money

Debit cards are convenient — but they’re not always the safest choice. Swiped in the wrong place, a debit card can expose your bank account to fraud, delays, or lost protection.

While they’re fine for grabbing cash at a trusted ATM or some transactions, there are certain situations where using a debit card just isn’t worth the risk.

Here are five places where you should think twice before swiping — and what to use instead.

1. At gas stations and convenience stores

According to the FBI, card skimming costs consumers and banks over $1 billion a year. And gas stations are one of the most common places for card skimming.

Skimmers are tiny devices attached to card readers you don’t even notice. When you swipe your card, they copy your info. If it’s your debit card, that’s real money from your checking account that can be tapped into.

Convenience stores and smaller shops can also be risky if the machines aren’t closely monitored.

It’s better to use a credit card instead. Better yet, tap to pay using your phone or contactless card — it’s harder to skim and adds another layer of protection.

2. When booking travel

Any time I book travel, I’m using a rewards credit card. Debit cards don’t get anywhere near the same perks or protections.

Most travel credit cards offer amazing reward rates — sometimes 3x, 5x, or even 10x points when booking through the issuer’s portal. I like to think of those points like a built-in discount. A $1,000 trip could earn $50 to $100 worth of points toward my next vacation.

Another big reason is that travel credit cards typically include built-in protections that debit cards don’t offer, like:

• Trip cancellation and interruption insurance
• Rental car coverage
• Lost luggage reimbursement

These perks can save you hundreds (and a ton of hassle) if something goes wrong.

Don’t have a travel rewards credit card? Compare the top travel credit cards and find one that fits your trip style.

Even legit-looking sites can have poor security. And once your debit card info is compromised, the hacker isn’t stealing borrowed credit — they’re going after the real money sitting in your checking account.

While banks usually reimburse you, your account can be frozen in the meantime. And if you need your money for rent, groceries, or other bills, this can become a real hassle.

Credit cards offer fraud protection, zero-liability policies, and some even let you use virtual card numbers for added security.

4. Buying expensive electronics or gear

Just bought a new MacBook? DSLR camera? Fancy espresso machine? Don’t swipe your debit card.

Many credit cards offer purchase protection and extended warranties on eligible big-ticket items. That’s added insurance in case something breaks, gets stolen, or shows up defective.

Purchase protection can also cover theft or damage — which is especially useful when your toddler decides your new MacBook is a launchpad for their action figures.

5. Bars, restaurants, and anywhere your card disappears

The reality is, every time you hand your debit card to someone, you’re trusting a stranger with a direct line to your bank account. That’s a big risk for a plate of nachos.

Bars and restaurants are super busy places, so it’s easier for your card to get misplaced or fall into the wrong hands.

Whenever I’m out and about, I use my credit card for anything where my physical card leaves my hand. If anything seems fishy, I can lock my card in seconds. And it takes just a few clicks in my mobile app to dispute any fraud charges, without touching any of my real money.

The bottom line

There’s nothing wrong with using a debit card for the basics. Like pulling cash from an ATM or paying that pesky parking ticket online through your county’s secure site.

But credit cards offer stronger fraud protection, better perks, and even rewards on everyday purchases. Just pay your balance in full each month, and you’ll avoid interest while stacking up points or cash back.

Need to upgrade your wallet? Compare the best credit cards for security, rewards, and peace of mind.

Despite how much Americans spend to look younger, some pretty nice perks accompany aging. If you’re getting older, there are reasons to celebrate: Not only are you wiser, you’re also eligible for discounts at some of your favorite places. Here’s a sample of what you can find when you want to make the most of your Social Security or pension benefits.

Image source: Getty Images.

Cell Phones

Groceries

Hotels

Restaurants

Retailers

Travel

This list represents a tiny percentage of the discounts available to those 50 and older. Rather than taking more than you want from your retirement savings, here are tips for landing more discounts:

• Don’t be shy about asking: Even if it’s not advertised, many businesses are interested in catering to established consumers and offer price breaks to keep them coming back. You can save real money by making it a habit to ask.
• Consider AARP: If you’re not a member of AARP yet, that’s where you’ll find a shocking number of discounts. A standard AARP costs around $20 annually, although a discount may be available when you join. Spending $20 or less annually may just help you fight inflation.
• Carry ID: Some places require proof of age before granting a discount. You should be good to go as long as you have ID.
• Make banks work for your business: Despite being in the business of making money, here’s a breakdown of the some of the most common perks banks offer seniors:

-Waived fees: Banks often eliminate monthly maintenance fee for checking and savings accounts.

-Free checks: Some banks offer free or discounted checks.

-Safe deposit boxes: Ask your bank about discounts available to seniors on safe deposit boxes.

-Higher interest rates: Some senior discount programs offer a higher rate on savings accounts.

-Miscellaneous savings: Banks may offer additional perks like free bank drafts, discounted money

orders, and even prescription discount cards.

The power is in your hands as a consumer. For the most part, you get to choose where to spend your money. Whether you’re saving for a vacation or making sure you’re ready for the next bear market, it’s OK to make businesses work for your patronage.

Investors in electronic design automation and engineering simulation software company Synopsys (SNPS 1.68%) recently saw their stock crash more than 35% on the day of its third-quarter earnings release. The decline prompted Cathie Wood’s Ark Invest to double down on the stock by purchasing almost 16,000 shares for its exchange-traded funds (ETFs).

Should investors follow Ark into buying Synopsys on a dip, or is this the start of a deeper move downward?

How Synopsys is poised for growth

Before delving into the details of the third-quarter update, it’s worth examining the long-term investment case and why Ark is enthusiastic about the company. The case for Synopsys rests on the surge of interest in artificial intelligence (AI)-powered products and the growth of the market for companies developing custom-made chips to integrate into their products.

As products become increasingly smart, and the value quotient of a product stemming from its software/intelligence continues to rise, there will be significant opportunities for Synopsys to expand beyond its core customer base. Synopsys is a leader in the electronic design automation (EDA) that semiconductor and electronics companies use to design chips, including AI chip design.

While semiconductors are its core customer base, a growing number of electronics, technology, automotive, medical, industrial, aerospace, and defense companies are designing chips in-house. As such, Synopsys has an organic growth opportunity — and that has been enhanced by a high-profile acquisition.

Why the Ansys deal is a game changer

The recent acquisition of engineering simulation and analysis software company Ansys will help accelerate that growth, not least because Ansys’ existing customer base (companies that want to simulate and model) is a lot broader than Synopsys’ base. In a nutshell, the acquisition of Ansys will allow Synopsys to amplify its sales footprint to a customer base it’s already expanding in.

It will also create a so-called “silicon-to-systems” solution provider, whereby it sells EDA (legacy Synopsys) to help customers design chips, and simulation software (new Synopsys/Ansys) so they can model how the chips and products infused with AI will perform.

What happened in the third quarter

While the long-term outlook for its EDA, simulation, and analysis solutions (Ansys) remains excellent, the company’s second business segment — design intellectual property (IP) — faces significant near-term challenges, and it showed in the near 8% decline in sales in the third quarter.

Data source: Synopsys.

While EDA provides the tools to design and develop chips, design IP offers third-party IP blocks (licensed for use) that customers can incorporate into their design. Intel is a longtime customer and collaborator. Discussing the disappointing performance in the third quarter, CEO Sassine Ghazi narrowed it down to three reasons:

• Export restrictions curtailed investment decisions for customers investing in China.
• “Challenges at a major foundry customer are also having a sizable impact on the year,” according to Ghazi on the earnings call.
• Partly in connection with the issues at the foundry customer (possibly Intel) Ghazi noted, “We made certain road map and resource decisions that did not yield their intended results.”

Consequently, Ghazi said he was taking a more cautious view of the fourth quarter and refocusing resources on higher-growth areas in design IP, while conducting a strategic review of his portfolio.

Image source: Getty Images.

What it means for investors

On one hand, the share price crash presents an interesting opportunity to buy into an exciting long-term growth story.

On the other hand, investors should be aware that the issues identified in the design IP segment may take time to resolve. Even though the restrictions on Synopsys sales to China have been lifted, the impact persists, with Ghazi noting that customers are “questioning whether or not they will invest in a multiyear commitment with Synopsys, how broad will they make that investment?” 

The issue with the foundry customer is something Synopsys has control over, and the adjustments to its design IP business toward higher-growth opportunities will take time to come to fruition. Meanwhile, management is busy integrating the Ansys acquisition.

While the sell-off appears overdone, it will take time for Synopsys to work through these issues, and cautious investors will want to see some hard evidence of improvement before buying in.

Though artificial intelligence has been the hottest trend on Wall Street, it’s far from the only catalyst responsible for sending the benchmark S&P 500 (^GSPC -0.13%) to new heights. Investor excitement surrounding stock splits in high-profile businesses has played a close second fiddle.

A stock split allows a publicly traded company to cosmetically adjust its share price and outstanding share count by the same factor. These changes are “cosmetic” in the sense that they don’t impact a company’s market cap or its operating performance.

Image source: Getty Images.

Typically, investors keep their distance from businesses enacting reverse splits and gravitate to those announcing and completing forward splits. The latter is designed to lower a company’s share price to make it more nominally affordable for retail investors who can’t buy fractional shares through their broker. Companies that complete forward splits are usually out-innovating and out-executing their competition.

As of the closing bell on Sept. 12, three magnificent businesses had announced and completed forward splits this year. Whereas the benchmark S&P 500 has risen by roughly 12% on a year-to-date (YTD) basis, Wall Street’s trio of stock-split stocks has crushed it!

O’Reilly Automotive: up 36% YTD

Though it wasn’t the first to complete its split, auto parts supplier O’Reilly Automotive (ORLY -0.85%) kicked off stock-split euphoria in 2025 by announcing its intent to conduct a 15-for-1 forward split in mid-March. O’Reilly sought shareholder approval for its largest-ever stock split and was granted it, which paved the way for its split taking effect before the opening bell on June 10.

While shares of the company have jumped 36% on a year-to-date basis, they’re up closer to 67,000% since its initial public offering (IPO) in 1993.

O’Reilly Automotive has a few important tailwinds working in its favor. On a macro basis, S&P Global Mobility recently reported that the average age of vehicles on U.S. roadways jumped to 12.8 years in 2025. For context, this is up from an average of 11.1 years in 2012. With consumers hanging onto their cars and light trucks longer than ever before, they and their mechanics will be turning to auto parts retailers like O’Reilly to keep these vehicles in tip-top shape.

Additionally, O’Reilly has reworked its distribution system to ensure that drivers and mechanics have access to the parts they need. O’Reilly entered the year with 31 distribution centers and close to 400 hub stores. These hub stores feed from the distribution centers and ensure that outlying retail locations have access to more than 153,000 stock keeping units (SKUs) delivered same-day or on an overnight basis.

From an investment standpoint, O’Reilly’s greatest gift might just be its stellar capital-return program. Since initiating a share repurchase program in January 2011, O’Reilly has spent $26.6 billion to buy back almost 60% of its outstanding shares. For companies with steady or growing net income, buybacks can provide a big boost to earnings per share (EPS).

Image source: Getty Images.

Fastenal: up 32% YTD

A second stock-split stock that’s come close to tripling the year-to-date return of the broad-based S&P 500 is wholesale industrial and construction supplies company Fastenal (FAST -1.07%). Shares are up 32% YTD, but more than 150,000% since its August 1987 IPO.

Stock splits might as well be part of Fastenal’s corporate culture. The 2-for-1 split that was announced in April and effected prior to the start of trading on May 22 marked the ninth time in 37 years Fastenal had completed a split.

Fastenal is a company that benefits immensely from the disproportionate nature of economic cycles. This is to say that while economic downturns are normal, healthy, and inevitable, they tend to be short-lived. The average economic expansion since the end of World War II has stuck around five years, which is fantastic news for a company whose growth tends to ebb-and-flow with the health of the U.S. economy and cyclical industries.

Fastenal’s ongoing success is also reflective of its closeknit ties to its most-promising clients. During the second quarter, more than 73% of its net revenue traced back to contract sales, which are multisite, local, regional, and government customers that offer significant revenue potential. Being able to place its inventory solutions on-site helps integrate Fastenal’s products into the supply chains of its most important customers.

Lastly, innovation has been key to Fastenal’s six-digit percentage rally since its debut. The company’s managed inventory solutions, such as its internet-connected wireless vending machines and inventory tracking bins, help its clients save money and ensures that Fastenal has a good bead on the supply chain needs of its customers.

Interactive Brokers Group: up 44% YTD

However, the top-performer among stock-split stocks in 2025 is automated electronic brokerage firm Interactive Brokers Group (IBKR 0.45%), which has rallied 44% YTD and 438% over the trailing half-decade.

Unlike O’Reilly Automotive and Fastenal, Interactive Brokers made history when it completed a 4-for-1 forward split before the opening bell on June 18. This marked its first split since becoming a public company in May 2007.

One of the top tailwinds for Interactive Brokers Group is the stock market being in an uptrend. When the S&P 500 is hitting new highs, investors have a tendency to want in on the action. This typically means trading more, adding more money to the platform, and potentially using margin. Bull markets for the S&P 500 often create an excellent operating environment for Interactive Brokers.

Another factor fueling this outperformance is the company’s investments in technology and automation. Though these investments came at a cost, they’re allowing Interactive Brokers to offer higher interest rates to customers on cash kept in their accounts, as well as lower borrowing rates for margin. These are attractive perks that are clearly resonating with investors.

The final piece of the puzzle is that every meaningful key performance indicator for Interactive Brokers is pointing significantly higher. During the June-ended quarter, customer accounts and customer equity on the platform jumped 32% and 34%, respectively, with daily active revenue trades (a measure of trading activity on the platform) climbing 49%! It’s not hard to see why Interactive Brokers Group is leading the way in 2025.

One of the most common misconceptions about investing is that you need a significant sum of money to get started. Too often, would-be investors sit on the sidelines, waiting to accumulate what they perceive is “enough” capital before making their first move.

The reality is that even a modest investment can provide ownership in some of the world’s most influential businesses. With the right mindset and a commitment to long-term growth, a small stake today can become the foundation for meaningful wealth in the years ahead.

With that in mind, here are six artificial intelligence (AI) stocks you can begin building a position in with just $1,000.

Image source: Getty Images.

The hardware backbones

AI development is inseparable from infrastructure. As demand for compute and inference continues to accelerate, investors should focus on the companies supplying the hardware backbone that makes this growth possible.

At the top of this list is Nvidia (NVDA -1.55%), the undisputed leader in AI infrastructure. Its graphics processing units (GPUs) remain the gold standard for training AI workloads, while its CUDA software architecture helps form a deep competitive moat — making it both costly and complex for developers to switch providers.

In practice, rising capital expenditures (capex) from hyperscalers flow directly back to Nvidia. This creates a lucrative feedback loop: More investment in AI infrastructure drives ongoing demand for Nvidia’s chips, which in turn fuels the next wave of applications beyond today’s large language models (LLMs).

Nebius Group is emerging as a notable player in the evolving cloud infrastructure landscape. The company’s business model centers on renting GPUs through a specialized platform designed to help enterprises manage AI workloads with greater efficiency and flexibility.

Positioned as both cost-effective and technologically capable, Nebius is carving out a niche in infrastructure-as-a-service (IaaS) beyond incumbents like CoreWeave. Nebius benefits from strong ties to Nvidia and recently secured a $17.4 billion partnership with Microsoft.

The silent giant enabling the GPU ecosystem is Taiwan Semiconductor Manufacturing. While designers like Nvidia and Advanced Micro Devices capture outsize attention, it’s TSMC’s foundry that brings their chips to life — producing semiconductors at the most advanced nodes available.

As emerging AI applications in robotics and autonomous systems demand increasingly sophisticated fabrication processes, TSMC’s deep footprint in cutting-edge manufacturing is set to expand.

The software superstar

Once dismissed as a niche government contractor, Palantir Technologies (PLTR -0.58%) has transformed into one of the most formidable players in the software arena. Throughout the AI revolution, the company has gone toe to toe with enterprise incumbents like Salesforce and SAP, carving out market share across the private sector and proving its platform is indispensable.

What truly differentiates Palantir is the trust it commands at the highest level. While smaller rivals such as C3.ai and BigBear.ai are left chasing deals that are narrow in scope, Palantir is securing $10 billion contracts with the U.S. Army and forging strategic alliances with NATO.

Even more telling is how tech titans like Amazon, Microsoft, and Oracle have opted to partner with Palantir rather than compete head-on. This alignment opened new doors in healthcare, energy, and financial services — where Palantir is winning sticky, long-term contracts that provide durable revenue visibility and expanding unit economics.

In short, Palantir has evolved into a cornerstone of the AI software landscape — positioned to scale alongside the public and private sectors as AI investments continue to move downstream.

A magnificent duo

While infrastructure and software tend to dominate the headlines, two consumer-facing giants — Alphabet (GOOG -0.09%) (GOOGL -0.13%) and Meta Platforms (META 1.93%) — remain underappreciated relative to their “Magnificent Seven” peers.

Alphabet’s strength lies in the breadth and integration of its ecosystem. Advertising remains a cash cow fueled by dominance in search (Google) and engagement (YouTube). Yet beneath the surface, Alphabet has quietly built a vertically integrated AI empire: Custom Tensor Processing units (TPU) that rival with Nvidia’s GPUs, a rapidly expanding cloud computing platform, and DeepMind — Alphabet’s internal research lab driving breakthroughs that flow right into commercially available products.

Meanwhile, Meta commands arguably the most valuable social media network on the planet. With billions of users across Facebook, Instagram, and WhatsApp, the company is not only monetizing attention through advertising, but also unlocking new avenues of growth through AI-powered personalization. Few companies can deploy new features so broadly and effectively at scale — positioning Meta as a winner in the next phase of AI’s digital transformation.

A hopeful report about a potential blockbuster drug currently in development and news of an expansion of manufacturing capability helped push Eli Lilly (LLY 2.09%) stock skyward on Tuesday. Shares of the massive U.S. pharmaceutical company closed the day more than 2% higher in value, on a session when the S&P 500 index landed slightly in the red.

A quickened approval process

Reuters published an article speculating that orforglipron, Eli Lilly’s next-generation obesity drug currently in development, could earn Food and Drug Administration (FDA) approval by the end of this year.

Image source: Getty Images.

The report was anchored by several analysts tracking Eli Lilly who believe a fast-track review process recently launched by the regulator could put orforglipron on pharmacy shelves very soon. Under the FDA’s Commissioner’s National Priority Voucher, the process for qualifying investigational drugs can be shorted to within 1-2 months. That’s well down from the roughly 10 months for a standard review.

The news agency quoted one of those analysts, Jefferies‘ Akash Tiwari, as saying that “We think orforglipron is a prime candidate for this pilot program as it treats a high-burden chronic condition and can be priced at parity.”

Virginia expansion

Meanwhile, Eli Lilly announced that it aims to construct a new manufacturing facility in Virginia. This factory, estimated to cost $5 billion, will concentrate largely on the production of antibody-drug conjugates, medications that are designed for delivery directly to affected cells in the body.

The Virginia plant is part of an assertive “capital expansion” program. Eli Lilly said it has devoted $50 billion to activities such as factory builds since 2020.

Shares of Ferguson Enterprises (FERG 7.89%) rose as much as 9.8% on Tuesday, following the release of mixed results for the fourth quarter of fiscal 2025, ended July 31. The distributor of plumbing and heating supplies erased negative sentiment from last week’s dividend announcement. All told, Ferguson’s stock is back where it was a month ago.

Earnings, revenue, and dividend support

Ferguson’s Q4 revenue rose 6.9% year over year, landing at $8.5 billion. Adjusted bottom-line earnings jumped from $2.98 to $3.48 per share — a 17% increase. The analyst community had expected earnings near $3.29 per share on sales in the neighborhood of $8.7 billion.

At the same time, management issued mildly bullish guidance for the just-started fiscal year 2026. Adjusted operating margins should widen and Ferguson’s single-digit revenue growth is slated to continue.

The confident presentation also reassured investors who were concerned about Ferguson’s future dividends. Last week’s dividend announcement included warnings about the difficulty of moving money across international borders in this macroeconomic era, potentially slowing down dividend payouts. Today’s earnings release and conference call didn’t give much weight to those cash-moving issues, though. All seems forgiven.

Image source: Getty Images.

Beyond the Q4 numbers

It should be noted that Ferguson is a multinational company, stemming from the 2024 merger of a British and an American business. Still, essentially all of Ferguson’s sales come from North America. I wouldn’t worry too much about Ferguson supporting its largely American dividend checks with funds from British banks — the whole operation has effectively moved west.

As for the actual business, Ferguson is doing fine. The company benefits from tighter air conditioning standards in the U.S. market, which outweighed milder demand for residential home improvement products in the fourth quarter. Other headwinds included a slowing new construction market and uncertain long-term macroeconomic trends.

At the same time, Ferguson is preparing for better times. The company completed nine acquisitions in this fiscal year and another one after the period closed on July 31. It is also making the most of its human capital, cross-training plumbers and air conditioning contractors to handle both types of work.

The stock isn’t exactly cheap at 25 times trailing earnings, given the single-digit top-line growth. The richer profit margins and ambitious growth-boosting acquisitions could make Ferguson an interesting stock to own in the long run, though.

Shares of Webtoon Entertainment (WBTN 39.17%) skyrocketed on Tuesday, peaking with a 42.5% one-day gain just after noon ET. The company just expanded its partnership with Walt Disney (DIS -0.25%), significantly boosting the business value of the Webtoon digital comics platform.

Image source: Getty Images.

Disney is back with a bigger deal

About a month ago, on Aug. 12, Webtoon struck up an agreement with the House of Mouse. That deal involved about 100 hand-picked comics from the worlds of Star Wars, Spider-Man, Avengers, Alien, and the core Disney storytelling brand. Investors were quick to embrace that announcement, which is easy to find on Webtoon’s three-month stock chart.

Today’s Disney deal builds on the earlier contract. Now, the two companies are working up a much broader digital comics presentation with more than 35,000 titles from Disney’s comic-book worlds. Many of these stories have not been available in digital form before, and Disney will develop a few entirely original titles for this platform.

Webtoon’s content catalog just got a Hulk-sized adrenaline shot. At the same time, a ton of rarely seen Disney content should find new fans on this new platform. The Webtoon format is already familiar to millions of younger consumers.

What the stock surge means for investors

Together, the two Disney announcements have more than doubled Webtoon’s stock price in less than five weeks. The total gain adds up to 117% as of this writing.

Many small companies would react to this kind of surge by issuing new shares, essentially shoveling cash from new investors to the company’s coffers. But Webtoon is an independently managed, California-based subsidiary of South Korean internet services giant Naver. A large stock offering would undermine the parent company’s voting power. Therefore, the Naver backing should protect Webtoon shareholders against costly share dilution. It’s no guarantee, but I don’t expect Naver to lessen its power in the Webtoon boardroom.

As for the Disney/Webtoon pairing, it remains to be seen how quickly this business can get going. Webtoon is still developing the mobile app and back-end infrastructure to support this project, with no firm release date in the books yet. At the same time, launching should be easy with Naver’s massive data centers and Disney’s marketing muscle.

So it’s a speculative jump, but backed by a plethora of big-name assets. I’m keeping an eye on this 20-year-old digital media upstart, waiting for Disney’s fireworks to start before putting cash into this stock. There’s so much the two partners aren’t saying about financial agreements and expected profits.

Despite periods of turmoil in the stock market this year, most of the “Magnificent Seven” stocks have stayed hot. Those tech-focused megacaps have histories of generating strong earnings and free cash flows, and they’re all investing heavily in artificial intelligence (AI). Many investors expect them to be the primary beneficiaries of the AI revolution, which helps explain why their market caps have all now surpassed $1 trillion.

Despite their sheer size, some Wall Street analysts still foresee their shares making big moves upward. According to certain analysts, these two Magnificent Seven stocks could rise by 31% and 19%, respectively, over the next year.

Image source: Getty Images.

Microsoft: Reaping the rewards of AI investment

There was a time when investors had questions about Microsoft‘s (MSFT -0.44%) investments in artificial intelligence. But recent quarters have largely put those doubts to rest, and Microsoft’s stock has risen about 20% so far this year. In the company’s fiscal 2025 fourth quarter (which ended June 30), Microsoft’s Azure and other cloud services division, which houses a lot of its AI offerings, generated astounding revenue growth of 39% year over year.

“Cloud and AI is the driving force of business transformation across every industry and sector,” said CEO Satya Nadella in Microsoft’s latest earnings release.

Following the earnings release, Truist Securities analyst Joel P. Fishbein Jr. issued a research report, maintaining a buy rating on Microsoft and raising his price target on the stock to $675, forecasting a gain of about 31% over the next 12 months. Fishbein thinks the tech giant will continue to see strong growth from its cloud business, as well as tailwinds in the broader AI ecosystem. “Sustained strong cloud growth at scale & growing AI demand capture can lead to at least low teens double-digit rev, profit & CF (cash flow) growth over an extended period, while consistently returning cash via divs/repurchases,” he wrote.

Microsoft has been able to monetize AI by integrating AI models from OpenAI and charging clients that use these templates. Additionally, Microsoft sells its Azure clients enterprise AI tools through Azure Foundry that allow them to build and implement AI chat, conversational AI, and AI agents, among other tools. Further growth is likely as AI begins to spread to more parts of the economy and different types of businesses across sectors.

Though it can be hard to gauge how much more room for growth a company with a more than $3 trillion market cap might have, I don’t have any issue recommending Microsoft to long-term investors. In addition to AI, the company has a tremendous slate of businesses, including its popular suite of office productivity software, its traditional cloud business, video games, and social media platforms. Plus, Microsoft is one of the only companies with a debt rating higher than the U.S. government.

Alphabet: Overcoming challenges all year

It’s been a tremendously volatile year for Alphabet (GOOG 0.14%) (GOOGL 0.03%). Toward the end of 2024, a federal judge sided with the Department of Justice in a lawsuit, agreeing that the Google parent had employed monopolistic practices to protect its domination of the search engine space, as well as in its digital advertising practices.

The Justice Department then asked U.S. District Judge Amit Mehta to make Alphabet divest itself of its Google Chrome unit, a key element of the company’s search business, which drives over half of Alphabet’s revenue. But recently, Judge Mehta ruled that the company would not have to do this.

Furthermore, Mehta said Alphabet can continue to pay distributors like Apple to make Google the default search engine on their web browsers. Alphabet reportedly paid Apple over $20 billion in 2022 to make it the default engine on the Safari browser, which is installed standard on all iPhones. However, Mehta said that exclusive contracts will not be allowed and that Google would have to share some of its search data with rivals. Overall, investors considered this a positive outcome for Alphabet.

Many were also concerned earlier this year that AI chatbots like OpenAI’s ChatGPT might significantly cut into Google’s search business. However, the AI Overviews results powered by Google Gemini that now top the responses to most Google search queries appear to be making progress and meeting the needs of consumers. Evercore ISI analyst Mark Mahaney said the judge’s ruling had removed a clear overhang on the stock, which will allow investors to focus on the company’s fundamentals.

“What we see is a Core Catalyst, with Google Search revenue growth likely to remain DD% [double digit] for the foreseeable future,” Mahaney wrote in a research note. While generative AI  will undoubtedly continue to provide competition, Mahaney believes Google’s ability to innovate will keep its search engine competitive and allow the company to continue to generate solid growth. His new 12-month price target on Alphabet stock is $300, implying about 19% upside from current levels.

I largely agree with Mahaney, although I think investors should monitor competition from the likes of ChatGPT. But Alphabet also has many other strong and growing businesses, among them its cloud business, YouTube, its Waymo self-driving vehicle unit, and even its own AI chip design business. Even after its big run-up, Alphabet still trades at about 24 times forward earnings. Given that the company’s relevance is unlikely to fade any time soon, at that level, it looks like a good long-term buy.

Shares of USA Rare Earth (USAR 7.86%) spiked higher by as much as 15.6% in early trading today. The move comes after commentary on a JPMorgan podcast created optimism that the company could be the next in line for government investment following the landmark deal with MP Materials announced recently.

What JPMorgan said

In the internal podcast, JPMorgan’s co-head of mid-cap mergers and acquisitions, Andrew Castaldo, discussed the recent MP Materials deal and said JPMorgan believes that “there’s a whole slew of different critical minerals” that “the administration is also focused on, that could potentially be ripe for this type of collaboration.” He also noted that “we’ve had no less than 100 calls with clients to talk about the MP transaction as well as what this means for other industries.”

What it could mean for USA Rare Earth

It’s natural for investors to hear this kind of commentary and conclude that USA Rare Earth could be next. After all, the company is on track to begin producing rare-earth magnets at its Stillwater, Oklahoma, facility in 2026.

That will help reduce America’s dependence on foreign-sourced rare-earth magnets. The company plans to use the near-term revenue and earnings from magnet production to ultimately develop the Round Top Mountain in Texas, which it controls the mining rights to, to provide its own supply of rare-earth materials for magnet production.

Image source: Getty Images.

Clearly, it will take time and likely a lot of capital to fulfill the plan. Given the strategic importance of securing a domestic supply of rare-earth materials and magnets, it’s perfectly feasible that the current administration could also consider providing some form of support to USA Rare Earth.

Shares of Dave & Buster’s Entertainment (PLAY -16.12%) were taking a dive today after the “eatertainment” chain missed estimates on the top and bottom lines.

As of 10:08 a.m. ET, the stock was down 16.2% on the news.

Image source: Getty Images.

Dave & Buster’s falls behind

The arcade operator reported flat revenue in the quarter at $557.4 million, which missed estimates at $562.7 million. Comparable sales fell 3% in the period, showing that D&B appears to be losing customers.

On the bottom line, the results also disappointed as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell from $151.6 million to $129.8 million. Adjusted earnings per share, meanwhile, fell from $1.12 to $0.40, which was well below the consensus at $0.92.

Dave & Buster’s brought on a new CEO toward the end of the quarter. Tarun Lai comes to the company after serving as an executive at Yum! Brands for 25 years, most recently as president of KFC.

Lai said, “My immediate focus is clear: reinforce our guest-first culture, deliver memorable experiences, and drive meaningful growth in sales, cash flow, and shareholder value.”

What’s next for Dave & Buster’s

Looking ahead, Dave & Buster’s didn’t offer guidance in the earnings release, but the appointment of a new CEO should offer some hope for a turnaround.

Restaurant chains have been broadly struggling this year due in part to weak consumer sentiment, concerns about tariffs, and a softening labor market, so that may partly explain Dave & Buster’s challenges. However, the stock has struggled for years despite being the leader in its category.

If the new CEO can return the company to growth, the stock has significant upside potential, but that’s likely to take time, if it happens.

AI stocks are soaring after Oracle and others posted record levels of investment, and most sector stocks are now trading near all-time highs.

However, one big name is getting left behind. That’s ASML (ASML 0.92%), the world’s only maker of extreme ultraviolet (EUV) lithography machines, which are used to make the most advanced semiconductors. ASML plays a crucial role in the global semiconductor supply chain, serving foundries like TSMC with its mammoth machines that cost tens of millions of dollars.

While ASML stock is up 17% year to date, it’s still down significantly from its all-time high, off 26% from its peak in July 2024, showing that the company hasn’t lived up to earlier expectations.

ASML was in the news last week after it invested in Mistral AI, following in the footsteps of tech titans like Nvidia that have invested in smaller AI companies. ASML is investing 1.3 billion euros in the European AI start-up in a Series C funding round. As part of the deal, they formed a collaboration agreement around the use of AI models across ASML’s product portfolio and to team up on research and development to benefit ASML customers.

Investors seemed to like the deal as the stock moved higher last week. Is it a sign of things to come? Let’s take a closer look at where ASML stands today to see if it’s a buy.

Image source: Getty Images.

Can ASML bounce back?

ASML’s deal with Mistral seemed to breathe some new life into the stock as Arete upgraded it to a buy, and Bank of America said that the Mistral investment could expand the stock’s multiple. In recent quarters, ASML has struggled with volatile demand for its machines, including in China, though it has touted strong demand related to AI. Unlike chip designers like Nvidia or even manufacturers like TSMC, ASML is exposed to a different product cycle as a semiconductor equipment manufacturer.

In the second quarter, the company saw strong growth with revenue rising 23% to 7.69 billion euros and net income up 45% to 2.3 billion euros. Bookings in the quarter were flat at 5.5 billion euros.

For the full year, management expects revenue growth to slow, calling for 15% revenue growth for 2025. For 2030, the company continues to target 44 billion to 60 billion euros, or 52 billion at the midpoint, up from 28.3 billion in 2024. That implies a compound annual growth rate of just around 11% at the midpoint.

ASML has a competitive advantage in the industry based on technology, but the demand cycle is outside of its control. The long-term guidance is subject to change, and ASML said, “Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macroeconomic and geopolitical developments.”

Is ASML a buy?

The Mistral AI deal is a smart move as it gives ASML some direct exposure to a promising AI start-up and leverages its market power into a new revenue stream. The tailwinds from AI are encouraging as well, but near-term expectations are muted as analysts expect essentially flat growth for the second half of the year and just 4% in 2026.

Following the stock’s recent rebound, ASML shares trade at a forward price-to-earnings ratio of around 30 based on current estimates.

That’s pricey for a stock with single-digit revenue growth, but ASML has enough of a competitive advantage to make holding the stock worthwhile.

At this point, getting a small position in ASML makes sense as estimates are low enough over the coming quarters that the company could top expectations, sending the stock higher. Looking out further, if the AI boom continues, ASML will eventually be a winner even if it got off to a slow start.

One of the hottest stocks this year has been Opendoor (OPEN 4.30%), which is up more than 500% year to date as of this writing. The stock recently shot up nearly 80% in one day after the company announced both a new CEO and that its co-founders were returning to take seats on its board of directors.

However, the stock’s meteoric rise this year is not because of the strength of its business or signs of a turnaround. In fact, the stock saw its share price actually cut in half earlier this year before hedge fund manager Eric Jackson of EMJ Capital started hyping the stock on social media platform X (formerly Twitter) in July, saying it had the potential to be a 100-bagger. Others then piled in, with influential newsletter writer and podcaster Anthony Pompliano also promoting the stock. Essentially, it’s become a meme stock.

With a high short interest and retail investors jumping in, the stock skyrocketed despite poor results.

A struggling business

Opendoor is essentially a company that flips houses. It uses a proprietary algorithm to act as an instant buyer of homes, making all-cash offers to sellers. While the company typically offers somewhat lower amounts than what a home is worth, the allure for sellers is that it’s a quick sale, and they can avoid the hassle of things like house showings and open houses.

The company makes money in two primary ways. The first revenue stream is through flipping the house, where it makes repairs and then sells it at a higher price. It charges a service fee, which it says is akin to a realtor’s commission. It’s also been working to expand its business into a more comprehensive platform, offering services such as mortgage services and title insurance.

The biggest issue with Opendoor’s business model is that the company takes on significant inventory risk. Once it buys a home, it owns the home. These things aren’t cheap. This process exposes Opendoor to losses if a house sits too long, since it has to pay real estate taxes and other costs like utilities. Meanwhile, home prices can also fall. The model can work in a rising price environment, but in a tough real estate environment, it can be challenging.

Profits have been tough to come by for the company, although last quarter it was able to squeeze out its first quarter of EBITDA profitability in three years. Its revenue climbed 4% to $1.6 billion, as it sold 4,299 homes, up 5%.

This is a low-gross-margin business, and gross margins slipped by 30 basis points to 8.2%. It recorded a net loss of $29 million in the quarter, but positive adjusted EBITDA of $23 million.

However, the company offered up a cautious outlook going forward due to what it called a deteriorating housing market. It said consistently high mortgage rates are leading to less buyer demand, resulting in both fewer acquisitions and lower resale volumes. The company only purchased 1,757 homes in the second quarter, which was down 63% versus a year ago.

As a result, it guided for third-quarter revenue of between $800 million to $875 million, and an adjusted EBITDA loss of between $28 million and $21 million. That compares to revenue of $1.4 billion in Q3 last year and an adjusted EBITDA loss of $28 million.

The company has started to lean more into working with real estate agents for business. It’s also introduced a cash plus hybrid product where a seller gets cash upfront, but can receive additional proceeds after the sale.

Image source: Getty Images.

Why the stock is unlikely to be a long-term winner

While Opendoor has had a great run, it’s unlikely to be a long-term winner. It has a capital-intensive business model with slim gross margins. The ability to really scale this business over the long run is difficult, and the company carries significant inventory risk.

After its latest surge, its market cap jumped to $7.7 billion. The company only generated $433 million in gross profits last year and $227 million through the first six months of this year, while projecting a slowdown in the second half.

The company would be smart to use its elevated stock price to issue stock and start stockpiling cash. However, even with that, it is hard to justify its current valuation for a business model that, as currently constructed, just isn’t that attractive.

Experts are predicting a cut in interest rates at the Federal Reserve’s meeting on Tuesday and Wednesday this week. And even more cuts could follow in late 2025 and beyond.

That means certificate of deposit (CD) rates of 4.00% or higher will likely disappear, too.

If you’ve been thinking about opening a CD, now is definitely the time. Here’s what you should know if you’re opening a CD.

What to know when opening a CD

A CD is a type of savings account where you deposit your money for a set period, earning a fixed interest rate in return for the commitment. For example, you might open a 1-year CD that earns 4.00% APY. That means when your CD matures after a full year, you’ll get your money back, plus 4.00% in interest.

Here’s how to pick the right CD for you:

• Find the right term length: Shorter terms (3-12 months) give you quicker access to your cash. Longer terms (a few years) give you a longer guaranteed rate of return.
• Shop for the best rate: Online banks usually offer higher APYs.
• Fund your account: Transfer money from an existing bank account to a CD.
• Wait it out — and don’t touch your money: Most CDs charge a penalty for early withdrawals.
• Plan your next move: Once your CD matures, you can either withdraw your money or roll it over into another CD.

Who should open a CD now?

CDs are a great fit for you if:

• You already have an emergency fund in a savings account
• You want a guaranteed return over a few months or years
• You’re saving for a short- to medium-term goal
• You want to lock in a high interest rate while you still can

With rates expected to fall as soon as this week, now is definitely the time to lock in your CD rate.

Act now before rates drop

Traders expect the Fed to announce an interest rate cut this week, and Fed leadership recently projected that rates would fall through 2027 and beyond. That means today’s high CD rates could soon disappear — for a very long time.

If those predictions turn out to be true, you’ll be glad you locked in a 4.00%-plus APY while you still could.

Ready to open a CD? Check out our full list of the best CDs available now to see some of the highest APYs you can still get.

Social Security may be the most valuable retirement asset most Americans have. The pension for retired workers accounted for 20% of families’ total wealth in 2022, according to a study by the Congressional Budget Office. That’s based on a calculation valuing all future payments at present value.

Those future payments get a boost every year, which could make them even more valuable to Americans. The annual cost-of-living adjustment (COLA) helps benefits keep up with inflation. And while we won’t have the official 2026 COLA number until mid-October, it looks like it’ll come in higher than what analysts anticipated at the start of the year.

But a bigger COLA isn’t necessarily reason for Social Security recipients to celebrate. Here’s what retirees need to know.

Image source: Getty Images.

What’s pushing the 2026 COLA higher?

The annual COLA is based on a standard measure of inflation published every month by the Bureau of Labor Statistics called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

The CPI-W is one of several Consumer Price Index measurements the government publishes. The BLS surveys thousands of businesses and households across the country to collect pricing data on over 200 line items. Those prices are then indexed to a standard price from when the BLS first started collecting data, and weighted according to typical spending patterns of the group the index is supposed to follow. In the case of the CPI-W, the basket of goods represents the spending of working-age adults living in cities.

The Social Security Administration calculates the COLA by taking the average year-over-year increase in the CPI-W during the third quarter, i.e. July, August, and September. The BLS just published August’s CPI numbers on Sept. 11, with the CPI-W climbing 2.8% year over year. That follows a 2.5% increase in July. The final reading to determine the 2026 COLA will come out on Oct. 15.

Based on expectations for that reading, both The Senior Citizen’s League and independent analyst Mary Johnson have published their expectations for next year’s COLA. The former expects it to come in at 2.7% while the latter expects retirees to receive a 2.8% bump. Both estimates are higher than the 2.5% initial estimate The Senior Citizen’s League published before the start of the year.

The reasons for a higher COLA are bad news for 70 million beneficiaries

A bigger-than-expected raise is usually great news for those receiving it, but in the case of Social Security’s 70 million beneficiaries, it signals a challenging economic environment.

The biggest challenge is that the CPI-W doesn’t perfectly match the spending of most seniors. Most people don’t spend their money in retirement the same way they did when they were working age. They probably commute less and spend less on new clothing. They probably have different dining habits. And it’s almost certain that their medical bills have climbed higher as they grow older.

To that end, some of the biggest expenses seniors face are climbing faster than the overall CPI-W numbers. Medical care services were notably 4.2% higher this August than the year before. While gasoline prices were down, utilities were way up. Shelter expenses climbed 3.6%. Despite a 2.7% or 2.8% raise coming in January, most seniors have seen their real cost of living climb much more over the past year.

Rising medical costs are most prominently seen in the Medicare Trustees’ estimate for next year’s Medicare Part B premium. They expect the program will have to charge a standard monthly premium of $206.20 next year, an 11.5% increase from 2025. For those keeping track, that far outpaces the expectations for Social Security’s COLA. Beneficiaries age 65 and older enrolled in Medicare will see that amount come right out of their new monthly payments.

The Senior Citizens League contends this situation isn’t unique to this year’s COLA. It ran a study that estimates the buying power of someone’s benefits who started Social Security in 2010 has decreased 20% through 2024.

The best economic environment for Social Security has historically been slow, steady, and predictable inflation. Under the current administration, which has gone back and forth on trade policies numerous times since the start of the year, prices have become anything but predictable. While many businesses have taken preemptive steps to curb and delay the impact of tariffs, the costs will eventually get passed through to consumers. That could result in even more pain for those on a fixed income next year.

While a 2.7% or 2.8% raise might be bigger than anticipated, many seniors may find that it doesn’t go far enough next year.

In 2020, the U.S. Securities and Exchange Commission (SEC) sued a company called Ripple, alleging it was in breach of financial securities laws for the way it was issuing its cryptocurrency token, XRP (XRP 1.08%). The lawsuit threatened to derail Ripple’s business model, and it suppressed the price of XRP for years.

But everything changed when President Donald Trump was reelected last November. He promised to make America “the crypto capital of the world,” which involved taking a friendlier approach to regulation. He appointed crypto-advocate Paul Atkins to run the SEC, and the agency has since withdrawn from several active cases against industry giants like Binance and Coinbase.

The SEC also dropped its case against Ripple in August, bringing the brutal five-year legal battle to an official end. Here’s what might be in store for XRP from here.

Image source: Getty Images.

Why the SEC sued Ripple

Ripple created a unique payments network called Ripple Payments. It facilitates instant cross-border transactions by enabling global banks to deal with one another directly, no matter what existing infrastructure they use. Without Ripple Payments, banks using the SWIFT (Society of Worldwide Interbank Financial Telecommunication) network would have to use an intermediary to send money to banks that don’t use the system, delaying payments by several days.

Ripple created XRP as a bridge currency to standardize each transaction within Ripple Payments. For example, an American bank might send XRP to a European bank rather than sending U.S. dollars, cutting out costly foreign exchange fees. The cost of a single transaction using XRP is typically 0.00001 of a token, which is a fraction of one U.S. cent.

XRP has a total supply of 100 billion tokens. There are 59.6 billion in circulation, and the rest are controlled by Ripple, which gradually releases them to meet demand. As a result, XRP is a centralized cryptocurrency. Decentralized cryptocurrencies like Bitcoin (BTC 0.08%) aren’t controlled by any person or company, and they are typically earned through a process called “mining.”

That’s why the SEC sued Ripple in 2020. The regulator argued that XRP should be classified as a financial security, just like stocks and bonds, which are also issued by companies. This would have forced Ripple to operate under a very strict regulatory framework, potentially derailing its business model.

In August 2024, a judge issued a ruling that mostly favored Ripple. The SEC lodged an appeal which could have dragged the legal battle on for several more years, but the Trump administration’s pro-crypto agenda changed things. The Atkins-led SEC officially dropped the appeal last month, formally closing the case.

Here’s what might happen next

XRP hit a new record high in July for the first time in seven years, in anticipation of Ripple’s settlement with the SEC. Bullish sentiment was also fueled by the approval of a new exchange-traded fund (ETF) called the ProShares Ultra XRP ETF on July 18. It invests in futures contracts, so it doesn’t own any XRP directly. But investors are speculating that regulatory approval for spot ETFs could follow, and those funds would start buying up XRP tokens.

There is some precedent, because futures-based Bitcoin ETFs came before spot ETFs, so investors are hoping XRP follows the same path. This proved to be very bullish for Bitcoin because many investors already viewed it as a legitimate store of value, so ETFs gave financial advisors and institutions a safe, regulated way to own it.

I’m not convinced that spot ETFs would have the same effect on XRP, because it doesn’t have a proven reputation as a store of value. It’s a bridge currency in the Ripple Payments network, and ETFs wouldn’t improve that use case at all.

That brings me to a crucial point. Ripple Payments supports the use of fiat currency, so banks don’t have to use XRP. This means that the success of the network won’t necessarily lead to a higher value per token over the long term.

Therefore, if Ripple Payments isn’t a reliable value creator for XRP, and ETFs fail to become a tailwind like they are for Bitcoin, then volatility is likely to be the overriding theme from here. When XRP hit its previous record high in 2018, it plunged by more than 90% over the following year.

The token is in a better position today, but I don’t see a clear fundamental case for sustainable long-term upside from here, which leaves investors exposed to potential price corrections in the future.

On Wall Street, market cap serves as a differentiator of good and great businesses. While there are plenty of budding small- and mid-cap companies, businesses with valuations in excess of $10 billion have (more often than not) demonstrated their innovative capacity and backed up their worth to Wall Street.

But among this class of proven businesses is a truly elite group of 11 public companies that have reached the psychologically important trillion-dollar valuation plateau, not accounting for the effects of inflation over time (looking at you, Dutch East India Company). These 11 indelible titans include all seven members of the “Magnificent Seven,” Broadcom, Berkshire Hathaway, Taiwan Semiconductor Manufacturing, and Saudi Aramco, the latter of which doesn’t trade on U.S. exchanges.

Image source: Getty Images.

Last week, integrated cloud applications and cloud infrastructure services provider Oracle (ORCL 3.33%) came within a stone’s throw of becoming the 12th public company to reach at least a $1 trillion valuation before retreating. While the rise of artificial intelligence (AI) makes it a logical candidate to eventually surpass a market cap of $1 trillion, there’s another industry leader that’s ideally positioned to become Wall Street’s next trillion-dollar stock.

Oracle came oh-so-close to entering the trillion-dollar ranks

Following the closing bell on Sept. 9, Larry Ellison’s company delivered nothing short of a jaw-dropper with its fiscal 2026 first-quarter operating results.

It’s exceptionally rare when a megacap company moves by a double-digit percentage in a single trading session. At one point on Sept. 10, Oracle stock was higher by more than 40% and peaked at a market cap of $982 billion. Though it’s given back $150 billion in market value since its Sept. 10 peak, it closed out the week with a 25% gain, which isn’t shabby at all.

The hoopla surrounding Oracle has to do with its updated remaining performance obligations (RPO) forecast — RPO is essentially a backlog of future revenue based on contracts signed — and projected growth ramp for its high-margin Oracle Cloud Infrastructure (OCI) segment. OCI offers on-demand cloud-computing services, which can run AI workloads on private, public, and hybrid clouds, and also leases out AI compute.

On a year-over-year basis for the quarter ended Aug. 31, Oracle announced its RPO jumped 359% to $455 billion on the heels of signing four multibillion contracts during the fiscal first quarter. During the company’s conference call, CEO Safra Catz singled out privately held OpenAI and xAI, as well as Magnificent Seven members Meta Platforms and Nvidia, as some of these significant cloud contracts.

What’s perhaps even more impressive than the growth of Oracle’s backlog is its projected ramp in sales from OCI. Catz laid out a stunning growth forecast that calls for:

• 77% sales growth to $18 billion in fiscal year (FY) 2026
• 78% sales growth to $32 billion in FY 2027
• 128% sales growth to $73 billion in FY 2028
• 56% sales growth to $114 billon in FY 2029
• 26% sales growth to $144 billion in FY 2030

Catz and Oracle co-founder/Chief Technology Officer Larry Ellison have outlined a clear path to outsized growth that the company has lacked since the dot-com days. However, a wait-and-see approach from investors may be preferred in the quarters to come given that Oracle has missed Wall Street’s earnings per share consensus in three of the last four quarters. This could stall its efforts to quickly join the elite trillion-dollar club.

Image source: Getty Images.

This is the sensational company that can beat Oracle to the trillion-dollar plateau

Considering how Wall Street lives and breathes anything having to do with AI, you might be thinking a tech company is the next logical candidate to reach the trillion-dollar plateau. But what if I told you that time-tested retailer Walmart (WMT 0.14%), which closed out last week with a market cap of $825 billion, has an inside path to a $1 trillion valuation?

On the surface, things might not seem perfect for the retail industry. Recent job market revisions point to a potentially weakening U.S. economy.

At the same time, the effects of President Donald Trump’s tariff policies have begun to show up in monthly inflation reports. Between May and August, the trailing-12-month inflation rate, based on the Consumer Price Index for All Urban Consumers (CPI-U), rose by 67 basis points to 2.92%. When coupled with a weakening job market, rising inflation ignites fears of stagflation, which is a worse-case scenario for the Federal Reserve.

These scenarios are typically bad news for most retailers — but Walmart isn’t “most retailers.”

For decades, Walmart’s success has derived from its focus on value and convenience. When times are tough or uncertain in America, people turn to Walmart for a good deal on groceries, toiletries, and countless other items. If Trump’s tariffs are eventually ruled legal by the Supreme Court and remain in place, their inflationary impact is only going to drive more consumers, including affluent shoppers, into Walmart stores. Even if the company eats a portion of these tariffs, the benefit from increased foot traffic more than outweighs its sacrifice.

To build on this low-cost/value point, Walmart undeniably uses its size to its advantage. It has deep pockets and purchases products in bulk to lower its per-unit cost. This allows it to undercut mom-and-pop shops and national grocery chains on price and keeps consumers confined to its ecosystem of products and services (especially when they live close to a supercenter).

Another key to Walmart’s success has been its embrace of technology. Promoting its online retail channels and Walmart+ subscription service helped lift global e-commerce sales by 25% during the fiscal 2026 second quarter (ended July 31), and has pushed its U.S. e-commerce operations into the profit column. It’s also leaning into AI as a way to improve supply chain management and improve order fulfillment times.

It would only take a 21% move higher for Walmart to become the 12th public company to reach $1 trillion, and it looks to be in an ideal position to do so.