may be wondering how to avoid capital gains taxes altogether. The short answer is that you likely can't. Indeed, the vast majority of retail investors are unable to sidestep the tax man completely. 

However, with a few subtle but important changes to your investing strategy, you may be able to reap significant tax deductions. Put another way, you could walk away with bigger profits than anticipated as the money stays in your pocket instead of going into Uncle Sam's coffers.

How much will I pay in capital gains taxes?

If you're wondering what investments qualify for capital gains taxes, the answer is quite simple. 

According to current Internal Revenue Service (IRS) policies, "(a)lmost everything you own and use for personal or investment purposes is a capital asset." That includes stocks, bonds and exchange-traded funds (ETFs), but also other non-traditional investment assets including physical real estate properties or even cryptocurrencies like bitcoin. 

But while a broad array of investments qualify for capital gains taxes on their returns, the rate at which you are taxed depends on two main categories: The amount of time you have owned the underlying investment and your taxable income bracket.

If you hold the asset for less than one year before you sell, it is a short-term investment for capital gains tax purposes. This means your profits are taxed as ordinary income just like a paycheck. The 2023 short-term capital gains rates for those income tax brackets are as follows according to the IRS.

• 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for couples filing jointly)
• 35% for incomes over $231,251 ($462,501 for couples filing jointly)
• 32% for incomes over $182,101 ($364,201 for couples filing jointly)
• 24% for incomes over $95,376 ($190,751 for couples filing jointly)
• 22% for incomes over $44,726 ($89,451 for couples filing jointly)
• 12% for incomes over $11,001 ($22,001 for couples filing jointly)

Long-term capital gains rates, however, can be significantly lower – all the way down to zero. According to the IRS:

• A capital gains rate of 0% applies to those single filers with taxable income of up to $44,625, or $89,250 for investors who are married and filing jointly
• A capital gains rate of 15% applies if your taxable income is more than $44,625 but less than $492,301 for single filers, or more than $89,250 but less than or equal to $553,850 for married couples that file jointly

Anyone above that 15% tax threshold is taxed at a 20% long-term capital gains tax rate – a higher measure, but still less than all but the lowest of all the ordinary income tax brackets. You can find the 2024 capital gains tax rates here.

Dividend tax rates mirror these long-term capital tax rates, so long as they are "qualified dividends." This can sometimes be hard to pin down, but if you're invested in a mainstream asset such as blue chip stock Apple (AAPL) and you have been for a few months, you have qualified dividends. But other less straightforward profit-sharing deals such as dividends on employee stock options or payments from a foreign investment may be "unqualified" and considered "ordinary dividends." 

Always read the fine print on dividends to get the details on tax treatment because in this case it has less to do with your behavior as an investor and more to do with the underlying status of the investment itself.

Unqualified dividends are taxed as ordinary income, just like short-term capital gains, which can be a much higher rate.

How to reduce or avoid capital gains taxes

There may be a small group of investors who don't have much cash and fit into that lowest tax bracket of 0%. But chances are that if you make less than $40,000 a year, you don't have much spare cash to invest in the stock market.

This means the vast majority of us likely fall into the 15% bucket for capital gains taxes – so long as we hold assets for a year plus one day or longer. That lower long-term capital gains tax rate is a way to incentivize investors to buy and hold.

It's also important to acknowledge that gains are not calculated on a position-by-position basis. Your capital losses can offset your capital gains. Put another way, if you achieve a $1,000 investment profit on one asset, you can offset potential taxes by locking in a $1,000 loss on a different investment to net out your capital gains to zero.

These capital losses can also be carried forward to the next tax year, too, if you have a particularly bad run and wind up locking in more losses than you do gains. 

This requires a bit of extra paperwork, including the Capital Loss Carryover Worksheet provided by the IRS, but could be a useful way to ensure next year's profits aren't undercut by taxes.

To be clear, you should never trade investments solely because of capital gains tax risks. Even a 37% haircut on a massive gain is better than a loss locked in just to thwart the IRS. But considering the differences in the tax brackets and the potential for significant capital gains tax savings, all investors should inform themselves about how their behavior can change their investment tax burdens and take that into account along with everything else.

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Warren Buffett stepped down as CEO of Berkshire Hathaway (BRK.B) at the end of 2025, and although he remains chairman, the holding company's stock portfolio is under new management.

Buffett always handled the largest positions in the Berkshire Hathaway portfolio, but those days are no more. The greatest long-term investor of all time still keeps his hand in and plays a key advisory role. Investment manager Ted Weschler also continues to manage perhaps 5% of Berkshire's stock investments.

But there's no question that CEO Greg Abel is now calling the shots.

In the first quarter of 2026, Abel reduced or closed out positions in 22 names, many of them thought to be picks by former investment manager Todd Combs, who decamped to JPMorgan Chase (JPM) at the end of last year.

The overhaul shouldn't come as a shock. After all, Berkshire's portfolio has been changing dramatically for years now. Although old-guard favorites such as American Express (AXP) and Coca-Cola (KO) still form the core of the portfolio, Buffett & Co. have taken a shine to names such as Apple (AAPL), most recently, Alphabet (GOOGL).

One thing that hasn't changed, however, is Buffett's preference for maintaining a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple alone accounts for more than a fifth of Berkshire's U.S. stock portfolio, according to data from WhaleWisdom. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 67% of its portfolio value, while the top 10 account for 90%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Regardless, whether we're talking about Berkshire's biggest bets or the scores of stocks it maintains at the margins, Buffett's focus shifted after the COVID-19 pandemic.

Berkshire used to see value in a host of big bank stocks. Today, the holding company is far more selective. Healthcare stocks and payments processors were a long-time Buffett bet. But not anymore.

If you want to know which stocks Berkshire is buying and selling, look no further than our portfolio analysis.

Price, share totals and other data as of March 31, 2026. Sources: Berkshire Hathaway's SEC Form 13F filed May 15, 2026, for the reporting period ended March 31, 2026; and WhaleWisdom.

The Berkshire Hathaway portfolio

Stocks Berkshire is buying

Buffett famously avoided airlines for decades. When he finally did come around, his timing was terrible, spreading his bets among a handful of major carriers not too long before COVID-19 set the industry into a tailspin. As a result, he quickly closed out those positions.

So it's a mark of change that Berkshire initiated a stake in Delta Air Lines in Q1, buying 39.8 million shares worth $2.6 billion. With a portfolio weight of a bit more than 1%, the air carrier is Berkshire's 14th-largest holding.

As noted above, Berkshire also made a bet on the consumer discretionary sector, picking up 3 million shares in Macy's. The tiny position in the department store operator was worth $55 million as of the end of Q1. At less than 0.1% of the portfolio, M stock is Berkshire's 27th-largest investment.

More interestingly, Berkshire more than tripled its stake in Google parent Alphabet (GOOGL). The holding company now owns 54 million shares worth $15.6 billion as of the end of Q1. With a weight of 5.9%, the Google parent's Class A shares are Berkshire's 7th-largest U.S. equity holding. Berkshire first bought GOOGL in the third quarter of 2025.

Relatedly, Berkshire initiated a stake in Alphabet Class C (GOOG) stock, picking up 3.6 million shares during the first three months of the year. With a value of $1 billion, the Class C investment accounts for Berkshire's 19th-largest holding.

In another vote of confidence in an existing position, Berkshire tripled its holdings of The New York Times Co. (NYT), adding another 10 million shares during Q1. With a market value of $1.3 billion, or 0.5% of the portfolio, NYT is Berkshire's 17th-largest investment — up from 30th place when it first bought the stock at the end of 2025.

Berkshire also added to homebuilder Lennar (LEN), an investment Berkshire initiated last year. The holding company bought another 3 million shares to bring its total stake to 10 million. With a market value of $877 million, LEN accounts for 0.3% of the portfolio, or the 21st-largest investment. Berkshire picked up more Lennar Class B (LEN.B) stock, as well. However, at less than 0.1% of the portfolio, it's essentially immaterial to a company of Berkshire's size.

Stocks Berkshire is selling

Berkshire reversed course on Chevron (CVX) in Q1, cutting its position in the integrated oil major by 35%. After boosting its stake in Q4, the holding company sold 46 million shares to start the year. Berkshire, which has owned the Buy-rated Dow Jones stock since the fourth quarter of 2020, still owns more than 84 million shares worth $17.5 billion as of quarter's end. And with a weight of more than 6.6% in the portfolio, CVX remains Berkshire's fifth-largest holding.

In another reprise from previous quarters, Buffett once again sold Bank of America (BAC) stock, which has been a major holding since 2017. Don't panic, though. Berkshire reduced its investment in the nation's second-largest bank by assets by less than 1%.

With 513 million shares worth more than $25 billion as of March 31, BAC slipped one place, to Berkshire's No. 3 holding.

In other sales, Berkshire continued to ease up on DaVita (DVA), its 11th-largest holding, this time 5%. The company also massively reduced exposure to Constellation Brands (STZ), a stake it initiated at the end of 2024, by 95%.

Elsewhere, Berkshire cut its stakes in Liberty Live Holdings (LLYVK) and Nucor (NUE), but with portfolio weights of less than 1%, respectively, these names don't move the needle.

The biggest changes came in the form of exits. After slashing its stake by 77% last quarter, Berkshire closed out its position in Amazon.com (AMZN).

A number of other familiar names were also banished from the portfolio. Apparently Berkshire is no longer a fan of payments processors, having exited its stakes in both Visa (V) and Mastercard (MA). The holding company owned both stocks since 2011.

Also getting the boot were Charter Communications (CHTR), Diageo (DEO), UnitedHealth Group (UNH), Domino's Pizza (DPZ), Heico (HEI), Lamar Advertising (LAMR), Formula One Group (FWONK), Atlanta Braves Holdings (BATRK), Pool Corp. (POOL), Allegion (ALLE), Aon (AON), Liberty Latin America Class A (LILA) and Liberty Latin America Class C (LILAK).

Berkshire's top five holdings

• Warren Buffett has always maintained a concentrated Berkshire Hathaway equity portfolio.
• The top five positions in the Berkshire portfolio account for 67% of its total value.
• Apple, American Express, Coca-Cola, Bank of America and Chevron are the five largest holdings.

As noted above, Buffett has always maintained a highly concentrated portfolio. Indeed, he's said that "diversification makes very little sense for anyone who knows what they're doing."

The stocks below accounted for 67% of Berkshire's total U.S. equities portfolio value as of the end of Q1. If you want to know what's driving the bulk of the Buffett's returns, check out the names below.

Apple

Buffett has called Apple "Berkshire's third business," so it should come as no surprise that the iPhone maker routinely takes the top spot among the holding company's positions.

True, Berkshire has pared its stake in Apple in recent quarters, but Buffett has assured shareholders he adores AAPL as much as ever. BRK.B's former CEO took pains to explain that the iPhone maker is still — er — the Apple of his eye.

For the record, the sales were for tax purposes. The greatest long-term investor of all time said that AAPL is "even better" than American Express or Coca-Cola, two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

More recently, Buffett said he wasn't comfortable with Apple accounting for such an outsized weight in the portfolio.

As Apple's sixth-largest shareholder, Berkshire's continuing interest in the iPhone maker has market-wide implications.

American Express

Berkshire closed out its stakes in payments processors Visa (V) and Mastercard (MA), but it continues to adore American Express.

Buffett took his first stake in AmEx in the 1960s, and it’s still paying off a half-century later.

There's a lot to love about AmEx: Its management is strong; it's a dominant brand in the industry; and it generates copious amounts of free cash flow — the money left after essential capital expenditures are made that can be used to finance dividends and stock buybacks.

The current yield on the dividend isn't eye-catching, but it is safe and growing. The stock is only slightly more volatile than the broader market. Those are attributes that will help long-term investors sleep better at night.

Coca-Cola

Buffett famously drank Coca-Cola for 52 years before investing in the stock.

He finally took the plunge in 1988. "We expect to hold these securities for a long time," Buffett wrote back then of his new stake in Coke in a letter to Berkshire shareholders. "In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

As of the end of Q1 2026, Berkshire owned 9.3% of Coca-Cola’s outstanding shares. Analysts like the stock's prospects, too. Wall Street gives KO a consensus recommendation of Buy, with strong conviction.

Bank of America

Bank of America is Berkshire Hathaway's fourth-largest holding. Buffett first acquired BAC stock in Q3 2017. Berkshire is the bank's second-largest institutional shareholder.

In an April 2023 media appearance, Buffett said that he unloaded many of the holding company's bank stocks because he didn't think they were near as solid investments as they once were. As for Bank of America, he said this about the bank and its CEO:

"I like [CEO] Brian Moynihan enormously. And I just don't wanna, I don't wanna sell it," the then 92-year-old CEO told CNBC's Becky Quick.

"But I did sell banks that we'd owned for 25 or 30 years. And if they asked me why I did it, I told them — I just think the system isn't set up quite right in terms of connecting punishment to culprits on something that's important," Buffett added.

Chevron

Thanks to the outlook for crude oil prices, the energy sector is enjoying steady and predictable free cash flow. Chevron, the only energy name among all 30 Dow Jones stocks, is returning some of this cash to shareholders through dividends and buybacks.

Make no mistake: There are few things Buffett likes more than dividends and buybacks.

It also helps that oil is a solid hedge against inflation. With inflation still running ahead of the Federal Reserve's 2% target, commodities should remain in favor.

Berkshire's massive pile of cash, equivalents and short-term investments is much better put to use in an asset such as Chevron under such conditions.

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With the S&P 500 index of the largest U.S. stocks rising about 26% on a total return basis (price change plus dividends) in 2023, many folks are looking for smart ways to invest in 2024. 

But as the old saying goes, past performance is no guarantee of future returns. It's important to take stock of the current economic environment as well as your personal risk tolerance before plowing your hard-earned cash into what's popular.

The good news is that there are plenty of smart ways to invest your money this year. In fact, for most investors with a modest amount of cash, it's easier than ever before to put just a few hundred dollars to work and improve your personal finances significantly.

Smart ways to invest your money: CDs

With the recent increase in interest rates, it's easier than ever before to tap into safe returns that are nearly guaranteed. One of the most rock-solid options out there is a CD, or certificate of deposit. CDs are similar to high-yield savings accounts – these vehicles are basically just bank accounts where you get a fixed rate of return – only can't withdraw your money before a deadline without penalty. 

"For disciplined consumers, CDs can be a great way to set aside money while earning higher interest rates on their balances," writes Kiplinger contributor Seychelle Thomas in her feature on whether or not CDs make a good investment. "However, it's critical to have a readily accessible form of savings even if the rates aren't as high compared to a CD." 

If you don't need your cash immediately, a 1-year CD can offer as much as a 5.5% return right now. Rates, minimum deposits and durations may vary, so make sure to shop around for the best option that fits for you.

Smart ways to invest your money: Bond funds

If you want more "liquid" interest-bearing assets that are low-risk, bonds are a good option. Bonds are investment vehicles where investors give some cash to governments or corporations in exchange for repayment plus interest. Think of it as you, the investor, acting as the bank, and getting paid for the service of loaning out your money.

Rather than do the research for individual bonds, many investors prefer bond funds – which can include both traditional mutual funds or bond ETFs (exchange-traded funds). Both of these options are baskets of hundreds or even thousands of bonds, offering built-in diversification and a structured way to invest your money on Monday but get it back out on Tuesday if you really need it.

The largest bond fund at present is the Vanguard Total Bond Market ETF (BND), with more than $300 billion in total net assets. As the name implies, it holds a wide array of bonds from corporate debt to U.S. Treasury bonds to mortgage-backed securities. 

There are other more tactical options, but with almost 11,000 individual bonds in BND, you get easy access to the totality of this marketplace in a single holding. Right now, this Vanguard bond fund yields 4.3% – meaning the investment offers a slightly smaller rate of return than CDs, but more flexibility.

BND also trades as a mutual fund, the Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX). It requires a $3,000 initial investment.

Smart ways to invest your money for growth: Stocks

If CDs are all but guaranteed to give you your principal investment back, and bonds offer low volatility but more liquidity, stocks round out the list of smart ways to invest your money with a more aggressive but also potentially more profitable option to invest your money.

Stocks are investment stakes in publicly traded companies. And unlike the prior two options, stocks don't deliver a fixed rate of return. Instead, they generally deliver profits by appreciating in value based on those companies achieving better results.

The big success story many folks talk about is Tesla (TSLA). If you invested just $1,000 in its stock on the first day it traded back in 2010, you would have about $140,000 today! Of course, predicting future performance is easier said than done. There are plenty of horror stories, too. Some companies ultimately do go bankrupt and investors lose everything.

So, as with bonds, the safer route is typically to invest in a diversified basket of stocks via an ETF or mutual fund. The largest and most popular vehicle out there is the SPDR S&P 500 ETF Trust (SPY) with almost $500 billion in assets. Tied to the popular S&P index of the 500 largest U.S. stocks that includes Apple (AAPL) and other popular names, this S&P 500 ETF gives you exposure to the biggest companies on Wall Street in one holding that's easy to buy and sell.

Just remember that stocks are much riskier than bonds or CDs. So make sure you assess your own goals and risk tolerance before investing in SPY or any other stock market investment.

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It's a simple question – what is common stock? – but it's a good one. It's the first step in getting to know what you're buying in the stock market. And it's important that you as an investor know what you're buying.

Common stock is a type of security that gives you partial ownership in a corporation. As an owner of the corporation, you have certain rights and benefits.

These include a residual claim on future profits, the right to vote on important company matters such as electing board members and approving acquisitions, and receiving dividends from the company's cash flow from operations.

Although the existence of common stock dates back to 2000 BCE with the Assyrian people in Mesopotamia (present-day Middle East), the modern record considers the common stock issued by the Dutch East India Corporation in 1602 to be the first example of an actual printed document indicating proof of ownership.

In 1611, the Amsterdam Stock Exchange was created, the world's first stock exchange.

Here in the U.S., the earliest example of an organized stock exchange was in 1792, when the Buttonwood Agreement was signed by 24 prominent stockbrokers and merchants of the day.

It would eventually become the New York Stock Exchange in March 1817. Today, there are more than 2,200 companies whose common stocks are traded on the NYSE.

How does common stock fit into a company's capital structure?

The two elements of a company's capital structure are debt obligations and total shareholders' equity. This is a company's invested capital, the funds used to finance its operations, purchase assets and grow.

A company's shareholders' equity consists of common and preferred stock and retained earnings. When combined with outstanding debt, you have the entire capital structure of a business, the invested capital.

The mix between debt and equity depends on several factors, including, but not limited to, a company's cost of capital, business strategy, future revenue estimates, investment requirements, bond rating, the valuation of its common stock and many more.

When companies grow quickly, they're more likely to hold higher debt levels on their balance sheet, comfortable knowing that they will generate significant future cash flow, thus enabling them to pay down the debt more quickly.

Companies growing more slowly will be less open to significantly leveraging their balance sheets, knowing cash flows will be insufficient to repay the debt promptly.

These decisions regarding capital structure are part of a company's broader capital allocation strategy, which includes investing in its existing business, making acquisitions, paying dividends, repaying debt and repurchasing its stock.

The decisions regarding a company's capital structure and allocation go hand in hand.

What is common stock vs preferred stock vs retained earnings?

Shareholders' equity represents one of the three main parts of a balance sheet. The others are liabilities and assets. A company's assets are equal to shareholders' equity and liabilities.

Shareholder equity combines common stock, preferred stock and retained earnings.

Preferred stock is considered a "hybrid" security because it has a face value and pays regularly scheduled income to investors in the same manner as fixed-income vehicles such as bonds. However, preferred stocks trade on public exchanges just like common stocks. But they don't come with voting rights.

There are two significant benefits of owning preferred shares.

First, if a company liquidates its business, once the debtholders are paid in full, any funds left over go to the shareholders.

Preferred shareholders, as the name implies, take precedence over the owners of common stock. If there are any funds remaining, the common stockholders get paid.

Second, preferred shareholders must be paid their stated dividend income before any payments are made to owners of common stock.

Unfortunately, like common stock, a company is not required to pay dividends. During the COVID-19 pandemic, many companies paused, cut or eliminated monthly or quarterly dividends to save cash. Both types of stocks were affected.

Retained earnings are a company's cumulative profits not paid out as dividends or used for stock buybacks. This figure changes from quarter to quarter.

For example, as of December 2024, Microsoft (MSFT) had $203.5 billion in retained earnings, up from $188.9 billion as of September 2024, even after the Mag 7 stock spent $4.7 billion on share repurchases and paid $6.2 billion in dividends.

The risks of owning common stock

While investing in common stocks can deliver significant capital appreciation – Apple (AAPL), Nvidia (NVDA) and Adobe (ADBE) are just three examples of impressive long-term gains public companies can return to shareholders – there are also legitimate risks.

Common stocks are volatile. Their prices do not go up in a straight line, routinely exhibiting periods of correction.

Investors uncomfortable with risk are better suited to fixed-income investments, such as Treasury bills, where the principal is guaranteed.

Other potential risks of owning common stocks include lack of diversification, foreign exchange, interest rates and country and company-specific issues.

Many investors buy exchange-traded funds (ETFs) to diversify their common-stock portfolios more easily. By avoiding a concentrated portfolio, investors reduce the company-specific risk from each holding.

An example of country and foreign exchange-specific risk would be investing in the common stock of a Latin American company listed on a U.S. stock exchange.

South American countries often have very precarious political structures. When combined with the region's highly volatile currencies, the investor adds additional risk beyond the business.

When a company's assets are liquidated due to insolvency, the creditors and bondholders are paid first, followed by preferred stockholders.

Common stockholders are the last to receive any proceeds from a liquidation. In bankruptcy proceedings, common stockholders often end up with nothing for their ownership.

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Apple is raising prices again for many of its services, including Apple TV Plus. Effective immediately, the monthly price changes for Apple services are:

• Apple TV Plus, Apple's TV streaming service, is $9.99, up $3
• Apple Arcade, Apple's video game subscription service, is $6.99, up $2
• Apple News, the news subscription service, is $12.99, up $3
• Apple One, Apple's bundle of subscription services also sees hikes. The Premier plan is now $37.95, up $5, while the Apple One Individual and Family plans rose by $3, to $19.95 and $25.95 respectively.

The increases are effective immediately for new subscribers and in 30 days for existing subscribers on their next renewal date, an Apple spokesperson told Kiplinger.

The increase is Apple’s second for its services segment in a year. In October 2022, it raised monthly prices for Apple Music by $1, to $10.99, Apple TV Plus by $2, to $6.99 and the Apple One bundle for individuals by $2, to $16.95.

"We are focused on delivering the best experiences possible for our customers by consistently adding high-quality entertainment, content and innovative features to our services," the spokesperson said. “With the increase in these individual services, the pricing of Apple One will also be adjusted. It remains the easiest and best way to get all of Apple’s subscription services in one simple plan at the best value."

Industry-wide price hikes

Apple joins the club as multiple streaming services have raised their prices in recent months. These include Netflix, which hiked its prices for its basic and premium plans earlier this month.

Also earlier this month, Warner Bros. Discovery raised the price for its Discovery Plus ad-free monthly subscription in the U.S., and Amazon Prime Video announced it will place ads in its Prime Video streaming service in early 2024.

 In August, Disney announced a price hike for its monthly ad-free Disney Plus and ad-free Hulu plans. 

There have also been price increases in the music streaming space — in July Spotify hiked monthly prices for its Premium Individual, Premium Duo, Premium Family and Premium Student plans.

How to save on streaming

With so many of the major streaming platforms raising prices, you may be searching for promotions or new options.

For tips on how to save money while making sure you get to watch some of the must-see releases, check out our round-up of how to save on streaming services and find deals.

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Apple (AAPL) stock has been in a slump since notching a record high at the end of 2025, but that means little to truly long-term investors.

Recall that at one point last year, AAPL stock lost as much as 30% of its value. Shares soon went on a remarkable run, adding about $1.6 trillion to the company's market cap in only eight months.

Given that context, a 9% drawdown from AAPL's December record is just the cost of doing business. If you want to own equities, volatility is merely the price of admission.

Truly long-term buy-and-hold Apple investors already know this. After all, they've been through these sorts of things many times before – and have been rewarded with incomparable returns over the past few decades.

As famed speculator Jesse Livermore once said, the big money is made by "sitting tight." If any stock proves the wisdom of his words, it's Apple.

From January 1990 through December 2020, AAPL stock created $2.67 trillion in shareholder wealth, or an annualized dollar-weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

Indeed, per Bessembinder's findings, which account for a stock's increase in market cap adjusted for cash flows in and out of the business and other adjustments, Apple was the best stock in the world over those 30 years.

True, AAPL stock traded sideways for the first few years of the 21st century, but an explosion of innovation soon put an end to that.

Under the visionary leadership of the late Steve Jobs, Apple essentially reinvented itself for the mobile age, launching revolutionary gadgets such as the iPod, MacBook and iPad.

But what really set Apple on its course to becoming the world's third-largest publicly traded company – and one of hedge funds' favorite blue chip stocks – was the 2007 debut of the iPhone.

Today, Apple isn't just a purveyor of gadgets; it sells an entire ecosystem of personal consumer electronics and related services. And it's a sticky ecosystem at that.

No less an eminence than Warren Buffett has called the iPhone maker Berkshire Hathaway's (BRK.B) "third business," noting Apple fans' fantastic brand loyalty as one reason for being all-in on the stock. (Apple accounts for more than fifth of the value of the Berkshire Hathaway equity portfolio.)

True, Berkshire Hathaway cut its Apple stake sharply over the past year, but that was because the holding company believes that corporate taxes are likely to rise at some point in the future. Bulls needn't worry about Berkshire losing its taste for the stock. Warren Buffett adores Apple as much as ever.

Little wonder the iconic tech firm was tapped to become one of the elite 30 Dow Jones stocks. In 2015, Apple replaced AT&T (T) in the Dow Jones Industrial Average.

The bottom line on Apple stock?

Over the past 20 years Apple stock generated an annualized total return (price change plus dividends) of 27.4%. By comparison, the S&P 500 delivered an annualized total return of 10.8% over the same span.

What does that look like on a brokerage statement? Check out the chart below and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth about $130,000.

The same $1,000 invested in an S&P 500 index fund would theoretically have turned into less than $8,000 over the same period.

For those wondering if Apple stock is a buy at current levels, Wall Street certainly thinks so.

Of the 48 analysts covering AAPL surveyed by S&P Global Market Intelligence, 25 rate it at Strong Buy, six say Buy, 15 have it at Hold, one says it's a Sell and one has it at Strong Sell.

That works out to a consensus recommendation of Buy, with high conviction.

More Stocks of the Past 20 Years

• If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
• If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
• If You'd Put $1,000 Into Netflix Stock 20 Years Ago, Here's What You'd Have Today

Stocks closed mostly higher Monday, with two of the three major benchmarks building on Friday's positive momentum. 

Amid a relatively bare economic and earnings calendar, investors took in a deluge of single-stock news, including reports of a potential nationwide TikTok ban – which sent Snap (SNAP) stock soaring. 

The Dow Jones Industrial Average outpaced its peers today, adding 0.1% to 33,431, while the S&P 500 edged up 0.07% to 4,048. The Nasdaq Composite, however, slipped into the red near the close, giving back 0.1% to 11,675.

While moves for the major benchmarks were modest, Snapchat parent Snap jumped 9.4% amid reports Congress is considering a nationwide ban of Chinese social media platform TikTok. 

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Last week, the U.S. House Foreign Affairs Committee advanced legislation that would give President Joe Biden the authority to ban TikTok in the U.S. due to national security concerns. The bill will now proceed to the House of Representatives for a full vote. In December, Congress passed a bill that banned the platform from use on devices owned by the federal government. Social media stock Pinterest (PINS, +1.1%) also closed higher.

Elsewhere, Apple (AAPL, +1.9%) was one of the best Dow stocks today – second only to healthcare giant Merck (MRK, +3.9%) – after Goldman Sachs analyst Michael Ng initiated coverage on the iPhone maker with a Buy rating. "Apple's installed base growth, secular growth in services, and new product innovation should more than offset cyclical headwinds to product revenue, such as a reduced iPhone unit demand due to a lengthening replacement cycle and reduced consumer demand for the PC & tablet category," Ng wrote in a note to clients. 

The best blue chip dividend stocks

The rest of the week will draw more economic headlines. Fed Chair Jerome Powell is set to kick off his two-day congressional testimony tomorrow, with investors anxious for more clarity on the central bank's future plans for interest rates. Economic data has come in relatively strong recently, and the next big data point is due out at the end of this week. Specifically, the February jobs report will be released ahead of Friday's open.

"This week will likely deliver a make-or-break moment for risk appetite as we will hear Fed Chair Powell's testimony to Congress and find out if the hot January jobs report was an aberration," says Edward Moya, senior market strategist at currency data provider OANDA.

With inflation data due out next week, and the next Fed meeting scheduled for the end of this month, the potential for volatility is high. As such, investors should stay focused on the best blue chip stocks that are poised to weather the storm – and what better place to start than with the best blue chip dividend stocks? This short list of high-quality names can deliver both income and outperformance in a turbulent market.

A busy week on Wall Street ended with wild swings for stocks as investors took in a mixed bag of Big Tech earnings and a shockingly strong monthly jobs report. After bouncing between positive and negative territory throughout the day, the major benchmarks ultimately ended Friday on a down note. 

The shakiness started last night after Apple (AAPL, +2.4%), Amazon.com (AMZN) and Alphabet (GOOGL, +2.8%) reported earnings. All three tech giants fell short of bottom-line estimates in their quarterly results, while Apple and Alphabet also missed on the top line. Despite its Q4 revenue beat, though, Amazon stock tumbled 8.4% – the worst return of the day for the group – as growth in its Amazon Web Services cloud segment slowed. "One common theme among the tech giants was growing concern about consumer weakness and challenging economic conditions," says José Torres, senior economist at Interactive Brokers.

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This morning's January jobs report only added to investor uncertainty. The Labor Department said the U.S. economy added a jaw-dropping 517,000 jobs last month, well above economists expectations for 189,000 new jobs. Additionally, the unemployment rate declined to 3.4% from 3.5% in December – its lowest level since 1969. Today's data complicates the Fed's efforts to bring down inflation by aggressively hiking interest rates.

"The disinflation process may have begun, but a strong labor market may prove troubling for bets for inflation to continue to drop quickly," says Edward Moya, senior market strategist at currency data provider OANDA. "Investors expecting that the Fed will cut rates at the end of the year might be in for a rude awakening. We won't see linear moves with inflation trends and that should make it unlikely for inflation to be at low enough levels to justify rate cuts."

After falling at the open in reaction to tech earnings and the jobs report, the major benchmarks found their way into positive territory by late morning. But by the close, the indexes had swung back into negative territory, with the Dow Jones Industrial Average ending down 0.4% at 33,926, the S&P 500 off 1.0% at 4,136, and the Nasdaq Composite 1.6% lower at 12,006. 

The Best Utility Stocks to Buy

We often talk about the importance of dividend-paying stocks as a means of not only providing additional income for investors, but also creating a ballast for portfolios against a volatile market. 

One sector known for having these defensive qualities is utilities. Case in point: The utility sector is down around 2% on a year-over-year basis, compared to a nearly 10% decline for the broad market. Plus, the utility sector – which is known for having some of the best dividend stocks – currently sports an attractive 3% yield, almost double that of the S&P 500.

And the best utility stocks tend to be more stable than companies in other sectors, as well as have reliable revenue streams that often support healthy and consistent dividends over the long term.

Earlier this month, pay transparency laws went into effect in Washington and California, requiring employers to list pay ranges on job listings. Later this year, New York state will also follow suit. These laws, already in place in Colorado, are one way that states are combatting wage gaps —including racial and gender pay gaps. In fact, the gender pay gap was cut by 45% in organizations that disclosed pay compared to those that didn’t. As more states, including South Carolina and Massachusetts, begin developing pay transparency laws, this could soon become the new norm. 

Here’s what you need to know about the new pay transparency laws effective this year.

California: At the beginning of this year, California’s labor code began requiring employers with more than 15 employees to list salary ranges on job postings, even for postings on third-party websites. 

Employers are also required to share pay ranges for an employee's current position, upon request — which is likely to put the cat among the pigeons... Home to many powerful companies — like Apple and Wells Fargo — and to millions of employees, California's pay transparency laws could soon become the new normal across states. 

Washington: Similar to California, Washington now requires employers with more than 15 workers to share salary information on job postings — both internally and on third-party sites like Glassdoor and LinkedIn — thanks to the Equal Pay and Opportunities Act. Furthermore, company benefits, like health care, retirement benefits and sick leave, are also required on job listings. These requirements are effective whether the applicant will fill a position in person or remotely.  

Rhode Island: Rhode Island has also required further pay transparency from employers. According to Rhode Island’s Pay Equity Act, if requested, employers are required to provide pay ranges for job listings if "inquired about". However, they don't have to list these ranges outright on job listings. Employers will also be required to disclose salary ranges before an employee is hired or before they change positions. 

New York State: New York state’s transparency laws will go into effect in September of this year. Starting in September, New York employers are required to share pay ranges for job listings. This applies to employers with four or more workers. Pay transparency laws have been in effect in New York City since November 1, 2022, which made it the largest municipality in the U.S. to codify pay transparency.

Stocks closed lower Monday as caution set in ahead of a busy week on Wall Street. 

In addition to a jam-packed earnings calendar that features trillion-dollar tech titans Apple (AAPL) and Alphabet (GOOGL), there's a full economic docket too – one that includes a Fed meeting and the monthly jobs report. 

"This week's big tech earnings will enable investors to learn whether or not the economy is slowing and investors will see which companies are strong enough to weather the potential for tough times, and which companies will struggle," says David Trainer, CEO of investment research firm New Constructs. "We expect the stock market to be more discerning as it awards the stronger companies with more value, while sending the stocks of weaker companies lower, a dynamic that sounds simple, but didn't occur in 2020 and 2021."

Ahead of this busy batch of tech earnings, the Nasdaq Composite underperformed today, shedding 2.0% to 11,393. The S&P 500 gave back 1.3% to 4,017, and the Dow Jones Industrial Average fell 0.8% to 33,717.

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Investors are also keeping a close eye on this week's gathering of Federal Reserve officials. For those who have been wondering, "when is the next Fed meeting," the answer to that question is tomorrow, though the policy announcement is not due until Wednesday afternoon. 

Wall Street expects the Federal Open Market Committee (FOMC) to hike its benchmark interest rate by 25 basis points (0.25%). The tone of this meeting will likely be similar to the December one, says Jonathan Pingle, economist at UBS Global Research: "A smaller rate hike as the terminal rate nears, a Fed more confident inflation is peaking, but also an FOMC that thinks it is too soon to signal a stop."

Meanwhile, Pingle anticipates "a very solid gain" in the January jobs report, which will be released Friday morning. And this, he adds, "should keep more rate hikes in play." 

The Best AI Stocks to Buy

Today's price action from tech stocks marks a change of pace to what has so far been a hot stretch for the beaten-down sector. "The script has been flipped in 2023," say Adam Turnquist, chief technical strategist, and Jeffrey Buchbinder, chief equity strategist at LPL Financial. "Last year's underperformers have turned into outperformers this year, driving the S&P 500 Index up [roughly] 5% this month." And the Nasdaq is up nearly 9% after plunging more than 33% in 2022. 

Turnquist and Buchbinder add that several seasonality indicators – including the Santa Claus rally and the fact that we're in the third year of a presidential cycle, which tends to be bullish for stocks – "suggest the path of least resistance for the broader market is likely higher for the year." The longer-term selloff in tech certainly creates opportunities for investors to scoop up some of the best growth stocks at a bargain. Artificial intelligence (AI) companies, in particular, are poised for impressive growth over the next decade – and that should mean great things for Wall Street's best AI stocks. 

Warren Buffett's retirement as CEO of Berkshire Hathaway (BRK.B) marks the end of an era, but it's unlikely to be the end of the holding company's love of high-quality dividend stocks.

To be sure, much will change. New CEO Greg Abel is creating his own vision for Berkshire Hathaway. Meanwhile, Todd Combs, who, along with Ted Weschler, had managed perhaps 10% of Berkshire Hathaway's stock portfolio, left in December to take a job at JPMorgan Chase (JPM).

The days of investors diligently tracking every one of Berkshire's buys and sells just won't be the same.

Be that as it may, the Oracle of Omaha has said that his preferred holding period is "forever," and that's been a winning formula when it comes to Buffett's best dividend stocks.

What Buffett has to say about dividend stocks 

Berkshire famously doesn't pay a dividend of its own, even as Buffett liked to rake them in with both fists. There's no hypocrisy here. Buffett is a master of capital allocation. Investors entrust him with their capital to maximize their returns. Why would Buffett return cash to shareholders via a dividend that yields, say, 2% when he's confident he can generate a greater return on their capital elsewhere?

When he's on the other side of the deal, however, Buffett has had an abiding love for long-term and reliable dividend payers. For one thing, dividends enforce management discipline, he's said. Even better is the magic of compounding.

When a company raises its dividend regularly over an extended period of time, the yield on an investor's cost basis goes up. Hold on long enough at that puny 2% yield you started with, and it could hit double-digits or more one day.

Buffett periodically liked to highlight this fact in his annual letters to shareholders, noting that —– spoiler alert —– in 1994, Berkshire received $75 million in Coca-Cola (KO) cash dividends. Less than two decades later, that sum had ballooned to more than $700 million.

"Growth occurred every year, just as certain as birthdays," Buffett wrote. "All Charlie [Munger] and I were required to do was cash Coke's quarterly dividend checks. We expect that those checks are highly likely to grow."

They have.

How we chose the best Buffett dividend stocks

Note that Berkshire amassed its massive KO stake back in the late 1980s and early 1990s. Based on the initial cost of the investment, the dividend yield on Buffett's stake is around 60%.

With that example being top of mind, we screened Berkshire's portfolio for the best Buffett dividend stocks based on the current forward yield, commitment to dependable dividend growth over the long haul, and analysts' consensus recommendations.

Have a look at five of the best Buffett dividend stocks.

• Market value: $341.6 billion
• Dividend yield: 2.7%
• Percentage of Berkshire Hathaway portfolio: 11.6%
• Berkshire Hathaway ownership stake: 9.3%

No surprises here. Few companies have Coca-Cola's track record when it comes to returning cash to shareholders. Indeed, this member of the S&P 500 Dividend Aristocrats Index has increased its payout annually for more than six decades.

Buffett quipped that he drank Coke — and watched its stock — for more than 50 years before finally taking the plunge in 1988. Today, KO is Berkshire's third-largest holding, one that generated $816 million in dividend income in 2025.

KO stock has trailed the broader market over the past few years, but analysts say it's poised to get its momentum back. The Buy-rated Dow Jones stock remains one of Wall Street's favorite names in the consumer staples sector. Analysts surveyed by S&P Global Market Intelligence give shares a consensus recommendation of Buy, with high conviction to boot.

• Market value: $400.7 billion
• Dividend yield: 2.0%
• Percentage of Berkshire Hathaway portfolio: 9.5%
• Berkshire Hathaway ownership stake: 7.2%

Buffett first bought Bank of America (BAC) back in 2017, and he's clearly pretty fond of it. Even as Berkshire slashed or outright exited stakes in a host of financial stocks over the years, he remained committed to the nation's second biggest bank by assets.

Partly that's because BAC stock paid Berkshire about $625 million in cash dividends in 2025.

It also helps that BAC has raised its dividend annually for 13 years and counting.

True, Buffett has been trimming Berkshire's BAC stake over the past few quarters, but it is still the holding company's fourth-largest position.

The Street likes BAC over the shorter term as well. Industry analysts give shares a consensus recommendation of Buy, with very high conviction.

"We believe that the current BAC share price undervalues the franchise given ongoing improvement in return metrics and continued positive operating leverage," writes Argus Research analyst Stephen Biggar, who rates the financial stock at Buy.

• Market value: $34.8 billion
• Dividend yield: 2.5%
• Percentage of Berkshire Hathaway portfolio: 1.4%
• Berkshire Hathaway ownership stake: 8.1%

When Buffett initiated a stake in Kroger (KR) in 2019, it looked like a classic defensive dividend play. With almost 2,700 locations in 35 states, Kroger is one of the nation's largest grocery retailer.

It's a low-margin business in a defensive sector, but it sure does pay dividends. Heck, Kroger has hiked its dividend annually for 19 straight years — and at a compound annual growth rate of 13%.

As a low-beta stock, KR tends to lag the broader market when everything is going up. It also tends to hold up better when stocks are selling off. Interestingly, KR has generated competitive long-term performance vs the S&P 500 despite the secular bull market.

Looking at the next 12 to 18 months, the Street gives KR stock a consensus recommendation of Buy, albeit with somewhat mixed conviction.

Kroger is Berkshire's 12th-largest holding.

• Market value: $4.37 trillion
• Dividend yield: 0.4%
• Percentage of Berkshire Hathaway portfolio: 22%
• Berkshire Hathaway ownership stake: 1.6%

Don't let the paltry yield on Apple's (AAPL) dividend fool you. Yes, the company gets flack for its tiny yield, but that's partly a function of its soaring share price and partly due to its strict dividend policy.

Apple prefers returning cash to shareholders through stock buybacks, which are more tax-friendly. As such, it generally follows a regimen where it regularly raises its dividend by only one cent.

That sounds like a lousy deal until you realize that Apple's dividend has increased at a compound annual growth rate of more than 7% over the past decade. Buffett's No. 1 pick, which he first bought in 2016, paid Berkshire $280 million in cash dividends last year.

Meanwhile, investors counting on future increases to the payout can probably rest easy. In fiscal 2025, Apple generated $98.7 billion in free cash flow — and that was after paying out more than $15 billion in dividends.

The Street gives Apple a consensus recommendation of Buy, with mixed conviction.

• Market value: $230.5 billion
• Dividend yield: 1.1%
• Percentage of Berkshire Hathaway portfolio: 17.4%
• Berkshire Hathaway ownership stake: 22.2%

Buffett really loves American Express (AXP). He first bought the stock in the 1960s, but he didn't start building Berkshire's massive long-term holding until the 1990s.

Today, Berkshire owns more than a fifth of the financial company's shares outstanding. And at more than 20% of its U.S. equity portfolio, AXP is Berkshire's second-largest holding after Apple.

AXP's dividend yield won't impress impatient equity income investors. Those with longer horizons will appreciate the fact that AXP has increased its payout at a compound annual growth rate of more than 11% over the past decade.

Analysts are split on AXP over the shorter term, giving shares a consensus recommendation of Hold.

Speaking for the bulls, Argus Research analyst Stephen Biggar cites a competitive strength in making his Buy call on AXP.

"The company's customers, who tend to have higher incomes than those of other credit card companies as well as better credit scores, are generally more insulated from economic distress and have not shown signs of slower spending despite periods of high inflation and interest rates," the analyst writes.

Related content

• 9 Warren Buffett Quotes for Investors to Live By
• A Timeline of Warren Buffett's Life and Berkshire Hathaway
• 5 of Warren Buffett's Best Investments
• 7 of Warren Buffett's Biggest Misses

Apple MacBook owners suffering from faulty keyboards may have an early holiday present. A $50 million class action lawsuit settlement by Apple has been given preliminary approval by the presiding federal judge in California, according to Law360. Roughly $33m of that will be assigned to lawsuit class members, who can now look forward to a payout of up to $395 each.

U.S. District Judge Edward J. Davila said the deal is fair and reasonable, especially considering the various risks of continuing litigation that has involved over two years of negotiations and more than 1 million pages of documents.

Find out if you're among the affected users eligible for a payout.

Apple MacBook Lawsuit: The Context

The class action lawsuits have focused on the widely disliked butterfly keyboards used on MacBook models in the last decade. Users complained that the keys tended to exhibit several problems, according to Apple's own Keyboard Service Program:

• Letters or characters repeat unexpectedly
• Letters or characters do not appear
• Key(s) feel "sticky" or do not respond in a consistent manner

Apple initially put out an apology to the “small number of users [who] are having issues with their third-generation butterfly keyboard”, according to MacWorld. Following two class action lawsuits launched by affected users in 2018, Apple then discontinued the design, starting in 2019, and offered affected users replacement keyboards through their Keyboard Service Program.

Still, this wasn't enough for many affected users, who continued to pursue litigation. Judge Davila granted class-action status to one of the plaintiff lawsuits in March 2021. Apple finally reached a $50 million settlement with plaintiffs (still subject to the judge's review) in July 2022, as reported by Reuters. 

Apple Macbook settlement: Payouts

Now that the court has issued preliminary approval, affected class members can expect the relief. Here's a breakdown of the settlement tiers, per Law360.

If you had an affected keyboard repaired or replaced by Apple, the company will contact you automatically about your payout. More information will be shared at the official KeyboardSettlement.com website once it goes live.

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Stocks kicked off the final trading month of 2022 in fickle fashion, as traders and investors digested a series of economic reports and Wednesday’s comments by Federal Reserve Chief Jerome Powell. 

A reading on U.S. manufacturing activity contracted for the first time since the height of the pandemic, raising the specter of recession in 2023. Apple (AAPL) stock continued to deal with the potential impact to iPhone production from COVID-19 lockdowns and civil unrest in China. Meanwhile, the Fed's preferred measure of inflation showed that prices for core goods and services continued to moderate.

Perhaps the most important piece of macroeconomic news on Thursday came from the Institute for Supply Management. Its gauge of factory activity slipped to 49 in November from 50.2 the previous month. Readings below 50 indicate contraction. The gauge has now declined in five of the past six months, but this was the first time that factory activity actually receded since May 2020. 

Elsewhere, the core personal consumption expenditures price index (the one the Fed pays most attention to) rose 0.2% in October. That was slightly below economists' average estimate. The index, which excludes volatile food and energy prices, rose 5% year over year.

Personal income for October jumped 0.7%, which easily topped the forecast for growth of 0.4% estimate. Personal spending increased 0.8%, which matched projections.

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Lastly, market participants continued to process the implications of Fed Chair Jerome Powell's speech to the Brookings Institution. Although the central bank is now expected to raise interest rates by just 0.5% when it meets in mid-December, Powell remained hawkish about where rates will ultimately peak.

All these mixed signals led to a mixed close for the major indexes in a seesaw session on Thursday. The blue-chip Dow Jones Industrial Average fell 0.6% to close at 34,395, while the broader S&P 500 was essentially unchanged (or off less than 0.1%) at 4,076. The tech-heavy Nasdaq Composite, however, gained more than 0.1% to reach 11,482.

The Bottom Line

The bear market rages on, but the best blue-chip stocks never go out of style. Indeed, the Dow – that elite bastion of just 30 blue chips – is now down only 3.4% for the year-to-date on a total return basis (price plus dividends). No wonder a number of Dow stocks make the list of the best stocks to buy for a bear market. Another subset of the Dow, the best Dow dividend stocks, is clobbering the broader market in 2022.

Contrast that with last year, when high-flying growth stocks were all the rage. A number of those names – including Carvana (CVNA) and Rivian (RIVN) – have come crashing down to earth, and now one noted tech bear says former market darling Altassian (TEAM) could even go to $0.

As we enter the final month of 2022, a year unforgiving to the tech industry, Apple (AAPL, $148.03) stock remains quite volatile.

A big reason is the potential iPhone shortfall resulting from worker unrest at the Foxconn plant in Zhengzhou, China. Employees at the plant where Apple iPhone Pro's are manufactured have been protesting the country's zero-COVID policy.

Sources suggest that unrest at the plant could result in a production shortfall of 6 million units for the iPhone Pro. The protests started in October over food shortages but have recently turned to COVID.

While the situation is fluid – Apple and Foxconn believe they can fill the shortfall in 2023 – it could make investors think twice before buying Apple stock.

At the very least, it gives investors food for thought when investing in companies that rely on China for their manufacturing requirements. "It will force Apple to accelerate the diversification of its production base," said Asymmetric Advisors analyst Amir Anvarzadeh, as reported by Bloomberg.

In the long run, this could be the best thing to happen to Apple. However, in the near term, investors ought to temper their expectations for Apple stock as it heads into 2023.

"We estimate that Apple now has significant iPhone shortages that could take off roughly at least 5% of units in the quarter and potentially up to 10% depending on the next few weeks in China around Foxconn production and protests," says Wedbush analyst Daniel Ives. 

Ives estimates that the iPhone supply disruptions cost Apple $1 billion per week in lost sales.

On the bright side, the latest information suggests that city officials in Zhengzhou lifted the COVID lockdown on Nov. 30, allowing workers at Foxconn's iPhone City campus to leave the property.

In addition, Foxconn has offered employees who left the plant between Oct. 1 and Nov. 10 bonuses of up to $1,672 if they return to work and remain on the job for at least two months.

It's too early to know what the lifting of these COVID restrictions in Zhengzhou means for Foxconn's plans to entice thousands of workers back to work through monetary rewards.

And investors willing to stand by Apple through its supply issues have other concerns to worry about heading into 2023.

For starters, a significant portion of iPhone owners has likely upgraded their phones in the past two years, resulting in waning demand in the year ahead.

In addition, the company's software and services revenue, according to Oppenheimer analyst Marin Yang, is experiencing a slowdown due to lower consumer spending resulting from higher inflation and interest rates.

Ultimately, Ives believes iPhone 14 shortages could be as much as 30% in Apple stores heading into the holiday shopping season. That's not good news, given consumers have already said they're looking to spend less this year.

Still, Apple stock remains an excellent long-term investment and analysts maintain a consensus Buy rating on the iPhone maker, according to S&P Global Market Intelligence. However, shares could face more near-term volatility. 

In the meantime, it makes sense when buying Apple (or any other stock) to tread carefully.

BofA Global Research sees the S&P 500 moving sideways in 2023 due to declining earnings per share. That said, it does project the index will average annual returns of 8% over the next decade.

If you're thinking of buying Apple stock, look past the production problems in China and focus on the long term. That's what Warren Buffett's doing (Apple, for those who don't know, is the top holding in the Berkshire Hathaway equity portfolio).

Equal-weight S&P 500 exchange-traded funds (ETFs) could be poised to have their day in the sun, and here's why. 

A stunning selloff in Big Tech has the S&P 500 Index down by more than 17% so far in 2022 – on pace to close out its worst year since 2008. And this has ETFs based on the index becoming far less reliant on mega-cap stocks like Apple (AAPL) and Amazon.com (AMZN) that have lost massive amounts of market value this year, reducing their weightings in the S&P 500.

As one example, the iShares Core S&P 500 ETF (IVV) currently has 18.1% of its nearly $303 billion in net assets invested in five stocks: Apple, Amazon, Microsoft (MSFT), Alphabet (GOOGL) and Meta Platforms (META). That’s down from its high of more than 24% in September 2020.

That's a good thing. 

Estimates suggest that as much as $7 trillion was invested in S&P 500-linked ETFs and mutual funds at the end of 2021. Heading into 2023, buyers of these funds will get a more balanced portfolio than in recent years.

That's also a good thing. 

Still, many of these index ETFs that assign weight based on market value still have outsized exposure to tech stocks. And with the Federal Reserve committed to keeping interest rates higher for longer in order to bring down inflation, the troubles Big Tech has seen this year could continue for the time being. 

One solution for investors is to use equal-weight S&P 500 ETFs that don't play favorites. 

The problem: There are only two U.S.-listed S&P 500 equal-weight fund options available to investors. And both are offered by Invesco.

The Invesco S&P 500 Equal Weight ETF (RSP) tracks the performance of the S&P 500 Equal Weight Index. Both the ETF and the index are rebalanced quarterly. Based on 503 holdings, each stock in the ETF is rebalanced to a weighting of 0.20% on the third Friday in March, June, September and December.

By looking at RSP's current holdings, you can tell that 304 are either flat or in positive territory since the last rebalancing in the third week of September, with the next rebalancing in December.    

The top three sectors by weighting for RSP are industrials (14.8%), technology (14.7%), and financials (13.6%). In addition, five sectors have a weighting of 10% or higher.

By comparison, the market cap-weighted IVV's top three sectors by weighting are technology (26.5%), healthcare (14.9%), and financials (11.6%). All five of the tech stocks mentioned earlier are in the top 10. However, none are in RSP's top 10. 

In terms of performance, the equal-weight S&P 500 ETF is down 12.3% year-to-date, 510 basis points better than the market cap-weighted one. (A basis point = 0.01%.)

The mutual fund version is the Invesco Equally-Weighted S&P 500 Fund (VADAX). It, too, tracks the performance of the S&P 500 Equal Weight Index, and has a similar number of holdings and rebalances four times a year. 

The big difference is that the mutual fund has an expense ratio of 0.52% (or, $52 annually for every $10,000 invested), more than twice the RSP's 0.20% fee.

Other broad-market equal-weighted ETFs revolving around the S&P 500's 11 sectors include the Invesco S&P 500 Equal Weight Technology ETF (RYT), the Invesco S&P 500 Equal Weight Health Care ETF (RYH), Invesco S&P 500 Equal Weight Consumer Staples (RHS). There are similar ETFs for energy, financials, utilities, consumer discretionary, materials, industrials, real estate and communication services.

Lastly, if you want something less broad, Invesco offers the Invesco S&P 100 Equal Weight ETF (EQWL). It tracks the performance of the S&P 100 Index, a collection of 100 large-cap, blue-chip U.S. companies. 

Instead of rebalancing each quarter to 0.20% per holding as RSP does, it rebalances to 1.0%. EQWL charges five basis points more in expense fees than RSP, but Morningstar gives it an overall five-star rating out of 1,153 funds.  

As Big Tech struggles, RSP, VADAX, and the other Invesco offerings are worth considering in 2023 and beyond.    

Stocks blazed a path higher Thursday after the latest consumer price index (CPI) showed inflation cooled in October.

Ahead of the opening bell, the Labor Department said consumer prices increased 7.7% year-over-year in October – the slowest annual gain since January. On a monthly basis, the CPI was up 0.4%. Both figures were smaller than economists were anticipating. Core CPI, which excludes volatile energy and food prices, also increased at a slower-than-expected pace last month.

Many of Wall Street's top minds were quick to chime in following this morning's release of the October CPI, including Michael Reinking, senior market strategist at the New York Stock Exchange. "Today's data is an obvious step in the right direction," Reinking says. "While we have seen false dawns before, given the broader economic backdrop, it does seem this could be the start of the rollover." He adds that this inflation data "opens the door to the Fed to slow the pace of rate hikes going forward, and we are now seeing markets price in an 80% probability of a 50 basis point rate hike in December." (A basis point = 0.01%.)

The tech sector (+8.2%), whose components are most sensitive to interest rates, were the biggest gainers today. Among individual stocks soaring were Apple (AAPL, +8.9%), Meta Platforms (META, +10.3%) and Microsoft (MSFT, +8.2%). 

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As such, the tech-heavy Nasdaq Composite spiked 7.4% to 11,114, while the broader S&P 500 Index (+5.5% at 3,956) and the blue-chip Dow Jones Industrial Average (+3.7% at 33,715) also scored notable gains. It was the best day for the stock market since 2020.

What Do Tech Layoffs Mean for Stocks?

Today's inflation data sparked an appetite for even the riskiest of assets. Bitcoin, for example, jumped 11.2% to $18,008. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) This marks quite a change of pace for the digital asset, which has plummeted this week on news of a major shakeup in the crypto space. 

To quickly recap that drama: Crypto exchange Binance initially said it would buy the non-U.S. assets of rival FTX, amid liquidity challenges at the latter firm, before backing out of the deal due to "the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations," per a statement on Twitter. With Binance no longer giving FTX a lifeline, many are speculating that the crypto exchange is teetering on bankruptcy, given that it needs $4 billion to remain solvent, according to its CEO, Sam Bankman-Fried.

The upheaval in the cryptocurrency space creates bigger waves for the already embattled tech sector, which is trying to navigate slower growth for the first time in years. Most recently, that has resulted in several big tech firms announcing massive layoffs, including Facebook parent Meta Platforms (META), which said earlier this week it is firing roughly 13% of its global workforce. What do these tech layoffs mean for investors? Read on as we take a closer look.

It remains to be seen if October will maintain its reputation as a bear-market killer, but so far so good. The Dow Jones Industrial Average logged its best October ever, while the broader S&P 500 delivered impressive gains of its own.

Even the Nasdaq Composite, while lagging the other two major indexes by wide margins, chipped in handsomely. And that's despite the tech-heavy index laboring under the weight of truly dismal performances from its largest components.

Indeed, the Dow itself shrugged off selloffs in tech constituents such as Apple (AAPL) and Microsoft (MSFT) to generate double-digit percent gains for the month.

But what's most encouraging is what has historically come next when the Dow produces a boffo October: the blue-chip barometer has gone on to generate even more impressive upside over the following three-, six- and 12-month periods. 

The Dow finished the month of October up 14%. That's the average's best month overall since 1976, and its best October in history, according to Ryan Detrick, chief market strategist at Carson Group. Have a look at the three major benchmark's October returns in 2022:

The Dow's historical performance from here, however, is where things get really interesting. As Detrick notes, since World War II, whenever the Dow has logged a gain of at least 10% in October, it has gone on to do great things. Have a look at the table below, courtesy of Carson Group.

If past is prologue, there is an 82% chance that the Dow will be higher both three months and six months from now, and a 73% chance that it will be higher rather than lower in 12 month's time. Even better are the magnitude of the Dow's returns.

As you can see in the above table, the Dow's three-month average return following a 10%+ October gain is 5.6%. Six months out, the average increase hits 10.7%. And as for a year later? The Dow has delivered an average return of 15.9%.

Past performance, as we all know too well, is not indicative of future returns. There are no guarantees that the Dow's excellent October of 2022 will translate into outsized gains in the months and year ahead.

Nevertheless, this is indeed an extremely encouraging historical fact. And goodness knows, the market needs all the reasons for optimism it can get right about now.  

Equities closed out an otherwise strong October in the red on Monday, as a rise in bond yields and declines in some big technology stocks weighed on the major indexes. 

The blue-chip Dow Jones Industrial Average slipped 0.4% to finish at 32,733, while the broader S&P 500 fell 0.7% to 3,872. The tech-heavy Nasdaq Composite slumped 1.0% to close at 10,988. 

Major tech names continued their selloff from last week, which featured a slew of disappointing quarterly earnings reports and forecasts. Dow components Apple (AAPL, -1.5%) and Microsoft (MSFT, -1.6%) were just two of the names in the multi-trillion-dollar-market-cap club to once again lose ground on Monday. Google parent Alphabet (GOOGL, -1.9%) and Amazon.com (AMZN, -0.9%) likewise continued to struggle, as did Facebook parent (and former mega-cap darling) Meta Platforms (META, -6.1%). 

Meanwhile, the yield on the benchmark 10-year Treasury note rose to 4.07% ahead of the Federal Reserve's regularly scheduled two-day policy meeting later this week. Market participants expect the central bank to once again raise short-term interest rates Wednesday, with a fourth 0.75%-point swipe at persistent inflation. 

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In October, Stocks Soared. Is the Bear Market Dead?

October might have ended with a whimper, but the month overall delivered big-time gains for equity investors. The S&P 500 rose 8.0% on a price basis for the month, and even the beaten and bruised Nasdaq tacked on a respectable 3.9%.

But no one did better than investors in the bluest of blue-chip stocks. The Dow, that elite bastion of just 30 blue chips, rose 14.0% for the month. Indeed, it was the Dow's best October since 1975. Partly that's a function of the Dow being a haven for companies with rising and reliable dividends. Indeed, a mini-portfolio of the Dow's best dividend stocks is clobbering the broader market so far this year. The Dow is also home to some of the best stocks to own in a bear market. 

What's most encouraging is what has historically come next when the Dow produces a boffo October: the blue-chip barometer has gone on to generate even more impressive upside over the following three-, six- and 12-month periods. 

It remains to be seen if October will maintain its reputation as a bear-market killer, but so far so good. Read on to see what history has to say about the market's prospects after the Dow logged one of its best Octobers in ages.

After a rough year trying to offload overstocks and returns, Target is doubling down on its relationship with Apple hoping to revive in-store sales with Apple popup shops and reward customers who are members of Target Circle, its free customer loyalty program, with exclusive deals on Apple products and services. While the pop-up stores are, obviously, a brick-and-mortar option, these Apple products and discounts are also available at Target.com and via the Target app.

Apple shop-within-a-shop stores have popped up in more than 150 Target stores, enhancing an already firm relationship the two retailers enjoyed. That number is more than three times the number of previous Apple stores inside a Target store. The first Apple shop-in-shop at Target opened in February 2021, during the pandemic.

In addition to these offers on Apple products – Apple watches, Airpods, iPads and the new iPhone 14, for example – shoppers who are Target Circle members get targeted offers from Apple services. Those offers include Apple Arcade, Apple Music, Apple News+ and iCloud+, free deals that could run as long as five months.

Target Circle members also have a four-month free trial of Apple Fitness+, which represents a bonus month. (Apple usually offers Apple Fitness+ as a three month freebie and charges $9.99 a month after the free trial). No purchase is necessary for the Target promotion. Apple Fitness+ offers more than 3,000 workouts and meditations, with new ones added weekly. Workouts range from 5 minutes to 45 minutes, led by trainers.

“For years, Target has been a destination for Apple products. Now we are excited to deepen our collaboration with Apple so even more guests can access the exceptional Apple at Target shop-in-shop experience,” said Jill Sando, executive vice president and chief merchandising officer, Target. “Guests love the branded and immersive retail experiences we’re creating with Apple and other partners including Disney, Ulta Beauty and Levi’s.”

Target isn’t not alone among traditional bricks and mortar retailers in firming key relationships with name-brand suppliers. Kohl’s is doing it with high-end beauty supplier Sephora, as well as offering Amazon return services in stores.

Stocks closed higher Monday, building on last week's gains ahead of the busiest week of the third-quarter earnings season thus far.

Roughly one-third of the S&P 500 companies are scheduled to unveil their quarterly results this week. The earnings calendar is jam-packed with several Big Tech names, including Google parent Alphabet (GOOGL, +1.4%) and iPhone maker Apple (AAPL, +1.5%). The technology sector (+1.4%) performed well ahead of the release of these updates, though healthcare (+1.9%) was the top gainer today. 

Not all of the day's price action was positive, though. U.S.-listed Chinese stocks like Alibaba (BABA, -12.5%) and Baidu (BIDU, -12.6%) spiraled after Xi Jinping over the weekend began his third term as president of China by consolidating the country's top leadership roles with loyalists.

Despite the downside in Chinese stocks, the major indexes all finished with solid gains. The Dow Jones Industrial Average closed up 1.3% to 31,499, the S&P 500 Index gained 1.2% to 3,797, and the Nasdaq Composite rose 0.9% to 10,952.

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In economic news, both the flash manufacturing and services purchasing managers' indexes (PMIs) for October came in lower than economists were expecting, with each falling below the 50 mark, which signals contraction. 

"The flash PMIs showed significant weakness across both the service and manufacturing parts of the economy, which is good news for investors expecting the Fed to pause early next year," says Edward Moya,  senior market strategist at currency data provider OANDA. "The flash manufacturing PMI dropped to the weakest levels since mid-2020. Barely testing contraction territory is still a big deal as demand softens and further pain is widely expected. The U.S. economy is making its way to a recession, but it won't be a steady decline as large parts of the economy still have strength." 

The Best Blue-Chip Dividend Stocks

Dividend stocks never go out of style – and that has been especially true for investors looking to cushion the blow the broader market has inflicted on their portfolios this year. "Historically, dividends have played an important role in overall investor return," says John Osterweis, founder and co-chief investment officer at Osterweis Capital Management. "This is especially true in higher interest rate environments." Osterweis adds that during periods "when markets swoon, dividends account for 50% or more of overall S&P 500 returns, as was the case in the 1940s and 1970s." 

Investors seeking out the best dividend stocks have no shortage of options to choose from, including quality companies with a history of solid dividend growth or those sporting high yields. To that end, we've compiled a list of these top Dow dividend stocks, each of which boasts above-market dividend yields and can offer value to investors in uncertain times.

Yesterday's market rise proved just a blip as stocks on Thursday returned to the script for most of September by finishing solidly in negative territory. 

The decline came as yields on government bonds resumed their climb. After the 10-year Treasury yield notched its biggest one-day decline since 2009 yesterday, it rose 6.2 basis points today to 3.769% (a basis point is 0.01%).

A pair of economic reports did little to lift sentiment. The final reading on Q2 gross domestic product (GDP) confirmed the U.S. economy contracted for a second straight quarter, meeting the technical definition of a recession. Additionally, weekly jobless claims fell more than economists were expecting (193,000 actual vs. 215,000 estimate), hitting their lowest level since April. While this jobs data "would ordinarily be celebrated, on this occasion that resilience could translate to stubborn inflation and more rate hikes," says Craig Erlam, senior market analyst at currency provider OANDA.

In terms of single-stock movers, Apple (AAPL, -4.9%) took a notable slide after BofA Securities analyst Wamsi Mohan downgraded the tech giant to Neutral (the equivalent of Hold) from Buy, citing weaker consumer demand for its new iPhone 14.

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AAPL's decline put more pressure on the major indexes, with the Dow Jones Industrial Average shedding 1.5% to 29,225, the S&P 500 Index giving back 2.1% to 3,640, and the Nasdaq Composite sliding 2.8% to 10,737.

Other news in the stock market today:

• The small-cap Russell 2000 spiraled 2.4% to 1,674.
• U.S. crude futures fell 1.1% to finish at $81.23 per barrel.
• Gold futures ending marginally lower at $1,668.60 an ounce.
• Bitcoin slipped 0.6% to $19,420.50. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• CarMax (KMX) plummeted 24.6% after the used car dealer reported earnings. In its fiscal second quarter, KMX recorded a 54% year-over-year drop in earnings to 79 cents per share, while revenue ticked up 2% to $8.1 billion. Analysts were expecting earnings of $1.72 per share on $8.5 billion in sales. "On their conference call the company's CEO highlighted broad weakness in the used car market," says Michael Reinking, senior market strategist at the New York Stock Exchange. "This news has hit the auto makers, OEMs and semiconductor stocks hard. One slight positive takeaway from this report is that car prices are moving lower. This has been a big source of inflationary pressure over the last year so we should expect to see this flow through the data in the coming months."
• Bed Bath & Beyond (BBBY) tumbled 4.2% after the home goods retailer said fiscal second-quarter sales fell 28%  to $1.4 billion, while its net loss widened to $4.59 per share from 72 cents per share in the year-ago period. Consensus estimates were for revenue of $1.5 billion and a per-share loss of $1.85. Additionally, same-store sales plummeted 26% over the three-month period.

Q4 Stock Opportunities

We're rounding third and heading for home. More specifically, tomorrow marks the end of the third quarter, meaning there's just one more to go in what has been a tough year for stocks. 

We're certain to see more volatility through the end of the year, with the third-quarter earnings season set to kick off in two weeks, midterm elections happening in early November and two more Fed meetings on the docket. But we are also entering a historically positive stretch for stocks. Since 1928, the S&P 500 has averaged gains of 0.5% in October, 0.8% in November and 1.4% in December, according to Yardeni Research. 

This year's slump creates "incredible opportunity," says Sonia Joao, chief operating officer of Robertson Wealth Management. "Some of our favorite growth names, particularly in technology, are trading at prices we never expected to see again." With that in mind, take a look at the best stocks to buy for the rest of 2022 and beyond. Some of these are familiar names and others are not so well known, but they all present potential opportunities heading into the final quarter of the year.

The stock market bounced sharply on Wednesday after the Bank of England (BoE) took emergency action to shore up its bond market.

Similar to the U.S. Treasury market, yields on U.K. government bonds have been spiking lately. The most recent surge came after the government put into effect the largest set of tax cuts in decades – a move that sent the British pound spiraling. Overnight, though, the BofE said it will begin buying longer-term U.K. bonds and delay selling bonds it purchased during the pandemic "to restore orderly market conditions."

This led to a rally in U.K. and U.S. bonds, which sent yields lower (remember, bond prices and yields move in opposite directions). Most notably, the 10-year Treasury yield, which earlier topped the 4.0% level for the first time since 2008, finished down 23.8 basis points at 3.725%. A basis point is one-one hundredth of a percentage point.

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As for the equities market, the Dow Jones Industrial Average jumped 1.9% to 29,683, the S&P 500 Index rallied 2.0% to 3,719, and the Nasdaq Composite gained 2.1% to 11,051.

Other news in the stock market today:

• The small-cap Russell 2000 jumped 3.2% to 1,715.
• U.S. crude futures spiked 4.7% to settle at $82.15 per barrel as Hurricane Ian gained strength in the Gulf of Mexico.
• Gold futures rose 2.1% to finish at $1,670 an ounce.
• Bitcoin gained 2.5% to 19,535. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Apple (AAPL) was the only Dow Jones stock to finish in negative territory today, shedding 1.3%. The move lower comes after a Bloomberg report suggested the tech giant has asked suppliers not to increase production of its new iPhone 14s as it anticipates a decline in demand. "We still believe that AAPL will meet/exceed September quarter expectations and see more favorable mix supporting average selling prices for the iPhone 14 cycle," says CFRA Research analyst Angelo Zino (Buy). "However, we see downside risk as we progress through the cycle, specifically in the March quarter, given extremely tough comparisons and our belief that not even AAPL is immune to macro headwinds. In addition, the virtually parabolic move/strength of the U.S. dollar is adding significant risk to all large-cap tech companies ahead of September quarter earnings season, including AAPL, where we see growth expectations likely be tempered within both hardware and services."
• Biogen (BIIB) soared 39.9% after the drugmaker reported positive late-stage study results for lecanemab, an Alzheimer's disease drug being co-developed with Japan's Eisai. The data showed the treatment slowed cognitive decline by 27% after 18 months. UBS Global Research analyst Colin Bristow (Buy) was one of many to chime in on BIIB stock today, calling the results "clinically meaningful" and "the positive Alzheimer's data point we were waiting for."

What's Next for Stocks?

So, what's next for the stock market? It's a question that will only be answered with time, but also one that has sparked a lot of chatter around Wall Street.

"We know the stock market doesn't just go up in a straight line," says Scott Wren, senior global market strategist at Wells Fargo Investment Institute. For investors, Wren says "it is helpful to look at history and realize that at some point inflation will ease, financial markets will stabilize, and the Federal Reserve will be finished hiking interest rates. While those things won't likely happen tomorrow or next week, we believe the markets are pricing in much of the bad news we expect to hear in coming months." 

Wren is just a single voice of many, and here, we've rounded up what some other top minds are expecting next for stocks – including one strategist who makes a compelling case for owning both value and growth stocks in the current environment. See what they have to say. 

It has been a rough year for the stock market but even more so for mega-cap tech stocks. From the start of 2022 through early August, the four largest technology companies lost an average of 14% of their value, including dividends, compared with a decline of 12% for the benchmark S&P 500 Index. (Prices, returns and other data are as of Aug. 5 unless otherwise noted.)

The four biggest tech firms also happen to be the biggest U.S. companies of any kind, as measured by market capitalization (price times shares outstanding). In order of size, the Mega Four are Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL) and Amazon.com (AMZN). Over the past five years, their share prices have more than tripled, and each has a market cap of more than a trillion dollars. But investors are bewitched by what behavioral economists call "recency bias," or putting too much emphasis on the latest events, so losses over the previous few months are prominent in investing decisions.

Smart investors take a long view, both forward and backward. They look carefully at a company's progress over the years and then try to forecast a decade out. With this kind of analysis, the 2022 decline is clearly a buying opportunity for three reasons:

Adaptability. Each of the Mega Four started with a single big idea: search-based advertising for Google, personal computing for Apple, online shopping for Amazon and operating-system software for Microsoft. None has abandoned its original business, but all have moved into other sectors. Those transitions have been impressive and nearly unique among corporations. The flexibility that the Mega Four have displayed bodes well for future adaptation to changing markets.

For example, every one of the four is a leader in the supremely profitable business of cloud computing, which lets users store massive amounts of data remotely and securely, accessible anywhere in the world. Three-fourths of Amazon's profits last year came from its cloud-computing unit. For the quarter ending June 30, Microsoft's Intelligent Cloud revenue represented 39% of total sales for the company; Alphabet's cloud revenues jumped 35% in the same quarter.

Even Apple, a manufacturing company, understands the value of cloud computing. Revenues from the company's services division, which in addition to the cloud includes Apple TV+, Apple Music, the Apple Card and the App Store, are growing three times as fast as iPhone sales. Forbes predicts profits from services will reach $50 billion a year, surpassing the profits from iPhone sales, by 2025.

All the companies are using a subscription model, the best example being Amazon Prime, to guarantee a flow of cash. In addition, both Apple and Amazon have made major investments in video production and streaming.

Alphabet's YouTube, even though it is blocked in China, has become a huge global advertising vehicle, with 2.6 billion users. Meanwhile, Microsoft is one of the three largest gaming companies in the world. Alphabet's Google owns Nest thermostats and Verily Life Sciences. Amazon owns the Whole Foods Market chain, with $17 billion in revenues. Alphabet's Gmail service is the largest in the world, accounting for 37% of all email openings last year.

Not all the tech companies' investments (or "other bets," as Alphabet officially calls them) have paid off – Google Fiber, bringing super-high-speed internet connections to about a dozen cities, has been disappointing, for one – but the Mega Four have remarkable acquisition track records and plenty of cash to buy more businesses. Among the three of them, Microsoft, Apple and Alphabet collectively have a total of nearly $300 billion in cash and short-term investments on their balance sheets.

Congress and regulators, of course, may stand in the way of further growth by acquisition. But the big tech companies have also grown organically, with such great businesses as Amazon Web Services, the largest cloud-services organization in the world, generated within their own organizations.

Profitability. The reason the Mega Four have so much cash is that they are absurdly profitable. Take return on equity, which is net income divided by shareholders' equity (a firm's net worth, or what would get turned over to the stockholders if a company were liquidated). According to a Nasdaq primer, return on equity "enables investors to identify companies that diligently deploy cash for higher returns." Apple's current return on equity is 153%. In other words, raising $1 million in equity produces profits of $1.53 million! For comparison, Zack's, an investment research firm, reports that the average for the mini-computer sector is 19%.

A cruder profit measurement is operating margin, or return on sales – that is, profits divided by revenues. For all U.S. industries, the average figure is about 11%, but Microsoft's is nearly 40% over the past 12 months, and Alphabet's is about 30%. Amazon is mainly a retailer, so its margins are lower, but its cloud business has an operating margin of about 30%. There's no need to get bogged down in statistics. It's sufficient to say that these companies are profit machines, even when the economy appears to be slowing down as the Federal Reserve raises interest rates to thwart inflation.

Valuation. Now I get to the best part of the Mega Four story: These stocks are cheap. I can't predict whether they'll get cheaper in the short run, but it's clear that becoming partners in some of the best businesses in the world is a better deal today than it was at the start of the year.

Alphabet, whose shares have dropped from $148 earlier this year to $117, now carries a forward price-to-earnings (P/E) ratio, based on a consensus of analysts' earnings forecasts for the next 12 months, of 22, and Apple's is 27. Despite a recent bounce, Amazon is considerably less expensive than it was two years ago, and Microsoft has lost $59 a share since it traded at $342 in November 2021.

The company that used to be the fifth-largest U.S. stock and now ranks 11th, Meta Platforms (META), the former Facebook, provides a striking contrast to the Mega Four. Some 97% of Meta's total revenue comes from advertising sales, which fell in the most recent quarter because of vulnerability to trends in the overall global economy and increased competition. Meta is trying to make its own shift, "moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology," as its latest earnings report says.

Can Meta's management lead this kind of massive, risky transition? That's uncertain, but when it comes to valuation, Meta is hard to resist. The stock has plunged 50% this year, and its P/E is currently a mere 18. Meta and Johnson & Johnson (JNJ) have the same market cap, but Meta earned about 40% more in the most recent quarter.

Of all the ideas that created America's biggest tech companies, Facebook's was the most simple and revolutionary. It completely changed the way we connect with other people and upended the advertising world. Today, one out of every six ad dollars in the world is spent on Facebook – twice as much as on Google.

The main case for the Mega Four – or Five – is their success. I realize that the market battlefield is littered with giant winners that have become losers, General Electric (GE) being the prime example. There are no guarantees in investing. But when the market sours on companies because of the state of the economy, it's a good time to be buying the best.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. Of the stocks mentioned here, he owns Microsoft and Amazon.com. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. You can reach him at James_Glassman@kiplinger.com.

Warren Buffett's Berkshire Hathaway (BRK.B, $302.82) took advantage of the market's second-quarter swoon to add to its stakes in Apple (AAPL, $173.16), Chevron (CVX, $156.80), Occidental Petroleum (OXY, $64.34) and a handful of other stocks, but the holding company didn't make any exciting or surprising new moves, a regulatory filing made late Monday revealed.

Chairman and CEO Buffett, along with co-portfolio managers Ted Weschler and Todd Combs, were once again net purchasers of equities during the three months ended June 30, although their pace of buying slowed considerably compared with Q1.

After subtracting sales, Berkshire spent $3.8 billion on stocks during the second quarter, down from net purchases of $41 billion in equities during the first three months of 2022. The S&P 500 lost more than 16% of its value during the second quarter. Suffice to say that Buffett and his lieutenants were once again greedy when others were fearful.

It's also worth noting that Buffett and his subalterns' buying stands in stark contrast to last year's second quarter, when Berkshire was a net seller of equities. And, for good measure, Buffett also spent $1 billion buying back Berkshire Hathaway stock during Q2.

Among the notable additions, Buffett bought another 3.9 million shares in Apple, which is Berkshire's largest position by a wide margin.

The company owned nearly 895 million shares in the iPhone maker, a stake worth $122.3 billion as of June 30. AAPL accounted for 41% of Berkshire's portfolio value at the end of Q2. That's down from 43% at the end of the first quarter due to a slump in Apple's share price.

Buffett has also been aggressively adding to Berkshire's stake in Occidental Petroleum. Berkshire bought an additional 9.6 million shares – worth about $530 million – in the integrated oil and gas firm in late June. The holding company again added to its stake in July, buying another 4.3 million OXY shares worth $250 million.

Including warrants, Berkshire owns roughly 30% of OXY's shares outstanding. Naturally, the conglomerate's large and growing position in OXY is fueling speculation that Buffett could be eyeing a buyout of Occidental Petroleum.

In some other notable purchases, Berkshire topped off existing stakes in Chevron, Celanese (CE, $116.22), Paramount Global (PARA, $26.55) and Ally Financial (ALLY, $35.68)

On the other side of Berkshire's ledger, the company exited what remained of its small stake in Verizon (VZ, $45.55), the only telecommunications stock in the Dow Jones Industrial Average. Berkshire also closed out its short-lived position in Royalty Pharma (RPRX, $43.87).

In other stock sales, Berkshire slashed its stake in Store Capital (STOR, $29.24) by more than 50%. Buffett also reduced Berkshire's exposure to General Motors (GM, $39.40) and Kroger (KR, $47.52).

Ultimately, however, Buffett and his lieutenants had themselves a relatively quiet quarter, making mostly immaterial moves. The Berkshire Hathaway portfolio is highly concentrated, after all, with its top five holdings accounting for 75% of the total portfolio value. STOR, GM and KR don't really move the needle here.

And so although Berkshire went on a shopping spree in Q2, it mostly consisted of bargain hunting in a few of Buffett's favorite names. Investors looking for new stock or sector ideas based on the Oracle's Q2 moves didn't get much, if anything, to work with.

Stocks kept on rising Friday, as Amazon.com (AMZN) and Apple (AAPL) closed out a busy week of Big Tech earnings in fine fashion.

Amazon stock soared 10.4% after the e-commerce company reported a second-quarter top-line beat due in part to 33% year-over-year revenue growth in its cloud segment (Amazon Web Services) and an 18% jump in ad sales. AMZN also gave an upbeat current-quarter revenue outlook thanks to what it called a "record-breaking Prime Day."

Meanwhile, Apple shares gained 3.3% after the iPhone maker reported higher-than-expected earnings and revenue in its fiscal third quarter. However, the company's revenue growth rate slowed significantly when compared to the year-ago period.

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On the economic front, the personal consumption expenditures (PCE) index rose 6.8% on an annualized basis in June – its biggest year-over-year rise since January 1982. But, the headline figure might not be as jolting as it initially appears. "This inflation metric is for June and we know much has changed since then, especially gas prices, so investors should put this inflation report into historical context," says Jeffery Roach, chief economist for independent broker-dealer LPL Financial. He adds that July inflation rates should ease a bit as food and energy costs have likely pulled back this month.

The tech-heavy Nasdaq Composite outpaced its peers, soaring 1.9% to 12,390, though the S&P 500 Index (+1.4% to 4,130) and Dow Jones Industrial Average (+1.0% to 32,845) still posted solid gains. All three indexes ended higher on a weekly basis. And for July, the Dow and S&P 500 had their best month since November 2020, while the Nasdaq enjoyed its biggest monthly gain since April 2020.

Other news in the stock market today:

• The small-cap Russell 2000 tacked on 0.7% to 1,885.
• U.S. crude futures jumped 2.3% to $98.62 per barrel.
• Gold futures rose 0.7% to finish at $1,781.80 an ounce.
• Bitcoin edged up 0.5% to $23,906. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Roku (ROKU) plummeted 23.1% after the streaming company reported earnings. ROKU reported a wider-than-anticipated loss of 82 cents per share in its second quarter, while revenue of $764 million also missed the mark. The company also forecast current-quarter revenue below analysts' consensus estimate due to a struggling advertising market. "Roku is facing various near-term challenges, including reduced variable advertising spending, and ongoing supply chain issues coupled with inflationary pressure have impacted smart TV sales," says Wedbush analyst Michael Pachter. "Meanwhile, Roku continues to invest heavily for future growth, resulting in unpalatable results for investors." But while the analyst called ROKU "dead money over the next quarter at least," he maintained an Outperform rating on the stock, expecting a rebound over the next 12 months.
• Oil majors Chevron (CVX) and Exxon Mobil (XOM) reported record profits in Q2 thanks to booming commodity prices. For the three-month period, CVX brought in adjusted earnings of $5.82 per share on $68.8 billion in revenue, while XOM reported adjusted earnings of $4.14 per share on $115.7 billion in revenue. Both energy stocks soared in reaction, with CVX up 8.7% and XOM spiking 4.7%.

What the Smart Money is Buying

Investors may be cheering as the stock market wraps up its best month of 2022, but that excitement could be fleeting, if history is any guide. "Analyzing monthly average returns for the S&P 500 back to 1950, the worst month [for stocks] is September, followed by August," says Gieseppe Sette, president of AI-driven investment research firm Toggle AI.

While we have covered numerous ways for investors to ride out rougher waters – think yield-friendly sectors like utilities or real estate investment trusts (REITs) – it sometimes pays to see what the "smart money" is doing during these volatile times. While you can't get rich by simply copying moves billionaire investors are making, their resources and connections give them unique insight into the market that most of us don't have, and that alone makes their top stock picks worth a closer look.

Karee Venema was long AMZN and AAPL as of this writing.

Amazon.com Prime Day offers a frenzy of deals and discounts, but the best bargain of all might be Amazon stock, analysts say.

Shares are off by 32% for the year-to-date, lagging the broader market by about 13 percentage points. Rising fears of recession and its potential impact on retail spending are partly responsible for the selloff. The market's rotation out of pricey growth stocks and into more value-oriented names is likewise doing AMZN no favors. See the chart below:

True, Amazon is hardly alone when it comes to mega-cap names getting slaughtered in 2022. Where the stock does distinguish itself is in its deeply discounted valuation, and the mass of Wall Street analysts banging the table for it as a screaming bargain buy.

AMZN's Elite Consensus Recommendation

It's well known that Sell calls are rare on the Street. For different reasons entirely, it's almost equally unusual for analysts (as a group, anyway) to bestow uninhibited praise on a name. Indeed, only 25 stocks in the S&P 500 carry a consensus recommendation of Strong Buy.

AMZN happens to be one of them. Of the 53 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 37 rate it at Strong Buy, 13 say Buy, one has it at Hold, one says Sell and one says Strong Sell.

If there is a single point of agreement among the many, many AMZN bulls, it's that shares have been beaten down past the point of reason.

Here's perhaps the best example of that disconnect: At current levels, Amazon's cloud-computing business alone is worth more than the value the market is assigning to the entire company.

Just look at Amazon's enterprise value, or its theoretical takeout price that accounts for both cash and debt. It stands at $1.09 trillion. Meanwhile, Amazon Web Services – the company's fast-growing cloud-computing business – has an estimated enterprise value by itself of $1.2 trillion to $2 trillion, analysts say.

In other words, if you buy AMZN stock at current levels, you're getting the retail business essentially for free. True, AWS and Amazon's advertising services business are the company's shining stars, generating outsized growth rates. But retail still accounts for more than half of the company's total sales.

More traditional valuation metrics tell much the same story with AMZN stock. Shares change hands at 42 times analysts' 2023 earnings per share estimate, according to data from YCharts. And yet AMZN has traded at an average forward P/E of 147 over the past five years.

Paying 42-times expected earnings might not sound like a bargain on the face of it. But then few companies are forecast to generate average annual EPS growth of more than 40% over the next three to five years. Amazon is. Combine those two estimates, and AMZN offers far better value than the S&P 500.

Analysts Say AMZN Is Primed for Outperformance

Be forewarned that as compellingly priced as AMZN stock might be, valuation is pretty unhelpful as a timing tool. Investors committing fresh capital to the stock should be prepared to be patient.

That said, the Street's collective bullishness suggests AMZN investors won't have to wait too long to enjoy some truly outsized returns. With an average target price of $175.12, analysts give AMZN stock implied upside of a whopping 55% in the next 12 months or so.

Just as fashions rotate in and out of style, so, too, do stock market favorites. Out of favor big-time these days are communications services stocks. The broad sector includes telecom companies (think AT&T), media and entertainment firms (Netflix), and inter-active media and services (Electronic Arts, Twitter). Rising interest rates and higher inflation have dampened the outlook for shares in growth-oriented companies, tripping up the sector (and others). Over the past 12 months, the S&P 500 Communications Services index has lost 22%.

Fidelity Select Wireless (FWRLX) has done better than the sector index over the past year, albeit with a loss of 9.6%. Manager Matthew Drukker keeps a trim portfolio of 47 stocks, investing in U.S. and foreign stocks across what he calls the “telecommunication ecosystem,” which includes smartphone chip makers, mobile service providers and firms behind popular apps.

A handful of Drukker’s top holdings have posted good gains over the past 12 months, including Apple (up 22%) and chipmaker Marvell Technology (up 27%). But stocks such as social media firm Snap (down 53%) and Swedish telecom company Ericsson (down 42%) have been a drag.

Drukker isn’t worried. Many of the companies in the fund, he says, will benefit from the rollout of 5G, including Verizon Communications, T-Mobile and Marvell. But adoption of this fifth-generation tech standard for wireless networks has been slow. “We’re a couple years into what is going to be a 10-year cycle,” he says.

For now, it’s business as usual. Drukker favors firms with pricing power, a growing market share, or product innovation that can drive revenue growth and boost free cash flow (money left over after paying necessary expenses to maintain and invest in the business).

Take American Tower, which owns and operates cell-phone towers all over the world. The real estate investment trust bakes in a 3% annual increase to its leasing rates in its U.S. contracts with service providers such as T-Mobile and Verizon. And clients tend to stick around: In some locales, the telecom firms don’t have other options.

Warren Buffett went wild with Berkshire Hathaway's (BRK.B, $309.29) checkbook during the first quarter, scooping up equities at his fastest pace since the Great Financial Crisis.

True, it took an epically bad start to the year for stocks and the worst inflation in four decades to lure Berkshire's chairman and chief executive back into the market.

But he's back, and in a big way.

The Berkshire Hathaway equity portfolio scooped up $41.5 billion in net stock purchases in the first quarter. That's the most cash Buffett has splurged on equities in a quarter since 2008.

Contrast that with last year, when Berkshire was a net seller of equities in all four quarters of 2021.

In addition to spending another $3.2 billion buying back BRK.B shares and acquiring insurer Alleghany outright for $11.6 billion, Buffett and his lieutenants Ted Weschler and Todd Combs found plenty of other ways to make a serious dent in the conglomerate's cash pile.

Among the more notable moves, Buffett deployed serious financial resources into the energy sector in Q1, taking advantage of both rising oil prices and crude's properties as an inflation hedge. Elsewhere, Apple's (AAPL) Q1 stock skid prompted Buffett to add about $600 million to Berkshire's top holding.

And, of course, we all remember that Buffett bought a commanding 11.4% stake in PC and printer maker HP (HPQ).

We know what the greatest long-term investor of all time has been up to because the U.S. Securities and Exchange Commission requires investment managers with at least $100 million in assets to file a Form 13F quarterly report disclosing changes in share ownership. These documents add an important level of transparency to the stock market and give Buffett-ologists a bead on what the Berkshire chief is thinking.

When Buffett initiates a stake in some company, or adds to an existing one, investors read into that as a vote of confidence. But if he pares his holdings in a stock, it can spark investors to rethink their own investments.

Here's the scorecard for what Warren Buffett was buying and selling during the first quarter of 2022, based on Berkshire Hathaway's 13F filed on May 16, 2022, for the period ended March 31, 2022. You can check out the entire list of Buffett stocks here, or continue reading if you're most interested in Buffett's most recent transactions.

And remember: Not all "Warren Buffett stocks" are actually his picks. Some of Berkshire Hathaway's positions are handled by portfolio co-managers Weschler and Combs.

Current share prices are as of May 16, 2022. Holdings data is as of March 31, 2022. Sources: Berkshire Hathaway's SEC Form 13F filed May 16, 2022, for the reporting period ended March 31, 2022; and WhaleWisdom.

• Action: Reduced stake
• Shares held: 57,985,263 (-5% from Q4 2021)
• Value of stake: $3,326,615,000

Warren Buffett once again reduced Berkshire Hathaway's exposure to one of his more recent favorite stock picks in Q1. The holding company shed 3.4 million shares, or 5% of its stake, in supermarket operator Kroger (KR, $53.20).

The move followed another slight reduction in Q4, when Berkshire pared the stake by 350,000 shares, or less than 0.01%.

Kroger operates roughly 2,750 retail food stores operating under such banners as Dillons, Ralphs, Harris Teeter and its namesake brand, as well as 1,585 gas stations and even 170 jewelry stores under banners including Fred Meyer Jewelers and Littman Jewelers.

Buffett first bought the consumer staples play in the fourth quarter of 2019 and quickly built on the position over the following two years. Shares are up by 120% on a total return basis since Oct. 1, 2019, vs. a total return of 43% for the S&P 500.

More impressively, KR generated a total return of 27% for the year-to-date through March 31 – a period during which the broader market's total return came to -4.6%.

Perhaps Buffett was content to take a little off the top of what has been a winning position in an otherwise dismal year for equities.

The KR position now accounts for 0.8% of Berkshire's portfolio value, down from 0.9% at the end of 2021.

• Action: Reduced stake
• Shares held: 14,754,811 (-39% from Q4 2021)
• Value of stake: $431,283,000

Berkshire slashed its position in Store Capital (STOR, $27.35) by 39%, or 9.7 million shares in Q1.

The position, which Berkshire initiated in the summer of 2017, was always something of an unusual one. Real estate investment trusts (REITs) – a way to invest in real estate without owning the actual assets – have never been big among Buffett stocks.

Store invests in single-tenant properties including chain restaurants, supermarkets, drugstores and other retail, service and distribution facilities. That is to say, Store is a bet on brick-and-mortar retail, which is thought to be in permanent decline.

Buffett, however, spied value – and he spied it for quite some time. Store Capital CEO Christopher Volk told CNBC that Buffett studied the REIT for three years before taking his position.

STOR stock suffered through a rough first quarter, losing nearly 15% of its value while underperforming the broader market by about 10 percentage points.

Store accounted for only 0.25% of Berkshire's equity portfolio at the end of Q4. That's now down to 0.12%. Any further decline in the share price will be even less material to BRK.B's returns.

Berkshire still remains important to Store, however. Even with just 5.4% of the REITs shares outstanding – down from 8.7% at Q4's end – Berkshire remains its third largest shareholder after Vanguard and BlackRock.

• Action: Reduced stake
• Shares held: 1,496,372 (-82% from Q4 2021)
• Value of stake: $58,299,000

Berkshire continued to unwind its relatively short-lived involvement with Royalty Pharma (RPRX, $40.26) in Q1, dumping 82% of its stake.

Given the size and nature of the investment, it was most likely handled by Ted Weschler or Todd Combs.

Whomever was responsible, he appears to have had an abrupt change of heart at the end of 2021. Berkshire cut the position by 34% in Q4, just three months after initiating a stake of 13.1 million shares in Q3.

Berkshire has been shedding many of its bets in the healthcare sector for the past several quarters, and the tiny position in RPRX was not spared.

Royalty Pharma, as the name might indicate, is focused on acquiring biopharmaceutical royalties. It doesn't research or develop drugs – it helps provide capital for the companies that do. Through that model, RPRX has gotten a piece of blockbuster drugs such as AbbVie's (ABBV) Imbruvica, Biogen's (BIIB) Tysabri and Pfizer's (PFE) Xtandi.

To be sure, RPRX was never a significant holding to begin with. It now accounts for just 0.02% of Berkshire Hathaway's equity portfolio, down from 0.1% at the end of Q4.

• Action: Reduced stake
• Shares held: 1,380,111 (-99% from Q4 2021)
• Value of stake: $70,303,000

Berkshire all but eliminated its bet on Verizon Communications (VZ, $49.04), the only telecommunications stock in the Dow Jones Industrial Average. Buffett sold off 99% of the stake, leaving Berkshire with just 1.4 million shares worth $70.3 million at quarter's end.

Verizon had all the making of a long-term Buffett holding when Berkshire initiated the stake during the fourth quarter of 2020. The blue-chip dividend payer with ample free cash flow looked right at home. In one fell swoop, the telco accounted for a sizable 3.2% of Berkshire's total equity portfolio value.

Buffett even added to the VZ holding the following quarter, no doubt encouraged by Verizon's growth prospects in the new era of 5G networking.

But although dividends and defense never go out of style, the thesis on Verizon has changed in the intervening years. Rival T-Mobile US (TMUS) is challenging it for market share gains, for one thing. And more than a few Wall Street analysts fret about Verizon's rising costs.

Whatever Buffett's reasons for selling, Verizon is now but a rump position in the Berkshire Hathaway equity portfolio, accounting for a measly 0.02% of its value.

• Action: Exited stake
• Shares sold: 675,054
• Value of stake: $0

Warren Buffett is at long last officially done with Wells Fargo (WFC, $42.21).

WFC, which had been in the Berkshire portfolio since 2001, is no more. Buffett sold off the remaining 675,054 shares Berkshire inexplicably still held onto after years of selling off the position.

Wells Fargo was once considered among the most treasured of Buffett stocks. But it turned into a weight around the Oracle's neck starting in 2016, when numerous scandals bubbled to the surface. The bank opened millions of phony accounts, modified mortgages without authorization and charged customers for auto insurance they did not need.

Buffett eventually started selling at the start of 2018. However, for several quarters, most of those sales appeared to be routine parings of the position to keep it below a regulatory 10% maximum ownership threshold for banks.

Then came the hacksaw:

• Q4 2019: Buffett dumps more than 55 million shares (~15% of the position).
• Q2 2020: Buffett jettisons another 85.6 million shares (~26%).
• Q3 2020: Down go another 85.6 million shares (~46%).
• Q4 2020: Berkshire unloads 75 million shares (~58%).
• Q1 2021: Buffett makes his deepest cut yet, selling off 51.7 million shares, or 98.7% of the remaining position, all but eliminating WFC from the portfolio.
• Q1 2022: The end.

• Action: Exited stake
• Shares sold: 5,202,674
• Value of stake: $0

As noted above, Berkshire reversed course on the healthcare sector some time ago, but he really accelerated his exits in Q1.

Buffett sold off the holding company's remaining stake in Bristol-Myers Squibb (BMY, $76.91), dumping 5.2 million shares. The move was largely telegraphed three months ago when Berkshire cut its BMY stake by 76% during the fourth quarter of 2021.

Berkshire Hathaway first bought BMY in Q3 2020 and immediately added to the position in Q4 of that year. But the interest didn't last long. And this past quarter's move comes as part of a general retreat by Berkshire on bets in the pharmaceutical industry.

In the case of BMY, its late 2019 acquisition of biotech giant Celgene was thought to be a big part of Buffett's attraction to the stock. The deal brought in a pair of blockbuster multiple myeloma treatments: Pomalyst and Revlimid, the latter of which also treats mantle cell lymphoma and myelodysplastic syndrome.

A long track record of successful acquisitions has kept the pharma company's pipeline primed with big-name drugs over the years. Buffett, however, seems to have reset his expectations for BMY – and the broader sector.

• Action: Exited stake
• Shares sold: 3,033,561
• Value of stake: $0

AbbVie (ABBV, $155.47) is yet another example of Berkshire's total rethinking of its big pharma bets. The holding company sold off its remaining 3 million shares in ABBV in Q1.

Buffett first bought AbbVie during the third quarter of 2020 as part of a wider bet on the pharmaceutical industry. But Berkshire has all but given up on the position, gutting it over the past four consecutive quarters.

The pharma giant is best known for blockbuster drugs such as Humira and Imbruvica, but analysts are also optimistic about the potential for its cancer-fighting and immunology drugs.

ABBV seemed like a classic Buffett stock in certain respects – namely, the biopharma firm's storied dividend history. AbbVie is an S&P 500 Dividend Aristocrat, by virtue of having raised its dividend every year for 50 years. The most recent hike – an 8.5% increase to the quarterly payment to $1.41 per share – was declared in October 2021.

• Action: Added to stake
• Shares held: 890,923,410 (+0.4% from Q4 2021)
• Value of stake: $155,564,138,000

Warren Buffett absolutely adores Apple (AAPL, $145.54), and he took a three-day dip in the share price to add to Berkshire's holdings.

He wanted even more.

"Unfortunately the stock went back up, so I stopped," Buffett told CNBC following Berkshire Hathaway's annual shareholders meeting in May. "Otherwise who knows how much we would have bought?"

At 43% of the portfolio, AAPL is Berkshire's largest position by far, and Buffett wouldn't have it any other way.

"I don't think of Apple as a stock," Buffett has said about Apple. "I think of it as our third business."

And it might as well be. Berkshire is Apple's third-largest investor with an 887 million-share stake representing about 5.5% of all shares outstanding. Only Vanguard and BlackRock – giants of the passively managed index fund universe – hold more Apple stock.

The Oracle of Omaha has only occasionally dabbled in technology stocks. But he bought Apple with two fists, and he's more than happy to discuss his ardor for AAPL. As he has said more than once on CNBC, he loves the power of Apple's brand and its ecosystem of products (such as the iPhone and iPad) and services (such as Apple Pay and iTunes).

"It's probably the best business I know in the world," Buffett said a year ago. "And that is a bigger commitment that we have in any business except insurance and the railroad."

This has been an exceptionally fruitful investment for Buffett. AAPL shares have gained more than 430% on a price basis alone since the end of Q1 2016, when Berkshire initiated its stake. The broader market has barely doubled in price over the same span.

• Action: Added to stake
• Shares held: 62,045,847 (+3% from Q4 2021)
• Value of stake: $2,713,886,000

Buffett apparently went bargain hunting in General Motors (GM, $37.10) stock in Q1, upping Berkshire's stake by 3%.

Shares in the automaker lost a quarter of their value over the first three months of 2022, which improved both GM's dividend yield and its stock's valuation.

Buffett first took a stake in General Motors in early 2012, and became increasingly constructive on the world's fourth-largest auto manufacturer by production. He raised BRK.B's stake in 2018, 2019 and 2020, but then went into reverse and cut exposure as recently as 2021.

General Motors has always looked like another classic Buffett value bet. After all, there are fewer American brands more iconic than GM. He also has sung the praises of CEO Mary Barra on several occasions. And the stock perennially trades at crazy-cheap multiples of expected earnings.

GM is still a relatively small position, accounting for less than 1% of Berkshire's portfolio, but the recent buying, if nothing else, shows Buffett hasn't given up on the venerable company.

• Action: Added to stake
• Shares held: 2,170,000 (+19% from Q4 2021)
• Value of stake: $707,615,000

Berkshire gave a large vote of confidence to RH (RH, $279.83) in Q1, which many readers know as Restoration Hardware.

The holding company upped its position by 19%, or 2.2 million shares. Berkshire's total holdings were worth $708 million as of March 31. Berkshire, which was already positioned in home furnishings retail via its Nebraska Furniture Mart subsidiary, initiated the RH position Q3 2019, and added to it by 1% at the end of last year.

RH operates 104 retail and outlet stores across the U.S. and Canada. It also owns Waterworks, a high-end bath-and-kitchen retailer with 14 showrooms.

While brick-and-mortar retailers have struggled mightily over the past few years thanks in part to the rise of e-commerce, RH has found success catering to the upper crust. And that success continued throughout the COVID pandemic as Americans, forced to work from home, decided to spend on improving their environs.

It's hard to tell whether this was an Oracle of Omaha buy, or a project of one of his lieutenants, Ted Weschler or Todd Combs. Buffett has been mostly mum on RH. Still, the stake fits broadly with the Oracle's worldview. Buffett stocks tend to be bets on America's growth, which certainly includes housing-related industries.

With 10.1% of RH's shares outstanding, Berkshire Hathaway is the company's second largest stockholder.

• Action: Added to stake
• Shares held: 7,722,451 (+264% from Q4 2021)
• Value of stake: $539,336,000

In a position most likely handled by Ted Weschler, Berkshire more than tripled its stake in Formula One Group (FWONK, $60.22). The purchase of an additional 5.6 million shares brings the conglomerate's total holdings up to 7.7 million shares worth $539 million as of March 31.

Berkshire initiated the stake in Q4 – a minuscule one of just 2.1 million shares, worth $134 million at the time. Even now FWONK accounts for only 0.15% of Berkshire's portfolio value.

FWONK holds commercial rights for the Formula One World Championship – a nine-month long motor race-based competition in which teams compete for the constructors' championship and drivers compete for the drivers' championship.

Formula One Group also is a subsidiary of John Malone's Liberty Media Corporation, making FWONK yet another of several Berkshire investments tied to the billionaire businessman. Weschler, in his pre-Berkshire career as a hedge fund manager, invested in a number of Malone's businesses.

• Action: Added to stake
• Shares held: 159,178,117 (+316% from Q4 2021)
• Value of stake: $25,918,973,000

It had been nearly impossible to get a bead on Buffett & Co.'s holdings in the energy sector over the past couple years.

Consider some of Uncle Warren's moves:

• Q4 2019: Sold off most of his Phillips 66 (PSX) position, but added more than 150% to his Occidental Petroleum (OXY) stake, and nearly 40% to a Suncor (SU) stake.
• Q1 2020: Fully exited Phillips 66.
• Q2 2020: Bailed out of his Occidental position, but upped Suncor by 28%.
• Q4 2020: Initiated a position in Chevron (CVX, $173.01), but dropped more than a quarter of the Suncor position.
• Q1 2021: Exited Suncor, sold more than half the Chevron position.

But now, after making another small trim to CVX during the second quarter of 2020, Buffett has come back with vengeance. He upped Berkshire's Chevron stake by 24% in the third quarter, by 33% in the fourth quarter, and now by more than 300% in Q1.

Chevron, a member of the Dow Jones Industrial Average, is flush with cash thanks to skyrocketing prices for crude oil. Russia's invasion of Ukraine helped global benchmark Brent crude oil futures hit nearly $140 a barrel at one point during the first quarter.

The energy sector is now awash in cash, and companies such as Chevron are returning this windfall to shareholders through dividends and buybacks.

Make no mistake: there are few things Buffett likes more than dividends and buybacks.

It also helps that oil is a solid hedge against inflation. With prices rising at the fastest pace in four decades, cash is trash. Berkshire's massive pile of cash, equivalents and short-term investments is much better put to use in an asset like Chevron under such conditions.

• Action: Added to stake
• Shares held: 64,315,222 (+338% from Q4 2021)
• Value of stake: $5,152,292,000

We know that either Ted Weschler or Todd Combs first bought shares in video game publisher Activision Blizzard (ATVI, $78.00) in Q4. Buffett said so.

But it was the Oracle of Omaha himself who upped the position by 338% in Q1.

The original purchase was simply great timing. In mid-January, Microsoft (MSFT) agreed to pay $68.7 billion, or $95 a share in cash, for ATVI. At the time the deal was announced, the software titan was paying a premium of roughly 30% to the video game maker's most recent closing price.

BRK.B, however, bought more than 14.6 million shares in ATVI – worth $975.2 million as of Dec. 31 – during the fourth quarter at an estimated average price of $66.53 per share. That was a quick score.

As for the latest purchases, that's a bet by Buffett that the deal will indeed close. It's an arbitrage play, and we know this because Buffett said as much at Berkshire's annual meeting.

"It is my purchases, not the manager who bought it some months ago," Buffett said about the latest Activision buys. "If the deal goes through, we make some money, and if the deal doesn't go through, who knows what happens."

Activision shareholders approved the company's sale to Microsoft, but some investors are betting the deal could be scuttled by antitrust regulators.

• Action: Added to stake
• Shares held: 4,780,000 (+466% from Q4 2021)
• Value of stake: $387,180,000

Warren Buffett very much kept in line with some of his other investments in home retail when he initiated a stake in Floor & Decor (FND, $69.80) in the third quarter of 2021, then added to the stake in Q4.

But he really put an exclamation point on the investment in Q1 2022, adding another 3.9 million shares. FND went from a negligible 0.03% of Berkshire's portfolio to a more significant 0.1%.

Floor & Decor sells hard surface flooring and related accessories primarily through 133 company-operated warehouse store formats.

It remains a small position, to be sure, but it still fits nicely with some of Buffett's other holdings and investments.

Berkshire, for example, has been building a position in home goods retailer RH since the third quarter of 2019. And he's made no secret of his love for Berkshire Hathaway's wholly owned subsidiary Nebraska Furniture Mart.

Floor & Decor thus appears to be a way to play the housing market, albeit with a somewhat oblique, Buffett-style angle.

• Action: New stake
• Shares held: 8,969,420
• Value of stake: $389,990,000

Ally Financial (ALLY, $38.73) shareholders no doubt appreciated getting Warren Buffett's vote of confidence. The stock is off roughly 30% over the past 52 weeks, including a 19% drop year-to-date and a 9% decline in the first quarter, when Berkshire Hathaway set up camp.

Ally Financial has actually done business for more than a century, though for most of that time it operated as General Motors Acceptance Corporation. It rebranded as Ally in 2010, then went public in 2014. Its main businesses are Ally Bank, an online bank that offers traditional products such as savings and checking services, CDs and IRAs; and Ally Invest, which provides securities-brokerage and investment-advisory services.

After a couple of years of shedding many of his bank holdings, Buffett appears ready to get back into the space. That said, the Ally stake isn't anything to gawk at – the roughly $390 million position amounts to just a tenth of a percent of Berkshire's overall equity holdings.

It's not an insignificant chunk of Ally Financial, however. Berkshire's 2.7% ownership stake makes it the financial institution's fifth-largest shareholder.

• Action: New stake
• Shares held: 420,293
• Value of stake: $620,034,000

It's possible that Buffett saw something familiar and comforting in the shares of insurance and investment firm Markel (MKL, $1,325.11).

At more than a thousand bucks a pop, MKL stock isn't as easy for traders to push up and down as your garden-variety stock. That's precisely why Warren Buffett has never split Berkshire's A-class shares, whose $460,000 price tag would be enough to buy your average-priced home in Massachusetts with enough left over to park a couple new Mini Coopers in the garage.

Markel is a three-pronged financial institution. Its three major business lines are insurance (insurance, reinsurance, fronting and insurance-linked securities); investing; and Markel Ventures. The latter is a growing portfolio of companies, such as luxury handbag maker Brahmin, homebuilder Eagle and architectural product maker Panel Specialists.

Buffett merely dipped a toe into this position during the first quarter of 2022, buying about 420,000 shares, or $620 million worth of the financial stock. That's less than two-tenths of a percent of the equity portfolio, though it's a 3.1% position in Markel – good enough to make the Oracle its fifth-largest shareholder.

• Action: New stake
• Shares held: 2,921,975
• Value of stake: $894,504,000

Buffett exited a pair of pharma/biotech holdings during the first quarter and heavily sold out of a third. But that doesn't mean he's done with the healthcare sector.

McKesson (MCK, $327.83) offers a number of healthcare solutions – including supply chain management, retail pharmacy, community oncology and specialty care – in 14 countries. For instance, its pharmaceutical distribution business serves 40,000 retail chains, long-term care providers and other customers, while its medical-surgical supplies business gets hundreds of thousands of products – everything from bandages to exam tables – to hospitals and doctor's offices across the nation.

McKesson is one of the few Buffett stocks that was bought on the way up. MCK shares surged by 23% during the first quarter and are currently up 32% year-to-date.

That said, Berkshire didn't buy too many of its shares. The new position comes to just about $900 million, or a quarter of a percent of Berkshire Hathaway's equity portfolio, putting it around the middle of the pack. Buffett, however, becomes a top-10 shareholder, as his 2.9 million shares represent a nearly 2% stake.

• Action: New stake
• Shares held: 7,880,998
• Value of stake: $1,125,958,000

Berkshire became a top-five shareholder in Celanese (CE, $144.68) in Q1, initiating a position that accounts for 7.3% of the chemical company's shares outstanding.

The holding is less meaningful for Berkshire, however, comprising just 0.3% of its equity portfolio. With 7.9 million shares worth $1.1 billion, the relatively small size of the CE investments suggests that it was likely the doing of either Weschler or Combs.

Either way, the commanding stake in the firm known for acetic acid and vinyl acetate monomer gives Berkshire its only position in the materials sector.

In addition to giving Berkshire exposure to a part of the market that it had lacked, Celanese has strong long-term growth prospects and a commitment to returning cash to shareholders.

Analysts forecast the company to generate average annual earnings per share growth of more than 17% over the next three to five years, for one thing. Meanwhile, CE has raised its dividend annually for 14 years. Even better, from Berkshire's point of view, is the company's history of share repurchases.

Buffett generally prefers buybacks to dividends not only because they're more tax efficient (dividends get taxed twice), but because they increase an investor's claim on earnings without the investor having to lift a finger.

• Action: New stake
• Shares held: 68,947,760
• Value of stake: $2,606,915,000

Paramount Global (PARA, $28.02) is a mass media and entertainment organization that resulted from 2019's merger between Viacom and CBS. Its properties include Paramount Pictures' film and television studios, CBS, The CW, Comedy Central, MTV, Nickelodeon, BET, CMT and Showtime.

It also gives Buffett three more streaming properties – Paramount+, Showtime OTT and Pluto TV – to add alongside Apple's (AAPL) Apple TV+ and Amazon.com's (AMZN) Amazon Prime.

Admittedly, Paramount+ is something of a second-tier streamer. Its 62 million subscribers pales in comparison to the likes of Netflix's (NFLX) 221 million subscribers or Amazon Prime's 149 million.

While it's not a traditional value category, PARA very much looks like a Buffett value bet. Paramount's shares trade at just 9 times estimates and at a price/earnings-to-growth (PEG) ratio of around 0.8 (anything less than one is considered undervalued). Shares now yield more than 3% at current prices, too.

Buffett dug in with both hands, too. The $2.6 billion buy-in during the first quarter makes Berkshire Paramount's top shareholder with an 11.3% stake. That said, PARA isn't a huge presence in the Berkshire Hathaway equity portfolio at a weight of 0.7%.

• Action: New stake
• Shares held: 55,155,797
• Value of stake: $2,945,319,000

After Uncle Warren ended his longtime relationship with Wells Fargo, he rekindled things with another old financial flame – Citigroup (C, $47.46) – entering a new stake roughly 20 years after he exited the last one.

Financial stocks broadly failed to gain any traction during the first quarter of 2022, but Citigroup really struggled, declining by roughly 12% between the start of the year and March 31. However, that dip might have been the push Buffett needed to enter the nation's fourth-largest bank by assets.

Citigroup has been the weakest of the Big Four banks over the past year, losing more than a third of its value over that time. That has in turn made Citigroup look like quite the value play; shares currently trade at just 7 times next year's earnings estimates and now yield north of 4%.

This was a relatively big splash by Berkshire, too. The nearly $3 billion position immediately puts Citigroup within the holding company's top 15 positions. It also translates into a 2.8% stake Warren Buffett the fourth-largest shareholder in the bank, behind fund giants Vanguard (8.5%), BlackRock (8.3%) and State Street (4.7%).

• Action: New stake
• Shares held: 104,476,035
• Value of stake: $3,792,480,000

Buffett dipped into Berkshire's massive cash pile in Q1 to initiate a commanding position in HP (HPQ, $37.51). And this big new bet on a PC and printer maker appears to be another classic Buffett value play.

HPQ generates a steady and ample stream of free cash flow (FCF) – the cash left after expenses, capital expenditures and financial commitments have been met – or an average of nearly $4 billion a year over the past five years.

Industry analysts expect that FCF number to increase and – most importantly – to flow into investors' pockets.

Free cash flow supports dividends, and it's no secret Buffett adores dividends. HPQ, for its part, has been not only a generous dividend payer, but a dividend grower. The company has increased its payout annually for 13 years. The most recent hike came in November – a 29% increase in the quarterly disbursement to 25 cents per share.

True, the market for PCs and printers is hardly overflowing with growth prospects. But HPQ has a solid track record of slow but steady gains on the top line. Wall Street analysts see this incremental revenue growth continuing for years, all helped by recent strategic acquisitions.

And then there's HPQ's valuation, which Buffett appears to have found irresistible.

Buffett, with 11.4% of HP's shares outstanding, snatched up a boring but dependable cash machine at a bargain price.

• Action: New stake
• Shares held: 136,373,000
• Value of stake: $7,737,804,000

Warren Buffett has been absolutely hoovering up stock in Occidental Petroleum (OXY, $67.72).

In a flurry of Q1 purchases, Berkshire bought more than 136 million OXY shares, or 14.6% of the integrated oil and gas company's shares outstanding.

The stake, worth $7.7 billion as of March 31, coincides with the ongoing melt-up in energy prices, which was sparked by the Russian invasion of Ukraine. Global benchmark Brent crude oil futures hit nearly $140 a barrel at one point during the first three months of the year.

It also helps that oil tends to be a good hedge against inflation, which is rising at a pace not seen in four decades.

Like the rest of the industry, OXY is flush with cash, which it is returning to shareholders through dividends and buybacks – both of which Buffett loves.

The Occidental common shares Buffett purchased only added to its already substantial exposure to the energy firm, which includes $10 billion worth of 8% preferred shares, as well as 84 million warrants to purchase OXY stock. Occidental shares must trade above the warrants' exercise price of $59.62 for the warrants to be in the money.

Berkshire is Occidental's largest shareholder by a wide margin. Vanguard, with a 10.9% ownership stake, comes in a distant second.

U.S. stocks finished both the day and the month on a down note as a fresh round of earnings forecasts from companies only added to investors' laundry list of concerns.

Last night, Amazon.com (AMZN, -14.1%) said first-quarter revenue rose 7% on a year-over-year basis – the slowest pace in 20 years – to $116.4 billion, just shy of the consensus estimate. AMZN also offered lower-than-expected Q2 revenue guidance due to forex headwinds and the company's plan to move this year's Prime Day to July from June.

Apple (AAPL) was another post-earnings decliner, sliding 3.7%. The tech giant reported a 9% annual rise in revenue to $97.3 billion – the most ever for a March quarter – but warned supply-chain issues caused by COVID-related lockdowns in China could create a $4 billion to $8 billion drag on sales in the current quarter.

"The guidance from multiple companies on the supply-chain situation and expenses going up seems to be weighing down the market after the brief recovery days," says Jimmy Lee, CEO of independent wealth management firm The Wealth Consulting Group. "So, I'm fairly happy with how the consumer seems to be holding up so far [adjusted for inflation, consumer spending rose 0.2% month-over-month in March, according to this morning's Commerce Department report], but Q2 will be more telling and sets up stocks to continue the volatility that we've seen so far this year."

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That volatility was on full display today, with the Nasdaq Composite sinking 4.2% to 12,334, the S&P 500 Index spiraling 3.6% to 4,131 and the Dow Jones Industrial Average surrendering 2.8% to 32,977.

For all of April, the Nasdaq shed 13.3% – marking its biggest monthly decline since October 2008 – the S&P 500 fell 8.8% and Dow gave back 4.9% for their worst months since March 2020.

Other news in the stock market today:

• The small-cap Russell 2000 slumped 2.8% to 1,864.
• U.S. crude oil futures slipped 0.6% to end at $104.69 per barrel.
• Gold futures gained 1.1% to finish at $1,911.70 an ounce.
• Bitcoin fell 4% to $38,351.14. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
• Tesla (TSLA) closed down 0.8% amid headlines that CEO Elon Musk sold roughly $8.4 billion in TSLA shares this week, according to the Securities and Exchange Commission (SEC). The reports follow Monday's headlines that Musk will buy Twitter (TWTR) for $44 billion. Yesterday, the billionaire tweeted that he is not planning to sell any additional shares. TSLA stock finished the week down more than 12%, but CFRA Research analyst Garrett Nelson said this "weakness presents an attractive entry point in one of the market's most compelling growth stories." He reiterated a Strong Buy recommendation on the shares, adding that "pressure from large stock sales by Musk have created opportunity for investors to buy shares at a discount in the past."
• Intel (INTC) was the worst Dow Jones stock today, shedding 6.90% after earnings. In its fiscal second quarter, the semiconductor firm reported a 7%year-over-year decline in revenue to $18.35 billion – slightly more than analysts were expecting – while gross margin narrowed to 50.4% from 55.2%. INTC also offered weaker-than-anticipated current-quarter guidance, citing inventory and inflation challenges. Oppenheimer analyst Rick Schafer maintained a Perform (Neutral) rating on Intel, saying the bar is raised for the second half. "The company is in prove-it mode as management pushes capacity expansion and return to process leadership," Schafer writes in a note to clients. "We remain sidelined for now."

Sell in May and Go Away? Not So Fast.

What can investors expect going forward? Next week brings the start of a new month – as well as renewed focus on the old "Sell in May and Go Away" adage, familiar to many because of the tendency for stock returns to historically underperform in the six months between May and October. Here at Kiplinger, we believe investors are better off just sticking around.

That certainly doesn't mean that we think stocks have the all-clear to head higher in May. There are numerous worries – inflation and rate hikes, for example – that will likely continue to impact markets.

What's more, "down Aprils tend to be followed by down Mays," says Chris Larkin, managing director of trading at E*TRADE. "And on top of that, May's average return is even worse when the S&P 500 is red for the year heading into the month."

Instead of fretting, investors should focus on their core portfolio, which can easily be built with some solid, low-cost funds such as those that make up our Kiplinger 25 – our favorite actively managed no-load mutual funds – or our Kiplinger ETF 20, the best cheap exchange-traded funds you can buy. And for those who want to mix some tactical positions into their portfolio, consider these stocks with strong profit margins. These well-managed firms have the potential to do well across different economic environments and have reasonable valuations to boot.

Karee Venema was long AAPL as of this writing.

Making good stock picks is challenging at any time. But these days, investors must be wary of companies that are vulnerable to higher-for-longer inflation, as well as lingering supply-chain disruptions, rising interest rates and the scary geopolitical situation in eastern Europe.

Some companies hold up better than others in tough times. Firms that lead their market or industry, for example, typically have strong pricing power – think Apple or Nike. These types of companies can pass on higher wages and material costs to customers by raising prices for goods or services without seeing much slip in demand.

Other firms fortify their results by controlling costs (Johnson & Johnson has proved adept at this in years past). Still others have businesses that are simply less sensitive to rising material and labor costs, or even supply-chain issues, because of the services or goods they sell (Netflix, say, or Airbnb).

One way to find companies with those attributes is to scrutinize profit margins. Why not profits alone? A company's bottom line – its net income or profit – matters, of course. But profit margins can show how efficiently a company manages its operations and costs over time, in good and bad periods. Well-managed firms can maintain or expand profit margins through changing economic and market conditions. Often, these companies also have strong balance sheets and a steady stream of free cash flow (cash profits left after expenses to maintain or expand the business).

"These companies are well placed to do well in different economic environments," says Ian Mortimer, portfolio manager of SmartETFs Dividend Builder ETF (DIVS).

There are different ways to measure profit margins. Gross margins show the percentage of revenue that remains after deducting the costs of producing the goods or services a company has sold. Operating margins reflect the percentage of revenue left after on-going expenses to run the business, which includes the costs of goods, wages and other expenses related to running the company. And net margins are the ratio of net income to revenues and show how much of every dollar actually hits the bottom line.

The stock picks below have the potential for improving profit margins of one kind or another. In most cases, we're talking about gross margins, but in a few cases, we refer to operating or net margins. We also looked for growth catalysts that might propel profits higher, as well as reasonably valued shares relative to peers or the broad market.

Returns and data are through April 26.

• Market value: $1.4 trillion

E-commerce giant Amazon.com (AMZN, $2,814.50) just raised its annual membership fee for Prime (its free shipping and streaming video services) by 17%, to $139 from $119. It's a good bet that most of Prime's current 200 million members, and perhaps millions more, will pony it up. The last time Amazon increased the annual fee (in 2018 by 20%), the number of subscribers doubled in three years. That's pricing power.

More important, however, is the shift in Amazon's overall business to a mix with higher gross margins.

E-commerce is still the main business, and online retail is a low-margin trade. However, Amazon's growth now comes from two other businesses with healthy margins: advertising sales and Amazon Web Services, its cloud-computing business.

And they're growing fast. Ad sales – for spots on Amazon's website, Prime Video and Fire TV – topped $31 billion in 2021, a 58% jump from 2020. The firm's new contract to stream the NFL's Thursday Night Football games should propel ad sales even more this year. And AWS revenues, which account for 13% of overall sales, increased 37% in 2021.

As these divisions continue to grow, it should fatten Amazon's gross margins to 43.5% in 2023, up from 42.0% in 2021, says analyst CFRA analyst Tuna Amobi. Look past 2022, during which wage inflation and investments in shipping and logistics may hamper gross-margin expansion.

Amazon's not exactly among the cheapest stock picks you'll find right now – shares trade at a whopping 53 times estimated earnings for the year ahead. But that's a discount to its five-year historical P/E of 85. And analysts expect the mega-cap company to pump out 25% average annual earnings growth over the next three years.

• Market value: $15.0 billion

The pandemic revitalized spending on health-science research, and that's to the benefit of Bio-Techne (TECH, $382.54). The company is a leader in the production of proteins, antibodies and other compounds used in medical research, drug development and diagnostic tests. Its proteins, for instance, are necessary for COVID vaccines and treatments.

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That's just part of the reason Argus Research analyst David Toung rates Bio-Techne stock a Buy.

The company is re-investing its robust operating cash flow to expand production capacity and make what Toung calls tuck-in acquisitions – small cash deals for private companies. It has completed more than a dozen such deals since 2014. Most recently, in 2021 it acquired Asuragen, a maker of diagnostic and research products such as oncology testing kits, for $215 million in cash plus $105 million more if certain milestones are achieved.

Andy Adams, a portfolio manager with the mutual fund company Mairs & Power, says the company has been able to improve gross margins in recent years, from 65% in 2017 to 68.1% in 2021, despite its many acquisitions.

Analysts predict average annual earnings growth of 26% over the next three years. That comes at a premium, however, and shares trade at a price-earnings multiple of 45 times year-ahead estimates. Still, that's below the average P/E for biotech firms of 59.

• Market value: $228.7 billion

Semiconductor giant Broadcom (AVGO, $555.05) is best known for its networking-switch chips for data centers and its radio-frequency filters for high-end smartphones. But thanks to well-executed acquisitions, Broadcom is highly diversified across a range of fast-growing tech areas.

"Put it all together, and you have a combination of end markets with big growth," from cloud computing and factory automation to data centers and 5G, says Mortimer, the Dividend Builder portfolio manager. "That will drive growth regardless of the economic environment."

The company is extremely profitable and well run. Annual gross margins have climbed steadily in recent years. And analysts expect them to widen to 76% over the next two fiscal years (ending in October), up from 73.9% in fiscal 2021. Meanwhile, costs have barely budged in recent years, and the company pays a hefty dividend, which it has raised for 13 consecutive years.

The semiconductor industry has been dealing with supply-chain bottlenecks since the start of the pandemic, says John Buckingham, editor of investing newsletter The Prudent Speculator. Broadcom isn't immune to that, but its size and "tight" supplier relationships have helped minimize the impact, he says. AVGO has a good handle on supply and demand through the first half of 2023, and so far, it has been passing on material cost increases to customers.

Analysts expect earnings to jump an average of 15% a year over the next three years. And shares trade at 17 times expected year-ahead earnings, below the typical P/E of 21 for its semiconductor peers.

• Market value: $58.8 billion

Moderna (MRNA, $144.14) doesn't fit squarely in the expanding-profit-margin box, at least historically.

The biotech stock, a pioneer in mRNA technology, has only just become profitable thanks to demand last year for its COVID-19 vaccine. In 2021, Moderna reported $28.29 in earnings per share, a titanic shift from its $2 loss per share the previous year. Gross margins were a fat 75.1% for 2021, above the 61.3% average for peers, and a net profit margin of 66.0% was well ahead of the average 19% for the biotech industry, according to Zacks Investment Research.

Shares are down 70% from their high last August – a much bigger decline than the typical biotech stock experienced – which makes Moderna a compelling value. The stock suffered as investors worried that its COVID vaccine was less effective against new variants of the virus.

But Moderna has plenty of irons in the fire. It is still working on new coronavirus treatments, including vaccines for specific variants. It has signed $19 billion in agreements for its COVID vaccine for this year, and it has $3 billion more in potential orders for the vaccine in 2023. Plus, Moderna has 44 vaccines and therapeutics in development, half of which are in later-stage clinical trials, including mRNA-based vaccines for the flu and Zika and a personalized cancer vaccine.

What's more, the company is a financial stronghold, with $17.6 billion in cash and investments and minimal debt. Analysts expect 2022 earnings to be a tad lower than in 2021, but they see growth of 7% per year, on average, over the next three years. At current prices, Moderna trades at a price-earnings multiple of 5.3, a fraction of the average P/E of 59 for biotech stocks.

• Market value: $421.9 billion

Visa (V, $209.36) payment-processing network operates like a toll booth, so the more electronic transactions that Visa handles, the higher the company's revenue.

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The ongoing shift to digital payments and online shopping has been a boon, as has strong growth in transactions using the company's crypto-linked cards, which make it easy to pay for products and services with digital currencies. A sharp recovery in international travel and cross-border money flows offers more upside. As long as higher price tags don't crimp consumer spending, stickier inflation is a positive: About 55% to 60% of Visa revenues will get a boost from inflation, says CFRA analyst David Holt.

Holt pays close attention to Visa's operating expenses and margins. If the firm can control costs, any increase in revenue from higher transaction volumes falls to its bottom line.

"The beauty of Visa's business model is its operating leverage. As volume builds, operating margins expand," says Holt, who rates the stock a "buy."

He sees operating margins widening over the next two years to 68.0% by the end of 2023, up from 65.6% in 2021, helping to fuel roughly 20% earnings growth over that period. He thinks the shares deserve a P/E of 38, which, applied to per share earnings estimates of more than $7 for the fiscal year ending in September, results in his 12-month price target of $270.

That's an "above-market P/E multiple," Holt says, but it's supported by achievable revenue targets and well-controlled expenses.

Social media stocks are in the limelight following news that one of their own will soon be taken private.

Specifically, Twitter (TWTR) put out a press release late in the day on April 25 confirming that its board of directors had agreed to Elon Musk's offer to buy the social media platform and take it private for $44 billion, or $54.20 a share.

The agreed-upon price is a 38% premium to Twitter's closing share price on April 1, 2022, the day before the Tesla (TSLA) CEO announced a 9.1% stake in the company.

By purchasing Twitter and taking it private, Musk has narrowed the list of social stocks for investors to choose from.

Here, we take a closer look at three top-rated social media stocks to watch post-Twitter. Each name featured here sports a consensus Buy recommendation from analysts and has solid growth prospects for the remainder of 2022.

Data is as of April 25. Analysts' ratings courtesy of S&P Global Market Intelligence. Stocks are listed by analysts' consensus recommendation, from highest score (worst) to lowest (best).

• Market value: $13.2 billion
• Analysts' consensus recommendation: 2.44 (Buy)

According to S&P Global Market Intelligence, Pinterest (PINS, $20.00) has a whopping 22 Hold ratings and one Sell recommendation. This compares to 11 analysts who rate it a Strong Buy or Buy. So while the social media stock's consensus rating is a Buy, it's only by the thinnest of margins.

Still, PINS currently trades at a reasonable 5.3 times sales. And while the online product and idea discovery company is considered more of a long shot over the next 12 months, Pinterest is not deterred.

The company continues to grow its user base by entering into partnerships with some of e-commerce's biggest platforms. For example, on April 13, it announced a partnership with WooCommerce – an open-source e-commerce platform with more than 3 million sellers – connecting its merchants with Pinterest's more than 400 million monthly active users (MAUs).

"WooCommerce merchants can create or connect a Pinterest for Business account and automatically sync their product catalog, turning their products into browsable product Pins," the company stated in its press release. "By installing the Pinterest tag, users can measure conversions on their Pinterest ads and optimize these ads for shopping campaigns or retargeting."

According to Pinterest, when its users make purchases, they usually spend 2x more than buyers on other platforms. That's a number that should keep merchants engaged with the company's shopping tools.

One of the 22 analysts giving PINS a Hold rating is Argus Research's John Staszak. The analyst points to decline in monthly active users in both the third and fourth quarters of 2021 and concerns over the company's weaker revenue guidance. Still, Staszak's long-term rating is a Buy due to Pinterest's strong brand recognition in the U.S. and internationally.

Staszak has an earnings estimate of $1.34 a share for 2022 and $1.62 per share in 2023, though both are improvements over the $1.13 per share PINS reported in 2021. While it's cheap from an earnings perspective, PINS is the lowest-rated of the social stocks featured here.

• Market value: $507.6 billion
• Analysts' consensus recommendation: 1.72 (Buy)

From a value perspective, it's hard not to like Meta Platforms (FB, $186.99). The parent company of Facebook trades at just 4.5 times sales, almost half Twitter's valuation, and its operating income in 2021 was a healthy $46.8 billion. Comparatively, Twitter's operating income in fiscal 2021 was just $270 million.

Elon Musk will have to perform miracles for Twitter's operating income to get anywhere near Meta Platforms.

UBS Global Research published a research report for the U.S. internet industry on April 20. It was quite positive about FB's business in the second half of 2022.

"We are increasingly upbeat on the second-half bull case on Meta shares, and while Street estimates look high to us, we think this is largely priced into shares already and the risk/reward skew looks positive," UBS analysts – who have a Buy rating on FB – wrote in the report.

Susquehanna Financial Group analyst Shyam Patil is also bullish on FB, rating the social stock at Positive, which is the equivalent of Buy. Patil also has a $217.31 price target, representing implied upside of 16.2% from current levels.

Over at Credit Suisse, analyst Stephen Ju lowered his FB target price on April 21 by 19%, from $336 to $272, though that still provides for significant upside over the next 12 months.

Ju maintained an Outperform (Buy) rating on FB stock due to "potential for better than-expected ad revenue growth on product innovation (Facebook Shops, Search in Marketplaces, etc.)."

The analyst also points to conservative Street models that "underestimate the long-term monetization potential of other billion-user properties like Messenger and WhatsApp," as well as the ability for "faster free-cash-flow growth on greater efficiency on content screening/security costs."

Despite FB shares being hit with broad-market headwinds in 2022, most analysts agree that it is one of the best social media stocks out there. Of the 54 following the stock that are tracked by S&P Global Market Intelligence, 32 have it at Strong Buy, eight say Buy, 12 call it a Hold and just two rate it at Sell or Strong Sell.

All in all, Meta Platforms is one of the strongest Buys among social stocks. The company generates so much cash it's hard to ignore.

• Market value: $48.8 billion
• Analysts' consensus recommendation: 1.59 (Buy)

Snap (SNAP, $29.91) reported its Q1 2022 results on April 21. It lost 22 cents per share in the quarter, which was 5 cents worse than analysts expected. However, revenues were in-line with the consensus at $1.06 billion, while the company's daily active users (DAUs) came in at 332 million, up 18% year-over-year.

Despite SNAP stock falling on the news, CEO Evan Spiegel feels the solid growth in DAUs reflects the company's momentum – even with the operational challenges faced by social media stocks so far 2022. In the second quarter, it expects to grow sales by at least 20% over Q2 2021.

Analysts, meanwhile, are targeting 24% year-over-year revenue growth for Snap in the second quarter. This reflects Wall Street's bullish bias toward the social stock. Of the 41 analysts covering SNAP tracked by S&P Global Market Intelligence, 25 have it as a Strong Buy, eight as a Buy and eight say it's a Hold. There are no Sell recommendations at the moment.

"Snap in our view has been able to adapt to changes in Apple's ad-tracking policy; rivals such as Meta Platforms have struggled with those changes," says Argus Research analyst Jim Kelleher (Buy). Kelleher adds that while the process of addressing these issues is ongoing, "underlying fundamentals at the selfie company appear to be strengthening, not weakening."

BofA Securities analyst Justin Post (Buy) admitted it was a "tougher environment" in Q1 and that Snap and other social media stocks could see "future disruptions. Still, SNAP "is well positioned to accelerate in the second half of 2022," the analyst adds.

Post specifically points to solid two-year revenue trends, strong user growth and multiple product catalysts that could boost average revenue per user (ARPU) metrics as reasons he likes Snap, as well as the social stocks valuation. Snap is currently trading at 10.7 times sales.

So it is also a Buy, but perhaps for more aggressive investors.

The busiest week of second-quarter earnings season is upon us. Wall Street will be privy to results from some of the biggest names in technology, with Apple (AAPL, $155.35), Amazon.com (AMZN, $124.63), Alphabet (GOOGL, $114.34), Meta Platforms (META, $183.17) and Microsoft (MSFT, $264.84) among those on this week's earnings calendar.

"With the major U.S. tech names set to start reporting, traders will be poised to see how margins are holding up in the previous stock-market darlings, and hoping they paint a prettier picture than the underperformance from U.S. banks," says Sophie Lund-Yates, equity analyst at U.K.-based financial firm Hargreaves Lansdown.

Apple Margins Expected to Stay High

CFRA Research analyst Angelo Zino (Buy) expects Apple to report gross margins between 42% and 43% when it unveils its fiscal third-quarter results after the July 28 close.

"AAPL's gross margins remain elevated, benefiting from the ongoing shift towards services and better mix within products," says Zino. "Positive tailwinds ahead will include more favorable selling prices and mix towards services while unfavorable forex is expected to act as a headwind over the next several quarters."

Overall, analysts, on average, expect AAPL to report earnings per share (EPS) of $1.16, down 10.8% year-over-year (YoY), and revenue of $82.6 billion (+1.5% YoY).

Analyst: Amazon Remains a Top FANG Stock

Amazon.com will release its second-quarter earnings report after Thursday's close. Consensus estimates are for AMZN to unveil earnings of 15 cents per share (-80% YoY) and revenue of $119.1 billion, up 3.4% over the year-ago period.

BofA Global Research analyst Justin Post (Buy) recently lowered his Q2 revenue outlook for AMZN amid forex headwinds. "Key topics for the quarter will likely be inflation impact on the consumer spend, retail gross margins given Target's (TGT) second-quarter guidance update, still elevated gas prices and labor cost impact on operating costs and forex pressure," Post says.

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But while "inflation and recession risk clouds the near-term revenue and margin trajectory," Amazon remains Post's top pick among FANG stocks. Indeed, following its roughly 25% year-to-date decline, AMZN stock is one of the best deals around.

Alphabet Faces Tough Comps in Q2

Alphabet enjoys a Buy rating from CFRA Research analyst Angelo Zino due to its "valuation versus large-cap tech peers, free cash flow potential and [the] belief that GOOGL can sustain a 10%-plus long-term EPS growth pace." However, Zino admits that there are risks ahead, including currency headwinds and regulatory issues.

Another potential drawback for GOOGL in Q2 are tough year-over-year comparisons. The company saw Google search revenue jump 63% YoY in Q2 2021, while YouTube ad revenue was up 83%. This time around, Zino expects those figures to come in closer to 10% and in the high-teens percentage, respectively.

GOOGL will report its second-quarter results after Tuesday's close. Analysts, on average, see Alphabet's total revenue growth moderating to just 13.1% YoY to $70.0 billion, while earnings are expected to decline 4.4% to $1.30 per share.

Meta Earnings Will Be "Better Than Feared," Say Analysts

Meta Platforms reports its second-quarter earnings after Wednesday's close. Fellow social media stock Snap (SNAP) reported dismal results on July 21, missing on both the top and bottom lines and saying it will "substantially slow our rate of hiring, as well as the rate of operating expense growth" amid a challenging macroenvironment.

SNAP stock sold off sharply as a result, raising the question: Does the same fate await META shares?

Deutsche Bank analysts Benjamin Black and Lee Horowitz (Buy) believe the Facebook parent will post Q2 results that will be "better than feared." True, macro headwinds and engagement trends driven by the rise of TikTok have sparked concerns, but "our intra-quarter checks point to slightly more benign challenges. As such, we think an outcome better than feared should suffice to support shares, particularly with the company signaling perhaps even more cost discipline over the next 6-12 months," the two say.

Analysts' consensus estimates are for Meta Platforms to report second-quarter earnings of $2.61 per share (-38.3% YoY) and revenue of $29.0 billion (+3.9% YoY).

Microsoft Expected to Post Modest Growth in Q2

Microsoft is one of a number of Dow Jones stocks making an appearance on this week's earnings calendar, with the tech giant slated to unveil its fiscal fourth-quarter results after Tuesday's close.

Analysts, on average, believe MSFT will report earnings of $2.30 per share (+6.0% YoY) and revenue of $52.5 billion (+13.7% YoY) for the three-month period.

Morgan Stanley analyst Keith Weiss admits that multiple crosscurrents could impact Microsoft's results, including declining PC shipments, forex headwinds and easing consumer demand. However, thanks to strong feedback on the resiliency of MSFT's consumer business and data gathered from a recent management survey, Weiss has confidence the company can sustain its growth going forward. The analyst has an Outperform rating on MSFT, which is the equivalent of a Buy.

Karee Venema was long AAPL, AMZN and GOOGL as of this writing.