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With other tech giants sparring over consumer chatbots, IBM (IBM 1.22%) is quietly positioning itself to dominate a different artificial intelligence (AI) battlefield: the enterprise segment.

The centennial tech titan might seem like an unlikely AI winner, but there’s one key factor that could make IBM the surprise star of the artificial intelligence revolution. IBM’s AI solutions are tailor-made for large corporations.

Image source: Getty Images.

IBM’s secret weapon: Enterprise-class AI

The watsonx platform for generative AI services isn’t trying to write your poetry or plan your vacation. Instead, it’s helping Fortune 500 companies deploy AI with strict attention to data security and regulatory requirements. Combined with Red Hat’s OpenShift platform — IBM’s $34 billion acquisition from 2019 that’s now paying proverbial dividends — the company offers something unique: AI that works within existing enterprise infrastructure.

This isn’t just theory. Banks are using IBM’s watsonx to detect fraud while maintaining compliance with financial regulations. Healthcare systems are deploying IBM’s AI to analyze patient data without violating patient privacy regulations.

It’s all done with auditable data flows. Sure, watsonx will hallucinate from time to time, like any other system based on large language models (LLMs). But when it does, you’ll be able to trace the error back to its original inspiration.

Meanwhile, IBM’s consulting arm helps these enterprises make use of AI solutions. This unique focus on support services creates sticky, long-term business relationships.

The big blue numbers tell the story

IBM’s AI-based Automation segment grew 14% year over year in Q2 2025, while Red Hat revenue continues its double-digit revenue expansion. The enterprise AI market is projected to reach $600 billion by 2028, and IBM is uniquely positioned to capture this opportunity.

Unlike consumer AI companies burning cash on compute costs, IBM’s enterprise focus means higher margins and predictable revenue streams. While others chase the next viral chatbot, IBM is selling the picks and shovels of the enterprise AI gold rush — and that’s exactly why it will thrive. Buying IBM stock today should set you up for robust AI-boom gains.

Over the past five years, Eli Lilly (LLY 1.43%) has outperformed the broader market, largely thanks to its progress in the GLP-1 arena. Its major breakthroughs in the field are already leading to incredible commercial success.

But Lilly isn’t done just yet. Recent clinical developments may set the stage for further stock-market gains, and potentially allow the drugmaker to maintain that momentum through the end of the decade. Let’s find out what Eli Lilly has been up to, and what that means for investors.

The next generation of GLP-1 medicines

Eli Lilly’s tirzepatide, marketed under the brands Mounjaro for diabetes and Zepbound for weight management, is highly effective — and generating billions of dollars in sales per quarter already. However, the medicine is administered subcutaneously once a week. This route has several drawbacks compared to oral pills.

First, the latter are often cheaper to manufacture. With an oral GLP-1 medicine, drugmakers might be able to pass cost savings onto consumers, making them more accessible than their subcutaneous counterparts.

Image source: Getty Images.

Second, oral pills are easier on patients who abhor needles and injections. That’s why Lilly and other companies in the field have been racing to develop novel oral GLP-1 therapies. There is already one such treatment on the market: Novo Nordisk‘s Rybelsus, which was first approved in the U.S. in 2019 and is indicated for the treatment of type 2 diabetes.

But Eli Lilly is on the verge of launching its own oral option. The company’s orforglipron performed well in a series of phase 3 studies in diabetes and obesity. What’s more, Lilly recently released results from a 52-week study in diabetes patients that pitted orforglipron and Rybelsus head-to-head. During the trial, the highest dose of orforglipron resulted in an average blood-sugar reduction of 1.9%, compared to 1.5% for Rybelsus. Additionally, orforglipron induced an average weight loss of 8.2%, versus 5.3% for Rybelsus.

Once again, Lilly is showing its dominance in this area, even against the company with a first-mover advantage. And if orforglipron is approved by year-end, Eli Lilly’s shares could soar. Although the pharmaceutical giant has yet to complete regulatory submissions for orforglipron, some Wall Street analysts believe that the medicine is an excellent candidate for a new program launched by the U.S. Food and Drug Administration, which reduces the 10-month review time for drug applications to a mere one or two months.

Is Lilly overvalued?

No one would question that Eli Lilly is performing extremely well. In the past couple of years, it has arguably produced more positive clinical data in the rapidly growing field of weight management than the rest of the industry combined. And the drugmaker is reaping the rewards of a job well done; its financial results speak for themselves. Second-quarter revenue jumped by 38% year over year to $15.6 billion, while non-GAAP (adjusted) net earnings per share grew 61% to $6.31. Lilly even increased its guidance for the full year 2025.

However, the stock was recently trading at 24.7 times forward earnings estimates, while the average for the healthcare industry is 16.5.

That said, Eli Lilly is worth a hefty premium. Its revenue and earnings are already growing faster than those of its peers. And there are good reasons to believe the pharmaceutical leader will keep that up through the next few years (at the very least), as it continues to benefit from its groundbreaking work in the GLP-1 market. According to some analysts, orforglipron could generate as much as $12.7 billion in revenue by 2030.

Will this medicine cannibalize sales from Lilly’s other GLP-1 products? Not at all. Tirzepatide is still growing strongly and could generate nearly $62 billion in revenue by 2030, a figure unheard-of in the industry. A few years ago, some analysts predicted that tirzepatide would peak at $25 billion, which would have been pretty impressive. It’s already set to eclipse that number this year, just three years after it first hit the market. Lilly’s success in the GLP-1 market has been remarkable and should continue driving solid top-line growth.

Furthermore, several other products will contribute. Lilly’s Alzheimer’s disease medicine Kisunla has grabbed barely any headlines, but it could also achieve blockbuster status, as could Ebglyss, a new treatment for eczema.

Eli Lilly’s outstanding results and prospects justify its valuation, leaving plenty of upside for the company. The stock might not soar based on the recent clinical trial data for orforglipron showing its superiority to Rybelsus unless it leads to regulatory approval by year-end. But Lilly still looks likely to deliver market-beating returns over the next five years.

XRP (XRP -0.18%), the third-largest cryptocurrency by market cap, has been one of the more popular cryptocurrencies in the market since Donald Trump was elected president last November, and it has benefited immensely from the administration’s pro-crypto policies. When the administration installed a new leader at the Securities and Exchange Commission (SEC), the SEC eventually dropped an appeal in a long-standing lawsuit against Ripple, the company behind XRP.

That removed an overhang on XRP and allowed the company to move forward with its plans for a spot XRP exchange-traded fund (ETF), and the expansion of the Ripple ecosystem, which XRP plays a key role in.

Image source: Getty Images.

The technical strength of XRP’s network also may allow it to disrupt international payments. Ripple continues to bridge the gap between mainstream financial institutions/institutional traders and the crypto world. The mainstream players are now more likely to try new things with fewer regulatory risks.

Ripple’s CEO, Brad Garlinghouse, has said he thinks that XRP could steal significant volume from SWIFT, the Society for Worldwide Interbank Financial Telecommunications. Financial institutions use this messaging system globally to send payment instructions to one another. Cryptocurrencies like XRP could provide banks with instant liquidity, allowing them to hold fewer reserves and pre-fund fewer international accounts, providing them with more liquidity and capital flexibility of their own.

If you’d invested $500 in XRP five years ago

Due to XRP’s technical strength, ties to Ripple, and the end of the SEC lawsuit, XRP has been a big winner for investors who saw the opportunity five years ago and managed, perhaps, to invest just $500.

XRP Price data by YCharts

As you can see above, a $500 investment in XRP five years ago would be worth over $5,850 today for a total return of over 1,000%. Consider that the broader benchmark S&P 500 index has returned over 100% in the past five years, which is quite strong, but still not nearly as good as XRP’s performance.

Dividend yields have been on a downward trend over the past year due to rising stock prices. The S&P 500‘s dividend yield is down to less than 1.2%, approaching its lowest level on record. Because of that, it’s getting harder to find stocks with attractive payouts.

However, it’s not impossible. Clearway Energy (CWEN 0.67%) (CWEN.A 0.89%), Realty Income (O 0.83%), and Verizon (VZ 0.55%) currently stand out for their high dividend yields. The trio pays sustainable and steadily rising dividends, making them appealing options for those seeking to generate passive income.

Image source: Getty Images.

A powerful dividend stock

Clearway Energy’s dividend currently yields 6.3%. The company owns one of the country’s largest clean power platforms. It sells the electricity generated by its wind, solar, energy storage, and natural gas assets to utilities and large corporations under long-term, fixed-rate power purchase agreements (PPAs). Those contracts supply Clearway with stable and predictable cash flow to support its high-yielding dividend.

The company aims to pay out between 70% and 80% of its steady cash flows in dividends, retaining the remainder to invest in new income-generating renewable energy assets. The company has already secured several new investments, including plans to repower some existing wind farms and agreements to purchase several renewable energy projects currently under development. These secured investments position Clearway to grow its cash flow per share by more than 20% over the next two years. That should support a dividend increase of more than 10% from the current level by the end of 2027.

Clearway has multiple drivers to support its continued growth beyond 2027. It can repower additional wind farms, add battery storage to existing facilities, buy development projects from a related company, and acquire operating assets from third parties. The company believes it has the financial capacity to support 5% to 8%+ annual cash flow per share growth beyond 2027, which could support dividend increases within that target range.

A very consistent dividend stock

Realty Income’s dividend yield is 5.4%. The real estate investment trust (REIT) pays dividends monthly, making it even more attractive to passive income-seeking investors.

The REIT also has a stellar record of increasing its dividend. It has raised its payment 132 times since its public market listing in 1994. Realty Income has increased its dividend for 112 consecutive quarters and more than 30 straight years. It has grown its payout at a 4.2% compound annual rate during that timeframe.

Realty Income backs its high-yielding and steadily rising dividend with a diversified real estate portfolio (retail, industrial, gaming, and other properties). It invests in high-quality properties secured by long-term triple net leases (NNN), which provide it with very durable and stable cash flow. The REIT pays out about 75% of its cash flow in dividends, retaining the rest to reinvest in additional income-generating properties. Realty Income sees a staggering $14 trillion investment opportunity in NNN real estate, giving it a long growth runway.

The streak continues

Verizon leads this group with a 6.4% dividend yield. The telecom giant backs its big-time payout with recurring cash flow as consumers and businesses pay their wireless and internet bills.

The company generates massive cash flows ($38 billion in operating cash flow is expected this year), providing it with the funds to invest in projects that maintain and expand its networks, pay dividends, make acquisitions, and repay debt. Verizon is currently using its strong financial profile to acquire Frontier Communications in a $20 billion deal aimed at enhancing its fiber network. The company’s growth investments should enable it to continue expanding its copious cash flows.

Verizon’s financial strength and growing cash flows have enabled it to continue increasing its dividend. The company recently delivered its 19th consecutive annual dividend increase, the longest current streak in the U.S. telecom sector. With more growth ahead, that streak should continue.

Big-time income boosters

Clearway Energy, Realty Income, and Verizon pay high-yielding dividends backed by strong financial profiles. They also have solid records of increasing their dividends, which seem likely to continue. That makes them great stocks to buy right now to boost your passive income.

I’m less tempted to dip into savings

A cool side benefit I’ve learned since setting up my HYSA is that I’m way less tempted to dip into my savings when it’s kept at a completely separate bank.

When all my money is piled together in one account, it’s easy to blur the line between spending and savings. But with a dedicated HYSA, the barrier is enough to keep me disciplined. I know the cash is there if I really need it, but it’s not staring me in the face every time I log into my regular banking app.

Plus, my high-yield savings account is FDIC insured up to $250,000. So I’ve got both mental security and financial security in one place.

It doesn’t cost me anything to keep

Fintech banks are amazing these days. They don’t nickel-and-dime you like traditional banks tend to do.

My HYSA has no monthly fees, no balance requirements, and no surprise charges that pop up randomly. So even if my bank balance drops to $0 for a few months, it won’t cost me anything to keep the account open. And all the interest I earn is pure profit.

The tech is better, too. My bank’s mobile app is super clean, simple, and doing transfers is really easy.

It’s still the best home for short-term cash

At the end of the day, my HYSA is where I keep money I can’t afford to risk. I don’t want to invest it because I might need it in a pinch.

Since it’s sitting idle most of the year, I want it earning the highest APY possible. Even if the Fed continues to drop rates and we get down to a measly 1.00%-2.00% APY in the next couple years, it’s still better than earning almost zero in a checking account.

Check out today’s best high-yield savings accounts and start earning more on your money.

A lot of people work really hard to build up a retirement nest egg. If you’re approaching your senior years with a large balance in an IRA or 401(k), you probably gave up a lot to accumulate that wealth. So now, it should buy you the dream retirement you deserve.

But saving for retirement is only half the battle. It’s important to make sure your investment portfolio is working for you once your career comes to an end and the time comes to start living off your savings. Here are some of the biggest mistakes retirees make with their portfolios — and how you can avoid them.

Image source: Getty Images.

1. Investing too conservatively

Workers are often told to load their portfolios with stocks to generate strong returns while they’re in the process of building savings. Once you retire, you may be inclined to scale back on stocks to unload some of your risk.

That’s definitely not a bad idea. But one thing you don’t want to do is maintain too conservative a portfolio during retirement, either. Limiting yourself to, say, 10% stocks could mean minimizing risk, but also minimizing the returns your portfolio continues to generate.

You need your savings to be able to keep up with and, ideally, outpace inflation during your retirement years. This is especially important given that Social Security’s cost-of-living adjustments often do a poor job of helping retirees maintain their buying power from one year to the next.

So to that end, don’t be so quick to ditch stocks once you’re retired. Instead, make sure the stock portion of your portfolio is well balanced. Also, you may want to favor dividend stocks over growth stocks, since they tend to be less volatile and generate steady income that could help offset other potential portfolio losses.

2. Tapping investments early on when they’re down

Some retirees have the unfortunate luck of seeing the stock market decline just as they’re getting ready to tap their portfolios. If that happens to you, and you withdraw from a declining portfolio, you could end up with an income shortfall throughout retirement.

When stock values are down, you need to sell more shares of the ones you own to get the income you’re after. That means you’ll be left with fewer shares by the time the market recovers.

The solution? Have about two years’ worth of living expenses in cash. That way, if the market tanks at the start of your retirement, or at any point during your retirement, for that matter, you may not have to sell investments at a loss to generate the income you need.

3. Forgetting about real estate

One of the most important things you can do in retirement is maintain a diversified portfolio. And to that end, one corner of the market you don’t want to neglect is real estate.

Property values don’t always rise and fall with stock values. So real estate can serve as a great hedge at a time when you’re reliant on your portfolio for income.

That said, you don’t need to own physical real estate, like a rental property, to benefit from this strategy. Instead, you could invest in residential REITs, or real estate investment trusts.

Residential REITs are companies that own residential properties. These could include apartment buildings or student housing complexes.

While investing in any type of REIT might allow you to diversify nicely, one positive thing about residential properties is that they’re somewhat recession-proof, since people will always need a place to live, regardless of the economy. That makes residential REITs a particularly compelling choice for a retirement portfolio.

After working hard to build your nest egg, you deserve to enjoy retirement to the fullest. Avoiding these investment mistakes could help you do just that.

Vanguard has a long history of offering a variety of great exchange-traded funds (ETFs) that not only give you exposure to a variety of investments, but also do it at a a very low cost. Most of Vanguard’s ETF charge industry-low expense ratios, allowing you to keep more of the investment returns you make.

But which Vanguard ETFs should you consider, if you’ve got $1,000 to invest today? Here are three great options — including one that’s one of my top holdings.

Image source: Getty Images.

1. Vanguard S&P 500 ETF: Buy a whole basket of stocks

Legendary investor Warren Buffett recommends that most investors put their money into S&P 500 index funds because they provide exposure to the biggest companies and do so at a very low cost. He even went so far as to recommend one such fund in a Berkshire Hathaway annual letter, noting, “I suggest Vanguard’s.”

Buffett was referring to the Vanguard S&P 500 ETF (VOO 0.59%), which invests in stocks in the S&P 500 and has the goal of closely tracking the index’s returns. This fund is personally one of my largest holdings and is a great option for investors who want to put money into stocks but would rather not have to make regular changes to their investment strategy.

Aside from being a great way to invest in a wide variety of stocks across all sectors, you’ll get the added benefit of one of the cheapest expense ratios available. The Vanguard S&P 500 ETF charges just 0.03% in annual fees, which works out to be just $0.30 for every $1,000 invested.

2. Vanguard Information Technology ETF: Ride the tech wave

The Vanguard Information Technology ETF (VGT 0.25%) is designed for investors who want to focus their investment strategy on technology companies, while still spreading out some of the risk. The fund tracks the MSCI US Investable Market Information Technology 25/50 index, which includes more than 300 small- and large-cap technology companies.

That’s important because it means the Vanguard Information Technology ETF helps you invest in some of the leading artificial intelligence stocks of today — including Nvidia and Palantir — while also giving you exposure to the smaller tech companies that could become big players in the coming years. The fund also charges a very reasonable annual expense ratio of just 0.09% — equal to $0.90 for every $1,000 invested — allowing you to keep more of the returns you make.

3. Vanguard Growth ETF: Grow with the biggest companies

If you want to focus your investments on more growth stocks, then the Vanguard Growth ETF (VUG 0.48%) may be the right fund for you. This ETF tracks the performance of the CRSP US Large Cap Growth Index and includes more than 300 of the largest U.S. growth stocks.

Growth stocks are often technology-focused in the U.S., so you’ll have plenty of exposure to trends like AI and cloud computing — through companies including Nvidia — but you’ll also have exposure to consumer stocks, including Eli Lilly. You’ll also pay a low annual fee of just 0.04% with the Vanguard Growth ETF, far less than the average 0.93% similar funds charge.

Just remember that in order for these ETFs to work their magic, you’ve got to hold onto them for the long haul. Dipping in and out of these funds won’t do you much good — the real gains will come as you hold them (and buy more) through boom and bust cycles.

Nvidia‘s (NVDA 0.27%) announcement that it will invest up to $100 billion in OpenAI is being hailed by the company as a massive bet on the future of artificial intelligence (AI). Still, investors should take a closer look at what is really going on here. The money OpenAI receives will ultimately be plowed right back into Nvidia hardware, mostly through Oracle‘s cloud buildout, where the two companies recently signed a massive $300 billion deal.

OpenAI plans to deploy Nvidia systems that need 10 gigawatts of power, which is equal to roughly 4 million to 5 million graphics processing units (GPUs). If that sounds like a lot, it is, as it’s about the same total number of GPUs that Nvidia will ship this year. The first $10 billion of Nvidia’s investment will be deployed as soon as the first gigawatt of capacity is up, and the rest will be rolled out in stages as new data centers come online.

Image source: Getty Images.

Circular financing

On paper, the OpenAI investment helps secure billions of dollars in future demand. But it’s worth remembering that Nvidia is now helping finance one of its biggest customers to keep buying its chips. This is called circular financing.

Nvidia is essentially funding its own demand. This is exactly what Cisco Systems (CSCO -0.93%) did during the internet bubble, when it provided credit to telecoms so they could buy more Cisco routers. Those sales looked great — until the capital dried up and the entire market collapsed.

This is also a defensive move by Nvidia. More and more of Nvidia’s largest customers are designing their own custom AI chips. Alphabet has its TPUs, Amazon has Trainium and Inferentia, and Microsoft is working on its own chip. OpenAI itself has been developing custom chips to bring its costs down, and before this announcement, it placed a $10 billion order with Broadcom for custom chips to be delivered next year.

This is the same threat that Nvidia saw play out in crypto, where ASICs (application specific integrated circuits) displaced GPUs for Bitcoin mining. Nvidia doesn’t want to see that happen again. By investing in OpenAI, it’s trying to keep one of its biggest customers locked into the Nvidia ecosystem.

This also comes at a time when the market is shifting more toward inference, where Nvidia’s moat is much smaller. Training large language models (LLMs) is where Nvidia’s CUDA software platform shines. However, inference isn’t as complex and doesn’t require the same deep software integration. That’s why hyperscalers (owners of massive data centers) are so motivated to build custom chips.

Inference is also a continuous cost, so the economics of cost per inference start to dominate the discussion. That’s why Nvidia also took a $5 billion stake in Intel and announced a collaboration on AI processors, as it’s also trying to stave off Advanced Micro Devices in the inference market and keep its grip on this next phase of AI computing.

Is this a house of cards?

There’s no question that Nvidia is in a dominant position right now, and the OpenAI deal only strengthens its near-term outlook. But its OpenAI investment clearly looks like a defensive move that adds risk. When Cisco used circular financing during the internet boom, it looked brilliant, until the customers it was funding went bust.

Both Nvidia and OpenAI are better positioned, but the principle is the same: Nvidia is using its balance sheet to keep demand high. That works as long as the AI boom keeps running, but it makes the company more exposed if spending slows or if hyperscalers switch to cheaper solutions.

Nvidia remains the key player in AI infrastructure, but this deal is a reminder that its growth isn’t risk-free. A lot of Nvidia’s success is now riding on an unprofitable company that is bleeding massive amounts of cash that it is financing. OpenAI hasn’t actually proven yet that it has a great business model, and if it fails, this becomes a house of cards that collapses onto Nvidia.

For much of the last 16 years, the stock market has been unstoppable. With the exception of the five-week COVID-19 crash in February-March 2020, and the roughly nine-month bear market in 2022, the bulls have been in firm control on Wall Street.

The catalyst for this ongoing outperformance primarily rests with Wall Street’s trillion-dollar businesses. Think Nvidia (NVDA 0.27%) and Apple, as well as newer trillion-dollar club members Broadcom and Taiwan Semiconductor Manufacturing, which is also known as TSMC.

All told, just 11 publicly traded companies have ever reached a $1 trillion market cap, not accounting for the effects of inflation, and 10 trade on U.S. exchanges. This includes all members of the “Magnificent Seven,” along with Broadcom, TSMC, and billionaire Warren Buffett’s company, Berkshire Hathaway.

Image source: Getty Images.

While Nvidia appears to have the inside path to retaining its current title as Wall Street’s most valuable public company by the turn of the decade, another Mag Seven member is ideally positioned to dethrone Nvidia and leapfrog the likes of Apple and Microsoft along the way.

Despite its AI dominance, Nvidia’s spot atop the trillion-dollar pedestal is far from secure

As of the closing bell on Sept. 24, artificial intelligence (AI) titan Nvidia clocked in with a market cap north of $4.3 trillion. It’s the first public company to have reached the $4 trillion mark, and is believed to have a chance to surpass a $6 trillion valuation, based on the price targets of Wall Street’s most optimistic analysts.

This optimism stems from Nvidia’s dominant position as the leader in AI graphics processing units (GPUs) deployed in enterprise data centers. Three generations of advanced AI chips — Hopper (H100), Blackwell, and now Blackwell Ultra — have enjoyed insatiable demand and extensive order backlogs.

Aside from clear-cut compute advantages, Nvidia’s AI hardware benefits from a persistent lack of AI GPU supply. As long as enterprise demand overwhelms available hardware, Nvidia is going to have no trouble charging a premium for its GPUs and netting a gross margin in excess of 70%.

While these competitive edges would imply that Nvidia’s spot atop the trillion-dollar pedestal is secure, historical precedent would beg to differ.

One of the prime threats to Wall Street’s largest public company is that every next-big-thing trend dating back more than three decades has eventually navigated its way through a bubble-bursting event early in its expansion. This is to say that investors consistently overestimate the early adoption and real-world utility of next-big-thing innovations. Though AI has undeniable long-term applications, most businesses are nowhere close to optimizing these solutions at present, or have yet to net a positive return on their AI investments.

Competition is something that can’t be ignored, either. Even with external competitors lagging Nvidia in compute ability, there’s a very real possibility of Wall Street’s AI darling losing out on valuable data center real estate and/or being undermined by delayed AI GPU upgrade cycles.

Many of Nvidia’s largest customers by net sales are developing AI GPUs to deploy in their data centers. Though these chips won’t be competing with Nvidia’s hardware externally, they’re considerably cheaper to build and more readily accessible. It’s a recipe for Nvidia’s competitive edge to dwindle in the coming years, and for Wall Street’s AI kingpin to cede its title as the most valuable public company.

Image source: Amazon.

This will be Wall Street’s most valuable public company come 2030

Although Apple or Microsoft would seem to be logical choices to reclaim the top spot that both companies have previously held, dual-industry leader Amazon (AMZN 0.78%) is the trillion-dollar stock that looks to have the best chance to become Wall Street’s most valuable company by 2030.

The operating segment that typically introduces consumers to Amazon is its online marketplace. According to estimates from Analyzify, Amazon’s e-commerce segment accounts for a 37.6% share of U.S. online retail sales. Amazon’s spot as the leading e-commerce giant isn’t threatened — although its operating margin associated with online retail sales tends to be razor thin.

While Amazon’s retail operations provide a face for the company, it’s a trio of considerably higher-margin ancillary segments that’ll be responsible for bulking up the company’s operating cash flow in the years to come.

Nothing has more bearing on Amazon’s long-term success than cloud infrastructure platform Amazon Web Services (AWS). Tech analysis firm Canalys pegged its share of worldwide cloud infrastructure spend at 32% during the second quarter, which is nearly as much as Microsoft’s Azure and Alphabet‘s Google Cloud on a combined basis.

AWS has been growing by a high-teens percentage on a year-over-year basis, excluding currency movements. The thinking here is that the inclusion of generative AI solutions and large language model capabilities for AWS clients will only enhance the growth rate for AWS.

As of the June-ended quarter, AWS was pacing more than $123 billion in annual run-rate revenue. Most importantly, AWS is responsible for almost 58% of Amazon’s operating income through the first half of 2025 despite accounting for less than 19% of net sales. Even if an AI bubble forms and bursts, application providers like AWS can weather the storm.

The other pieces of the puzzle for Amazon are advertising services and subscription services. When you’re drawing billions of people to your site monthly, it’s not difficult to command exceptional ad-pricing power.

It also doesn’t hurt that Amazon has landed exclusive streaming partnerships with the National Football League and National Basketball Association. When coupled with e-commerce shipping perks and exclusive shopping events, Amazon has plenty of pricing power with its Prime subscription.

Finally, Amazon is historically inexpensive. From 2010 to 2019, Amazon closed out each year between 23 and 37 times trailing-12-month cash flow. Based on Wall Street’s consensus, Amazon’s cash flow per share is forecast to grow from a reported $11.04 in 2024 to $27.52 in 2029.

In other words, Amazon is valued at only 8 times projected cash flow in 2029, which means it can reasonably add $2.5 trillion to $4 trillion in market value from here and still be trading at a significant discount to its average cash flow multiple during the 2010s.

Sept. 27 (UPI) — Howard Rubin, a former prominent bond trader, and his ex-personal assistant are facing charges of sex trafficking and transporting women across state lines for commercial sex acts over course of a decade.

Rubin, 70, was arrested Friday at his home in Fairfield, Conn, the Department of Justice said.

At a hearing, he pleaded not guilty and federal Magistrate Judge Peggy Kuo in Brooklyn, N.Y., ordered him held without bond. His attorney Benjamin Rosenberg had hoped for a $25 billion bond.

Rubin worked for Salomon Brothers, Merrill Lynch, Bear Stearns and billionaire George Soros‘ investment company from 1982 to 2015.

If convicted of sex trafficking, Rubin and his assistant, Jennifer Powers, 45, each face a maximum possible sentence of life in prison and a mandatory minimum sentence of 15 years in prison, DOJ said. If convicted of transporting women to engage in commercial sex acts, they face a maximum sentence of 10 years’ imprisonment on each count.

If Rubin is convicted of bank fraud, that charge carries a maximum of 30 years’ imprisonment.

Prosecutors said they feared Rubin was a flight risk and he was considering hiring a “hit man to target women who had filed a civil suit against him.”

Rubin had more than $74 million in a Cayman Islands account, prosecutors wrote in a letter to the judge, which is just a portion of his “extraordinary wealth,” including funds held in accounts overseas. The prosecutors also noted allegations of previous witness intimidation and victims that were “universally” afraid of him.

“Today’s arrests show that no one who engages in sex trafficking, in this case in luxury hotels and a penthouse apartment that featured a so-called sex ‘dungeon,’ is above the law, and that they will be brought to justice,” Brooklyn U.S. Attorney Joseph Nocella said in a statement.

“Human beings are not chattel to be exploited for sex and sadistically abused, and anyone who thinks otherwise can expect to find themselves in handcuffs and facing federal prosecution like these defendants,” she said.

Rubin’s hearing was delayed by a medical incident and then he was evaluated at a hospital after he had a stroke in July, according to his attorney.

At least $1 million of Rubin’s money was spent on the alleged sex trafficking, prosecutors said. The incidents occurred from at least 2009 through 2019, according to the indictment, with the victims were listed as “Jane Does” in the filing.

In addition to Jane Does listed in the charges, federal prosecutor Tara McGrath said that there are dozens more unnamed victims and that there are 10 other people who helped Rubin carry out the scheme who have not been charged, the New York Times reported.

In the 10-count indictment obtained by CNBC, Rubin is accused of participating in sex acts with women in luxury hotels in New York City. He later created a “sex dungeon” — which included equipment for bondage and a device to “shock or electrocute women” — in a leased penthouse apartment in Manhattan near Central Park, according to the indictment. The apartment, it said, was rented for $18,000 per month from 2011 to 2017.

“During many of these encounters, Rubin brutalized women’s bodies, causing them to fear for their safety and/or resulting in significant pain or injuries, which at times required women to seek medical attention,” the indictment read.

The women were allegedly given drugs and alcohol before their sex acts, and Rubin the required the women to sign nondisclosure agreements.

The agreements “purported to require the women to assume the risk of the hazards and injury of the BDSM encounters with Rubin, prohibit the disclosure of information about the BDSM sex with Rubin and require the payment of damages in the event of a breach,” the Brooklyn U.S. Attorney’s Office said.

“Rubin used the NDAs to threaten the women with legal consequences and public shaming if they sought legal recourse,” the office said.

Powers, who allegedly spent $1 million of Rubin’s money for “operating and maintaining the trafficking network, was arrested at her home in Southlake, Texas. She is scheduled to appear at a hearing in the Northern District of Texas next week and then will be arraigned in the Eastern District of New York.

In the indictment, Rubin and Powers discussed electrocuting a tied-up woman’s genitals.

“I don’t care if she screams,” he wrote, along with the laughing face emoji, according to the indictment.

“This was not a one-man show,” Harry T. Chavis, special agent in charge in New York, said in a statement. “While Rubin dehumanized these women with abhorrent sexual acts, Powers is alleged to have run the day-to-day operations of the enterprise and got paid generously for her efforts.”

The women would receive $5,000 per encounter, but if he was left unsatisfied, they would be paid several thousand dollars less, according to prosecutors. Powers arranged women’s flights to New York from LaGuardia or John F. Kennedy International airports.

This is not the first time Rubin has been in legal trouble over sex abuse or sex trafficking allegations.

In November 2017, three Playboy models sued him, claiming they were beaten, sexually abused and rape by him in New York City in 2016.

In April 2022, a civil jury in Brooklyn federal court found Rubin guilty of sex trafficking six women. He was ordered to pay $3.85 million in compensatory and punitive damages. Powers was not found liable in this case.

Rubin’s longtime wife, Mary J. Henry, accused him of sexual abuse in divorce papers filed in 2021. They were married in 1985.

The U.S. Attorney’s Office didn’t comment to CNBC on why it was eight years between the first lawsuit and a criminal indictment.

Michael Lewis‘ book, Liar’s Poker, examined the workings of Solomon Brothers in the 1980s.

“Of all the traders, Rubin displayed raw trading instinct,” Lewis wrote about Rubin, who joined the firm in 1982.

After working for Salomon Brothers, Rubin went to Merrill Lynch in 1985. He was fired from Merrill Lynch in 1987 after making unauthorized trades that contributed to $250 million loss from mortgage securities.

Rubin later became a fund manager at Bear Stearns and then Soros Fund Management.

A federal jury on Thursday found hip-hop producer Metro Boomin not liable in his civil sexual assault case, after nearly a year of litigation. He is feeling more than relieved.

“I’m grateful and thankful to God that I can finally put all of this nonsense behind me,” the Grammy-nominated “Like That” musician said in a statement shared on Instagram after the verdict.

The jury sided with the 32-year-old artist, whose real name is Leland Tyler Wayne, after a brief trial that began Tuesday. He was cleared in all four actionable claims brought by Vanessa LeMaistre, who first raised her allegations in a lawsuit filed in Los Angeles in October 2024.

LeMaistre said in her initial lawsuit that she and Wayne struck up a connection in spring of 2016 amid their mutual grief: The musician had broken up with a longtime girlfriend and LeMaistre had lost a 9-month-old son “as a result of a rare and fatal disease,” according to court documents. LeMaistre alleged the assault occurred that September after he invited her to a recording studio to watch him work.

LeMaistre described the alleged incident as the “second worst thing that ever happened to her,” other than the death of her child. She also accused Wayne of impregnating her through rape and said she underwent an abortion.

The producer’s legal team quickly denied the allegations last October and dismissed the complaint as a “pure shakedown.” Attorney Lawrence C. Hinkle II echoed those sentiments Thursday in a statement shared after the verdict.

“We are extremely grateful for the jury’s careful consideration of the evidence and for reaching the correct decision,” Hinkle said. “The allegations against Mr. Wayne were frivolous and unequivocally false. Mr. Wayne has endured serious and damaging accusations, and today’s verdict confirms what he has always said — the plaintiff’s claims against him are completely fabricated.”

After Thursday’s verdict, LeMaistre attorney Michael J. Willemin said that although “the legal system is often stacked against survivors, our client showed unwavering fortitude throughout this trial.”

Willemin added: “We are disappointed in the outcome but are proud to represent Ms. LeMaistre and believe that the verdict will ultimately be overturned on appeal.”

Though the case — which was moved from L.A. County Superior Court to California Central District Court in December — ended in victory for Metro Boomin, he said in his statement it also resulted in a “a long list of losses.” He lamented the money and time “wasted” in the litigation process and said there had been an “incalculable amount of money and opportunities that did not make it to me or my team during this time.”

The Missouri-born artist also spoke about the case’s toll on his personal life, writing that “the trauma my family and I have endured during this dark period can never be forgiven.” He detailed adopting his youngest siblings and expressed concern over their possible online exposure to the case.

“I’m disappointed in not only the plaintiff but the janky lawyers who made the made the conscious decision to take on this suit, even though it was evident long ago that these claims had no legs or merit and would not end up going anywhere,” he said, later expressing gratitude for his own legal team.

Metro Boomin rose to prominence in the mid-2010s, working with rap stars including Young Thug, Future and Nicki Minaj. Over the years, he has also racked up collaborations with Drake, Kanye “Ye” West, Kendrick Lamar, SZA and Lil Wayne. Most recently, he reunited with Young Thug as a producer for Thug’s new album, “UY Scuti,” the rapper’s first since his release from Georgia’s Fulton County Jail last October.

With the case behind him for now, Metro Boomin concluded his statement by sending “peace and love to the actual victims out there as well as the innocent and accused.”

If you’re ever in need of a new stock pick, you can always borrow an idea or two from Berkshire Hathaway‘s (BRK.A 0.55%) (BRK.B 1.06%) portfolio of holdings hand-picked by Warren Buffett himself. And you should. Given enough time, Berkshire shares consistently outperform the broad market largely due to the conglomerate’s investments in publicly traded companies.

Not every Berkshire Hathaway holding is always a great buy, however. Sometimes they’re trading at too steep of a valuation for newcomers, and other times, they’ve just turned into clunkers.

With that as the backdrop, here’s a closer look at two Warren Buffett stocks you can feel good about buying today, but one name you might want to avoid until something big changes for the better.

Image source: The Motley Fool.

Buy: American Express

Many investors don’t realize that — through the attrition of other holdings as well as its own growth — credit card outfit American Express (AXP 0.55%) is now Berkshire Hathaway’s second-biggest stock holding, accounting for 17% of the outfit’s portfolio of publicly traded equities. Underscoring this bullishness is the fact that Berkshire also holds stakes in Visa and Mastercard, but has chosen to only hold much smaller positions in both.

Then again, it’s not difficult to see what the Oracle of Omaha has seen in AmEx since first establishing the position back in the 1990s. It’s not just a payment middleman like the aforementioned Mastercard and Visa. It operates an entire consumerism ecosystem, serving as the card issuer as well as the payment processor, while also managing a perks and rewards program that’s attractive enough for some members to pay up to $900 per year to hold the plastic. These perks include credit toward hotel stays and ride-hailing, cash back on grocery purchases, and discounted entertainment, just to name a few. Although some have tried, no rival has been able to successfully replicate this offering.

Of course, it’s worth pointing out that American Express’s cardholders tend to be a bit more affluent than average, and are therefore mostly unfazed by economic soft patches. As CEO Stephen Squeri pointed out of its Q2 numbers despite the turbulent economic backdrop at the time, “Our second-quarter results continued the strong momentum we have seen in our business over the last several quarters, with revenues growing 9 percent year-over-year to reach a record $17.9 billion, and adjusted EPS rising 17 percent.”

Buy: Kroger

It’s not a major Berkshire holding, and certainly not one that’s talked about much by Buffett (or anyone else, for that matter). But Kroger (KR -0.08%) is quietly one of Berkshire Hathaway’s best-performing stocks.

You know the company. With 2,731 stores producing annual sales on the order of $150 billion, Kroger is one of the country’s biggest grocery chains. Oh, it doesn’t grow very quickly, or produce a ton of profit; this year’s expected top-line growth of around 3% is only likely to lead to operating income of a little less than $5 billion. That’s just the nature of the well-saturated, low-margin food business.

What Kroger lacks in growth firepower, however, it makes up for in surprising consistency.

Although the volatile food business doesn’t exactly lend itself to it, not only has this company not failed to produce a meaningful full-year profit every year for over a decade now, but has roughly doubled its bottom line during this stretch. Making a point of remaining relevant by doing things like entering the e-commerce realm has helped a lot.

More important to would-be investors, although the grocer’s reported growth doesn’t seem all that impressive, the company’s found other ways to create considerable shareholder value. Its quarterly dividend payment has grown by a hefty 250% over the course of the past decade, for example, boosted by stock buybacks that have roughly halved the number of outstanding Kroger shares. In fact, reinvesting Kroger’s dividends in more shares of the increasingly scarce stock over the course of the past 30 years would have consistently outperformed an investment in the S&P 500 during this stretch.

Avoid: UnitedHealth Group

Finally, while Buffett was willing to dive into a small position in beleaguered health insurer UnitedHealth Group (UNH -0.43%) a few weeks back, you might not want to do the same just yet…if ever.

But first things first.

Yes, there’s some drama here. UnitedHealth shares have been beaten down since April, starting with a surprise shortfall of its first-quarter earnings estimates, followed by then-CEO Andrew Witty’s abrupt resignation for “personal reasons” in May. Then in July, the company confirmed that the U.S. Department of Justice was investing its Medicare billing practices. Its second-quarter earnings posted later that same month also missed analysts’ estimates due to the same high reimbursement costs that plagued its first-quarter results. All told, from peak to trough, UNH stock fell 60% in the middle of this year.

As Buffett himself has said, of course, you should be fearful when others are greedy, and greedy when others are fearful. Taking his own advice, he recently plowed into a stake in a long-established company that’s likely to be capable of overcoming all of its current woes. Berkshire now owns 5 million shares of UNH that are currently worth a little less than $2 billion.

Except, maybe this is one of those times you don’t follow Buffett’s lead, recognizing that UnitedHealth Group — along with the entire healthcare industry — seems to be running into these regulatory and pricing headwinds more and more regularly. UnitedHealth’s Medicare business ran into similar legal trouble back in 2017, for instance, while its pharmacy benefits management arm OptumRX was sued by the Federal Trade Commission just last year for artificially inflating insulin prices. It would also be naïve to not notice the federal government is increasingly scrutinizing every aspect of the nation’s healthcare industry, now that care costs have raced beyond reasonable affordability.

And for what it’s worth, although UnitedHealth has managed to continue growing its top line every year for over a decade now, actual operating profits and EBITDA stopped growing early last year, not counting the recent unexpected surges in its medical care costs.

UNH Revenue (TTM) data by YCharts

What gives? The entire healthcare industry may be at a tipping point, so to speak, and not in a good way. Although this wouldn’t necessarily be catastrophic for UnitedHealth, it certainly would undermine its value to investors. If nothing else, you might want to wait on the sidelines for the proverbial dust to settle before following Buffett into this uncertain trade.

Some companies seem like obvious slam-dunk investments. They have a combination of durable business models, visible growth profiles, and strong financials. Because of that, you don’t have to think twice when considering whether to buy these stocks.

Enbridge (ENB 0.04%), Brookfield Infrastructure (BIPC 2.58%) (BIP 4.92%), and Brookfield Asset Management (BAM 0.15%) stand out to a few Fool.com contributing analysts as no-brainer buys for 2025 and beyond. Here’s why they think these stocks will be great long-term investments.

Image source: Getty Images.

Enbridge has dividend investors covered today and tomorrow

Reuben Gregg Brewer (Enbridge): It is easy to get caught up in the fact that Enbridge has increased its dividend, in Canadian dollars, for 30 years and currently has a lofty 5.5% dividend yield. Those two facts do, indeed, make it a very attractive dividend stock.

But what about the business that backs the dividend? That’s where the real magic is here. Enbridge started out largely transporting oil through its fee-based energy infrastructure system. Looking at the direction the world was going, it started to add more and more natural gas transportation assets to its system, including regulated natural gas utilities. And, along the way, it dipped its toe into clean energy investments, with some sizable stakes in offshore wind farm assets in Europe. The trend is what’s important to note.

Essentially, Enbridge is a reliable dividend-paying energy stock that is changing its business along with the changing energy needs of the world. That is, in fact, the goal that management is pursuing. And it means that you, as a dividend investor, can comfortably own Enbridge even through the ongoing, likely decades-long, shift from dirtier fuels to cleaner ones.

The only drawback here is actually tied to the lofty dividend yield. Enbridge isn’t likely to be a fast-growing business, so the yield is going to make up a huge portion of your total return. But if you are focused on generating a large income stream from your investments, that probably won’t bother you much, if at all.

Strong earnings and dividend growth ahead

Neha Chamaria (Brookfield Asset Management): Brookfield Asset Management is among the largest alternative asset managers in the world, with over $1 trillion of assets under management (AUM). It’s a global powerhouse, operating in over 50 countries across five verticals: infrastructure, renewable power and energy transition, real estate, private equity, and credit. Here’s why the stock has caught my attention: The company has just announced bold growth plans through 2030.

Of its $1 trillion AUM, roughly $560 billion is fee-bearing capital. That’s the portion of its assets on which Brookfield Asset Management charges management fees, also its primary source of revenue. As of Dec. 31, 2024, 87% of that fee-bearing capital was perpetual (fees coming from its permanent capital vehicles and funds) or long-term (fees locked in for at least 10 years). That makes Brookfield Asset Management’s revenue and cash flows incredibly stable and predictable and also supports dividend growth. Brookfield Asset Management last increased its dividend by 15% earlier this year.

Brookfield Asset Management expects to more than double its fee-bearing capital base to $1.2 trillion by 2030, driven by growth in existing businesses and new verticals like insurance and wealth management. The company is off to a strong start in 2025, with its fee-based earnings rising 16% year over year in the second quarter. Notable recent announcements include an agreement with tech giant Google to deliver up to 3,000 megawatts of hydroelectric capacity in the U.S. during the quarter and a $10 billion investment in Sweden to develop artificial intelligence infrastructure.

With its earnings stability and massive growth targets, Brookfield Asset Management is a rock-solid stock to buy for 2025 and beyond.

Focused on capitalizing on these megatrends

Matt DiLallo (Brookfield Infrastructure): Brookfield Infrastructure is a leading global infrastructure investor. Part of the Brookfield Corporation family, along with Brookfield Asset Management, this entity owns and operates a diversified portfolio of crucial infrastructure assets across the utility, energy midstream, transportation, and data sectors.

The company focuses on deploying capital into infrastructure that capitalizes on three major global investment megatrends: digitalization, decarbonization, and deglobalization. The company sees a multitrillion-dollar investment opportunity ahead across these themes, particularly in infrastructure to support AI, such as data centers, semiconductor fabrication facilities, and natural gas power plants. Brookfield has already committed to investing significant capital to capitalize on this opportunity, including building a backlog of $5.9 billion of data infrastructure capital projects that it expects to complete over the next two to three years.

Brookfield has also secured several acquisitions this year. It’s investing $1.3 billion to buy interests in a U.S. refined products pipeline system, a U.S. bulk fiber network provider, and a North American railcar leasing portfolio. These new investments will boost its cash flow as the deals close in the coming quarters.

Brookfield’s powerful combination of organic growth drivers and acquisitions-driven expansion positions it to deliver more than 10% annual funds from operations (FFO) per share growth in 2025 and beyond. That will drive Brookfield’s ability to increase its more than 4%-yielding dividend by 5% to 9% annually. This compelling mix of income and growth makes Brookfield a no-brainer stock to buy and hold for the long term.

With the year winding down, older investors with money sitting in ordinary IRAs may soon need to withdraw at least some of it. It’s called a required minimum distribution, or RMD.

What’s the minimum? It depends on your age and the total market value of your retirement accounts as of the end of calendar 2024. Here’s the required minimum distribution on $50,000 worth of retirement savings at a range of ages, beginning with age 73, which is when RMD rules first kick in.

• 73: $1,886.79 (3.77%)
• 75: $2,032.52 (4.06%)
• 80: $2,475.25 (4.95%)
• 85: $3,125.00 (6.25%)
• 90: $4,095.36 (8.20%)
• 100: $7,812.50 (15.62%)

The size of the required — and taxable — distribution grows as you age, maxing out at 50% of the prior year’s ending balance for anyone lucky enough to reach the age of 120.

Important RMD rules

There are some noteworthy rules to consider here. Chief among them is that RMD rules only apply to ordinary IRAs like contributory/traditional IRAs, 401(k) accounts, or 403(b) accounts. They don’t apply to Roth IRAs.

Image source: Getty Images.

It’s also worth noting that you don’t necessarily need to take an RMD from each and every IRA you own. You can combine the value of all your ordinary IRAs and take a distribution from just one. And you can do the same for 403(b) accounts, although you can’t mix and match 403(b) and traditional IRA accounts. One key exception is 401(k) accounts; you must take your calculated minimum distribution from each and every one, assuming you own more than one.

As for timing, although your very first required minimum distribution doesn’t need to be completed until April 1 in the year after you turn 73, subsequent RMDs must be completed by the end of the calendar year. Just bear in mind that waiting until the last minute to take your first RMD means you’ll be taking two taxable distributions in the same tax year.

As someone who’s lived in and visited family throughout the Inland Empire for years, I have seen firsthand the rapid growth that has changed the region.

When I travel to Yucaipa nowadays, the orange groves of my youthful weekend visits have long since been replaced by housing developments as the town has nearly doubled in 30 years.

My colleague Terry Castleman has been analyzing the demographic changes taking place in California but he recently took a deep dive into the explosive growth of income in the Inland Empire, in particular the south desert portion of Riverside County.

Castleman, a data reporter, noted that two of the top three communities that saw the greatest growth in average income in the state between 2017 and 2022 were in the Coachella Valley, perhaps best known for hellish summer temperatures, Palm Springs and the Coachella Valley Music & Arts Festival.

For this analysis, The Times considered only communities with more than 3,000 tax returns. I’ll address the cities with fewer returns shortly.

Thousand Palms saw average incomes rise more than 3.5 times over that span, from $12,700 in 2017 to nearly $45,000 three years later. In nearby Indian Wells, incomes nearly doubled, from $139,000 to $256,000.

Castleman analyzed what was happening in his full article. Let’s look at some of those findings.

The Coachella Valley is experiencing a desert bloom

Income levels in Thousand Palms were far lower than in Indian Wells — but each is getting richer from a regionwide perspective, said Kyle Garman, an agent for Keller Williams who has sold real estate in the Coachella Valley for eight years.

Part of the story is attributable to remote work, he said, but the valley has also undergone a shift from being primarily a tourist destination to a place to settle down.

“It’s not just Palm Springs, it’s not just people coming for the festivals, it’s the whole valley,” Garman said.

Before the COVID-19 pandemic, home prices were much lower and only about 35% to 40% of residents stayed for the hottest months of the year, he said. As more attractions and infrastructure have become available to residents, though, “people are sticking around more.”

So, who is moving in?

The average California household has a net worth between three and six times their adjusted gross income, meaning that the average Indian Wells resident probably became a millionaire between 2017 and 2022 as average household income skyrocketed to $256,000 from $139,000.

In the Coachella Valley, “the money’s coming from all over,” Garman observed. When the housing market was most competitive, around 2022 and 2023, cash buyers flooded in.

Now, they’re high earners who have relocated to towns that were formerly less tony. “This is the new norm,” he said.

Garman pointed to a number of new Coachella Valley attractions that were drawing families — the Firebirds professional ice hockey team and Disney’s Cotino housing development.

Thousand Palms is unincorporated, drawing homeowners because, as one businessperson there put it: “Taxes are more reasonable, you have fewer regulations when you want to build.”

Notes that didn’t make Castleman’s cut

When Castleman looked at the income changes in smaller towns, he found some intriguing data.

He discovered staggering income jumps in towns like Helm, an unincorporated Fresno County village that has about 200 residents.

Between the 2017-2022 period, Helm saw incomes grow by 10 times, reaching near $200,000.

Castleman said many smaller towns throughout the state are disproportionately impacted by the moves of one or a handful of “big fish.”

“The experts told me that there was likely a big farm owner who reported huge losses one year and then huge gains the next year,” he said. “So, these towns can have wild fluctuations.”

For more, check out Castleman’s full story.

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Have a great weekend, from the Essential California team

Jim Rainey, staff writer
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How can we make this newsletter more useful? Send comments to [email protected]. Check our top stories, topics and the latest articles on latimes.com.

United Parcel Service (UPS 1.38%), which usually just goes by UPS, has a huge dividend yield of 7.9%. Many investors are likely attracted to it as a dividend stock, but that’s a risky call. It is more appropriate to see this package delivery giant as a turnaround stock. And if that’s how you view it, now could be the time to hit the buy button.

What UPS does is hard to do

Without getting into the logistical details, moving packages quickly and cost-effectively is very difficult. Even after huge capital investments in its own delivery service, Amazon still uses UPS. But Wall Street has a habit of going to extremes, which is a big part of why UPS could be an attractive turnaround stock.

Image source: Getty Images.

During the pandemic, package demand spiked. Investors extrapolated that demand far into the future, bidding up UPS’ stock price. Demand slowed, and UPS’ stock price crumbled when the world learned to live with COVID-19. UPS chose to start a major business overhaul as demand was returning to normal levels. The goal is to increase the use of technology to cut costs and to refocus on the company’s most profitable business lines to increase profit margins.

This is a multiyear effort with material up-front costs. And exiting low-margin business will lower sales even as it helps improve profitability. (Notably, UPS has chosen to proactively reduce its business relationship with Amazon.) Financial results have been ugly lately, which is what you’d expect. An over 97% dividend payout ratio, however, hints that most income investors should tread with caution.

However, there are positives starting to show through. For example, revenue per piece increased 5.5% in the U.S. business during the second quarter of 2025. That could be signaling that deeply out of favor UPS stock is turning a corner and is, thus, ripe for an upturn as investors get more confident in its business overhaul.

Maybe you can call Canada and Tesla (TSLA 3.94%) frenemies. The tension between the two entities has existed since Tesla allegedly manipulated Canada’s electric vehicle (EV) subsidy program. While Tesla believes it to be a misunderstanding and was later cleared of wrongdoing, it added to the political tension between the two nations, and added to the Canadian resentment toward Tesla CEO Elon Musk for then supporting the Trump administration.

It was a little messy, so it’s even more entertaining now that Canada might actually put more dollars in the pockets of Tesla. Here’s the situation.

What’s going on

Canadian automakers have been raising red flags and could be in for a bumpy ride if Canada’s electric vehicle (EV) mandate is enforced as currently described and EV sales don’t accelerate. Essentially, Canada’s EV sales mandate requires an automaker to ensure a certain percentage of new cars, SUVs, and light-duty trucks sold are zero-emission vehicles including hybrids.

Originally the mandate was supposed to start at 20% in 2026, but now it will begin in 2027 with the caveat that the initial target will be a challenging 27%. The percentage will rise steadily every year until 2035 when all new vehicle sales are intended to be EVs. For context, EV sales in Canada nearly reached 15% of total sales in 2024, but that was when the government was offering consumer rebates up to $5,000.

Once funding ran dry for the rebate in January, sales took a mighty plunge. The most recent data from Statistics Canada shows EV sales generated 7.7% of all new vehicle sales in July — a far cry from what’s going to be required to meet standards on average.

Image source: Tesla.

What are Canadian autos to do?

As most investors following the industry know, there’s a way to comply with these mandates by purchasing zero-emission credits from companies that have a surplus. Companies such as Tesla that only sell EVs and have no gasoline vehicle sales to offset, can simply sell their credits to needy gasoline-heavy automakers and pocket the money — it’s great business for pure EV makers. Zero-emission credit sales were instrumental during Tesla’s early years and still have been a major contributor to its financials.

The good news for Tesla is that Canadian automakers may not have an option other than to begrudgingly purchase from Tesla despite the ruffled feathers between the two entities. According to Canadian Vehicle Manufacturers’ Association president Brian Kingston, with 2026 models already being purchased, Tesla would be one — if not the only — automaker with a surplus of credits on hand to sell to other companies.

It also gets a little more complicated because as the targets become more challenging there will be more demand and less supply of these credits available, forcing some automakers to buy them ahead of time to be utilized when necessary. According to Kingston, estimates show over $1 billion has already been committed to this and could cost the Canadian industry more than $3 billion by 2030.

What it all means

Zero-emission credits have been a huge business for Tesla, and the company has generated billions and billions of dollars over the years selling them to needy automakers. Unfortunately for Tesla and other EV makers, changing policy in the U.S. has erased the need for these credits in the states.

In fact, Tesla was estimated to generate $3 billion from credit revenue in 2025 alone before the policy change knocked that estimate down by 40%. Tesla’s credit revenue is expected to plunge even further next year to $595 million before becoming irrelevant in 2027.

For investors, an extremely valuable Tesla revenue stream is about to dry up, unless Canada’s mandate stays as written. While it wouldn’t generate near the revenue the U.S. credit situation has, it would still be a welcome development as credit revenue in the U.S. fades rapidly — and Tesla could sure use a small win right now.

Investing in the stock market is one of the most surefire ways to build life-changing wealth, and the right investment can transform your savings.

Owning an exchange-traded fund (ETF) is a fantastic way to gain exposure to high-growth stocks with minimal effort on your part. A single ETF can contain dozens or hundreds of stocks, and you’ll own a stake in all of them by owning just one share of that fund.

If you’re looking for a high-powered ETF with a history of earning significantly above-average returns, the Vanguard Information Technology ETF (VGT 0.29%) could potentially turn just $100 per month into $2 million or more over time. Here’s how.

Image source: Getty Images.

A simple way to invest in tech stocks

The technology sector has a long track record of outperforming the market, and investing in a tech-focused ETF — like the Vanguard Information Technology ETF — can make it easier to invest in these stocks without having to research dozens of individual companies.

One of this ETF’s major strengths is its balance between industry-leading giants and smaller corporations. Around 44% of this fund is allocated to Nvidia, Microsoft, and Apple — the three largest holdings by a substantial margin. But it also contains an additional 313 stocks from all corners of the technology sector.

Major companies like Nvidia, Microsoft, and Apple are often more stable than their smaller counterparts. While they can still face significant volatility during economic rough patches, they’re very likely to recover and go on to see positive total returns over the long term.

Up-and-coming companies can be shakier than the industry titans, but these stocks also have more potential for explosive growth. If even one of them becomes the next tech powerhouse, investing now could set you up for substantial gains.

Building a $2 million portfolio

There are never any guarantees in the stock market, and past performance doesn’t predict future returns. That said, it can sometimes be helpful to look at historical returns to get an idea of roughly how much you might earn with a particular investment.

Over the last 10 years, the Vanguard Information Technology ETF has earned an average rate of return of more than 22% per year. For context, the market itself has earned an average return of around 10% per year over the last 50 years.

Again, this ETF may or may not continue earning 22% average annual returns. So to play it safe, let’s assume that going forward, you could earn either a 22%, 16%, or 11% average annual return. If you were to invest $100 per month, here’s approximately what you could accumulate over time.

Data source: Author’s calculations via investor.gov.

To build a portfolio worth $2 million or more, you’d need to invest consistently for around 30 years while earning returns in line with this ETF’s 10-year average. But even if you can’t invest that long or this fund underperforms in the future, you could still rack up hundreds of thousands of dollars over time.

Keep in mind, too, that if you decide to invest in this ETF, double-check that the rest of your portfolio is well-diversified. While this fund has a diverse assortment of tech stocks, investing in just one sector of the market — especially an industry as volatile as tech — increases risk.

Technology ETFs can supercharge your net worth with next to no effort on your part. By starting early and investing consistently, the Vanguard Information Technology ETF could turn small monthly contributions into millions.

When investors think about powerhouses in the semiconductor industry, the usual names that dominate the conversation are Nvidia, Advanced Micro Devices, and Broadcom. These companies are responsible for designing the high-performance chips and networking hardware powering next-generation data centers at an unprecedented scale.

Operating more quietly in the background, however, is Taiwan Semiconductor Manufacturing (TSM -1.17%). While TSMC (as it is also known) is less flashy than its peers in the race for artificial intelligence (AI) chips, the company’s supporting role is nonetheless mission-critical.

As the world’s largest chip foundry by revenue — with almost 70% market share — TSMC is the manufacturer behind many of the AI industry’s most advanced processors. Its dominance has left rivals like Intel struggling to catch up, with meaningful market share gains appearing more like a pipe dream than measurable reality.

But in a surprising twist, Tesla CEO Elon Musk recently highlighted a big break for one of those rivals, Samsung Electronics (SSNL.F 9.01%), giving its investors some much-needed optimism. The announcement raises an important question: Will Samsung’s latest win usher in a new era of growth and pose a serious challenge to TSMC’s supremacy?

Why Samsung’s deal with Tesla matters

In late July, Musk announced on X that Tesla had signed a $16.5 billion agreement with Samsung to produce its next-generation inference chip, known as the AI6. Samsung will be manufacturing these chips at a new foundry in Texas, strategically positioning the company closer to Tesla’s headquarters and reinforcing its footprint beyond South Korea.

Tesla’s upcoming innovations — most notably its Robotaxi platform and Optimus humanoid robot — will demand highly sophisticated chip designs and huge computing capacity to function. This makes securing advanced foundry services essential for the company’s ambitions in a rapidly evolving AI landscape.

Image source: Getty Images.

How does Samsung’s relationship with Tesla impact TSMC?

At first glance, a deal of this magnitude might look like a major setback for TSMC. The reality, however, is more nuanced.

Musk clarified that TSMC will manufacture the predecessor chip to the AI6 — aptly called the AI5. In other words, Tesla is deliberately engaging with multiple foundry partners as a strategic, cautious hedge aimed at reducing supply chain risk and ensuring redundancy.

While Samsung’s win provides a boost of credibility to its lagging foundry business, analysts at Morgan Stanley said that the deal is unlikely to meaningfully dent TSMC’s dominance or serve as a material headwind to its long-term revenue and earnings potential.

Moreover, as TSMC continues to invest in its own infrastructure here in the U.S., the company remains on secure footing to deepen its ties with AI’s biggest spenders even further.

Has Samsung delivered a checkmate against its fiercest rival?

Samsung investors have gained tangible proof that strengthens the company’s long-term prospects, but TSMC’s durable technological position remains supported by entrenched scale, advanced processor leadership, and deep customer relationships. For now, this deal underscores that Samsung can still compete for landmark contracts and carve out relevance in an industry where TSMC’s gold-standard reputation remains firmly intact.

At a more macro level, the deal also signals that as AI applications become increasingly more sophisticated, leading enterprises like Tesla are keen on maintaining choice by diversifying key manufacturing partners to ensure stability, flexibility, and supply chain resilience.

For investors, the larger takeaway is clear: Samsung’s relationship with Tesla illustrates that the company is capable of winning meaningful battles. Nevertheless, TSMC is still ahead.

Rather than a checkmate, this development looks more like a fleeting stalemate at best — a dynamic that will continue to evolve as global demand for next-generation chip architectures accelerates and further intensifies the foundry race.