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Stocks that pay big dividends can give your portfolio a big boost, but beware! Some high dividends could be … traps!

A yield trap is a type of dividend stock offering a very high yield. But the only reason its yield is so high is that the share price dropped significantly over a relatively short time (and is likely to stay down for a while), increasing the odds that the dividend will need to be cut (or even suspended altogether). Investors who buy in chasing the high yield can get hit with the double whammy of a dividend cut and a sharp share price drop as investors dump the stock.

Here are three stocks paying high dividends that look very risky right now, and one high-yielding stock that’s a much safer pick.

Image source: Getty Images.

At-Risk Dividend No. 1: LyondellBasell (current yield: 10.4%)

Industrial chemical and materials companies like LyondellBasell (LYB -1.76%) have had a rough few years. Prior to the COVID-19 pandemic, these companies could count on steady, if slow-growing, demand for their products, which include construction materials, lubricants for industrial machinery, automobile coatings, consumer packaging, and other industrial products.

Usually, this diversified customer base would prevent a slowdown in one sector from affecting a company like LyondellBasell’s bottom line too much. However, the sectors that rely on these products the most — automotive, construction, and manufacturing — are in a multi-year slump.

This has hurt LyondellBasell’s bottom line. Trailing 12-month net income has collapsed by 96.7% over the past three years and free cash flow has dropped by 91.6% to $453 million. Considering that dividends are paid out of free cash flow, and the company’s current dividend payouts add up to $1.72 billion per year, investors should be concerned about dividend sustainability.

The company is clearly hoping it can power through. It has launched a “Cash Improvement Plan” and sold some assets in an effort to “support shareholder returns.” But with just $1.7 billion in cash left on its balance sheet, it won’t be long before the company has to either turn to borrowing to support its dividend — which isn’t sustainable over the long term — or cut it, like…

At-Risk Dividend No. 2: Dow (current yield: 5.8%)

LyondellBasell’s fellow chemical company Dow (DOW -1.36%) is facing the same headwinds, but has fared even worse, with earnings and free cash flow that both turned sharply negative in the most recent quarter.

Like LyondellBasell, Dow’s dividend yield crept above 10% as its share price dropped by more than 60% from its highs. However, with negative cash flow eating into the company’s balance sheet, Dow ripped off the bandage and cut its quarterly dividend in half, from $0.70/share to $0.35/share.

It’s ironic that even after that major cut, Dow still has a higher yield than most other companies. But if the industry doesn’t pull out of the slump it’s currently in, further cuts could be coming.

At-Risk Dividend No. 3: UPS (current yield: 7.8%)

In a case of “same song, different beat,” shipping and logistics giant UPS (UPS 0.43%) has seen a post-pandemic collapse in net income (down 50% in the last three years) and free cash flow (down 65%), as the pandemic-era delivery boom — for which UPS made major capacity upgrades — fizzled. Investors responded by sending shares down 57% from their highs.

With dividend payouts of $5.4 billion outstripping the company’s trailing cash flow of $3.5 billion, and tariffs expected to reduce shipping and delivery volume even further in the near term, the company’s $6.3 billion cash hoard may not last long enough to avoid a cut, although CEO Carol Tome is trying to. “You have our commitment to a stable and growing dividend,” she said on the most recent earnings call, but investors should remember that dividend policy can change without warning.

Safe Dividend: MPLX (current yield: 7.6%)

If high dividends are what you’re after, why pick UPS’ risky 7.8% yield when you could get a nearly identical 7.6% yield that’s much more secure? Midstream energy company MPLX (MPLX -0.48%) offers just such a payout.

MPLX operates pipelines, storage units, and shipping terminals for the oil and gas industry. As a master limited partnership (MLP), it gets favorable tax treatment in exchange for paying out almost all of its cash flow as dividends to investors. The only drawback to MLP ownership is some increased reporting at tax time if you hold your MLP shares in certain types of accounts.

Unlike the other three companies listed here, MPLX’s net income and free cash flow have only been growing over the past three years. Better yet, so has its dividend payout. But it still has plenty of dividend coverage, with its distributable cash flow currently 1.5x higher than its payouts, meaning MPLX has ample room to address a potential business slump without cutting its dividend.

That’s the kind of peace of mind you won’t get from LyondellBasell, Dow, or UPS right now, and why MPLX is a better choice for most dividend investors.

When Home Depot (HD -0.68%) talks, the stock market listens. The blue chip Dow Jones Industrial Average component is a bellwether for consumer spending and the housing market.

In recent years, Home Depot’s results have disappointed. Earnings have been falling, and fiscal 2025 same-store sales are expected to grow by just 1%. But that sluggish growth could quickly fade into the rearview mirror.

In an effort to maximize employment and reduce inflation to 2% over the long run, Jerome Powell and the Federal Reserve are cutting interest rates by 0.25% — citing a weak labor market and “somewhat elevated” inflation. More cuts could be in the cards to boost consumer spending and avoid a recession. Although artificial intelligence (AI) has been driving the stock market to record highs, U.S. gross domestic product growth is projected to be just 1.6% in 2025 and under 2% every year through 2028 — illustrating weakness in the broader economy.

Here’s why an interest rate cut is great news for Home Depot, and whether the dividend stock is a buy now.

Image source: Getty Images.

A much-needed jolt

Higher interest rates have a significant impact on consumer spending, particularly on discretionary goods, services, and travel. When money is more readily available for borrowing, consumers may opt for a car loan or a mortgage because the monthly payment is lower. Or they may finance a home improvement project. In this vein, lower interest rates can lead to an increase in renovation projects, which benefits Home Depot.

There’s a big difference between going to Home Depot for a few spare parts to fix an appliance and redoing an entire room or section of a house. And Home Depot’s poor results suggest that a lot of customers are putting off big projects until conditions improve.

On its August earnings call (second quarter 2025), Home Depot said that lower interest rates would help boost demand and provide relief for mortgages. Home Depot CEO Ted Decker said the following:

When we talk generally though to our customers, each of our sets of consumers and pros, the number one reason for deferring the large project is general economic uncertainty, that is larger than prices of projects, of labor availability, all the various things we’ve talked about in the past. By a wide margin, economic uncertainty is number one.

The prospect of good-paying jobs and lower interest rates could certainly give Home Depot’s residential business a lift. However, the company has also been investing heavily in its professional and commercial contractor business. In June 2024, Home Depot completed its $18.25 billion acquisition of SRS Distribution, expanding its home improvement and construction business. SRS specializes in selling roofing products to contractors — which provides cross-selling opportunities with Home Depot’s retail outlets.

Home Depot made the SRS acquisition in the middle of an industrywide downturn — a sign that it is investing for the long term. SRS essentially makes Home Depot even more of a coiled spring for the next cyclical expansion period, potentially amplifying the benefits the company will feel from lower interest rates.

Taking a home improvement rebound for granted

The market is forward-looking and cares more about where businesses are headed than where they have been. And unfortunately for investors considering Home Depot, the stock is already priced as if interest rates will continue to fall.

As you can see in the following chart, Home Depot’s earnings were on the rise leading up to the pandemic, then entered a new phase during the pandemic as consumers accelerated spending on do-it-yourself home improvement projects, driven by low interest rates.

HD data by YCharts

But Home Depot’s earnings have been ticking down in recent years even though its stock price is around an all-time high — suggesting that investors are looking past the company’s near-term struggles in anticipation of a recovery.

In February, Home Depot raised its dividend by the lowest amount in 15 years and issued a dire warning to investors about a prolonged downturn in the home improvement industry. So it could take several interest rate cuts to really move the needle on consumer spending at Home Depot.

In the meantime, the stock is on the expensive side, with a price-to-earnings ratio of 28.2 and a forward P/E of 27.7 compared to a 10-year median P/E of just 23. Meaning that Home Depot’s earnings would need to grow 20% faster than its stock price just for the valuation to come back down to historical averages over the last decade.

A quality company at a premium valuation

Home Depot is an excellent company, but it is already priced for a recovery. So the stock isn’t a screaming buy now.

The good news is that Home Depot could still be a good buy for long-term investors who believe in the company’s potential for store expansions, same-store sales growth, and that the SRS acquisition will pay off. If Home Depot enters a multiyear period of double-digit earnings growth, its valuation could quickly come down, making the stock more attractive.

Home Depot could also reaccelerate its dividend growth rate, building on its 16-year track record of consecutive annual dividend raises. Home Depot yields 2.2% — which is better than the 1.2% yield of the S&P 500.

All told, Home Depot isn’t a no-brainer buy now because the stock price has run up ahead of anticipated rate cuts. But it’s still a decent buy for long-term investors.

Costco Wholesale (COST -0.78%) is not only one of America’s favorite retailers. It’s also been a top retail stock to own over its history.

Over the last decade, it’s up 570%, easily outpacing the S&P 500‘s increase of 240%, and most investors would argue that Costco is lower-risk than the broad-based index. After all, the retailer is a classic defensive stock. As a consumer staples company, it sells primarily products that people need, like groceries, paper products, and health and beauty products. It’s also known for its buy-in-bulk bargain prices, which attract consumers in both good times and bad.

Costco has actually underperformed the market this year as it’s up just 4% through Sept. 19, pulling back from its recent peak. Is this a buying opportunity for the retail giant? Let’s take a look at the arguments to buy, sell, or hold Costco.

Image source: Getty Images.

Buy Costco

Costco is one of the most, if not the most, reliable retailers in the industry. It’s the leader in the membership-based warehouse retail sector, well ahead of competitors like BJ Wholesale and Walmart‘s Sam’s Club.

Costco regularly ranks among the top in customer satisfaction among retailers, and it has a strong renewal rate, at 93% in fiscal 2024 in North America and 90.5% globally.

Costco’s business model has also proven to be rock-solid in any market, and its low prices keep customers coming back. The company makes most of its net income through membership fees, essentially selling goods at near-cost to incentivize buying memberships.

That’s created a wide economic moat as it has grown its membership base by about 10% annually in recent years. Costco is also continuing to open new stores, expanding its footprint in the U.S. and internationally. Given the demand for new stores, as well as its growth in e-commerce, Costco’s growth runway appears to be longer than it is for most large retailers.

And given the stability of its business, Costco is a great bet to deliver steady growth, which is why it trades at a premium.

Additionally, Costco also has a track record of paying special dividends every three years or so, rewarding shareholders.

Sell Costco

Costco’s results speak for themselves. The company has a long track record of delivering steady same-store sales growth and expanding profits.

However, Costco’s growth seems to be generously priced into the stock at this point as it trades at a price-to-earnings ratio of 54, which is more expensive than about any other brick-and-mortar retailer.

Costco trades at a premium in part because the business is so reliable, but the stock’s growth has been driven over the years by multiple expansion, rather than just earnings growth. A stock can’t grow like that forever, and that might explain why Costco has underperformed the S&P 500 this year.

A good business alone isn’t enough of a reason to buy a stock. It has to trade at a good value as well.

Hold Costco

Costco is a classic buy-and-hold stock. While it could go through ups and downs according to market trends and company-specific events, it has a business model that should continue to endure despite pressure from e-commerce or potential economic turmoil.

Given the balance between the success of the business and the high valuation, holding the stock makes sense.

What’s the verdict?

Under normal circumstances, there’s a good argument for Costco being a long-term buy, but the stock is expensive enough, at double the price-to-earnings ratio of the S&P 500, that there’s better value to find elsewhere.

Holding Costco looks like the best option now. While it could underperform the market in the short or even medium term, it still looks like a winner over the long term.

Do you like low-cost stocks? If so, you’re not alone. So does legendary stock-picker and Berkshire Hathaway (BRK.A 0.20%) (BRK.B 0.24%) CEO Warren Buffett. His company is currently holding about four dozen value stocks, which collectively account for one-third of the conglomerate’s total market cap.

One of these names is absurdly cheap right now, and could make you measurably richer at some point in the foreseeable future. That stock? The Kraft Heinz Company (KHC -0.15%).

Surprised? Just hear me out.

Yes, that Kraft Heinz

Anyone keeping tabs on Kraft Heinz for the past few years might be more than a little shocked at the suggestion. While hopes were high for the merger of then-separate Kraft and Heinz that Warren Buffett helped orchestrate back in 2015, by 2017 it was clear the pairing was a bust. Buffett eventually conceded in 2019 that “we [Berkshire Hathaway] overpaid for Kraft,” although the assessment still understated the ultimate problem. Delivering that ugly truth is the fact that KHC stock — including Berkshire’s 325.6 million shares — continued to fall well after that confession, recently hitting a multiyear low that’s more than 70% below 2017’s peak.

What went wrong? A handful of things. Chief among them is that these two companies should have never been combined in the first place.

Corporate culture is a real thing. That’s arguably even more the case for older, bigger, and more complex companies like Heinz as well as Kraft, each of which also managed in-house departments like advertising and product development. Although Heinz’s then-CEO Bernardo Hees thought he had the right plan in place to successfully meld the two companies into one when he took the helm in 2015, in retrospect he clearly didn’t.

Hees was replaced by Miguel Patricio in 2019, who was replaced by Carlos Abrams-Rivera in 2023, neither of whom was able to rekindle the magic of either iconic brand. (That being said, in their defense it’s worth pointing out that both companies were struggling with relevancy and marketability prior to the merger. It may have been a lost cause no matter who was in charge.)

Fast-forward to today… or, at least earlier this month. After 10 torturous years, Kraft Heinz announced in early September that it would be splitting back into two separate publicly traded entities in an effort to unwind the disastrous merger.

It’s not quite a reversion back to pre-merger Kraft and Heinz. One of the companies will own Heinz, Philadelphia cream cheese, and Kraft macaroni and cheese. The other will own Oscar Mayer, Kraft singles cheese slices, and Lunchables. But this divvying up allows for at least a bit more focus than is currently possible. That can only help.

Shrinking its way to success

Not everyone agrees this is what the struggling combined company needs at this time. In fact, given the stock’s stumble following the announcement, most interested parties aren’t enthusiastic about the split. Buffett is reportedly disappointed as well, implying he thinks what’s not working can still be fixed without breaking the company up. Or if nothing else, as independent food industry analyst Nicholas Fereday noted, “The very fact they’re splitting up doesn’t change any of it and explain how they’re going to inject energy, excitement and clarity.”

And maybe these criticisms are fair.

Consider this, however: After more than five (and really, seven) years of poor performance, what could have been fixed arguably should have been and would have been fixed by now. If nothing else, separating the complex food behemoth into two better-focused players certainly can’t make matters any worse — once the disruption stemming from the split is in the rearview mirror anyway.

Image source: Motley Fool.

That’s the crux of the argument for stepping into a position of this beaten-down stock while its forward-looking dividend yield stands at 6.2% and the stock is priced at only about 10 times this year’s and next year’s projected per-share earnings. Most of any risk is already reflected here, leaving only upside even if that upside is modest for now.

Bolstering this bullish thesis is what’s likely to happen once Kraft Heinz becomes two companies and two stocks. Although it’s only speculation at this point, Mizuho Securities’ managing director John Baumgartner writes: “Asset sales (notably Oscar Mayer) could prune material underperformers and enhance portfolio growth prospects. We believe strategic acquirers exist, and that asset sales can prove accretive for shareholders.”

That being said, it’s worth adding that the sweeping bearishness surrounding this ticker now also makes it something of a contrarian prospect. That won’t keep it moving higher forever, but it could get it moving in that direction.

Not your typical buy-and-hold investment

It’s admittedly unusual to tout the breakup of a food giant as a means of unlocking value. Technology and industrial companies? Yes. But consumer staples? Not so much. It’s an industry that’s historically benefited from scale rather than been crimped by it.

The marketplace is changing, though. So are consumers. People are generally eating more pre-prepared and processed food these days, or eating more restaurant-prepared meals; the made-at-home meal space that Kraft Heinz operates in is a shrinking no-man’s land. And to the extent the company’s products are still relevant, technology and consumers’ interest in exploring brands other than the ones they grew up with are making it possible for smaller players to compete with giants like Kraft Heinz.

So, perhaps a breakup followed by the sale of some of both new companies’ brands to smaller, nimbler food companies is what’s needed to unlock the value that’s buried deep within Kraft Heinz.

Just don’t lose perspective on the kind of trade you’d be taking on. The Kraft Heinz Company is anything but a foundational holding for anyone’s portfolio. There’s no certainty here, but there’s sure to be plenty of volatility as long as splits, sales, and spinoffs are being considered.

Bitmine Immersion Technologies (BMNR -10.21%) didn’t have timing on its side with its latest round of capital raising. The cryptocurrency mining and holding company that concentrates on Ethereum saw its share price sag by more than 10% on Monday after it provided details of a share sale. That came on a trading day when the S&P 500 index closed up by 0.4%.

A big share and warrant sale

That morning, Bitmine divulged that it signed a purchase agreement for an institutional investor to buy slightly over 5.2 million shares of its common stock. That investor, which the company did not identify, is paying $70 per share for the stock.

Image source: Getty Images.

It is also receiving warrants to buy an additional pack of up to 10.4 million-plus shares at an exercise price of $87.50 apiece. Bitmine wrote that the “Potential future aggregate proceeds from the warrants represent approximately $913 million from cash exercises.”

All told, the company added, the total take from these issues could be roughly $1.28 billion.

Future 5% holder?

Bitmine has set a goal of acquiring 5% of total available Ethereum. Helpfully, and also on Monday, it offered an update on its holdings of the popular cryptocurrency. It wrote in a press release that its portfolio of Ethereum now tops 2% of supply.

That amount has ramped up quite considerably of late. Fueled by $20 billion in equity financing, in late August, the company snapped up almost 200,000 Ethereum. Prior to that buy-in, Bitmine held less than 1%.

Unfortunately for the company, its twin announcements came on the heels of a broad cryptocurrency sell-off this past weekend, which leaked into Monday trading. Timing is often critical in the ever-volatile cryptoverse; the bright side of this is that investor sentiment on Bitmine could improve quite drastically once Ethereum starts to head north in value again.

Lumen Technologies (LUMN 9.11%) saw a very healthy bounce in its stock price on Monday, following the telecom company’s latest operational update. Investors enthusiastically traded the tech and telecom stock up by 9% in reaction to the news, a figure that was more than good enough to beat the 0.4% rise of the S&P 500 (^GSPC 0.44%).

Powered by fiber

That morning, Lumen announced that so far this year, it’s added over 2.2 million new intercity miles to its existing fiber-optic network. This is a technology that allows for much faster data transmission speeds than more traditional methods. At such a pace, the company expects to have 16.6 million intercity fiber miles by the end of this year.

Image source: Getty Images.

Ultimately, the telecom’s goal is to wire America with 47 million intercity fiber miles by the end of 2028, which counts on a continued and rather aggressive build-out schedule. This is a foundational aim of its broader Big Build program.

Fiber is appropriate for our modern age, as it can handle the vast chunks of data required to power artificial intelligence (AI) functionalities.

Lumen quoted its executive vice president of enterprise operations Kye Prigg as saying, “AI is fueling a surge in network demand like we’ve never seen, and Lumen is building the backbone to meet it.”

A good-looking play on AI

Recently, many investors have cooled on the stocks most closely identified with the Great AI Boom. Currently, they’re looking for less obvious plays in companies that should benefit from the increased resource needs of the technology, and Lumen fits the bill. Assuming its fiber rollout goes at least close to plan, the company’s stock should stay in the good graces of the market.

Inclusion on a list of prestigious businesses was a key news item driving GoPro (GPRO 19.14%) stock’s price 19% higher on Monday. This double-digit rise easily topped the 0.4% increase of the benchmark S&P 500 (^GSPC 0.44%) that trading session.

A high degree of trust

GoPro has been selected for inclusion on Newsweek‘s 1,000-strong annual list of World’s Most Trustworthy Companies for 2025. This compilation is broken down into 23 categories, and the action camera maker was No. 5 in its category: appliances and electronics. All told, 33 companies comprised that category.

Image source: Getty Images.

The company wasn’t shy in touting its inclusion. In its press release touting this, GoPro mentioned that it’s now been included on Newsweek‘s list for two years in a row.

The magazine says its rankings are based on “extensive independent surveys,” of 65,000 people in 20 countries. Collectively, these individuals submitted 200,000 company evaluations based on a trio of criteria (customer, investor, and employee trust).

In GoPro’s press release, the company quoted founder and CEO Nicholas Woodman as saying, “This recognition underscores our commitment to product quality, innovation, and super serving our customers.”

Let’s keep our eyes on the ball

These days, GoPro is among the current crop of meme stocks that can rise or slide precipitously on any kind of news item. Newsweek isn’t the must-read periodical it used to be in the pre-social media days, but still, the company’s win is certainly a notable, positive development. Yet, investors should be more concerned with GoPro’s fundamental performance than the victories it scores in the media world.

Shares of UiPath (PATH 10.83%) rallied on Monday, with shares up 10.5% as of 3 p.m. ET.

UiPAth received a positive sell-side analyst note today, and was discussed extensively on Reddit message board Wall Street Bets (WSB) over the weekend. The combination sent UiPath shares rising, given that shares still trade some 85% below their 2021 all-time high.

Truist gives a thumbs-up, but WSB takes it from there

On Monday, Truist Financial analyst Terry Tillman wrote a note saying he came away “increasingly confident” in UiPath being able to meet or exceed its full-year outlook given on its recent earnings release, following a meeting last week with the company’s CFO, chief operating officer, and investor relations team. That being said, Tillman didn’t change his price target on the stock, leaving it at $12 per share and giving UiPath a hold rating.

While the commentary on full-year guidance is nice, the note by itself probably wasn’t enough to get the stock moving as much as it did today. Likely, the extra boost was provided by meme stock traders on the Reddit message board Wall Street Bets. Mentions of UiPath have increased recently, with one WSB monitor citing a 500% increase in mentions for the stock over the weekend. That likely came when one popular WSB Redditor posted Friday that his next big stock bet is UiPath. If other message board traders follow this poster’s bet, that could be spurring buying and short covering action on Monday.

Image source: Getty Images.

Do your own due diligence

UiPath is still down hugely from its 2021 highs, so if it can harness the power of AI to boost its automation software, the stock could stage a comeback. However, AI also has the potential to raise competition for UiPath, given that a number of AI companies, from the “Magnificent Seven” to OpenAI, are all looking to serve enterprises with AI automation tools.

That being said, that competitive threat has made UiPath trade rather cheaply for a software company, at just 4.3 times sales and 18 times next year’s adjusted earnings estimates.

Intel (INTC -2.59%) just had one of its best days in years, with its stock price surging after Nvidia (NVDA 3.70%) revealed it would take a $5 billion stake in the chipmaker and partner on new products. The stock price is now up about 50% on the year.

While the market loved the deal, it is worth taking a closer look at what this deal really means for Intel and whether this is a true turning point or just a short-term jolt.

Image source: Getty Images.

Why Nvidia is partnering with Intel

The collaboration between Nvidia and Intel appears largely aimed at rival Advanced Micro Devices (AMD 1.73%). AMD’s central processing units (CPUs) have been steadily taking share from Intel in both the data center and computer segments. Meanwhile, the company has started to fuse its graphics processing units (GPUs) and CPUs together, which is a direct challenge to Nvidia. However, thus far, most of its success in this area has been in gaming and computers and not in artificial intelligence (AI).

Nonetheless, Nvidia does not appear content to just dominate the massive data center market, and with this collaboration, it will look to address the laptop market as well. It also looks to stave off any advantages that AMD may gain in the data center market with a combined GPU/CPU chip, especially as the market moves more toward inference.

As such, the companies will look to combine Intel CPUs with Nvidia GPUs connected by NVLink, giving laptop buyers an integrated option that is much more powerful. Intel will also build custom x86 CPUs for Nvidia’s rack-scale servers, making Nvidia a major customer for its chips. That is a big win for Intel, given how much share it has lost to AMD in the data center over the past five years. For Nvidia, this is about making sure AMD doesn’t gain too much ground with its own combined CPU/GPU solutions.

While the $5 billion investment is a drop in the bucket for Nvidia, it does matter for Intel. Intel has been burning through cash trying to scale its foundry business and build new fabs in the U.S. and Europe. Its foundry operating losses were $3.2 billion last quarter, worse than a year ago.

The Nvidia capital injection, along with $9 billion from the U.S. government and $2 billion from SoftBank, gives Intel a $16 billion war chest to keep investing without wrecking its balance sheet. It also signals to the market that Nvidia sees Intel as too important to fail. The company may be a competitor in some markets, but Nvidia apparently wants a strong CPU partner to keep AMD from getting too much leverage in the CPU market.

Is Intel’s stock a buy?

Despite the stock’s huge jump, there are still plenty of risks with the Intel story. Intel’s core PC business remains soft, with client computing revenue down 3% year over year last quarter. Its data center and AI segment revenue grew just 4%, which was far behind the booming numbers from Nvidia and even AMD.

And while the company says its product roadmaps remain on track, its recent history is not good, with the company often missing deadlines or even scrapping products. In addition, Nvidia said that it is not giving up on the CPUs it has been developing with Arm Holdings.

Intel’s money-losing foundry business is also an issue, and it does not sound like Nvidia is riding to the rescue with regard to this part of its business. Nvidia has made clear that it is not moving away from Taiwan Semiconductor Manufacturing as its primary manufacturing partner. Intel doesn’t have the expertise or scale of TSMC, so Nvidia is still very reliant on the foundry leader.

While the partnership with Nvidia is a positive, it doesn’t solve all of Intel’s problems. It still needs to prove it can execute and that all the money it’s pouring into its foundry business will pay off. Gaining Nvidia as a foundry customer likely would have been a bigger deal, but that was not the case.

Meanwhile, after the jump in its stock price this year, the stock is no longer in the bargain bin. As such, I wouldn’t chase the rally.

Plug Power (PLUG 18.35%) stock took off Monday morning. Shares of the hydrogen fuel cell supplier peaked with an almost 15% gain in early trading. The stock remained higher by 11.9% as of 1:30 p.m. ET.

Plug develops and commercializes hydrogen fuel cell systems. Large companies including Amazon, Walmart, and Home Depot utilize Plug’s systems to power forklifts and other material handling equipment in distribution centers and warehouses.

A big announcement today has investors thinking Plug’s future business could be related to an even faster-growing segment.

Image source: Getty Images.

Plug Power can help fill growing power needs

Plug operates a green hydrogen production facility in Georgia that began liquid hydrogen shipments last year. That hydrogen fuel could soon be used for more than forklifts as the need to power data centers explodes.

An announcement today highlighted that growing need. Tech giant Nvidia announced plans to invest as much as $100 billion in ChatGPT developer OpenAI as part of a major data center buildout.

Plug Power stock has already been rising in recent weeks due to increasing power needs as well as the Federal Reserve’s decision to lower interest rates last week. The strategic partnership between Nvidia and OpenAI will enable OpenAI to build and deploy a minimum of 10 gigawatts (GW) of data centers used for artificial intelligence (AI) growth. That would be enough power to supply electricity to over 8 million homes.

Plug Power has seen strong demand for its GenDrive fuel cells, with total revenue increasing 21% in the most recent quarter. As more companies look to supply power for data centers, Plug Power could see sharply increasing demand.

Plug has reported big losses in the first half of 2025, though. Operating losses of over $350 million were an improvement over last year, but investors should still consider it a high-risk investment. If customers do line up for its fuel cells, however, there could be more upside to Plug Power stock.

Artificial intelligence (AI) is one of the most important growth opportunities for many technology companies in recent years. Sure, some companies don’t have clear avenues to benefit from the technology and are just benefiting from the hype, but there are plenty of companies that have experienced significant growth from artificial intelligence — and also make good investments.

If you’re in the market for a few AI stock ideas, here are two that could continue to benefit from the increasing demand for artificial intelligence hardware and software.

Image source: Getty Images.

1. Broadcom

Broadcom (AVGO -1.23%) makes application-specific integrated circuits (ASICs) for AI data centers that are custom to client needs. The company’s XPUs have become an integral part of many AI data centers, including ones built by Meta and Alphabet.

What makes Broadcom an intriguing opportunity is that it’s not just a bet on AI processors. In addition to its AI semiconductor designs, the company also sells networking products, like switches, and its purchase of VMware a few years ago makes it a formidable software player as well. Software sales rose 17% to $6.7 billion in the third quarter (ended Aug. 3), and now account for nearly 43% of the company’s total revenue.

The result of Broadcom’s software and hardware prowess is impressive sales and earnings growth. Total revenue rose 22% in Q3 to $15.9 billion and non-GAAP earnings popped 36% to $1.69 per share. Broadcom’s AI revenue jumped 63% in the quarter to $5.2 billion, and management expects continued growth in the current quarter — with AI sales estimated to reach $6.2 billion.

Management estimates that the company’s AI revenue could reach up to $90 billion annually by 2027, which means Broadcom and its investors may have more to look forward to.

2. Microsoft

Microsoft (MSFT -0.51%) has spent the past few years implementing OpenAI‘s ChatGPT bot into its suite of software — from Microsoft 365 to GitHub — and now has millions of customers using its Copilot AI. That’s been a boon to nearly all of the company’s services, and in Q4 (ended June 30), the company’s sales rose 18% to $76 billion and non-GAAP earnings popped 24% to $3.65 per share.

As important as its software offerings are, one of the biggest AI opportunities for Microsoft comes from its cloud computing service, Azure. Microsoft CEO Satya Nadella said on the company’s Q4 earnings call that Azure surpassed $75 billion in annual revenue — a 34% increase — and that, “We continue to lead the AI infrastructure wave and took share every quarter this year.”

AI infrastructure will continue to be important for the company for years to come, considering that Goldman Sachs research estimates that global AI cloud computing revenue could reach an estimated $2 trillion by 2030. Microsoft has 20% of the cloud computing market right now, and continues to take market share away from Amazon. With its current cloud computing position and the huge potential for AI cloud sales, Microsoft will likely continue to benefit from this emerging space for years to come.

Keep this in mind when investing in AI

There are some signs that the U.S. economy is slowing down. The August jobs report was worse than expected, spurring the Federal Reserve to cut interest rates at its most recent meeting.

But even if there’s a slowdown, it’s important to keep in mind that artificial intelligence is now mission-critical for many companies. That means that it’s unlikely that there will be a significant pullback in investments or focus by companies anytime soon. While nothing is certain, Microsoft and Broadcom look poised to ride the wave of growing demand for AI hardware and services.

Published on 22/09/2025 – 16:37 GMT+2
•Updated
16:48

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EU Trade Commissioner Maroš Šefčovič landed in Indonesia on Monday with the hope of closing a trade deal with Jakarta.

“The intention certainly is to finalise political negotiations for an EU-Indonesia trade agreement,” Commission deputy chief spokesperson Olof Gill said.

Last July, Commission President Ursula von der Leyen reached a political agreement with her Indonesian counterpart President Prabowo Subianto, confident of concluding the negotiation in September this year.

By closing such a deal, the EU would secure access to a new market of around 280 million people.

Bilateral trade in goods between EU and Indonesia reached €27.3 billion in 2024, with EU exports worth €9.7 billion and EU imports worth €17.5 billion. The bloc would also strengthen its position in the region, since Indonesia was the EU’s fifth-biggest ASEAN trading partner in 2024.

India considered a ‘tough’ negotiator 

Increasing trade access to new markets has become EU’s top priority following the decision of its historic trade partner the US to impose tariffs on EU imports.

Under a trade agreement reached in July by the Commission and the US administration, 15% tariffs apply to most EU goods, while 50% tariffs continue to apply to imports of EU steel and aluminium.

The EU has since stepped up efforts to strengthen economic ties with the rest of the world.

It reached a political deal with the Mercosur countries – Argentina, Brazil, Paraguay and Uruguay – in December, which if approved by EU member states and MEPs would create a free trade area covering 780 million people.

The Commission is also aiming to finalise a landmark agreement with India this year. The talks have accelerated at the beginning of September with the Agriculture file reaching the negotiation table. But as Šefčovič noted on 12 September, New Delhi is a “tough” negotiator, and a swift outcome is not guaranteed.

Point — counterpoint.

Last week, I highlighted the astounding share price rise of quantum computing company D-Wave Quantum (QBTS -5.84%), which gained a terrific 52% over the course of the week, ending with a nearly 12% rise on Friday alone. Unimpressed, I argued that in the absence of real revenue and profits, D-Wave Quantum looked like a “speculative” investment good only for “momentum traders” — and warned that “serious investors should probably stay away.”

On Monday, D-Wave stock is tumbling — down 6.7% through 10 a.m. ET — and it kind of looks like I was right to warn investors to steer clear of the profitless quantum computing stock.

But what if I was wrong?

Image source: Getty Images.

B. Riley loves D-Wave Quantum stock

That’s the question we need to consider after investment bank B. Riley raised its price target on D-Wave Quantum stock by an aggressive 50%, to $33 per share.

According to the bank’s analyst, quantum “technology and commercial progress is outpacing B. Riley’s prior positive views.” As TheFly.com reports, the Department of Energy’s National Labs in particular are pushing companies to develop commercial quantum computing products, and as a result, the “former frontier technology is rapidly advancing toward integrated capability and commerciality.”

Is D-Wave stock a sell?

So the government wants commercial quantum computing. Great. That does not mean it will get it. What’s (still) missing from B. Riley’s positive write-up are hard numbers suggesting D-Wave Quantum will enjoy significant revenue or any profits in the near future.

D-Wave stock now trades at an insane 412 times trailing revenue. And even valued on optimistic analyst estimates from S&P Global Market Intelligence, the stock trades at 28 times the revenue it might (or might not) collect way out in 2030 — and 1,701 times its projected 2030 earnings.

Even momentum traders should be scared of numbers like these.

Published on
22/09/2025 – 15:00 GMT+2

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Porsche’s share price slid over 7% on Monday afternoon after the firm slashed its profit outlook and postponed the rollout of an electric range.

Shares in Volkswagen, Porsche’s largest shareholder, were also down over 7% on Monday afternoon.

Porsche made the announcements on Friday, warning that the EV pivot would dent its operating profits by €1.8 billion this year.

It forecast a positive return on sales of up to 2%, down from a previous range of 5 to 7%. The announcement marked the fourth time this year the carmaker has lowered its guidance.

Porsche said that its new SUV series, previously intended to be all-electric, would “initially be offered exclusively as a combustion engine and plug-in hybrid model due to market conditions”.

The firm added that a new software platform for EVs, planned for the 2030s, would also be delayed. Simultaneously, Porsche’s existing combustion engine models will remain available for a longer period.

The Volkswagen Group, parent company of Porsche, said in a separate statement that it expected a €5.1bn hit to its operating profits this year because of Porsche’s poor performance.

Challenges for the industry in Europe

Europe’s carmakers are struggling with lacklustre demand for their EVs as Chinese competitors continue to lead on innovation and price, partly thanks to generous subsidies from Beijing.

Adding to their woes is an economic slowdown in China, denting consumer appetite in Asian markets, paired with vacillating political support for EVs in Europe.

Some firms, including VW, are hoping that the EU will allow for some flexibility on its pledge to ban combustion engine cars from 2035. On the other hand, a lack of clarity over this deadline, along with the rollback of consumer subsidies, is making it hard for companies to plan and make investment decisions.

Along with these challenges at home, proposed 15% tariffs from the Trump administration threaten to squeeze margins on EU exports to the US.

At the end of September, Porsche will leave the DAX, Germany’s leading stock index, after a dramatic slide in its share price. The firm’s stock has fallen over 30% this year.

In order to plug losses, the company is looking to cut jobs. In March, Porsche said it would axe around 1,900 posts by 2029 through natural turnover, restrictive hiring, and voluntary agreements. The company added that another 2,000 jobs would be lost through the expiration of fixed-term employment contracts.

On Sept. 18, the Federal Reserve cut its benchmark interest rate by 0.25%. It was the central bank’s first interest rate cut since December, as it looks to balance both sides of its dual mandate to achieve both stable prices and maximum employment.

Interest rate cuts benefit companies with more debt, including small-cap stocks. One value play that investors might be overlooking is regional banks. Here’s why.

Image source: Getty Images.

How interest rate cuts could benefit regional banks

Regional banks can benefit from interest rate cuts because their deposit costs typically adjust downward faster than loan yields. Most deposits are short-term and rate-sensitive, while many loans are fixed or repriced more slowly. This timing gap can boost net interest margins, easing pressure from prior rate hikes.

Lower rates also stimulate borrowing demand, boosting loan growth and fee income. Together, these dynamics can boost profitability and capital flexibility for regional banks during easing cycles. The primary beneficiaries are banks with strong deposit franchises, sensitivity to interest rates, and balance sheets heavily tilted toward lending.

PNC Financial is one regional bank with a relatively low deposit beta, supported by a stable, low-cost funding base and broad geographic reach, with a balance sheet tilted toward lending. By contrast, more asset-sensitive peers such as Zions Bancorp and KeyCorp, whose earnings were pressured by higher deposit costs in the rising rate environment, could see outsized margin recovery if funding cost sensitivity eases with rate cuts.

How investors could play the rebound

For investors, rate cuts create an opportunity in regional banks. As funding costs ease faster than loan yields, margins expand, credit demand rises, and earnings improve.

With valuations still compressed from pressures that emerged during the regional bank crisis a couple of years ago, regionals could deliver solid upside as monetary policy becomes a tailwind. For those interested, the SPDR S&P Regional Banking ETF (KRE -1.25%) is one way to play the rebound across a diverse group of over 140+ regional bank stocks.

Investors in energy stocks, such as Chevron (CVX -1.71%), always need to keep a close eye on energy commodity prices. That’s one significant reason why the stock is intriguing right now, as the share price has outperformed during a period of downward drift in oil prices. That makes it particularly appealing for passive income investors looking to buy Chevron shares for a 4.3% dividend yield.

Chevron offers protection

The chart below compares Chevron to two higher-quality energy exploration and production companies, Devon Energy and Diamondback Energy. While the others have performed in line with the declining price of oil, Chevron has outperformed.

WTI Crude Oil Spot Price data by YCharts

This is a valuable demonstration of what many income-seeking investors are looking for from energy stocks. While pure-play exploration and production stocks have demonstrated a correlation with the price of oil, the benefits of Chevron being a vertically integrated oil major are becoming increasingly apparent.

This means it combines upstream operations (exploration and production) with downstream operations (refining, marketing, and chemicals), and in doing so secures the cash-flow generation to support a growing dividend.

In addition, Chevron’s $53 billion acquisition of Hess Corporation has added significant international assets (in Guyana) that tend to have a lower break-even cost (the minimum price of oil a producer can cover costs in producing oil), and adds assets in the Bakken (North Dakota) to Chevron’s existing strength in the Permian (West Texas and New Mexico).

Image source: Getty Images.

What it means to investors

While Chevron will never be completely immune from falling oil prices, its downstream assets and efforts to diversify by acquiring lower break-even-cost international assets protect it from a moderated decline, which is good news for income-seeking investors. At the same time, it has upside potential coming from a possible increase in oil prices.

Warren Buffett was onto something when he said that his “favorite holding period is forever.” Like Buffett, I prefer to buy stocks that I hope to be able to own for a long time.

The “Oracle of Omaha” and I share another thing in common: We both like dividend stocks. Over the long run, dividends can boost total returns significantly. Do I own any “forever” dividend stocks? Yep. Here are three income stocks I never plan to sell.

Image source: Getty Images.

1. AbbVie

Dividend Kings, an elite group of stocks that have increased their dividends for at least 50 consecutive years, are natural candidates to buy and hold. I think AbbVie (ABBV 0.19%) is one of the best Dividend Kings of all. The drugmaker has increased its dividend for 53 consecutive years. Its forward dividend yield is 2.95%, which is lower than the average over the last five years only because AbbVie’s stock has performed really well.

AbbVie makes therapies that target over 75 conditions. Its top-selling products treat autoimmune diseases, cancer, and neurological disorders. With an aging population, I expect the demand for safe and effective drugs for these therapeutic areas will continue to grow over the next few decades.

Probably the biggest risk for an established pharmaceutical company like AbbVie is that it won’t be able to successfully navigate a patent cliff. However, AbbVie has already demonstrated its ability to handle key patent expirations with ease.

Humira was once the top-selling drug in the world, but its sales began to plunge after biosimilar rivals entered the U.S. market in 2023. AbbVie didn’t skip a beat, though. The company already had two successors to Humira on the market. It had also reduced its dependence on its top blockbuster drug through strategic acquisitions and internal development. I’m confident that AbbVie will be able to survive and thrive when future losses of exclusivity come, too.

2. Brookfield Infrastructure Partners

Brookfield Infrastructure Partners (BIP -0.52%)has grown its distribution by a compound annual growth rate of 9% over the last 16 years. Its distribution yield tops 5.5%. That’s the kind of income that many investors would love to keep flowing and growing. I know I do.

The good news is that Brookfield Infrastructure is targeting average annual distribution growth of between 5% and 9%. Even better news is that its business should support this growth.

This limited partnership owns cell towers, data centers, electricity transmission lines, pipelines, rail, terminals, toll roads, and other infrastructure assets on five continents. These assets generate steady cash flow, with 85% of Brookfield Infrastructure’s funds from operations (FFO) contracted or regulated.

What I especially like about Brookfield Infrastructure, though, is its overall strategy. The LP buys infrastructure assets when they’re valued attractively. It enhances the value of those assets by managing them well. And when the opportunity arises, Brookfield sells mature assets and recycles the cash into new investments. This approach should work for a long time to come.

3. Realty Income

Realty Income‘s (O 0.17%) forward dividend yield of 5.45% isn’t too far behind Brookfield Infrastructure’s distribution yield. The real estate investment trust (REIT) also has an impressive track record, with 30 consecutive years of dividend increases and 132 monthly dividend increases since listing on the New York Stock Exchange in 1994.

Real estate can be a volatile market. However, Realty Income has demonstrated remarkable stability through up and down economic cycles. It has even delivered a positive operational return (the sum of dividend yield and adjusted FFO) for 29 consecutive years.

Importantly, Realty Income’s portfolio is well diversified. It owns more than 15,600 properties spread across every U.S. state, the U.K. and seven European countries. The REIT’s tenants represent 91 industries.

I expect Realty Income to generate solid growth over the long term, too. Its total addressable market is around $14 trillion. Roughly $8.5 trillion of this opportunity is in Europe, where the REIT faces minimal competition.

Despite a difficult start to the year, Tesla (TSLA 2.27%) stock is now up by double digits in 2025. With a market cap of $1.3 trillion, however, many investors are wondering how much additional growth potential shares offer. Some analysts think that Tesla can become a $2 trillion business by the end of 2026. But there are some key risks to be aware of before loading up on Tesla stock.

Image source: Getty Images.

Tesla trades at a steep premium to Rivian and Lucid Group

The biggest risk facing Tesla right now is the stock’s premium valuation. Shares trade at a price-to-sales ratio of around 16. Other electric car stocks like Lucid Group and Rivian have stocks that trade between 3 and 7 times sales. According to this metric, Tesla trades at a 100% to 400% premium over the competition. That’s the case even though competitors like Rivian and Lucid have market caps under $20 billion, theoretically providing much longer growth runways versus Tesla’s $1.3 trillion valuation.

Of course, paying a high premium isn’t a problem if the company in question is growing fast enough to justify such a valuation. A company that trades at 16 times trailing sales, for instance, would trade at just 8 times sales one year from now if revenues grew by 100%. That is far from the case for Tesla, however.

This year, analysts expect Tesla’s sales to fall by around 5%. For comparison, Lucid and Rivian are expected to see sales grow by 61% and 6%, respectively. Next year, analysts do expect positive growth to return for Tesla, with 20% sales growth expected. But Lucid and Rivian are still expected to see higher sales growth than Tesla, with 93% and 33% expected sales growth, respectively.

So at least on a price-to-sales basis, Tesla shares trade at a hefty premium to both Lucid and Rivian even though its expected sales growth both this year and next year are below that of both companies. What’s up with that?

To be sure, competitors like Rivian and Lucid don’t have the scale or brand name recognition that Tesla does. But as mentioned, both also have arguably much more room to grow long term. The main differentiator is current or near-term growth, but long term growth potential in a new and exciting — but possibly overhyped — business segment: robotaxis.

Source: Getty Images

Robotaxis could become a $1 trillion business for Tesla

Analysts are very bullish on Tesla’s robotaxi dreams. The company launched a pilot version of its autonomous taxi service this summer in Austin, Texas. Additional cities like San Francisco may soon be on the way. Tesla CEO Elon Musk optimistically believes there could be 1 million or more Tesla robotaxi’s roaming the streets of America by the end of 2026.

How big could this business be for Tesla? Dan Ives, an analyst at Wedbush Securities, believes it could soon add $1 trillion to Tesla’s market cap. Cathie Wood, a high-profile, outspoken Tesla investor, believes the overall market could eventually be worth $10 trillion. Tesla is uniquely positioned to take on this market, with its large production facilities, multi-year investments in autonomous driving, and its sheer access to capital.

Even if Tesla’s robotaxi service stumbles in its first year — which many skeptics predict — the growth opportunity is clearly immense. And as mentioned, Tesla is uniquely capable of taking a leading role in this new industry. But as Reuters recently pointed out, “getting from dozens to millions of self-driving cars won’t be easy.” This should be viewed as a multi-decade opportunity for Tesla, not a near-term reality. Tesla’s bumpy rollout in Austin should be a testament to that fact.

Tesla’s stock price is reasonable for long-term investors who believe in the company’s robotaxi aspirations. But the premium is far too high for a simple EV manufacturer with smaller business segments in energy storage and generation. Tesla remains an exciting company to watch, but investors must be bullish on robotaxis over the long haul to justify a position.

By now, Nvidia has become a household name. The artificial intelligence (AI) chip stock dominates the market for GPUs, the chips that make AI models like ChatGPT run, and has ridden the AI boom to become the most valuable company in the world.

However, some investors are already looking for the next big thing in technology, and seem to have settled on quantum computing, a revolutionary technology that uses qubits, or quantum bits, to process information. By doing so, these computers are able to perform complex calculations exponentially faster than traditional computers, meaning they could have a similar disruptive effect as AI.

Image source: Getty Images.

Quantum stocks have gotten buzzy this year, and stocks like IonQ (IONQ 5.63%) have surged. As you can see from the chart below, IonQ and its peers have skyrocketed over the last year in a rally that began last December with Alphabet‘s announcement of a breakthrough with its Willow quantum chip.

IONQ data by YCharts

IonQ is the biggest of the four pure-play quantum stocks, now trading at a market cap of $19.4 billion. Though the company still has very little revenue, it’s been building significant momentum and showing more evidence that it and quantum computing more generally can go mainstream. Let’s take a closer look at where IonQ stands today and where it could go in the next decade.

IonQ today

IonQ reported $20.7 million in revenue in the second quarter, up 82% from the quarter a year ago. That’s still tiny for a company with a market cap of nearly $20 billion, but there are signs of a bright future for IonQ.

In the second quarter, the company said a collaborative research program between it, AstraZeneca, Amazon Web Services (AWS), and Nvidia achieved more than 20 times improvement in end-to-end time-to-solution using a quantum-accelerated computational chemistry workflow for drug discovery. That’s strong evidence of the potential of the technology.

The company also forged partnerships around the world in the second quarter, including in South Korea, Japan, and Sweden, and announced an expansion in the Asia-Pacific region in collaboration with Emergence Quantum, an Australian company.

Finally, IonQ has been growing through a string of acquisitions, beefing up its capabilities in quantum computing. Those include Lightsynq and Capella in the second quarter, and Oxford Ionics and Vector Atomic, which hasn’t closed yet, in September.

Just on Wednesday, the company signed a memorandum of understanding with the U.S. Department of Energy to advance quantum technologies in space, showing the federal government is getting more involved in quantum.

Will it beat Nvidia over the next decade?

There’s a ton of uncertainty in quantum computing over the next decade. The technology seems promising, but IonQ’s growth forecast still seems relatively modest as it expects full-year revenue of $82 million to $100 million. It could still be several years before it reaches $1 billion.

Comparing IonQ’s prospects to Nvidia’s is difficult because Nvidia is at a much different stage of its life cycle. As the most valuable company in the world, the ceiling for Nvidia’s growth is much lower than IonQ. At a price-to-earnings ratio of roughly 40, a 10x for Nvidia over the next decade would mean reaching $40 trillion in market cap and $1 trillion in profit if it maintained its valuation.

Currently, there aren’t any companies with $1 trillion in revenue, let alone $1 trillion in profit, and the S&P 500‘s current market cap is about $55 trillion. Looking at it that way, a 10x return for Nvidia will be difficult, if not unrealistic, over the next decade.

With greater upside potential and the potential disruption from quantum computing, IonQ could outperform Nvidia, but it’s much riskier than the AI leader.

For tech-minded growth investors, owning both stocks might be the best approach. It will also give you exposure to the top names in AI and quantum computing.